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Low-methane intensity natural gas pilot program
The House bill contained a provision (sec. 806)
that would authorize the Director of the Defense Logistics
Agency to establish a pilot program to demonstrate the
feasibility of Department of Defense installations using
certified low-methane intensity natural gas. The Senate
amendment contained no similar provision. The House recedes. The
conferees direct the Secretary of Defense to submit a report to
the Committees on Armed Services of the Senate and the House of
Representatives, not later than March 1, 2024, on the
feasibility and advisability of establishing a pilot program to
demonstrate the use of certified low-methane intensity natural
gas on military installations located within the continental
United States. The report shall include a description of any
potential uses and benefits of low-methane intensity natural gas
to meet the energy requirements of military installations and
operational energy requirements of the Department, the
recommended number of military installations for the pilot
program, and a proposed timeline for the use of low-methane
intensity natural gas for the pilot program, if deemed feasible
and advisable.
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Sense of the Senate on independent cost assessment
The Senate amendment contained a provision
(sec. 807) that would express the sense of the Senate on
independent cost assessment. The House bill contained no similar
provision. The Senate recedes. The conferees note that the
capabilities for performing timely, rigorous, and
methodologically defensible cost assessments for the Department
of Defense are a critical element of a sustainable modernization
strategy for the United States. The demand for independent cost
estimates has only grown in recent years. The conferees urge the
Secretaries of Defense and of the military services to continue
to provide robust support for cost estimation activities,
including the Cost Assessment Data Enterprise, particularly to
ensure there are sufficient personnel, adequately trained and
equipped with the tools necessary to carry out such an important
function.
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Research, development, testing, and evaluation
contract cost sharing
The House bill
contained a provision (sec. 809) that would require that for any
contract that is awarded under or pursuant to a provision of
this Act using research, development, test and evaluation
funding, not less than 25 percent of the cost of such activities
under such contract must be provided by a non-Federal source.
The Senate amendment contained no similar provision. The House
recedes.
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Prohibition and report on contracts for online
tutoring services
The House bill contained
a provision (sec. 810) that would prohibit the Secretary of
Defense from entering into, or renewing, a contract for online
tutoring services from an entity owned or controlled by the
Government of the People’s Republic of China, unless a waiver is
approved by the Secretary. The Senate amendment contained a
similar provision (sec. 821). The conference agreement does not
include either provision. The conferees direct the Secretary of
Defense to provide a briefing to the Committees on Armed
Services of the Senate and the House of Representatives, not
later than March 1, 2024, on the process used to reduce the risk
of foreign influence in online tutoring and educational
services. This briefing shall include: (1) The results of the
Committee on Foreign Investment in the United States (CFIUS)
review(s) for all online tutoring services used by the
Department, if any; (2) The mitigation plan(s) developed to
address any risks identified in (1); and (3) A determination
about whether additional CFIUS reviews are warranted including
criteria for when follow-on CFIUS reviews should occur.
Furthermore, the conferees note that there is a related
reporting requirement in the committee report accompanying S.
2226 (S. Rept. 118–58), the National Defense Authorization Act
for Fiscal Year 2024, as passed by the Senate. The conferees
encourage the Department to merge these requirements into a
single response.
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Enhancement of Department of Defense capabilities to
prevent contractor fraud
The Senate
amendment contained a provision (sec. 813) that would authorize
the Secretary of Defense or the Secretary of a military
department to withhold contractual payments pending the
resolution of allegations that the contractor offered or gave a
gratuity to an officer, official, or employee of the United
States Government to influence a contract. The House bill
contained no similar provision. The Senate recedes.
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Inventory of inflation and escalation indices
The Senate amendment contained a provision
(sec. 816) that would require the Under Secretary of Defense for
Acquisition and Sustainment to conduct an inventory of inflation
and escalation indices currently used for contracting and
pricing purposes across the Department, and to make this
inventory available as a resource for all government and
industry contracting and pricing professionals by September 30,
2024. The House bill contained no similar provision. The Senate
recedes. The conferees are aware that the Department of Defense
relies on a combination of inflation and price escalation
indices from both commercial and government sources. The
committee encourages the Department, to the extent practical, to
rely on a standardized set of indices and make the
identification of the specific indices available for the public
and for industry. The conferees believe such a move will support
transparent budgeting and cost data for more standardized
comparison, for government and industry provided data.
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Competition requirements for purchases from Federal
Prison Industries
The House bill contained
a provision (sec. 822) that would amend competition requirements
for federal prison industries. The Senate amendment contained no
similar provision. The House recedes.
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Repeal of bonafide office rule for 8(a) contracts
with the Department of Defense
The Senate
amendment contained a provision (sec. 823) that would repeal the
bonafide office rule for 8(a) contracts with the Department of
Defense. The House bill contained no similar provision. The
Senate recedes.
