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P. L. 109-

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

LEGISLATIVE PROVISIONS NOT ADOPTED

House and Senate Bill Sections Not Enacted

House Conference Report 109-360

SEC. 811. APPLICABILITY OF STATUTORY EXECUTIVE COMPENSATION CAP MADE PROSPECTIVE.

(a) Prospective Applicability of Executive Compensation Cap- Section 808(e)(2) of Public Law 105-85 (41 U.S.C. 435 note; 111 Stat. 1838) is amended by striking `before, on,' and inserting `on'.

(b) Effective Date- The amendment made by subsection (a) shall apply as if included in Public Law 105-85 as enacted.

The House bill contained a provision (sec. 811) that would address the applicability of the executive compensation cap in section 808 of the National Defense Authorization Act for Fiscal Year 1998 (Public Law 105-85).

The Senate amendment contained no similar provision.

The House recedes.

SEC. 818. BUY AMERICAN REQUIREMENT FOR PROCUREMENTS OF GOODS CONTAINING COMPONENTS.

(a) Requirement- Notwithstanding any agreement described in subsection (b), with respect to any manufactured end product procured by the Department of Defense--

(1) the end product shall be manufactured in the United States; and

(2) the cost of components of the end product that are mined, produced, or manufactured inside the United States shall exceed 50 percent of the cost of all components of the end product.

(b) Agreement Described- An agreement referred to in subsection (a) is any reciprocal defense procurement memorandum of understanding between the United States and a foreign country pursuant to which the Secretary of Defense has prospectively waived the Buy American Act (41 U.S.C. 10a et seq.) for certain products in that country.

The Senate amendment contained no similar provision.

The House recedes.

SEC. 843. CLARIFICATION OF RAPID ACQUISITION AUTHORITY TO RESPOND TO COMBAT EMERGENCIES.

(a) SCOPE OF AUTHORITY- Subsection (c) of section 806 of the Bob Stump National Defense Authorization Act for Fiscal Year 2003 (10 U.S.C. 2302 note) is amended--

(1) by striking `combat capability' each place it appears; and

(2) by striking `fatalities' each place it appears and inserting `casualties'.

(b) DELEGATION OF AUTHORITY- Such subsection is further amended in paragraph (1) by inserting `below the Deputy Secretary of Defense' after `delegation'.

(c) WAIVER AUTHORITY- Subsection (d)(1) of such section is further amended--

(1) in subparagraph (B), by striking `or';

(2) in subparagraph (C), by striking the period and inserting `; or'; and

(3) by adding at the end the following new subparagraph:

`(D) domestic source or content restrictions that would inhibit or impede the rapid acquisition of the equipment.'.

The Senate amendment contained a provision (sec. 843) that would amend section 806 of the Bob Stump National Defense Authorization Act for Fiscal Year 2003 (Public Law 107-314) to give the Department of Defense greater flexibility to address combat emergencies.

The House bill contained no similar provision.

The Senate recedes.

The conferees note that the Senate provision adding a new category of statutes and regulations that are waivable to prevent combat fatalities was not necessary, because the Department may already waive any provision of law, policy, directive, or regulation addressing the solicitation and selection of sources pursuant to the authority in section 811 of the Ronald W. Reagan National Defense Authorization Act for Fiscal Year 2005 (Public Law 108-375) for the procurement of equipment urgently needed to eliminate a combat deficiency that has resulted in combat fatalities.

SEC. 812. CONDITIONAL WAIVER OF DOMESTIC SOURCE OR CONTENT REQUIREMENTS FOR CERTAIN COUNTRIES WITH RECIPROCAL DEFENSE PROCUREMENT AGREEMENTS WITH THE UNITED STATES.

(a) AUTHORITY FOR ANNUAL WAIVER- Subchapter V of chapter 148 of title 10, United States Code, is amended by adding at the end the following new section:

`Sec. 2539c. Domestic source or content requirements: one-year waiver for certain countries with reciprocal defense procurement agreements with the United States

`(a) WAIVER AUTHORITY- Subject to subsection (g), upon making a determination under subsection (b) that a foreign country described by that subsection has not qualitatively or quantitatively increased exports of defense items, as determined by the Secretary of Defense for purposes of this section, to the People's Republic of China during the fiscal year in which such determination is made, the Secretary of Defense may waive the application of any domestic source requirement or domestic content requirement referred to in subsection (c) and thereby authorize the procurement of items that are grown, reprocessed, reused, produced, or manufactured in such foreign country during the fiscal year following the fiscal year in which such determination is made.

`(b) ANNUAL DETERMINATIONS- Not later than September 30 each fiscal year, the Secretary of Defense may determine whether or not a foreign country with which the United States had in force during such fiscal year a reciprocal defense procurement memorandum of understanding or agreement qualitatively or quantitatively increased exports of defense items to the People's Republic of China during such fiscal year. Each such determination shall be in writing.

`(c) COVERED REQUIREMENTS- For purposes of this section:

`(1) A domestic source requirement is any requirement under law that the Department of Defense satisfy its requirements for an item by procuring an item that is grown, reprocessed, reused, produced, or manufactured in the United States or by a manufacturer that is a part of the national technology and industrial base (as defined in section 2500(1) of this title).

`(2) A domestic content requirement is any requirement under law that the Department of Defense satisfy its requirements for an item by procuring an item produced or manufactured partly or wholly from components and materials grown, reprocessed, reused, produced, or manufactured in the United States.

`(d) EFFECTIVE PERIOD OF WAIVER- Any waiver of the application of any domestic source requirement or domestic content with respect to a foreign country under subsection (a) shall be effective only for the fiscal year following the fiscal year in which is made the determination on which such waiver is based.

`(e) LIMITATION ON DELEGATION- The authority of the Secretary of Defense to waive the application of domestic source or content requirements under subsection (a) may not be delegated to any officer or employee other than the Deputy Secretary of Defense or the Under Secretary of Defense for Acquisition, Technology, and Logistics.

`(f) CONSULTATIONS- The Secretary of Defense may grant a waiver of the application of a domestic source or content requirement under subsection (a) only after consultation with the United States Trade Representative, the Secretary of Commerce, and the Secretary of State.

`(g) LAWS NOT WAIVABLE- The Secretary of Defense may not exercise the authority under subsection (a) to waive any domestic source or content requirement contained in any of the following laws:

`(1) The Small Business Act (15 U.S.C. 631 et seq.).

`(2) The Javits-Wagner-O'Day Act (41 U.S.C. 46 et seq.).

`(3) Section 2533a of this title.

`(4) Sections 7309 and 7310 of this title.

`(h) RELATIONSHIP TO OTHER WAIVER AUTHORITY- The authority under subsection (a) to waive a domestic source requirement or domestic content requirement is in addition to any other authority to waive such requirement.

`(i) CLARIFICATION OF RELATIONSHIP WITH BUY AMERICAN ACT- Nothing in this section shall be construed to alter in any way the applicability of the Buy American Act (41 U.S.C. 10a), or the authority of the Secretary of Defense to waive the requirements of such Act, with respect to the procurement of any item to which such Act would apply without regard to this section.

`(j) CONSTRUCTION WITH RESPECT TO LATER ENACTED LAWS- This section may not be construed as being inapplicable to a domestic source requirement or domestic content requirement that is set forth in a law enacted after the enactment of this section solely on the basis of the later enactment of such law.'.

