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

Legislative Proposals Not Adopted

P. L. 116-

House Conference Report 116-617

House Committee Report 116-442 Accompanying H. R. 6395

Senate Committee Report 116-236 to Accompanying S. 4049

The House bill contained a provision (sec. 802) that would amend section 2302(9) of title  10, United States Code, by adding to the term ``nontraditional defense contractor'' an entity that is owned entirely by an employee stock ownership plan (ESOP).

The Senate amendment contained no similar provision.

The House recedes.

The conferees note the Department of Defense may benefit from the workforce talent attracted by entities that are owned entirely by employee stock ownership plans (ESOPs), yet a recent Government Accountability Office study showed there are no readily available data to determine what percent of an entity is owned by an ESOP. Therefore, the conferees direct the Secretary of Defense to provide a briefing to the congressional defense committees by December 31, 2020, on the advantages of working with ESOPs and the barriers ESOPs face in contracting with the Department. For the purposes of this briefing, an ESOP shall mean an entity that is owned entirely by an employee stock ownership plan (as defined in section 4975(e)(7) of the Internal Revenue Code of 1986 (title 26 of United States Code)).

The House bill contained a provision (sec. 814) that would amend section 2410n of title 10, United States Code. This provision would eliminate the federal market share determination requirement for the purchase of products from Federal Prison Industries.

The Senate amendment contained no similar provision.

The House recedes.

The House bill contained a provision (sec. 820B) that would require certain defense contractors to submit to the Secretary of Defense and make available to the public an annual report naming the former Department of Defense (DOD) personnel to whom the contractor provided compensation in the past year--including certain political appointees, members of the Senior Executive Service, military officers in the grade of O-6 and above, and certain acquisition personnel--as well as the specific issues and lobbying activities in which each named DOD official engaged on behalf of the contractor over the same period.

The Senate amendment contained no similar provision.

The House recedes.

Not later than June 30, 2021, the Secretary of Defense, informed by the ongoing review of the Comptroller General of the United States on the post-government employment of former DOD officials, will provide to the Committees on Armed Services of the Senate and the House of Representatives a briefing on the implementation of Department of Defense Instruction 1000.32, Prohibition of Lobbying Activity by DOD Senior Officials, dated March 26, 2020. The briefing will provide an overview of the policies and procedures the Department has established to operationalize the limitations imposed by section 1045 of the National Defense Authorization Act for Fiscal Year 2018 (Public Law 115-91), on the ability of retired and former general and flag officers and senior civilian equivalents to engage in lobbying contacts and activities with respect to the DOD. In addition, the briefing will provide: (1) An explanation of the interplay between section 1045 and the longstanding regime of ethics laws applicable to the entirety of the executive branch; (2) An assessment of the effectiveness of the section 1045 limitations, both in promoting ethical conduct by former senior DOD officials in the context of post-government activities and in minimizing adverse effects on the Department of what is sometimes referred to as the ``revolving door;'' (3) An assessment of the clarity and enforceability of the ``behind the scenes'' restrictions imposed by section 1045; (4) A description of the legal and practical challenges, if any, in the Department's implementation of section 1045; (5) An evaluation of the effects, if any, of the limitations imposed by section 1045 on the Department's ability both to attract experienced and qualified persons to public service in the DOD and to derive benefit from communications with former senior employees and officers; and (6) A discussion of any related matter the Secretary deems appropriate.

The House bill contained a provision (sec. 825) that would provide further direction for the Department of Defense in implementing the Buy American Act, as defined by chapter 83 of title 41, United States Code, for major defense acquisition programs. The provision would contain additional specific direction pertaining to what comprises ``substantially all'' for the purposes of assessing manufactured articles, materials, or supplies, to be domestic and would also require the Secretary of Defense to establish an information repository for collection and analysis of information related to domestic source content of major defense acquisition programs.

The Senate amendment contained no similar provision.

The House recedes.