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Avoidance of use of lowest price technically
acceptable source selection process for certain logistics
services
The House bill contained a
provision (sec. 828) that would require the Department of
Defense to avoid Lowest Price Technically Acceptable (LPTA)
source selection criteria to the maximum extent possible for
fuel and fuel-related services, if such services are, or
reasonably could be, controlled by an adversary. The Senate
amendment contained no similar provision. The House recedes. The
conferees note continued questions about failed delivery of fuel
and fuel related services from vendors through LPTA source
selection in Oversees Contingency Operations (OCO). The William
M. (Mac) Thornberry National Defense Authorization Act for
Fiscal Year 2021 (Public Law 116–283) required an Inspector
General briefing on the issue and the National Defense
Authorization Act for Fiscal Year 2022 (Public Law 117–81)
required consideration of tradeoff processes for OCO fuel
contracting. The conferees urge the Defense Logistics Agency to
consider a broader tradeoff methodology for fuel and fuel
related contracting that considers past performance, technical
and quality abilities, cyber-preparedness, as well as price.
Therefore, the conferees direct the Under Secretary of Defense
for Acquisition and Sustainment, in consultation with Director
of the Defense Logistics Agency, to provide a briefing to the
congressional defense committees, not later than 60 days after
enactment of this Act, on a broader tradeoff methodology for
fuel and fuel related service contracting in OCO that includes
data on failed delivery from vendors from the past 5 years and
an analysis of risk to such failed deliveries in the U.S.
Central Command and U.S. Indo-Pacific Command areas of
responsibility in the future.
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Pilot program on the use of acquisition authority
for Office of Naval Research to aid in technology transition
The House bill contained a provision (sec.
831) that would delegate to the Chief of Naval Research
acquisition authority to enter into contracts or other
agreements for the commercialization of a prototype of the
Department of the Navy. The Senate amendment contained no
similar provision. The House recedes.
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Defense industrial base advanced capabilities pilot
program
The House bill contained a
provision (sec. 853) that would establish a public-private
partnership pilot program to accelerate the scaling, production,
and acquisition of advanced capabilities for national security.
The Senate amendment contained a similar provision (sec. 831).
The conference agreement does not include either provision.
Prohibition on computers or printers acquisitions involving
entities owned or controlled by China The House bill contained a
provision (sec. 832) that would prohibit computers or printers
acquisition involving entities controlled by China. The Senate
amendment contained no similar provision. The House recedes. The
conferees note the Inspector General’s audit of cybersecurity
risks in government purchases from 2019 that highlighted certain
purchases of printers and computers from companies that are
owned or controlled by entities in the People’s Republic of
China. The conferees are aware of the Department’s risk-based
approach to information technology, that includes use of the
authorities provided to the Federal Acquisition Security Council
(FASC). However, the conferees remain concerned that all risks
may not have been fully mitigated by the Department, and direct
the Under Secretary of Defense for Acquisition & Sustainment to
brief the congressional defense committees, not later than 60
days after enactment of this Act, on current approaches and
efforts to mitigate risks of acquiring computers and printers
from entities owned or controlled by entities in the People’s
Republic of China and the burden that would be placed on the
Department by prohibiting acquisition of computers and printers
from entities owned or controlled by entities in the People’s
Republic of China.
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Modifications to data, policy, and reporting on the
use of other transactions
The House bill
contained a provision (sec. 833) that would require the
Government Accountability Office to report on the Department of
Defense’s use of other transaction authority contracts. The
Senate amendment contained no similar provision. The House
recedes. The conferees direct the Comptroller General of the
United States to submit to the Committees on Armed Services of
the Senate and the House of Representatives, not later than
February 1, 2025, a report on the use of transactions authorized
under sections 4021 and 4022 of title 10, United States Code,
including: (1) The extent to which such transactions are used in
accordance with policy and guidance related to the use of such
transactions; (2) The total number of transactions for each
fiscal year made to nontraditional defense contractors (as
defined in section 3014 of title 10, United States Code); and
(3) A summary of such transactions to which the Department of
Defense is a participant for which performance has not been
completed on the date of submission of such report, including—
(a) a description of the entity or agency responsible for any
consortium; (b) the number of members in each consortium,
including the percentage of such members who are nontraditional
defense contractors for each such consortium; (c) the total
amount awarded under such transactions to each consortium
manager for fiscal years 2022 and 2023; (d) the total amount
awarded under such transactions to members who are
nontraditional defense contractors for each such consortium for
fiscal years 2022 and 2023; and (e) a list of contractors who
have been awarded more than $20.0 million under such
transactions, including a brief description of each such award,
the number of awards made, and the total dollar amount awarded
for fiscal years 2022 and 2023.
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Analyses of certain activities for action to address
sourcing and industrial capacity
The
Senate amendment contained a provision (sec. 833) that would
require the Secretary of Defense to conduct analysis and provide
recommendations on sourcing restrictions for a number of covered
items. The House bill contained no similar provision. The Senate
recedes.