(b) CLERICAL AMENDMENT- The table of sections at the beginning of subchapter V of such chapter is amended by adding at the end the following new item:

`2539c. Domestic source or content requirements: one-year waiver for certain countries with reciprocal defense procurement agreements with the United States.'.

The Senate amendment contained a provision (sec. 812) that would authorize the Secretary of Defense to annually determine whether a foreign country with a reciprocal defense procurement Memorandum of Understanding or agreement with the United States has qualitatively or quantitatively increased defense exports to China. If it is determined that no qualitative or quantitative increase has occurred in the previous year, the Secretary may on an annual basis waive the application of statutory domestic source requirements and domestic content requirements, provided that: (1) the application of the requirements would impede the reciprocal procurement of defense items under a Memorandum of Understanding between the United States and another country; and (2) the other country does not discriminate against items produced in the United States to a greater degree than the United States discriminates against items produced in that country.

The House bill contained no similar provision.

The Senate recedes.

SEC. 813. CONSISTENCY WITH UNITED STATES OBLIGATIONS UNDER TRADE AGREEMENTS.

No provision of this Act or any amendment made by this Act shall apply to a procurement by or for the Department of Defense to the extent that the Secretary of Defense, in consultation with the Secretary of Commerce, the United States Trade Representative, and the Secretary of State, determines that it is inconsistent with United States obligations under a trade agreement.

The Senate amendment contained a provision (sec. 813) that would require that no provision of this Act, or any amendment made by this Act, shall apply if the Secretary of Defense, in consultation with the Secretary of Commerce, the U.S. Trade Representative, and the Secretary of State, determines that the application of the provision would be inconsistent with international trade agreements of the United States.

The House bill contained no similar provision.

The Senate recedes.

SEC. 857. CONTRACTING INCENTIVE FOR SMALL POWER PLANTS ON FORMER MILITARY BASES.

(a) Authorization- Notwithstanding the limitation in section 501(b)(1)(B) of title 40, United States Code, the Administrator of the General Services Administration is authorized to contract for public utility services for a period of not more than 20 years, provided that such services are electricity services procured from a small power plant located on a qualified HUBZone base closure area.

(b) Definition of Small Power Plant- In this section, the term small power plant includes any power facility or project with electrical output of not more than 60 megawatts.

(c) Definition of Public Utility Electric Services- In this section, the term `public utility services', with respect to electricity services, includes electricity supplies and services, including transmission, generation, distribution, and other services directly used in providing electricity.

(d) Definition of HUBZone Base Closure Area- In this section, the term `HUBZone base closure area' has the same meaning as such term is defined in section 3(p)(4)(D) the Small Business Act, 15 U.S.C. 632(p)(4)(D).

(e) Applicability of Other Provisions of Law- Contracting pursuant to this section shall be subject to all other laws and regulations applicable to contracting for public utility services.

The Senate amendment contained a provision (sec. 857) that would extend the authorized period for contract for certain public utility services from 10 years to 20 years, provided that such services are procured from a small power plant located on a qualified HUBZone base closure area.

The House bill contained no similar provision.

The Senate recedes.

Sec. 1601. Short title.

Sec. 1602. Findings.

Sec. 1603. Definitions.

Sec. 1604. Requirements for commanders of combatant commands relating to contractors accompanying and not accompanying the force.

Sec. 1605. Requirements for contractors relating to possession of weapons.

Sec. 1606. Battlefield accountability.

SEC. 1601. SHORT TITLE.

This title may be cited as the `Contractors on the Battlefield Regulatory Act'.

SEC. 1602. FINDINGS.

Congress finds the following:

(1) Contract personnel have provided invaluable services in support of combat, humanitarian, peacekeeping, and reconstruction operations worldwide, and they should be recognized for their contributions, including in some instances the loss of their lives, in support of such operations.

(2) Contract personnel are appropriately prohibited from performing inherently governmental functions.

(3) Contract personnel will be present on and supporting the battlefield of tomorrow providing crucial goods and services for military, humanitarian, peacekeeping, and reconstruction operations.

SEC. 1603. DEFINITIONS.

In this title:

(1) CONTRACTOR ACCOMPANYING THE FORCE-

(A) IN GENERAL- The term `contractor accompanying the force' means a contractor for a contract with the Department of Defense, a subcontract at any tier under such a contract, or a task order at any tier issued under such a contract, if the contract, subcontract, or task order--

(i) is paid for using funds appropriated to or for the use of the Department; and

(ii) is for the performance of work that directly supports United States military operations overseas or deployed United States Armed Forces.

(B) EMPLOYEES INCLUDED- The term includes employees of any contractor described in subparagraph (A).

(2) CONTRACTOR NOT ACCOMPANYING THE FORCE-

(A) IN GENERAL- The term `contractor not accompanying the force' means a contractor for a contract with the Federal Government, a subcontract at any tier under such a contract, or a task order at any tier issued under such a contract, if the contract, subcontract, or task order is for the performance of work related to private security, reconstruction, humanitarian assistance, peacekeeping, or other activities in an area of responsibility of a commander of a combatant command.

(B) EMPLOYEES INCLUDED- The term includes employees of any contractor described in subparagraph (A).

(3) COMBATANT COMMAND- The term `combatant command' has the meaning provided in section 161(c) of title 10, United States Code.

SEC. 1604. REQUIREMENTS FOR COMMANDERS OF COMBATANT COMMANDS RELATING TO CONTRACTORS ACCOMPANYING AND NOT ACCOMPANYING THE FORCE.

(a) Protection of Contractors by Armed Forces-

(1) CONTRACTORS ACCOMPANYING FORCE- The Secretary of Defense shall require each commander of a combatant command to make a determination regarding the appropriate level of security protection by the Armed Forces of contractors accompanying the force in the commander's area of responsibility, and to include in the operational plans of the commander the results of the determination.

(2) CONTRACTORS NOT ACCOMPANYING FORCE- Any requirements for security protection of contractors accompanying the force included in operational plans under paragraph (1) may also be applied by the commander to contractors not accompanying the force.

(b) Communications Plan-

(1) CONTRACTORS ACCOMPANYING FORCE- The Secretary of Defense shall require each commander of a combatant command to include in the operational plans of the commander a communications plan for contractors accompanying the force in the commander's area of responsibility.

(2) CONTRACTORS NOT ACCOMPANYING FORCE- Such communications plan may be applied by the commander to contractors not accompanying the force in such area.

(3) PROVISION OF PLAN TO CONTRACTORS- Any communications plan included in operational plans under this subsection shall be provided by the commander concerned to the affected contractors.

(c) Sharing Intelligence-

(1) CONTRACTORS ACCOMPANYING FORCE- The Secretary of Defense shall require each commander of a combatant command to share with contractors accompanying the force open-source intelligence, threat assessments, and information related to contractor movement to avoid hostile or friendly fire incidents and to further the missions of both the Department of Defense and the contractors.

(2) CONTRACTORS NOT ACCOMPANYING FORCE- The Secretary of Defense shall require each commander of a combatant command to share, to the extent practicable, the intelligence, assessments, and information referred to in paragraph (1) with contractors not accompanying the force.

(3) WAIVER- The commander of a combatant command may waive the requirements of this subsection if required to ensure operational security in the commander's area of responsibility.