The conferees note the importance of the Department working with trusted foreign partners and developing methodologies to understand beneficial ownership within the defense industrial base. The conferees direct the Secretary to provide a briefing to the congressional defense committees not later than March 1, 2021, on mechanisms used to track foreign involvement in individual acquisition programs, as directed by section 2509 of title 10, United States Code, and elsewhere in this Act. The conferees further direct the Secretary to consider the benefits of working with allies and partners that are currently designated as ``qualifying countries'' under the Defense Federal Acquisition Regulation Supplement, to assist the countries' understanding of the composition of their supply chains, and any associated risks.

The conferees note that the National Defense Authorization Act for Fiscal Year 2020 (Public Law 116-92) established section 2509 of title 10, United States Code, which in subsection (d) directed the Department to develop a unified set of activities to modernize the systems of record, data sources and collection methods, and data exposure mechanisms to analyze and mitigate supply chain risks. The conferees note this followed direction on supply chain risk management in section 2339a of title 10, United States Code, which directed the Department to conduct certain activities to identify risk to national security systems and authorized certain contracting actions to mitigate supply chain risk with respect to companies, including subcontractors and suppliers. The conferees acknowledge the Department has taken significant steps to implement these provisions of law, including making use of the Department's existing Advanced Analytics (ADVANA) repository to populate information about suppliers. However, the conferees remain concerned about lack of coordination within the Department and delays in collecting all pertinent data. Therefore, the conferees direct the Secretary of Defense to ensure the collection and analysis of information related to sourcing of individual acquisition programs.

The House bill contained a provision (sec. 828) that expressed a sense of Congress regarding rulemaking to facilitate successful implementation of section 889 of the John S. McCain National Defense Authorization Act for Fiscal Year 2019 (Public Law 115-232; 132 Stat 1917; 41 U.S.C. note prec. 3901) which prohibits using or procuring certain telecommunications and video surveillance equipment.

The Senate amendment contained no similar provision.

The House recedes.

The conferees note that the Federal Acquisition Regulatory Council released an interim rule on the implementation of section 889(a)(1)(B) that went into effect on August 13, 2020. On August 12, 2020, the Director of National Intelligence provided the Department of Defense with a temporary waiver under the authority of section 889(d)(2) for certain contracting activities assessed as low-risk and to avoid disruption of end of year financial activities and has since extended that waiver a full year to September 30, 2022. Department of Defense officials have publicly stated the Department may seek additional waivers on a case-by-case basis, but does not seek to delay wholesale implementation of the rule. The conferees emphasize the importance of regular dialogue with the Department on section 889 implementation, generally, and encourage continued communication with the Committees on Armed Services of the Senate and the House of Representatives, especially on additional waivers the Department may seek. The committee looks forward to updates on the Department's positive progress towards compliance with statute and congressional intent.

The House bill contained a provision (sec. 829) that would amend section 2533b of title 10; sections 5323, 22905, 24305, and 50101 of title 49; and section 313 of title 23, United States Code, to add domestic content preferences for aluminum pertaining to activities of the Department of Defense, Federal Highway Administration, Federal Transit Administration,
Federal Railroad Administration, Federal Aviation Administration, and Amtrak.

The Senate amendment contained no similar provision.

The House recedes.

The conferees note that elsewhere in this Act, the Secretary of Defense is directed to conduct analyses of certain materials and technology sectors and make recommendations for action to address sourcing and industrial capacity, including specifically for aluminum.

The House bill contained a provision (sec. 830A) would require a briefing on the supply chain for small unmanned aircraft system components, including a discussion of current and projected future demand for small unmanned aircraft system components.

The Senate amendment contained no similar provision.

The House recedes.

The conferees expect the Department of Defense to continue its efforts to develop and sustain a secure and reliable sourcing strategy for small unmanned aircraft systems and their associated components. The conferees direct the Secretary of Defense in preparing the annual report due on March 1, 2021, as required by section 2504 of title 10, United States Code, to include an assessment of current and projected future demand for small unmanned aircraft system components. This assessment shall include: (1) The sustainability and availability of secure sources of critical components domestically and from sources in allied and partner nations; (2) The cost, availability, and quality of secure sources of critical components and other relevant information domestically and from sources in allied and partner nations; (3) Any plans of the Department of Defense to address gaps or deficiencies, including through the use of funds available under the Defense Production Act (50 U.S.C. 55) or through partnerships with public and private stakeholders; and (4) Other information as the Under Secretary of Defense for Acquisition and Sustainment determines to be appropriate.