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Strengthening truthful cost or pricing data
requirements
The House bill contained a
provision (sec. 834) that would amend Section 3702(a)(1) of
title 10, United States Code, by striking ‘‘only expected to
receive one bid shall be required’’ and inserting ‘‘only
expected to have one offeror, or for which award of a
costreimbursement contract is contemplated regardless of the
number of offers received, shall be required’’, and by adding
new exceptions for such requirement. Further, this section would
amend section 3503(a)(2) of title 41, United States Code, by
inserting ‘‘based on adequate price competition that results in
at least two responsive and responsible offers’’ after
‘‘commercial service’’. The Senate amendment contained no
similar provision. The House recedes.
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Pilot program on capital assistance to support
defense investment in the industrial base
The Senate amendment contained a provision (sec. 834) that would
allow the Secretary of Defense to carry out a pilot program
under this section to use certain financial instruments to
support defense investment in the industrial base. The House
bill contained no similar provision. The Senate recedes.
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Requirement to buy certain satellite components from
national technology and industrial base
The Senate amendment contained a provision (sec. 835) that would
require any contract that requires any traveling-wave tubes and
traveling-wave tube amplifier (TWTA) to be included in the
design of U.S. Government satellites used for national security,
defense, or intelligence purposes to be sourced from a
contractor in a country that is a member of the National
Technology and Industrial Base (NTIB). The House bill contained
no similar provision. The Senate recedes. The conferees are
aware that there are concerns with the resilience and robustness
of the defense supply chain, including for space-qualified
systems. In particular, the Department of Defense Industrial
Capabilities Report to Congress 2020 Annual Report called out
119 essential space capabilities with supply chain risks, such
as traveling wave tube amplifiers (TWTA). For that capability in
particular, it was noted that there is a sole domestic supplier
that competes with a single foreign provider that is able to
provide more competitive products and pricing. The report
further notes that ‘‘[h]aving a strong domestic source would
reduce dependence on the foreign source and ensure availability
of [National Security Space] specific TWTAs.’’ The committee
further notes that in some cases these TWTAs are used in
critical hardware used for nuclear command, control, and
communications to ensure the President has direct control of our
nuclear deterrent and for which the supply of U.S. trusted
electronics and parts is essential as well as certain national
security space systems for which a failure could range in
billions of taxpayer dollars and years to recover from.
Therefore, the conferees direct the Under Secretary of Defense
for Acquisition and Sustainment to provide a briefing on the
state of the TWTA industrial base to the congressional defense
committees, not later than June 17, 2024. Such briefing shall
include: (1) Assessment of the current TWTA needs for national
security space programs across the future years defense program
(FYDP), including projected timelines, anticipated quantities,
and identification of sensitive applications where additional
domestic supply sources would be recommended by the Department;
(2) Assessment of the health and viability of the current supply
base for TWTAs, including performance, capacity, and capability
of current suppliers as well as any companies that might be
induced to enter into this market; (3) Identification of supply
chain bottlenecks negatively impacting production lead times or
costs; 4) Identification of policy, regulatory, programmatic,
funding, or other impediments affecting the ability of suppliers
to meet projected production needs identified in (1); (5)
Recommendations for whether development or procurement of
systems with TWTAs should require domestic content, how domestic
sources of supply could be made more competitive, and an
assessment of the estimated cost of implementing domestic
content requirements; and (6) Any suggested legislation that may
be needed to ensure national security space TWTA requirements
can be satisfied in the near-term across the FYDP, as well as in
the longer-term in the 2034-time frame, including legislation
that could bolster domestic production capability and capacity.
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Sense of Congress relating to rubber supply
The House bill contained a provision (sec. 846)
that would express the sense of Congress regarding rubber
supply. The Senate amendment contained a similar provision (sec.
836). The conference agreement does not include either
provision. The conferees encourage the Department of Defense to
lessen dependence on adversarial nations for the procurement of
strategic and critical materials, including natural rubber, as a
stable source for tire manufacturing and production of other
components.
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Inclusion of titanium powder in definition of
specialty metals exempted from certain domestic sourcing
requirements
The House bill contained a
provision (sec. 842) that would add titanium powder in the
definition of specialty metals exempted from certain domestic
sourcing requirements. The Senate amendment contained no similar
provision. The House recedes. The conferees direct the Secretary
of Defense to brief the Committees on Armed Services of the
Senate and the House of Representatives, not later than June 1,
2024, on the Department’s efforts to identify and develop
domestic or otherwise secure sources of supply for titanium
powder for use in defense supply chains.
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Modification to miscellaneous limitations on the
procurement of goods other than United States goods
The House bill contained a provision (sec. 844)
that would require propulsion system components and power
generation systems to be procured and manufactured within the
National Technology Industrial Base. The Senate amendment
contained no similar provision. The House recedes.
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Timely payments for Department of Defense small
business subcontractors
The Senate
amendment contained a provision (sec. 844) that would improve
the timeliness of payments made to Department of Defense small
business subcontractors. The House bill contained no similar
provision. The Senate recedes.