SEC. 1605. REQUIREMENTS FOR CONTRACTORS RELATING TO POSSESSION OF WEAPONS.

(a) Requirement for Regulations Regarding Carrying Weapons for Contractors Accompanying Force- The Secretary of Defense shall prescribe regulations describing the type of weapons and circumstances under which contractors accompanying the force may carry a weapon for self defense or in order to perform work required under the contract, and information required to be provided by such contractors relating to such weapons. The regulations shall include the following:

(1) A requirement that a contractor accompanying the force request in writing approval, from the commander of the combatant command for the area in which the contractor is performing work under a contract, for the contractor to carry weapons.

(2) Subject to subsection (b), a requirement that the commander of a combatant command determine whether it is appropriate for a contractor accompanying the force to carry a weapon for self defense or in order to perform work required under the contract, taking into account the duties required to be performed under the contract and the security situation in the area of operations, and, if determined appropriate, to approve a request referred to in paragraph (1).

(3) A requirement that any contractor accompanying the force that is carrying a weapon for self defense use only a firearm that meets United States military specifications for self defense and ammunition that meets United States military specifications.

(4) A requirement that a contractor accompanying the force must have proof of appropriate training for using any firearm for self defense, as determined by the Secretary of Defense.

(b) Deemed Approval for Carrying Weapon- The regulations shall provide that, for purposes of the requirements of paragraphs (1) and (2) of subsection (a), a requirement in a contract awarded by the Department that a contractor carry a weapon to perform work under the contract shall be deemed to be approved by the commander for the contractor to carry such a weapon. The regulations shall require that the contracting officer for such a contract shall notify the appropriate commander of any such requirement.

SEC. 1606. BATTLEFIELD ACCOUNTABILITY.

(a) Quarterly List of Contractor Personnel in Commander's Area- The Secretary of Defense shall require each commander of a combatant command to obtain quarterly from contractors accompanying the force a list of all contractor personnel who are present in the commander's area of responsibility, with the following information for each individual on the list:

(1) Whether the individual carries a weapon.

(2) Proof of appropriate training with respect to any weapon carried by the individual.

(3) Proof of citizenship.

(b) Meetings With Contractors- The Secretary of Defense shall require each commander of a combatant command to meet regularly with representatives of contractors both accompanying and not accompanying the force who are present in the commander's area of responsibility, in order to provide information about the requirements of the commander with respect to the contractors and recommendations to the contractors regarding security for the protection of the contractors.

(c) Database- The Secretary of Defense shall require each commander of a combatant command to maintain a central database of the information provided under subsection (a) with respect to all contractors accompanying the force in the commander's area of responsibility and shall allow the commander to maintain such a database with respect to contractors not accompanying the force. The Secretary shall prescribe a design for the information to be collected for the database required under this subsection, which shall be uniform for all combatant commands. To the extent practicable, the Secretary shall rely on existing sources in the Department of Defense for the information to be included in the database and make such existing information available to each commander.

(d) Contractor Requirement- Any contractor accompanying the force, and, upon determination of the commander of a combatant command concerned, any contractor not accompanying the force, shall provide information sought by a commander of a combatant command for purposes of subsection (a), upon request from the commander.

The House bill contained a title (title XVI) that would establish certain requirements for contractors on the battlefield, including contractors accompanying the force and contractors not accompanying the force.

The Senate amendment contained no similar provision.

The House recedes.

The conferees note that subsequent to action on the House bill, the Secretary of Defense issued regulations addressing the issue of contractors on the battlefield. However, the regulations issued by the Secretary apply only to contractors accompanying the force.

The conferees believe that it is important for the Department of Defense to address issues raised by the presence on the battlefield of contractors not accompanying the force. This term includes contractors and subcontractors at any tier under a contract with any federal government agency, if the work to be performed is related to private security, reconstruction, humanitarian assistance, peacekeeping, or other activities in an area of responsibility of a commander of a combatant command in which there are ongoing combat operations or there is a significant risk that contractor employees could come under hostile fire.

Accordingly, the conferees direct the Secretary to revise all relevant policy, guidance, and instructions issued pursuant to section 1205 of the Ronald W. Reagan National Defense Authorization Act for Fiscal Year 2005 (Public Law 108-375) to address security issues raised by contractors not accompanying the force. The revised guidance should, at a minimum, address the following issues: (1) measures to ensure that security issues raised by contractors not accompanying the force are addressed in integrated planning by the combatant commanders; (2) measures to ensure visibility and accountability of employees of contractors not accompanying the force (including accounting for U.S. nationals, local nationals, and third-party nationals); (3) measures to ensure the communication of relevant threat information to contractors not accompanying the force; (4) measures addressing force protection and weapons issuance issues for contractors not accompanying the force (including accounting for the number and qualifications of all personnel carrying weapons); and (5) measures to ensure that the data gathered in the implementation of this guidance is kept and maintained in a central location for a reasonable period of time.

SEC. 819. DOMESTIC SOURCE RESTRICTION FOR LITHIUM ION CELLS AND BATTERIES.

Section 2534(a) of title 10, United States Code, is amended by adding at the end the following new paragraph:

`(6) LITHIUM ION CELLS AND BATTERIES- Lithium ion cells and batteries and manufacturing technology for lithium ion cells and batteries.'.

The House bill contained a provision (sec. 819) that would add lithium ion cells and batteries to the list of items subject to domestic source requirements under section 2534 of title 10, United States Code.

The Senate amendment contained no similar provision.

The House recedes.

SEC. 854. ENSURING TRANSPARENCY IN FEDERAL CONTRACTING.

(a) Publication of Information on Federal Contractor Penalties and Violations-

(1) The Secretary of Defense shall maintain a publicly-available website that provides information on instances in which major contractors have been fined, paid penalties or restitution, settled, plead guilty to, or had judgments entered against them in connection with allegations of improper conduct. The website shall be updated not less than once a year.

(2) For the purpose of this subsection, a major contractor is a contractor that receive at least $100,000,000 in Federal contracts in the most recent fiscal year for which data are available.

(b) Report on Federal Sole Source Contracts Related to Iraq Reconstruction-

(1) REPORT REQUIRED- Not later than 120 days after the date of the enactment of this Act, the Administrator for Federal Procurement Policy shall submit to Congress a report on all sole source contracts in excess of $2,000,000 entered into by executive agencies in connection with Iraq reconstruction from January 1, 2003, through the date of the enactment of this Act.

(2) CONTENT- The report submitted under paragraph (1) shall include the following information with respect to each such contract:

(A) The date the contract was awarded.

(B) The contract number.

(C) The name of the contractor.

(D) The amount awarded.

(E) A brief description of the work to be performed under the contract.

(3) EXECUTIVE AGENCY DEFINED- In this subsection, the term `executive agency' has the meaning given such term in section 4 of the Office of Federal Procurement Policy Act (41 U.S.C. 403).

The Senate amendment contained a provision (sec. 854) that would require publication of information on federal contractor penalties and violations and a report listing all federal sole source contracts related to Iraq reconstruction.

The House bill contained no similar provision.

The Senate recedes.

