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

Subtitle A—Acquisition Policy and Management.

P. L. 117-81

Joint Explanatory Statement

(a) Assessment Required.--The Under Secretary of Defense for Acquisition and Sustainment and the Chairman of the Joint Requirements Oversight Council shall jointly assess impediments and incentives to fulfilling the goals of section 3307 of title 41, United States Code, and section 2377 of title 10, United States Code, regarding preferences for commercial products and commercial services to--

(1) enhance the innovation strategy of the Department of Defense to compete effectively against peer adversaries; and

(2) encourage the rapid adoption of commercial advances in technology.

(b) Elements of Assessment.--The assessment shall include a review of the use of preferences for commercial products and commercial services in procurement, including an analysis of--

(1) relevant policies, regulations, and oversight processes;

(2) relevant acquisition workforce training and education;

(3) the role of requirements in the adaptive acquisition framework (as described in Department of Defense Instruction 5000.02, ``Operation of the Adaptive Acquisition Framework''),
including--

(A) the ability to accommodate evolving commercial functionality and new opportunities identified during market research; and

(B) how phasing and uncertainty in requirements are treated;

(4) the role of competitive procedures and source selection procedures, including the ability to structure acquisition processes to accommodate--

(A) multiple or unequal solutions; and

(B) emerging solutions that could fulfill program requirements;

(5) the role of planning, programming, and budgeting structures and processes, including appropriations categories;

(6) systemic biases in favor of custom solutions;

(7) allocation of technical data rights;

(8) strategies to control modernization and sustainment costs;

(9) the risk to contracting officers and other members of the acquisition workforce of acquiring commercial products and commercial services, and incentives and disincentives for taking such risks; and

(10) potential reforms that do not impose additional burdensome and time-consuming constraints on the acquisition process.

(c) Briefing.--Not later than 120 days after the date of the enactment of this Act, the Under Secretary of Defense for Acquisition and Sustainment and the Chairman of the Joint Requirements Oversight Council shall brief the congressional defense committees on the results of the required assessment and any actions undertaken to improve compliance with the statutory preference for commercial products and commercial services, including any recommendations to Congress for legislative action.

Assessment of impediments and incentives to improving the acquisition of commercial products and commercial services (sec. 807)

The Senate amendment contained a provision (sec. 803) that would require the Under Secretary of Defense for Acquisition and Sustainment and the Chairman of the Joint Requirements Oversight Council to jointly assess impediments and incentives to fulfilling the goals of sections 1906, 1907, and 3307 of title 41, United States Code, and sections 2375-2377 of title 10, United States Code, regarding preferences for commercial products and services.

The House bill contained no similar provision.

The agreement includes the Senate provision with an amendment that would modify elements of the assessment.

S. 2792--Senate Report117-39

Assessment of impediments and incentives to improving the acquisition of commercial technology, products, and services (sec. 803)

The committee recommends a provision that would require the Under Secretary of Defense for Acquisition and Sustainment and the Chairman of the Joint Requirements Oversight Council to jointly assess impediments and incentives to fulfilling the goals of sections 1906, 1907, and 3307 of title 41, United States Code, and sections 2375-2377 of title 10, United States Code, regarding preferences for commercial products and services. The objective of the assessment is to enhance the innovation strategy of the Department of Defense (DOD) to compete effectively against peer adversaries by rapidly
adopting commercial technology advances.

DOD leaders consistently emphasize the critical importance in the current great power competition of capitalizing quickly on commercial technology advances in such areas as artificial intelligence and machine learning, cloud computing, cloud-based enterprise services, and software products and services. However, the committee is concerned that, too often, DOD components choose to contract for the development of custom solutions when mature commercial capabilities exist that will save time and money and provide better performance. The committee is aware of instances where custom developments are justified as ``open source'' or on the grounds that commercial licenses are expensive. The committee is also aware that some DOD officials view commercial software as untrustworthy and argue that DOD should control the technical baseline through in-house software development. The committee is further aware that the requirements process, without careful attention, can be used to effectively foreclose on commercial solutions even before market research is conducted. Since DOD must have wide discretion to pursue non-commercial solutions to most military requirements, successful protests are rare, even when the underlying facts support a commercial acquisition.

The committee recognizes that DOD must maintain technical expertise in order to be a smart buyer, to manage programs effectively, and in some cases, to undertake in-house
development. It is also important when weighing acquisition options to consider sustainment requirements. Balancing these factors appropriately requires leadership and unbiased
processes.