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Procurement of covered hearing protection devices
The House bill contained a provision (sec.
845) that would allow the Secretary of Defense, in coordination
with the head of the Hearing Center of Excellence, to enter into
one or more contracts to procure covered hearing protection
devices for all members of the Armed Forces. The Senate
amendment contained no similar provision. The House recedes. The
conferees note of the importance of identifying and making
available hearing protection devices for the Department of
Defense community. The conferees are aware of
commercially-available active hearing protection devices that
have the potential to prevent hearing injury while allowing
servicemembers to remain cognizant of their operational
environment; benefit from improved overall situational
awareness; and increase mission effectiveness, safety, and
survivability. Further, the conferees have been informed that
the Army Program Executive Office (PEO) Soldier is the lead
office for the procurement and testing of these devices, and has
recently acquired some available systems for testing and
evaluation. The conferees are aware that such testing is
anticipated to begin in the second quarter of fiscal year 2024.
The conferees look forward to receiving the results of such
testing from the Army in order to better understand the
suitability of these devices for issuance to servicemembers that
may benefit from increased protection from hazardous and
operational noise.
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Extension of pilot program for streamlined
technology transition from the SBIR and STTR programs of the
Department of Defense
The Senate amendment
contained a provision (sec. 845) that would extend a pilot
program to support the transition of technologies developed
through the Small Business Innovation Research and Small
Business Technology Transfer programs to production. The House
bill contained no similar provision. The Senate recedes.
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Pilot program for recurring awards for production,
investment, and deployment through competitions
The House bill contained a provision (sec. 851) that would
establish a pilot program to acquire, through repeated
competition, attritable systems that solve urgent operational
needs in order to incentivize sustainable production, rapid
deployment, and iterative improvements. The Senate amendment
contained no similar provision. The House recedes.
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Amendments to contracting authority for certain
small business concerns
The Senate
amendment contained a provision (sec. 852) that would amend
contracts for socially and economically disadvantaged small
businesses, certain small businesses owned and controlled by
women, HUBZone small businesses, and small businesses owned and
controlled by service-disabled veterans. The House bill
contained no similar provision. The Senate recedes.
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Limitation on the availability of funds pending a
plan for implementing the replacement for the Selection
Acquisition Reporting system
The Senate
amendment contained a provision (sec. 861) that would limit the
use of travel funds for the Office of the Under Secretary of
Defense for Acquisition and Sustainment until that office
provides a plan for how it intends to implement the requirements
of section 809 of the James M. Inhofe National Defense
Authorization Act for Fiscal Year 2023 (Public Law 117–263) for
a replacement for the Selected Acquisition Reporting system. The
House bill contained no similar provision. The Senate recedes.
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Use of Industrial Base Fund for support for the
workforce for large surface combatants
The
House bill contained a provision (sec. 862) that would modify
the use of the Industrial Base Fund to include supporting the
large surface combatant industrial base. The Senate amendment
contained no similar provision. The House recedes. The conferees
note the effective use of the Industrial Base Analysis and
Sustainment (IBAS) program to support the submarine industrial
base. Given the importance of the shipbuilding industrial base
as a whole, the Department of Defense should find ways to expand
this model to support surface combatant production, as well as
submarines.
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Redesignation of Industrial Base Fund as Industrial
Base and Operational Infrastructure Fund; additional uses
The House bill contained a provision (sec. 863)
that would redefine and expand the purposes of the Industrial
Base Analysis and Sustainment Fund. The Senate amendment
contained no similar provision. The House recedes. The conferees
note the effective use of the Industrial Base Analysis and
Sustainment (IBAS) program to support critical industries and
supply chains within the defense industrial base. The conferees
encourage the Department of Defense to expand the use of IBAS,
where appropriate, to protect and develop domestic production of
key supply chains.
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Modification to procurement requirements relating to
rare earth elements and strategic and critical materials
The House bill contained a provision (sec.
865) that would modify procurement requirements relating to rare
earth elements and strategic and critical materials. The Senate
amendment contained no similar provision. The House recedes.
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Enhanced domestic content requirement for navy
shipbuilding programs
The Senate amendment
contained a provision (sec. 866) that would include additional
restrictions on purchasing non-domestic components for Navy
shipbuilding programs. The House bill contained no similar
provision. The Senate recedes.
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Addition of Administrator of the Small Business
Administration to the Federal Acquisition Regulatory Council
The Senate amendment contained a provision
(sec. 867) that would amend section 1302(b)(1) of title 41,
United States Code, by adding a new subparagraph to include the
Small Business Administration as a representative on the Federal
Acquisition Regulation Council. The House bill contained no
similar provision. The Senate recedes.