The conferees note that in November 2003, the Government Accountability Office (GAO) provided the congressional defense committees a status briefing on the extent of competition for Iraq reconstruction contracts. GAO subsequently issued a June 1, 2004, report entitled `Rebuilding Iraq: Fiscal Year 2003 Contract Award Procedures and Management Challenges'. The conferees direct GAO to update this work, not later than 270 days after the date of enactment of this Act, to address subsequent awards of contracts and task orders for Iraq reconstruction.

SEC. 851. FAIR ACCESS TO MULTIPLE-AWARD CONTRACTS.

Section 15(g) of the Small Business Act (15 U.S.C. 644(g)) is amended by adding at the end the following:

`(3) Fair access to multiple-award contracts-

`(A) STATEMENT OF CONGRESSIONAL POLICY- It is the policy of the Congress that Federal agencies shall endeavor to meet the contracting goals established under this subsection with regard to orders under multiple-award contracts, including Federal Supply Schedule contracts and multi-agency contracts.

`(B) AUTHORIZATION FOR LIMITED COMPETITION- The head of a contracting agency may include in any contract entered under section 2304a(d)(1)(B) or 2304b(e) of title 10, United States Code, a clause setting aside a specific share of awards under such contract pursuant to a competition that is limited to small business concerns, if the head of the contracting agency determines that such limitation is necessary to comply with the congressional policy stated in subparagraph (A).

`(C) REPORT REQUIREMENT-

`(i) IN GENERAL- Not later than 180 days after the date of enactment of this paragraph, the Administrator shall submit a report on the level of participation of small business concerns in multiple-award contracts, including Federal Supply Schedule contracts, to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives.

`(ii) CONTENTS- The report required by clause (i) shall include, for the most recent 2-year period for which data are available--

`(I) the total number of multiple-award contracts;

`(II) the total number of small business concerns that received multiple-award contracts;

`(III) the total number of orders under multiple-award contracts;

`(IV) the total value of orders under multiple-award contracts;

`(V) the number of orders received by small business concerns under multiple-award contracts;

`(VI) the value of orders received by small business concerns under multiple-award contracts;

`(VII) the number of small business concerns that received orders under multiple-award contracts; and

`(VIII) such other information as may be relevant.'.

The Senate amendment contained a provision (sec. 851) that would address the issue of small business participation in task orders and delivery orders awarded under government-wide acquisition contracts and other multiple award contracts.

The House bill contained no similar provision.

The Senate recedes.

SEC. 821. INCREASED FLEXIBILITY FOR DESIGNATION OF CRITICAL ACQUISITION POSITIONS IN DEFENSE ACQUISITION WORKFORCE.

Subparagraph (A) of section 1733(b)(1) of title 10, United States Code, is amended to read as follows:

`(A) Any acquisition position that is required to be filled by a senior civilian employee in the National Security Personnel System or a senior commissioned officer of the Army, Navy, Air Force, or Marine Corps, as determined in accordance with guidelines prescribed by the Secretary.'.

The House bill contained a provision (sec. 821) that would address the designation of critical acquisition positions under the Defense Acquisition Workforce Improvement Act (10 U.S.C. 1731 et seq.).

The Senate amendment contained no similar provision.

The House recedes.

The conferees note that this issue was addressed in section 812 of the Ronald W. Reagan National Defense Authorization Act for Fiscal Year 2005 (Public Law 108-375).

SEC. 832. LIMITATION AND REINVESTMENT AUTHORITY RELATING TO REDUCTION OF THE DEFENSE ACQUISITION AND SUPPORT WORKFORCE.

(a) LIMITATION- Notwithstanding any other provision of law, the defense acquisition and support workforce may not be reduced, during fiscal years 2006, 2007, and 2008, below the level of that workforce as of September 30, 2004, determined on the basis of full-time employee equivalence, except as may be necessary to strengthen the defense acquisition and support workforce in higher priority positions in accordance with this section.

(b) INCREASE AND REALIGNMENT OF WORKFORCE- (1)(A) During fiscal years 2006, 2007, and 2008, the Secretary of Defense shall increase the number of persons employed in the defense acquisition and support workforce as follows:

(i) During fiscal year 2006, to 105 percent of the baseline number (as defined in subparagraph (B)).

(ii) During fiscal year 2007, to 110 percent of the baseline number.

(iii) During fiscal year 2008, to 115 percent of the baseline number.

(B) In this paragraph, the term `baseline number', with respect to persons employed in the defense acquisition and support workforce, means the number of persons employed in such workforce as of September 30, 2004 (determined on the basis of full-time employee equivalence).

(C) The Secretary of Defense may waive a requirement in subparagraph (A) and, subject to subsection (a), employ in the defense acquisition and support workforce a lesser number of employees if the Secretary determines and certifies to the congressional defense committees that the cost of increasing such workforce to the larger size as required under that subparagraph would exceed the savings to be derived from the additional oversight that would be achieved by having a defense acquisition and support workforce of such larger size.

(2) During fiscal years 2006, 2007, and 2008, the Secretary of Defense may realign any part of the defense acquisition and support workforce to support reinvestment in other, higher priority positions in such workforce.

(c) HIGHER PRIORITY POSITIONS- For the purposes of this section, higher priority positions in the defense acquisition and support workforce include the following positions:

(1) Positions the responsibilities of which include system engineering.

(2) Positions the responsibilities of which include drafting performance-based work statements for services contracts and overseeing the performance of contracts awarded pursuant to such work statements.

(3) Positions the responsibilities of which include conducting spending analyses, negotiating company-wide pricing agreements, and taking other measures to reduce contract costs.

(4) Positions the responsibilities of which include reviewing contractor quality control systems, assessing and analyzing quality deficiency reports, and taking other measures to improve product quality.

(5) Positions the responsibilities of which include effectively conducting public-private competitions in accordance with Office of Management and Budget Circular A-76.

(6) Any other positions in the defense acquisition and support workforce that the Secretary of Defense identifies as being higher priority positions that are staffed at levels not likely to ensure efficient and effective performance of all of the responsibilities of those positions.

(d) STRATEGIC ASSESSMENT AND PLAN- (1) The Secretary of Defense shall--

(A) assess the extent to which the Department of Defense can recruit, retain, train, and provide professional development opportunities for acquisition professionals over the 10-fiscal year period beginning with fiscal year 2006; and

(B) develop a human resources strategic plan for the defense acquisition and support workforce that includes objectives and planned actions for improving the management of such workforce.

(2) The Secretary shall submit to Congress, not later than April 1, 2006, a report on the progress made in--

(A) completing the assessment required under paragraph (1); and

(B) completing and implementing the strategic plan required under such paragraph.

(e) DEFENSE ACQUISITION AND SUPPORT WORKFORCE DEFINED- In this section, the term `defense acquisition and support workforce' means members of the Armed Forces and civilian personnel who are assigned to, or are employed in, an organization of the Department of Defense that has acquisition as its predominant mission, as determined by the Secretary of Defense.

The Senate amendment contained a provision (sec. 832) that would require a 15 percent increase in the defense acquisition and support workforce during fiscal years 2006 through 2008.

The House bill contained no similar provision.

The Senate recedes.

SEC. 809I. MODIFICATION AND EXTENSION OF PILOT PROGRAM ON SHARE-IN-SAVINGS CONTRACTS.