The House bill contained a provision (sec. 830B) that would prohibit the head of an executive agency from procuring any commercial off-the-shelf drone or covered unmanned aircraft, or any component thereof for use in such a drone or unmanned aircraft, that is manufactured or assembled by a covered foreign entity, including any flight controllers, radios, core processors, printed circuit boards, cameras, or gimbals.

The Senate amendment contained no similar provision.

The House recedes.

The conferees note that the Department of Defense has taken steps to reduce unwanted dependence on foreign unmanned aircraft systems. The conferees direct the Secretary of Defense to continue these efforts by developing mechanisms to share appropriate threat information related to the operational use of such foreign systems to appropriate Federal agencies, upon request. The conferees note the importance of accounting for unmanned aircraft systems that are manufactured or assembled in foreign countries that are adversaries of the United States, tracking the use of those systems, and guarding against risks to national security associated with such systems. The conferees also underscore the importance of developing ways to enhance the capacity and capability of a domestic unmanned aircraft industry. The conferees direct the Secretary of Defense to provide a briefing to the congressional defense committees on activities to share such threat information with Federal agencies not later than October 1, 2021.

The House bill contained a provision (sec. 830C) that would express a Sense of Congress on gaps or vulnerabilities in the national technology and industrial base.

The Senate amendment contained no similar provision.

The House recedes.

The conferees direct the Secretary of Defense in preparing the annual report due on March 1, 2021 as required by section 2504 of title 10, United States Code, to include an assessment of gaps or vulnerabilities in the national technology and industrial base (as defined in section 2500 of title 10, United States Code) with respect to intellectual property theft as related to the development and long-term sustainability of defense technologies; the extent to which, if any, foreign adversaries engage in operations to exploit such gaps or vulnerabilities; recommendations to mitigate or address any such gaps or vulnerabilities identified by the Secretary; and any other matters the Secretary determines should be included.

Equitable adjustments to certain construction contracts

The House bill contained a provision (sec. 832) that would amend the Small Business Act (15 U.S.C. 631) to allow a small business performing a construction contract to submit a request for equitable adjustment to an agency if the contracting officer directs a change within the general scope of the contract without the agreement of the small business, and that would require the agency to provide an interim partial payment to the small business upon receipt of such request.

The Senate amendment contained no similar provision.

The House recedes.

The House bill contained a provision (sec. 833) that would exempt certain contracts awarded to small business concerns from category management requirements and that would require the Director of the Office of Management and Budget to develop and implement a plan to increase small business participation in agency-wide or Government-wide contracts.

The Senate amendment contained no similar provision.

The House recedes.

The House bill contained a provision (sec. 834) that would require the head of each Federal agency (as defined by section 551(a) of title 5, United States Code) to submit to the Congress a report on the timeliness of accelerated payments made to certain small business concerns.

The Senate amendment contained no similar provision.

The House recedes.

The conferees direct the head of each Federal agency to submit to the Congress not later than March 1, 2021 a report on the timeliness of payments made to a prime contractor (as
defined in section 8701 of title 41, United States Code) that is a small business concern (as defined in section 3 of the Small Business Act (section 632 of title 15, United States Code)) or to a prime contractor that subcontracts with a small business concern. The report shall include: (1) The date on which the Federal agency began providing accelerated payments in accordance with section 2307(a)(2) of title 10, United States Code, or paragraphs (10) and (11) of section 3903(a) of title 31, United States Code, as applicable, to a covered prime contractor; (2) Of contracts to which such sections apply, the amount and percentage of contracts with accelerated payment terms in accordance with such sections; and (3) Whether and on what date the agency discontinued implementation of the Office of Management and Budget Circular M-11-32 titled ``Accelerating Payments to Small Businesses for Goods and Services'' (issued September 14, 2011).

The House bill contained a provision (sec. 840) that would amend section 32 of the Small Business Act (15 U.S.C. 657b) by codifying the Small Business Administration's Boots to Business program, which provides entrepreneurial training for certain members of the Armed Forces who are transitioning to civilian life.

The Senate amendment contained no similar provision.