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Study and report on country of origin of end items
and components procured by Department of Defense
The House bill contained a provision (sec. 868) that
would require a study and report by the Comptroller General of
the United States to identify the degree to which the Department
of Defense is dependent on entities located in foreign countries
for the procurement of certain end items and components. The
Senate amendment contained no similar provision. The House
recedes. The conferees note that the assurance of supply chains
for critical components and items is essential for our national
security. Therefore, the conferees direct the Comptroller
General of the United States to provide a briefing to the
Committees on Armed Services of the Senate and the House of
Representatives, not later than March 31, 2024, on the degree to
which the Department of Defense is dependent on entities located
in foreign countries for the procurement of certain end items
and components. The briefing shall include: (1) A description of
the extent to which the procurement processes of the Department
of Defense allow for the determination of the country of origin
of the end items and components; (2) Descriptions of the
vulnerabilities in the supply chains for end items and
components and the countries from which such end items and
components are procured; and (3) Recommendations for legislative
or administrative action to address any identified supply chain,
including plans for alternative supply chains or alternative
countries from which to procure end items and components.
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Modifications to rights in technical data
The Senate amendment contained a provision
(sec. 868) that would modify rights in technical data. The House
bill contained no similar provision. The Senate recedes. The
conferees note intellectual property (IP), including technical
data rights and rights to computer software, is critically
important to the Department of Defense’s ability to modernize
capabilities and maintain technological superiority. As weapons
systems are increasingly reliant on rapidly evolving
technologies, commercial components, and software content,
acquiring and licensing the appropriate IP is vital to ensuring
that weapons systems and equipment remain functional,
sustainable, and affordable over the system’s lifecycle. IP and
technical data rights are also important to industry to protect
companies’ corporate assets from disclosure or misuse. However,
the Department of Defense has unique IP needs due to combat
logistics that includes battle damage repair and point of use
manufacturing. The conferees note the importance of the
Comptroller General study on requirements for data rights
required by the Senate report accompanying S. 2226 (S. Rept.
118– 58) to help clarifying these concerns. In addition to the
elements specified in that report, the conferees direct the
Comptroller General to also assess: (1) How the Department of
Defense determines what are considered ‘‘core’’ logistics
capabilities under section 2464 of Title 10, United States Code;
(2) Depot source of repair activations and whether data rights
requirements or data ordering contributed to significant
challenges; and (3) The level of variation found in contracts
for the same or similar mission systems or subsystems fielded on
separate weapon platforms, including requirements approaches,
data ordering, and validation of data delivery. Furthermore, the
conferees direct that this mandated review in the Senate report
shall also be addressed to the House Armed Services Committee
and include the additional elements specified above.
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Report on competition and equipment repair
The House bill contained a provision (sec. 870)
that would require the Secretary of Defense to provide a report
on a plan for avoiding contract terms in procurement agreements
that make it challenging for the Department of Defense to repair
equipment. The Senate amendment contained no similar provision.
The House recedes.
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Report on the United States defense and
technological industrial base
The House
bill contained a provision (sec. 871) that would require the
Secretary of Defense to report on the ability of the defense and
technological industrial base to meet the requirements for air
and missile defense within the area of responsibility of the
U.S. Central Command. The Senate amendment contained no similar
provision. The House recedes. The conferees note the importance
of air and missile defense capabilities as highlighted in both
Ukraine and Israel. Therefore, the conferees direct the
Secretary of Defense to provide a briefing to the Committees on
Armed Services of the Senate and the House of Representatives,
not later than March 1, 2024, on the ability of the industrial
base to meet the growing demand for air and missile defense
systems. The briefing shall include: (1) An assessment of the
extent to which the inefficiencies and inadequacies of the
defense and technological industrial base impede the timely
production and delivery of air and missile defense components to
the allies and partners of the United States; (2) An assessment
of the ongoing efforts of the Department of Defense to remedy
inefficiencies and inadequacies described in paragraph (1); and
(3) A strategy for addressing the inefficiencies or inadequacies
described in paragraph (1), including an evaluation of the
benefits of procuring the components from, and industrial
cooperation with, allies and partners of the United States. The
briefing shall be in an unclassified form but may contain a
classified annex.
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Report on defense industrial base competition
The House bill contained a provision (sec.
873) that would require the Government Accountability Office to
report on consolidation and competition within the defense
industrial base. The Senate amendment contained no similar
provision. The House recedes. The conferees are aware that
consolidation within the defense industrial base is causing
significant impacts on competition and the ability of the
Department of Defense to monitor and oversee the dynamics within
the industrial base. A report from the Government Accountability
Office titled ‘‘Defense Industrial Base: DOD Needs Better
Insight into Risks from Mergers and Acquisitions (GAO–24–106129,
dated October 17, 2023) highlighted many of the problems. In
particular, this report pointed out, ‘‘Most DOD assessments are
initiated in response to antitrust reviews of large M&A [mergers
and acquisitions] valued over a certain dollar threshold,
currently $111.4 million. Therefore, Industrial Base Policy’s
M&A office and DOD stakeholders focus on evaluating competition
risks in their M&A assessments. While DOD policy directs
Industrial Base Policy and DOD stakeholders to assess other
types of risks, such as national security and innovation risks,
they have not routinely done so. Moreover, DOD policy does not
provide clear direction about which M&A DOD should prioritize
for assessment, beyond those conducted in response to antitrust
reviews. DOD officials noted that the M&A office—which is
comprised of two to three staff—does not have the staff
resources to initiate more assessments of smaller M&A that may
also present risks . . . GAO found that DOD policy does not
require Industrial Base Policy and DOD stakeholders to conduct
monitoring. As a result, they cannot determine if risks occurred
and whether further action is needed to mitigate them.’’ As a
result, in the Senate report accompanying S. 2226 (S. Rept.