(a) INCLUSION OF INFORMATION TECHNOLOGY IMPROVEMENTS IN SHARE-IN-SAVINGS- Paragraph (1) of subsection (a) of section 2332 of title 10, United States Code, is amended by adding at the end the following new sentence: `Each such contract shall provide that the contractor shall incur the cost of implementing information technology improvements, including costs incurred in acquiring, installing, maintaining, and upgrading information technology equipment and training personnel in the use of such equipment, in exchange for a share of any savings directly resulting from the implementation of such improvements during the term of the contract.'.

(b) CONTRACT PERFORMANCE EVALUATION- Such subsection is further amended--

(1) in paragraph (3), by striking `, to the maximum extent practicable,';

(2) by striking paragraph (4);

(3) by redesignating paragraph (5) as paragraph (7); and

(4) inserting after paragraph (3) the following new paragraphs:

`(4) The head of an agency that enters into contracts pursuant to the authority of this section shall establish a panel of employees of such agency, independent of any program office or contracting office responsible for awarding and administering such contracts, for the purpose of verifying performance baselines and methodologies for calculating savings resulting from the implementation of information technology improvements under such contracts. Employees assigned to any such panel shall have experience and expertise appropriate for the duties of such panel.

`(5) Each contract awarded pursuant to the authority of this section shall include a provision containing a quantifiable baseline of current and projected costs, a methodology for calculating actual costs during the period of performance, and a savings share ratio governing the amount of payments the contractor is to receive under such contract that are certified by a panel established pursuant to paragraph (4) to be financially sound and based on the best available information.

`(6) Each contract awarded pursuant to the authority of this section shall--

`(A) provide that aggregate payments to the contractor may not exceed the amount the agency would have paid, in accordance with the baseline of current and projected costs incorporated in such contract, during the period covered by such contract; and

`(B) require an independent annual audit of actual costs in accordance with the methodology established under paragraph (5)(B), which shall serve as a basis for annual payments based on savings share ratio established in such contract.'.

(c) EXTENSION OF PILOT PROGRAM- Such section is further amended--

(1) in subsection (b)(3)(B), by striking `fiscal years 2003, 2004, and 2005' and inserting `fiscal years 2003 through 2007'; and

(2) in subsection (d), by striking `September 30, 2005' and inserting `September 30, 2007'.

(d) REPORTS TO CONGRESS-

(1) SECRETARY OF DEFENSE REPORTS- Not later than March 31, 2006, and each year thereafter until the year after the termination of the pilot program under section 2332 of title 10, United States Code (as amended by subsection (a)), the Secretary of Defense shall submit to Congress a report containing a list of each contract entered into by each Federal agency under such section during the preceding year that contains terms providing for the contractor to implement information technology improvements in exchange for a share of the savings derived from the implementation of such improvements. The report shall set forth, for each contract listed--

(A) the information technology performance acquired by reason of the improvements concerned;

(B) the total amount of payments made to the contractor during the year covered by the report; and

(C) the total amount of savings or other measurable benefits realized by the Federal agency during such year as a result of such improvements.

(2) COMPTROLLER GENERAL REPORTS- Not later than two months after the Secretary submits a report required by paragraph (1), the Comptroller General of the United States shall submit to Congress a report on the costs and benefits to the United States of the implementation of the technology improvements under the contracts covered by such report, together with such recommendations as the Comptroller General considers appropriate.

The Senate amendment contained a provision (sec. 809I) that would extend and modify the authority to conduct share-in-savings contracts at the Department of Defense.

The House bill contained no similar provision.

The Senate recedes.

The conferees note that the Department has never used its authority to implement share-in-savings contracts for information technology solutions. 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 regarding the utility of share-in-savings contracts and any steps that may be necessary and appropriate to make share-in-savings contracting a viable, effective, and desirable contacting method for use by the Department. The report shall be submitted by October 1, 2006.

SEC. 846. PILOT PROGRAM ON EXPANDED PUBLIC-PRIVATE PARTNERSHIPS FOR RESEARCH AND DEVELOPMENT.

(a) Pilot Program Authorized- The Secretary of Defense may carry out a pilot program to authorize the organizations referred to in subsection (b) to enter into cooperative research and development agreements under section 12 of the Stevenson-Wydler Technology Innovation Act of 1980 (15 U.S.C. 3710a) in order to assess the benefits of such agreements for such organizations and for the Department of Defense as a whole.

(b) Covered Organizations- The organizations referred to in this subsection are as follows:

(1) The National Defense University.

(2) The Defense Acquisition University.

(3) The Joint Forces Command.

(4) The United States Transportation Command.

(c) Limitation- No agreement may be entered into, or continue in force, under the pilot program under subsection (a) after September 30, 2009.

(d) Report- Not later than February 1, 2009, the Secretary shall submit to the congressional defense committees a report on the pilot program under subsection (a). The report shall include--

(1) a description of any agreements entered into under the pilot program; and

(2) the assessment of the Secretary of the benefits of the agreements entered into under the pilot program for the organizations referred to in subsection (b) and for the Department of Defense as a whole.

The Senate amendment contained a provision (sec. 846) that would establish a 3-year pilot program giving specified Department of Defense organizations the ability to enter into public-private partnerships for research and development activities.

The House bill contained no similar provision.

The Senate recedes.

SEC. 820. PROHIBITION ON DEFENSE CONTRACTORS REQUIRING LICENSES OR FEES FOR USE OF MILITARY LIKENESSES AND DESIGNATIONS.

(a) In General- The Secretary of Defense shall require that any contract entered into by the Department of Defense include a provision prohibiting the contractor from requiring toy and hobby manufacturers, distributors, or merchants to obtain licenses from or pay fees to the contractor for the use of military likenesses or designations on items provided under the contract.

(b) Limitation to United States Companies- Subsection (a) applies only with respect to toy and hobby manufacturers, distributors, or merchants incorporated in or organized under the laws of the United States.

The House bill contained a provision (sec. 820) that would prohibit defense contractors from requiring licenses or fees for the use of military likenesses and designations.

The Senate amendment contained no similar provision.

The House recedes.

SEC. 853. RADIO FREQUENCY IDENTIFIER TECHNOLOGY.

(a) Small Business Strategy- As part of implementing its requirement that contractors use radio frequency identifier technology, the Secretary of Defense shall develop and implement a strategy to educate the small business community regarding radio frequency identifier technology requirements, compliance, standards, and opportunities.

(b) Reporting- Not later than 180 days after the date of enactment of this Act, the Secretary of Defense shall submit a report to the Committee on Small Business and Entrepreneurship and the Committee on Armed Services of the Senate and the Committee on Small Business and the Committee on Armed Services of the House of Representatives detailing the status of the efforts by the Secretary of Defense to establish requirements for radio frequency identifier technology used in Department of Defense contracting, including--

(1) standardization of the data required to be reported by such technology;

(2) standardization of the manufacturing quality required for such technology; and

(3) the status of the efforts of the Secretary of Defense to develop and implement a strategy to educate the small business community, as required by section (a).

The Senate amendment contained a provision (sec. 853) that would require the Secretary of Defense to develop and implement a strategy to educate the small business community regarding radio frequency identifier technology requirements, compliance, standards, and opportunities. The provision would also require the Secretary to report to the congressional defense committees on the status of efforts to establish requirements for radio frequency identifier technology for Department of Defense contracting.

The House bill contained no similar provision.

The Senate recedes.