The House recedes.

The House bill contained a provision (sec. 841) that would create a locality preference for the award of military construction projects to firms and individuals within 60 miles of the location of the work, as well as other transparency and reporting requirements.

The Senate amendment contained no similar provision.

The House recedes.

The conferees recognize that military construction projects have the potential to provide significant economic stimulus to firms and individuals in local communities. The conferees encourage the military departments to seek opportunities to increase contracting opportunities to local entities and increase transparency and reporting of work performed by local entities, where practicable.

The Senate amendment contained a provision (sec. 841) that would permanently authorize the Department of Defense to use what are commonly known as Commercial Solutions Openings to solicit and acquire innovative commercial items, technologies, or services.

The House bill contained no similar provision.

The Senate recedes.

The conferees note that this authority was originally established in section 879 of the National Defense Authorization Act for Fiscal Year 2017 (Public Law 114-328) and that it has been successfully used by the Department to establish agreements with small businesses in technology areas relevant to supporting the current National Defense Strategy.

The conferees expect the Department to provide detailed justification to reauthorize this instrument and associated flexibilities. Accordingly, the conferees direct the Secretary of Defense to collect data on the specific cases, synthesize best practices, develop appropriate educational and training activities for the use of this authority, and to ensure such content is made available to the Department's acquisition workforce. As the conferees believe that such information will be invaluable to the Congress prior to considering reauthorization of this potentially powerful acquisition authority, the conferees direct the Under Secretary of Defense for Acquisition and Sustainment to provide a briefing to the congressional defense committees on the case data, best practices, and other activities by March 1, 2021.

The committee notes that this authority was originally established in section 879 of the National Defense Authorization Act for Fiscal Year 2017 (Public Law 114-328) and that it has been successfully used by the Department to establish agreements with small businesses in technology areas relevant to supporting the National Defense Strategy.

The committee directs the Secretary of Defense to collect and develop best practices for the use of this authority and to share those practices with relevant acquisition organizations as well as to include it with appropriate educational and training activities of the Department's acquisition workforce.

The House bill contained a provision (sec. 847) that would require the Secretary of Defense to submit a report to the congressional defense committees with a proposal for the transfer and consolidation of certain defense acquisition statutes within the framework of part V of subtitle A of title 10, United States Code (as enacted by section 801 of the National Defense Authorization Act for Fiscal Year 2019 (Public Law 115-232)), by February 21, 2021.

The Senate amendment contained a similar provision (sec. 5892) that would require the Secretary of Defense to submit a report to the congressional defense committees regarding the disposition of provisions of law in the notes sections of sections of title 10, United States Code.

The conference agreement does not include these provisions.

The House bill contained a provision (sec. 848) that would require the head of a Federal department or agency to initiate debarment proceedings against persons for whom four or
more willful or repeated violations of the Fair Labor Standards Act of 1938 (29 U.S.C. 201 et seq.) are listed in the Government-wide performance and integrity database.

The Senate amendment contained no similar provision.

The House recedes.

The conferees note that the Department of Defense continues to award contracts to companies cited for willful or repeated fair labor standards violations under the Fair Labor Standards Act of 1938 (FLSA). The conferees note the National Defense Authorization Act for 2020 (Public Law 116-92) established section 2509 of title 10, United States Code, pertaining to the integrity of the defense industrial base, which included directing attention to contractor behavior that constitutes violations of the law, fraud, and associated remedies, including suspension and debarment.

The conferees further note that a July 2020 Government Accountability Office (GAO) report, titled ``Defense Contractors: Information on Violations of Safety, Health, and Fair Labor Standards'' (GAO-20-587R), mandated by the National Defense Authorization Act for Fiscal Year 2020, reviewing data from 2015-2019, determined that 417 companies had been cited for willful or repeated violations of FLSA pertaining to minimum wage, overtime, or child labor. Specifically, GAO found almost 5,200 such violations, most frequently, failures to pay minimum wage, overtime, and to keep accurate records. The conferees note that these companies, representing less than half of one percent of the companies the Department does business with, could potentially be replaced by more responsible contractors in order to improve the integrity of the industrial base, and potentially reward companies with better records of performance in these matters.