118–58), the Senate Armed Services Committee (SASC) directed the
Assistant Secretary of Defense for Industrial Base Policy to
develop a M&A impact model to provide an analytical framework
for comprehensively assessing the defense M&A environment. In
developing this M&A impact model, the SASC also directed the
Department to include the following considerations: (1) The
competition goals the Department should pursue, linked to the
tools the Department currently has to enhance competition, and
what elements of M&A decision making would be most beneficial to
link goals to those elements; (2) The levers the Department has
to achieve its strategic objectives, including an assessment of
the resources needed for the workforce to meet those objectives;
(3) The data sources, internal to the DOD and available
commercially, academically or publicly, that should be leveraged
for decision making; and (4) Recommendations for how the
Department should assess the impacts of consolidation below the
statutory thresholds to better understand the long-term effect
on innovation and the supply base. The conferees direct that
such briefing in response to this requirement should also be
provided to the House Armed Services Committee. Furthermore, the
conferees direct the Comptroller General of the United States to
assess the framework being developed by the Department and
provide a briefing on the results of that assessment to the
Committees on Armed Services of the Senate and the House of
Representatives not later than 1 year after the enactment of
this Act.
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Entrepreneurial Innovation Project designations
The House bill contained a provision (sec.
881) that would require the Secretary of each military
department to identify promising research programs of the Small
Business Innovation Research Program or Small Business
Technology Transfer Program for inclusion in the future budgets
and plans of the Department of Defense. The Senate amendment
contained no similar provision. The House recedes. The conferees
note that a similar pilot program as proposed in section 881 was
established for the intelligence community in section 6716 of
the James M. Inhofe National Defense Authorization Act for
Fiscal Year 2023 (Public Law 117–263). The conferees believe
that before expanding that program to other agencies, it is
important to understand the results and potential effectiveness
of the current pilot program.
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Extension and modification of domestic investment
pilot program
The House bill contained a
provision (sec. 882) that would extend the domestic investment
pilot program under the Small Business Innovation Research
program until September 30, 2027. The Senate amendment contained
no similar provision. The House recedes.
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Study and report on the expansion of the Strategic
Funding Increase program of the Air Force
The House bill contained a provision (sec. 883) that would
require the Army, Navy, and Marine Corps to jointly provide a
report on the feasibility of establishing a program similar to
the Air Force’s Strategic Funding Increase (STRATFI) program.
The Senate amendment contained no similar provision. The House
recedes. The conferees note the success of Air Force Venture’s
STRATFI program in maturing technologies from the Small Business
Innovation Research (SBIR) and Small Business Technology
Transfer (STTR) programs and believe there could be value in
scaling this type of program across the services. The conferees
are concerned, however, that the SBIR/STTR programs of the Army,
Navy, and Marine Corps might not have the capital needed to
successfully execute and sustain such a program. Therefore, the
conferees direct the Service Acquisition Executives to
individually provide a briefing to the Committees on Armed
Services of the Senate and the House of Representatives, not
later than June 1, 2024, outlining the impact that establishing
a program like the Air Force STRATFI program would have on each
respective service’s SBIR/STTR program. The briefing should
include, but not be limited to: (1) The level of funding
required to successfully execute and sustain such a program, (2)
Any impact that such a program would have on the number of
SBIR/STTR awards that could be made by the services, (3) Any
analogous programs that currently exist within the services, and
(4) Any positive or negative impacts such a program would have
on the functioning of the services’ SBIR/STTR program, including
impact on timelines to make awards.
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Report on the Air Force First Look Program and the
Army First Stop Program
The House bill
contained a provision (sec. 885) that would require the
Secretary of Defense to submit a report analyzing the
initiatives of the Air Force First Look Program and the Army
First Stop Program. The Senate amendment contained no similar
provision. The House recedes. The conferees direct the Secretary
of Defense to provide a briefing to the Committees on Armed
Services of the Senate and the House of Representatives, not
later than March 1, 2024, on the Air Force First Look Program
and the Army First Stop Program. Such a briefing shall include:
(1) An analysis of the objectives of and results achieved by the
Air Force First Look Program and the Army First Stop Program;
(2) A description of criteria for participation in such
programs, including a description of contracts or other
agreements relating to such participation; and (3) An analysis
of the costs and benefits of participation in such programs for
all relevant parties.