The conferees direct the Secretary to: (1) develop and implement a strategy to educate the small business community on radio frequency identifier technology requirements; and (2) report to the congressional defense committees not later than October 1, 2006, on the strategy and the extent to which it has been implemented.

SEC. 825. RAPID ACQUISITION AUTHORITY TO RESPOND TO DEFENSE INTELLIGENCE COMMUNITY EMERGENCIES.

(a) Rapid Acquisition Authority- In the case of any critical intelligence capability that, as determined in writing by the Secretary of Defense, without delegation, is urgently needed to address a demonstrable, imminent, and urgent threat to national security that would likely result in combat fatalities or grave harm to the national security of the United States, the Secretary shall use the procedures developed under this section in order to accomplish the rapid acquisition and deployment of the needed critical intelligence capabilities.

(b) Designation of Senior Official- Whenever the Secretary makes a determination under subsection (a) that the rapid acquisition of critical intelligence capability is needed, the Secretary shall designate a senior official of the Department of Defense to ensure that the intelligence capability is acquired and deployed as quickly as possible, with a goal of awarding a contract for the acquisition of the intelligence capability within 15 days after the determination is made.

(c) Waiver Authority- Upon designation of a senior official under subsection (b), the Secretary shall authorize that official to waive any provision of law, policy, directive, or regulation described in subsection (f) that such official determines in writing would unnecessarily impede the rapid acquisition and deployment of the needed intelligence capability.

(d) Funding of Rapid Acquisitions- The authority of this section may not be used to acquire intelligence capability in an amount aggregating more than $20,000,000 during any fiscal year. For acquisitions of intelligence capability under this subsection during the fiscal year in which the Secretary makes the determination described in subsection (a) with respect to such intelligence capability, the Secretary may use any funds available to the Department of Defense for the Joint Military Intelligence Program or Tactical Intelligence and Related Activities for that fiscal year.

(e) Notice to Congress- The Secretary of Defense shall notify the congressional defense committees and the Permanent Select Committee on Intelligence of the House of Representatives within 15 days after each determination made under subsection (a). Each such notice shall identify in either classified or unclassified format, as appropriate--

(1) the intelligence capability to be acquired;

(2) the amount anticipated to be expended for the acquisition; and

(3) the source of funds for the acquisition.

(f) Waiver of Certain Statutes and Regulations-

(1) IN GENERAL- Upon a determination described in subsection (a), the senior official designated in accordance with subsection (b) with respect to that designation is authorized to waive any provision of law, policy, directive or regulation addressing--

(A) the establishment of the requirement for the intelligence capability;

(B) the research, development, test, and evaluation of the intelligence capability; or

(C) the solicitation and selection of sources, and the award of the contract, for procurement of the intelligence capability.

(2) LIMITATION- Nothing in this subsection authorizes the waiver of any provision of law imposing civil or criminal penalties.

The House bill contained a provision (sec. 825) that would provide the Secretary of Defense with rapid acquisition authority to procure intelligence capabilities that would enhance national security.

The Senate amendment contained no similar provision.

The House recedes.

SEC. 824. REPORTS ON CERTAIN DEFENSE CONTRACTS IN IRAQ AND AFGHANISTAN.

(a) QUARTERLY REPORTS-

(1) IN GENERAL- Not later than 90 days after the date of the enactment of this Act, and every 90 days thereafter, the Secretary of Defense shall submit to the appropriate committees of Congress a report that lists and describes each task or delivery order contract or other contract related to security and reconstruction activities in Iraq and Afghanistan in which an audit conducted by an investigative or audit component of the Department of Defense during the 90-day period ending on the date of such report resulted in a finding described in subsection (b).

(2) COVERAGE OF SUBCONTRACTS- For purposes of this section, any reference to a contract shall be treated as a reference to such contract and to any subcontracts under such contract.

(b) COVERED FINDING- A finding described in this subsection with respect to a task or delivery order contract or other contract described in subsection (a) is a finding by an investigative or audit component of the Department of Defense that the contract includes costs that are unsupported, questioned, or both.

(c) REPORT INFORMATION- Each report under subsection (a) shall include, with respect to each task or delivery order contract or other contract covered by such report--

(1) a description of the costs determined to be unsupported, questioned, or both; and

(2) a statement of the amount of such unsupported or questioned costs and the percentage of the total value of such task or delivery order that such costs represent.

(d) WITHHOLDING OF PAYMENTS- In the event that any costs under a task or delivery order contract or other contract described in subsection (a) are determined by an investigative or audit component of the Department of Defense to be unsupported, questioned, or both, the appropriate Federal procurement personnel may withhold from amounts otherwise payable to the contractor under such contract a sum of up to 100 percent of the total amount of such costs.

(e) RELEASE OF WITHHELD PAYMENTS- Upon a subsequent determination by the appropriate Federal procurement personnel, or investigative or audit component of the Department of Defense, that any unsupported or questioned costs for which an amount payable was withheld under subsection (d) has been determined to be allowable, or upon a settlement negotiated by the appropriate Federal procurement personnel, the appropriate Federal procurement personnel may release such amount for payment to the contractor concerned.

(f) INCLUSION OF INFORMATION ON WITHHOLDING AND RELEASE IN QUARTERLY REPORTS- Each report under subsection (a) after the initial report under that subsection shall include the following:

(1) A description of each action taken under subsection (d) or (e) during the period covered by such report.

(2) A justification of each determination or negotiated settlement under subsection (d) or (e) that appropriately explains the determination of the applicable Federal procurement personnel in terms of reasonableness, allocability, or other factors affecting the acceptability of the costs concerned.

(g) DEFINITIONS- In this section:

(1) The term `appropriate committees of Congress' means--

(A) the Committees on Appropriations, Armed Services, and Homeland Security and Governmental Affairs of the Senate; and

(B) the Committees on Appropriations, Armed Services, and Government Reform of the House of Representatives.

(2) The term `investigative or audit component of the Department of Defense' means any of the following:

(A) The Office of the Inspector General of the Department of Defense.

(B) The Defense Contract Audit Agency.

(C) The Defense Contract Management Agency.

(D) The Army Audit Agency.

(E) The Naval Audit Service.

(F) The Air Force Audit Agency.

(3) The term `questioned', with respect to a cost, means an unreasonable, unallocable, or unallowable cost.

The Senate amendment contained a provision (sec. 824) that would: (1) require quarterly reports from the Secretary of Defense on audit findings regarding costs incurred on contracts for security and reconstruction activities in Iraq and Afghanistan; and (2) establish requirements for withholding payments and releasing funds on such contracts.

The House bill contained no similar provision.

The Senate recedes.

The conferees direct the Government Accountability Office to report to the congressional defense committees not later than 270 days after the date of enactment of this Act on audit findings regarding costs incurred on contracts for security and reconstruction activities in Iraq and Afghanistan. The report should address costs found to be questioned or unsupported, funds withheld from contractors, and measures taken by the Department of Defense to settle disputes with contractors with regard to such costs.

SEC. 814. REQUIREMENT FOR CONTRACTING OPERATIONS TO BE INCLUDED IN INTERAGENCY PLANNING RELATED TO STABILIZATION AND RECONSTRUCTION.

(a) Inclusion of Contracting Operations in Interagency Planning- The Secretary of Defense shall include contracting operations in all relevant interagency planning operations of the Department of Defense related to stabilization and reconstruction operations.

