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

House Conference Report 109-360

SEC. 803. REQUIREMENT FOR DETERMINATION BY SECRETARY OF DEFENSE AND NOTIFICATION TO CONGRESS BEFORE PROCUREMENT OF MAJOR WEAPON SYSTEMS AS COMMERCIAL ITEMS.

(a) Requirement for Determination and Notification-

(1) IN GENERAL- Chapter 140 of title 10, United States Code, is amended by adding at the end the following new section:

`Sec. 2379. Requirement for determination by Secretary of Defense and notification to Congress before procurement of major weapon systems as commercial items

`(a) Requirement for Determination and Notification- A major weapon system of the Department of Defense may be treated as a commercial item, or purchased under procedures established for the procurement of commercial items, only if--

`(1) the Secretary of Defense determines that--

`(A) the major weapon system is a commercial item, as defined in section 4(12) of the Office of Federal Procurement Policy Act (41 U.S.C. 403(12)); and

`(B) such treatment is necessary to meet national security objectives; and

`(2) the congressional defense committees are notified at least 30 days before such treatment or purchase occurs.

`(b) Treatment of Subsystems and Components as Commercial Items- A subsystem or component of a major weapon system shall be treated as a commercial item and purchased under procedures established for the procurement of commercial items if such subsystem or component otherwise meets the requirements (other than requirements under subsection (a)) for treatment as a commercial item.

`(c) Delegation- The authority of the Secretary of Defense to make a determination under subsection (a) may be delegated only to the Deputy Secretary of Defense, without further redelegation.

`(d) Major Weapon System Defined- In this section, the term `major weapon system' means a weapon system acquired pursuant to a major defense acquisition program (as that term is defined in section 2430 of this title).'.

(2) CLERICAL AMENDMENT- The table of sections at the beginning of chapter 140 of such title is amended by adding at the end the following new item:

`2379. Requirement for determination by Secretary of Defense and notification to Congress before procurement of major weapon systems as commercial items.'.

(b) Effective Date- The amendments made by subsection (a) shall take effect on the date of the enactment of this Act, and shall apply to contracts entered into on or after such date.

The Senate amendment contained a provision (sec. 804) that would prohibit the purchase of a major weapon system as a commercial item unless such purchase is specifically authorized by Congress.

The House bill contained no similar provision.

The House recedes with an amendment that would require the Secretary of Defense, prior to any major weapon system being purchased under procedures established for the procurement of commercial items, to: (1) determine that a weapon system meets the definition of a commercial item; (2) determine that it is necessary to meet national security objectives to purchase such weapon system as a commercial item; and (3) notify congressional defense committees at least 30 days prior to the purchase or the treatment of the major weapon system as a commercial item.

Senate Report 109-69

The committee recommends a provision that would prohibit the purchase of a major weapon system as a commercial item unless such purchase is specifically authorized by Congress.

A recent series of hearings held by the Subcommittee on AirLand of the Committee on Armed Services has highlighted continuing problems resulting from `commercial item strategies' pursued by the Department of Defense over the last decade. Under this approach, the Department has attempted to acquire major weapon systems under streamlined procedures intended for the purchase of commercial items. Such streamlined procedures do not require application of the Truth in Negotiations Act, the Cost Accounting Standards, and other requirements that are otherwise applicable to the acquisition of major weapon systems.

The provision would ensure that acquisition procedures authorized for the acquisition of commercial items are used for true commercial items and not for the purchase of major weapon systems.