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Modification to pilot program to accelerate
Department of Defense SBIR and STTR awards
The House bill contained a provision (sec. 886) that would
require each Secretary of a military department to establish a
pilot program to reduce the time for awards under the Small
Business Innovation Research and Small Business Technology
Transfer programs. The Senate amendment contained no similar
provision. The House recedes.
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Briefing on the implementation of category
management memorandum
The House bill
contained a provision (sec. 887) that would require the Under
Secretary of Defense for Acquisition and Sustainment and the
Director of the Office of Small Business Programs of the
Department of Defense to provide a briefing on the
implementation of the memorandum entitled ‘‘Achieving Small
Business Goals through Category Management Practices.’’ The
Senate amendment contained no similar provision. The House
recedes. The conferees direct the Under Secretary of Defense for
Acquisition and Sustainment and the Director of the Office of
Small Business Programs of the Department of Defense to provide
a briefing, not later than June 1, 2024, to the Committees on
Armed Services of the Senate and the House of Representatives on
the implementation of the memorandum by the Under Secretary of
Defense for Acquisition and Sustainment entitled Achieving Small
Business Goals through Category Management Practices’’ and dated
January 27, 2023. The briefing shall include the following: (1)
The effects of the implementation of the memorandum on
contracting opportunities for small businesses; (2) The tools
and data analysis that are being used to support small business
concerns in procurement decisions to increase small business
opportunities; (3) The strategic efforts that have been taken to
achieve the small business participation goals of the Department
of Defense through the use of existing and open market contracts
to reach a mix of new entrants, seasoned 8(a) companies, and
other small disadvantaged businesses; (4) The opportunities that
have been identified to transition from bundled or consolidated
contracts without small business participation to contracts with
small business participation or to use small business set-aside
competition; (5) The metrics the Department of Defense has
established to measure the effects of the implementation of the
category management memorandum on opportunities for small
businesses to contract with the Department; (6) The success
stories of small business participation with the Department of
Defense that the Department has identified and is sharing in
industry engagements; (7) The sufficiency of the educational
resources identified in the category management memorandum; and
(8) Any recommendations on additional steps the Department of
Defense can take to maximize small business participation with
the Department through category management practices.
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Pilot program on the use of budget transfer
authority for Army research to aid in technology transition
The House bill contained a provision (sec. 892)
that would create a pilot program to allow the Army to use
acquisition authority to aid in the transition of technology
from the science and technology ecosystem to acquisition
activities and operational use. The Senate amendment contained
no similar provision. The House recedes. Seaplane procurement
and employment The House bill contained a provision (sec. 893)
that would require an analysis by the Secretary of Defense, not
later than 270 days after the date of the enactment of this Act,
on the feasibility and utility of the Department of Defense
procuring seaplanes and amphibious aircraft. The Senate
amendment contained no similar provision. The House recedes. The
conferees agree to direct the Secretary of Defense, not later
than 270 days after the date of the enactment of this Act, to
provide an analysis to the Committees on Armed Services of the
Senate and the House of Representatives on the feasibility and
utility of the Department of Defense procuring seaplanes and
amphibious aircraft.
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Limitation on availability of funds relating to
contracts with contract managers and auditors
The House bill contained a provision (sec. 894) that would
require the Secretary of Defense to annually review the value of
contracts entered into with contract managers and auditors for
the purpose of managing contracts of the Department of Defense
for a specified fiscal year. The Senate amendment contained no
similar provision. The House recedes.
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Inspector General report on Department of Defense
acquisition and contract administration
The House bill contained a provision (sec. 895) that would
require an Inspector General of the Department of Defense report
on Department-wide acquisitions and contract management,
including cost, price, and profit data. The Senate amendment
contained no similar provision. The House recedes. The conferees
note the importance of the Department of Defense’s ability to
obtain fair and reasonable costs in contracting. Therefore, not
later than March 31, 2024, the Inspector General of the
Department of Defense shall submit to the Committees on Armed
Services of the Senate and the House of Representatives a
briefing on the status and findings of the oversight, reviews,
audits, and inspections the Inspector General has conducted
regarding Department-wide acquisitions and contract management,
including: (1) Findings regarding the effectiveness of the
Department in obtaining the best value for the lowest reasonable
costs when acquiring goods and services, including by reducing
contract costs and ensuring that the profit of contractors for
the provision of such goods and services is reasonable; (2) An
assessment of allowable, allocable, and reasonable costs and
pricing for contracts; (3) The authorities and resources for
contracting officers of the Department to obtain certified cost
and pricing data from contractors of the Department; and (4) The
authorities and resources of the Comptroller of the Department
of Defense, the Office of Defense Pricing and Contracting, the
Defense Contract Audit Agency, and the Defense Contract
Management Agency to determine allowable, allocable, and
reasonable costs and pricing for contracts.