(b) Secretary of Defense Requirements- If the President designates the Department of Defense as the executive agency with primary responsibility for contracting operations in post-conflict, stabilization, or reconstruction operations, the Secretary of Defense shall develop policy and procedures for the Department of Defense to serve as such executive agency.

(c) Report-

(1) REQUIREMENT- The Secretary of Defense and the Secretary of State shall jointly prepare a report on lessons learned from carrying out contracting operations during Operation Iraqi Freedom.

(2) MATTERS COVERED- The report shall address the following with respect to such activities:

(A) Development of an appropriate acquisition planning strategy before obligation of funds, including the scope of planned contracting operations, project management, logistics, and financial considerations.

(B) Flow of appropriated funds.

(C) Ability to obtain military and civilian acquisition workforce personnel.

(D) Ability to obtain country clearances for such personnel.

(E) Ability to reprogram funds and to coordinate interagency activities.

(3) SUBMISSION- Not later than 180 days after the date of the enactment of this Act, the report shall be submitted to the Committees on Armed Services and Foreign Relations of the Senate and the Committees on Armed Services and International Relations of the House of Representatives.

The House bill contained a provision (sec. 814) that would require the Secretary of Defense to include contracting operations in all relevant interagency planning operations of the Department of Defense related to stabilization and reconstruction operations.

The Senate amendment contained no similar provision.

The House recedes.

SEC. 821. REQUIREMENTS FOR DEFENSE CONTRACTORS RELATING TO CERTAIN FORMER DEPARTMENT OF DEFENSE OFFICIALS.

(a) REQUIREMENTS-

(1) IN GENERAL- Chapter 141 of title 10, United States Code, is amended by adding at the end the following new section:

`Sec. 2410p. Defense contractors: requirements concerning former Department of Defense officials

`(a) IN GENERAL- Each contract for the procurement of goods or services in excess of $10,000,000, other than a contract for the procurement of commercial items, that is entered into by the Department of Defense shall include a provision under which the contractor agrees to submit to the Secretary of Defense, not later than April 1 of each year such contract is in effect, a written report setting forth the information required by subsection (b).

`(b) REPORT INFORMATION- A report by a contractor under subsection (a) shall--

`(1) list the name of each person who--

`(A) is a former officer or employee of the Department of Defense or a former or retired member of the armed forces; and

`(B) during the preceding calendar year was provided compensation by the contractor, if such compensation was first provided by the contractor--

`(i) not more than two years after such officer, employee, or member left service in the Department of Defense; and

`(ii) not more than two years before the date on which the report is required to be submitted; and

`(2) in the case of each person listed under paragraph (1)--

`(A) identify the agency in which such person was employed or served on active duty during the last two years of such person's service with the Department of Defense;

`(B) state such person's job title and identify each major defense system, if any, on which such person performed any work with the Department of Defense during the last two years of such person's service with the Department; and

`(C) state such person's current job title with the contractor and identify each major defense system on which such person has performed any work on behalf of the contractor.'.

(2) CLERICAL AMENDMENT- The table of sections at the beginning of chapter 141 of such title is amended by adding at the end the following new item:

`2410p. Defense contractors: requirements concerning former Department of Defense officials.'.

(b) EFFECTIVE DATE- The amendments made by subsection (a) shall take effect on the date of the enactment of this Act, and shall apply with respect to contracts entered into on or after that date.

The Senate amendment contained a provision (sec. 821) that would require companies that receive defense contracts in excess of $10.0 million (other than contracts for the procurement of commercial items) to report to the Department of Defense on an annual basis on former Department officials who receive compensation from the contractor.

The House bill contained no similar provision.

The Senate recedes.

The conferees expect the General Accountability Office to address the need, if any, for a reporting requirement of this type in the context of the review of the Department's efforts to identify contract fraud, waste, and abuse, as required by section 841.

SEC. 822. REVIEW OF CERTAIN CONTRACTOR ETHICS MATTERS.

(a) IN GENERAL- The Secretary of Defense shall, in consultation with the Director of the Office of Government Ethics and the Administrator for Federal Procurement Policy, conduct a review of the ethics considerations raised by the following:

(1) The performance by contractor employees of functions closely associated with inherently governmental functions.

(2) The performance by contractor employees of other functions historically performed by Government employees in the Federal workplace.

(b) OPTIONS TO BE ADDRESSED- The review under subsection (a) shall include the consideration of a broad range of options for addressing the ethics considerations described in that subsection, including--

(1) amending the Federal Acquisition Regulation to address ethics and personal conflict of interest concerns for contractor employees;

(2) implementing the Federal Acquisition Regulation, as so amended, through the incorporation of appropriate provisions in Federal agency contracts and in the solicitations for such contracts;

(3) requiring such contracts and solicitations to state that contractor employees will be bound by certain ethics standards, whether contractor-imposed or Government-imposed;

(4) encouraging Federal agency personnel to consider including provisions in contracts and solicitations that address conflict of interest issues and require contractor personnel to receive training on Government ethics rules; and

(5) continuing to identify and mitigate conflicts and ethics concerns involving contractor personnel on a case-by-case basis.

(c) REPORT-

(1) IN GENERAL- Not later than 6 months after the date of the enactment of this Act, the Secretary shall submit to the congressional defense committees a report setting forth the findings and recommendations of the Secretary as a result of the review under subsection (a) and the consideration of options under subsection (b).

(2) ADDITIONAL VIEWS- The report under paragraph (1) shall set forth the views, if any, of the Director of the Office of Government Ethics and the Administrator for Federal Procurement Policy on the matters covered by the report.

(d) FUNCTIONS CLOSELY ASSOCIATED WITH INHERENTLY GOVERNMENTAL FUNCTIONS DEFINED- In this section, the term `functions closely associated with inherently governmental functions' has the meaning given such term in section 2383(b)(3) of title 10, United States Code.

The House bill contained no similar provision.

The Senate recedes.

The conferees note that the advisory panel on acquisition laws, regulations, and practices established pursuant to the Services Acquisition Reform Act of 2003 (title XIV of Public Law 108-136) (the `SARA panel') is currently considering these issues. The conferees expect the Department of Defense to review all issues addressed by the SARA panel upon the conclusion of that panel's work.

SEC. 809J. SENSE OF SENATE ON APPLICABILITY OF COMPETITION EXCEPTIONS TO ELIGIBILITY OF NATIONAL GUARD FOR FINANCIAL ASSISTANCE FOR PERFORMANCE OF ADDITIONAL DUTIES.

It is the sense of the Senate that the amendment made by section 806 of the Ronald W. Reagan National Defense Authorization Act for Fiscal Year 2005 (Public Law 108-375; 118 Stat. 2010) permits the Secretary of Defense to provide financial assistance to the Army National Guard for the performance of additional duties specified in section 113(a) of title 32, United States Code, without the use of competitive procedures under the standard exceptions to the use of such procedures in accordance with section 2304(c) of title 10, United States Code.

The Senate amendment contained a provision (sec. 809J) that would express the sense of the Senate on the circumstances in which the Secretary of Defense may provide financial assistance to the Army National Guard for the performance of certain duties without the use of competitive procedures.

The House bill contained no similar provision.

The Senate recedes.