The conferees direct the Department to enter into an agreement with the Acquisition Innovation Research Center (AIRC) established by Section 835 of the National Defense Authorization Act for Fiscal Year 2020, to: (1) Assess and distinguish the extent to which statutory and discretionary debarment procedures address the Department of Defense's interests in being protected from those entities whose conduct poses business integrity risk to the Government; (2) Identify any gaps in the current requirements for statutory debarment as a result of labor law violations; (3) Provide recommendations as to whether the mission of the Interagency Suspension and Debarment Committee, an interagency body of which DOD is a member and which reports to the Congress annually on the status and improvements made to the Federal suspension and debarment system (pursuant to Section 873 of the Duncan Hunter National Defense Authorization Act for Fiscal Year 2009 (Public Law 110-417)), should be expanded to include not just discretionary but also statutory suspension and debarment; and (4) Provide any other recommendations the AIRC finds relevant.

The House bill contained a provision (sec. 849) that would reestablish and modify the duties of the Commission on Wartime Contracting.

The Senate amendment contained no similar provision.

The House recedes.

The conferees note that section 887 of the National Defense Authorization Act for Fiscal Year 2020 (Public Law 116-92) required the Comptroller General of the United States to report on the use of contractors to perform work supporting contingency operations, including the logistical support for such operations since January 1, 2009. That report will include an evaluation of the extent to which recommendations made by the Wartime Contracting Commission have been implemented in policy, guidance, education, and training. The conferees reemphasize the importance of rigorous oversight of contracting for military, security, and reconstruction operations abroad, and acknowledge the Commission's valuable work.

The House bill contained a provision (sec. 851) that would direct the Inspector General of the Department of Defense to submit reports assessing various aspects of private security contracts performed in areas of contingency operations.

The Senate amendment contained no similar provision.

The House recedes.

The House bill contained a provision (sec. 852) that would require the Under Secretary of Defense for Acquisition and Sustainment to publish any proposed revisions to the Unified Facilities Criteria regarding the use of variable refrigerant flow systems in the Federal Register and specify a comment period of at least 60 days.

The Senate amendment contained no similar provision.

The House recedes.

The Senate amendment contained a provision (sec. 863) that would require each military department to nominate to the congressional defense committees at least one acquisition
program for which it would be appropriate and advantageous to use large numbers of users to provide direct assessment of the outcome of a competitive contract award.

The House bill contained no similar provision.

The Senate recedes.

The conferees direct the Secretary of each military department to identify at least one newly started acquisition program for which it may be appropriate, under the Department's
new Adaptive Acquisition Framework, to have a proportional representation of end users participate in materiel solution analysis supporting a Milestone A decision; in technology
maturation and risk reduction activities supporting a Milestone B decision; and in developmental and operational testing activities supporting a fielding decision. The Secretaries shall brief the Committees on Armed Services of the Senate and the House of Representatives on the programs identified and activities conducted, in conjunction with the future years defense program submitted under section 221 of title 10, United States Code, for fiscal year 2022.

The Senate amendment contained a provision (sec. 5802) that would require the Secretary of Defense to submit a report to Congress on the Defense Manufacturing Communities Support Program.

The House bill contained no similar provision.

The Senate recedes.

The conferees direct the Secretary of Defense to submit a report to the congressional defense committees not later than September 30, 2021, evaluating the effect of the Defense Manufacturing Communities Support Program, as authorized under section 846 of the John S. McCain National Defense Authorization Act for Fiscal Year 2019 (Public Law 115-232), on the defense supply chain. The evaluation should consider the program's effect on: (1) The diversification of the supply chain; (2) Procurement costs; and (3) Efficient procurement processes.

The Senate amendment contained a provision (sec. 5873) that would amend section 7(b) of the Small Business Act (15 U.S.C. 636(b)) to establish requirements pertaining to rural
area disaster declarations.

The House bill contained no similar provision.

The Senate recedes.

The Senate amendment contained a provision (sec. 5877) that would amend section 623(a) of title 15, United States Code, to authorize non-profit childcare providers access to small business loan programs under title 15 of United States Code.

The House bill contained no similar provision.

The Senate recedes.