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Study on the electric vehicle supply chain
The House bill contained a provision (sec. 896)
that would require the Secretary of Defense to conduct a study
on the effects on the national security of the United States
from the influence of the People’s Republic of China on the
electric vehicle supply chain. The Senate amendment contained no
similar provision. The House recedes. The conferees direct the
Secretary of Defense, in consultation with the relevant Federal
agencies, to brief the Committees on Armed Services of the
Senate and the House of Representatives, not later than June 1,
2024, on the impacts to Department of Defense readiness
regarding the influence of the People’s Republic of China on the
electric vehicle supply chain. The briefing shall include: (1)
An evaluation of the percentage of critical minerals and rare
earths sourced from China that are necessary for construction of
electric vehicles in the United States; (2) A list of countries
that contribute to the electric vehicle supply chain of the
United States and that are members of China’s Belt and Road
Initiative or any subsequent economic agreement; and (3)
Potential vulnerabilities posed by an increased use of electric
vehicles by the vehicle fleet of the Department of Defense.
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Joint light tactical vehicle funding increase
The House bill contained a provision (sec.
897) that would au- thorize to be appropriated an additional
$15.0 million for Army and Marine Corps procurement of vehicle
safety data recorders with predictive logistics for weapons and
vehicles and make offsetting reductions for administration and
service-wide activities for the Office of the Secretary of
Defense. The Senate amendment contained no similar provision.
The House recedes. The specific authorization of appropriations
amounts can be found in the funding tables.
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Report on gallium and germanium
The House bill contained a provision (sec. 898) that would
require the Secretary of Defense to submit a report on gallium
and germanium. The Senate amendment contained no similar
provision. The House recedes. The conferees direct the Secretary
of Defense to conduct an analysis regarding gallium and
germanium, to include consultation with domestic producers of
gallium and germanium, with respect to changes in supply chain
dynamics, including production capabilities and capacities,
given the recent actions by the People’s Republic of China. The
analysis shall include an updated assessment of any shortfalls
in the supply of gallium and germanium of the United States due
to such decision and an update from the head of the Office of
Manufacturing Capability Expansion and Investment Prioritization
of the Department of Defense on the priority of projects
involving gallium and germanium, as informed by any projections
and changes in the supply of gallium and germanium as it relates
to national security requirements. The Secretary of Defense
shall brief the Committees on Armed Services of the Senateand
the House of Representatives, not later than June 1, 2024, on
the results of this analysis.
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Assessment of supply chain constraints impacting the
defense industrial base and foreign military sales
The House bill contained a provision (sec. 899)
that would require the Secretary of Defense to conduct an
assessment on constraints and threats to the supply chain of
Department of Defense contractors and subcontractors to produce
any defense article for use by the Department of Defense or that
is the subject of a foreign military sale and provide a report
on such assessment. The Senate amendment contained no similar
provision. The House recedes. The conferees direct the Secretary
of Defense to submit to the Committees on Armed Services of the
Senate and the House of Representatives a report, not later than
June 1, 2024, on the constraints and threats to the supply
chains to produce any defense articles that are the subject of
Foreign Military Sales.
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Sense of Congress regarding explosion welding
The House bill contained a provision (sec.
899A) that would express the sense of Congress regarding
explosion welding. The Senate amendment contained no similar
provision. The House recedes. The conferees note that explosion
welding is a critical capability for ensuring the national
security of the United States and its allies. A limited number
of domestic companies produce explosion welded alloys that
satisfy Department of Defense requirements. If domestic sources
fail, it could create a supply chain vulnerability. As such, the
Department should take appropriate steps to ensure that the
United States has a reliable and secure source for explosion
welding to support military needs.
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Prohibition on contracting with certain entities
The House bill contained a provision (sec.
899C) that would prohibit the Department of Defense from
entering into, renewing, or extending a contract for the
procurement of goods or services with an entity that is engaged
in a boycott of the State of Israel. The Senate amendment
contained no similar provision. The House recedes.
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Competition of small business concerns for
Department of Defense contracts
The Senate
amendment contained a provision (sec. 5841) that would require
the Secretary of Defense, not later than 180 days after the date
of the enactment of this Act, to issue guidance ensuring that
covered small businesses are better able to compete for
Department of Defense contracts. The House bill contained no
similar provision. The Senate recedes.
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Briefing on the redesignation of National Stock
Number parts as proprietary
The Senate
amendment contained a provision (sec. 5851) that would require
the Secretary of Defense to provide a briefing identifying which
National Stock Number parts in the Defense Logistics Agency
system have had their designation changed to proprietary over
the previous 5 years. The House bill contained no similar
provision. The Senate recedes. The conferees direct the
Secretary of Defense to provide a briefing to the congressional
defense committees, not later than March 1, 2024, identifying
which National Stock Number parts in the Defense Logistics
Agency system have had their designation changed to proprietary
over the previous 5 years, including a description of which
parts were, or continue to be, produced by small businesses
before the proprietary designation was applied, and the
justification for the changes in designation.
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