The conferees agree that section 806 of the Ronald W. Reagan National Defense Authorization Act for Fiscal Year 2005 (Public Law 108-375) already makes the competition requirement in section 113 of title 32, United States Code, subject to the exceptions in section 2304(c) of title 10, United States Code. Section 806 ensures that procedures other than competitive procedures are available for the selection of National Guard activities in the same circumstances and to the same extent as such procedures are available for the selection of any other entity.

SEC. 850. SMALL BUSINESS CONTRACTING IN OVERSEAS PROCUREMENTS.

Section 15(g) of the Small Business Act (15 U.S.C. 644(g)) is amended by adding at the end the following:

`(3) Small business contracting in overseas procurements-

`(A) STATEMENT OF CONGRESSIONAL POLICY- It is the policy of the Congress that Federal agencies shall endeavor to meet the contracting goals established under this subsection, regardless of the geographic area in which the contracts will be performed.

`(B) AUTHORIZATION TO USE CONTRACTING MECHANISMS- Federal agencies are authorized to use any of the contracting mechanisms authorized in this Act for the purpose of complying with the Congressional policy set forth in subparagraph (A).

`(C) REPORT TO CONGRESSIONAL COMMITTEES- Not later than 1 year after the date of enactment of this paragraph, the Administrator and the Chief Counsel for Advocacy shall submit to the Committee on Small Business and Entrepreneurship of the Senate and Committee on Small Business of the House of Representatives a report on the activities undertaken by Federal agencies, offices, and departments to carry out this paragraph.'.

The Senate amendment contained a provision (sec. 850) that would address the issue of small business participation in overseas procurement.

The House bill contained no similar provision.

The Senate recedes.

SEC. 833. TECHNICAL AMENDMENTS RELATING TO DEFENSE ACQUISITION WORKFORCE IMPROVEMENTS.

Section 1732 of title 10, United States Code, is amended--

(1) in subsection (c)--

(A) by striking `(b)(2)(A) and (b)(2)(B)' each place it appears in paragraphs (1) and (2) and inserting `(b)(1)(A) and (b)(1)(B)'; and

(B) by striking paragraph (3); and

(2) in subsection (d)(2), by striking `(b)(2)A)(ii)' and inserting `(b)(1)(A)(ii)'.

The Senate amendment contained a provision (sec. 833) that would make minor technical changes to the newly revised Defense Acquisition Workforce Improvement Act (DAWIA), chapter 87 of title 10, United States Code, enacted by section 812 of the Ronald W. Reagan National Defense Authorization Act for Fiscal Year 2005 (Public Law 108-375).

The House bill contained an identical provision (sec. 1046) that would include various technical and clerical amendments.

The Senate recedes.

The changes recommended by the Senate provision will be included in the section of the bill on technical and clerical amendments.

SEC. 809E. TEMPORARY INAPPLICABILITY OF BERRY AMENDMENT TO PROCUREMENTS OF SPECIALTY METALS USED TO PRODUCE FORCE PROTECTION EQUIPMENT.

(a) In General- Section 2533a(a) of title 10, United States Code, shall not apply to the procurement, during the 2-year period beginning on the date of the enactment of this Act, of specialty metals if such specialty metals are used to produce force protection equipment needed to prevent combat fatalities in Iraq or Afghanistan.

(b) Treatment of Procurements Within Period- For the purposes of subsection (a), a procurement shall be treated as being made during the 2-year period described in that subsection to the extent that funds are obligated by the Department of Defense for that procurement during that period.

The Senate amendment contained a provision (sec. 809E) that would temporarily make the requirements of section 2533a inapplicable for 2 years, title 10, United States Code, to not apply for two years the requirements of section 2533a, title 10, United States Code, to procurements of specialty metals used to produce force protection equipment needed to prevent combat fatalities in Iraq and Afghanistan.

The House bill contained no similar provision.

The Senate recedes.

SEC. 855. TERMINATION OF PROGRAM.

Section 711(c) of the Small Business Competitive Demonstration Program Act of 1988 (15 U.S.C. 644 note) is amended by inserting after `January 1, 1989' the following: `, and shall terminate on the date of enactment of the National Defense Authorization Act for Fiscal Year 2006'.

The Senate amendment contained a provision (sec. 855) that would terminate the small business competitive demonstration program.

The House bill contained no similar provision.

The Senate recedes.

SEC. 812. USE OF COMMERCIALLY AVAILABLE ONLINE SERVICES FOR FEDERAL PROCUREMENT OF COMMERCIAL ITEMS.

(a) Amendment to the Federal Acquisition Regulation- Not later than 180 days after the date of the enactment of this Act, the Federal Acquisition Regulation shall be revised to include provisions that require the head of an executive agency, to the maximum extent practicable, to use commercially available online procurement services to purchase commercial items, including those procurement services that allow the agency to conduct reverse auctions.

(b) Report- Not later than one year after the revisions to the Federal Acquisition Regulation are issued pursuant to subsection (a), the Administrator for Federal Procurement Policy shall submit to the Committees on Governmental Affairs and Homeland Security and on Armed Services of the Senate and the Committees on Government Reform and on Armed Services of the House of Representatives a report on the use of commercially available online procurement services. The report shall include--

(1) a list of the executive agencies that have used commercially available online procurement services, and the number of times each has so used such services;

(2) a list of the types of commercially available online procurement services used by each executive agency and the dollar value of the procurements conducted through each type of commercially available online procurement service; and

(3) the Administrator's recommendations for further encouraging the use of commercially available online procurement services, particularly those that afford the Federal Government the opportunity to conduct reverse auctions.

(c) Definitions- In this section:

(1) The term `commercially available online procurement services', with respect to procurement by executive agencies, includes reverse auctions and other services accessible on the Internet that allow executive agencies to purchase commercial items from electronic catalogs and offerors to bid for delivery orders of such items.

(2) The term `reverse auction', with respect to procurement by executive agencies, means a method of soliciting offers on the Internet for commercial items, not including construction-related services, in which--

(A) firms compete against each other on the Internet in real time and in an open and interactive environment; and

(B) each firm's identity and pricing are safeguarded.

(3) The term `Federal Acquisition Regulation' means the single Government-wide procurement regulation issued in accordance with sections 6 and 25 of the Office of Federal Procurement Policy Act (41 U.S.C. 405 and 421).

(4) The terms `executive agency', `commercial item', and `procurement' have the meanings provided those terms in section 4 of the Office of Federal Procurement Policy Act (41 U.S.C. 403 et seq.).

The House bill contained a provision (sec. 812) that would require the use of commercially available online procurement services, including reverse auction services, to purchase commercial items to the maximum extent practicable.

The Senate amendment contained no similar provision.

The House recedes.

The conferees note that online procurement services, such as reverse auction services, are appropriate for the acquisition of some types of commercial items, but may not be suitable for others. For example, items that call for technical solutions, require modification, or will be acquired on a basis other than low-cost are unlikely to be suited to acquisition through reverse auction methods. There may be cases in which the use of commercially available online procurement services could limit access to federal agency contracts.

The conferees direct the Administrator for Federal Procurement Policy, in consultation with the Federal Acquisition Regulatory Council established pursuant to section 25 of the Office of Federal Procurement Policy Act (41 U.S.C. 421), to review the use of online procurement services, such as reverse auction services, and identify: (1) types of commercial item procurements that are suitable for the use of such services; and (2) features that should be provided by online procurement services that are used by federal agencies.