Back to JWNDAA 2007 Contents

TITLE IX -- Department of Defense Organization and Management

Subtitle C—Chemical Demilitarization Program

JWNDAA Section

House Conference Report 109-702

(a) In General-

(1) AUTHORITY TO INCLUDE CLAUSES IN CONTRACTS- The Secretary of Defense may, for the purpose specified in paragraph (2), authorize the inclusion of an incentives clause in any contract for the destruction of the United States stockpile of lethal chemical agents and munitions carried out pursuant to section 1412 of the Department of Defense Authorization Act, 1986 (50 U.S.C. 1521).

(2) PURPOSE- The purpose of a clause referred to in paragraph (1) is to provide the contractor for a chemical demilitarization facility an incentive to accelerate the safe elimination of the United States chemical weapons stockpile and to reduce the total cost of the Chemical Demilitarization Program by providing incentive payments for the early completion of destruction operations and the closure of such facility.

(b) Incentives Clauses-

(1) IN GENERAL- An incentives clause under this section shall permit the contractor for the chemical demilitarization facility concerned the opportunity to earn incentive payments for the completion of destruction operations and facility closure activities within target incentive ranges specified in such clause.

(2) LIMITATION ON INCENTIVE PAYMENTS- The maximum incentive payment under an incentives clause with respect to a chemical demilitarization facility may not exceed amounts as follows:

(A) In the case of an incentive payment for the completion of destruction operations within the target incentive range specified in such clause, $110,000,000.

(B) In the case of an incentive payment for the completion of facility closure activities within the target incentive range specified in such clause, $55,000,000.

(3) TARGET RANGES- An incentives clause in a contract under this section shall specify the target incentive ranges of costs for completion of destruction operations and facility closure activities, respectively, as jointly agreed upon by the contracting officer and the contractor concerned. An incentives clause shall require a proportionate reduction in the maximum incentive payment amounts in the event that the contractor exceeds an agreed-upon target cost if such excess costs are the responsibility of the contractor.

(4) CALCULATION OF INCENTIVE PAYMENTS- The amount of the incentive payment earned by a contractor for a chemical demilitarization facility under an incentives clause under this section shall be based upon a determination by the Secretary on how early in the target incentive range specified in such clause destruction operations or facility closure activities, as the case may be, are completed.

(5) CONSISTENCY WITH EXISTING OBLIGATIONS- The provisions of any incentives clause under this section shall be consistent with the obligation of the Secretary of Defense under section 1412(c)(1)(A) of the Department of Defense Authorization Act, 1986, to provide for maximum protection for the environment, the general public, and the personnel who are involved in the destruction of the lethal chemical agents and munitions.

(6) ADDITIONAL TERMS AND CONDITIONS- In negotiating the inclusion of an incentives clause in a contract under this section, the Secretary may include in such clause such additional terms and conditions as the Secretary considers appropriate.

(c) Additional Limitation on Payments-

(1) PAYMENT CONDITIONAL ON PERFORMANCE- No payment may be made under an incentives clause under this section unless the Secretary determines that the contractor concerned has satisfactorily performed its duties under such incentives clause.

(2) PAYMENT CONTINGENT ON APPROPRIATIONS- An incentives clause under this section shall specify that the obligation of the Government to make payment under such incentives clause is subject to the availability of appropriations for that purpose. Amounts appropriated for Chemical Agents and Munitions Destruction, Defense, shall be available for payments under incentives clauses under this section.

The Senate amendment contained a provision (sec. 372) that would provide the Secretary of Defense authority to include an incentives clause in any contract for the destruction of the U.S. stockpile of lethal chemical agents and munitions in order to accelerate the safe elimination of the U.S. chemical weapons stockpile and to reduce the total cost of the chemical demilitarization program by affording the contractor an opportunity to share in the life cycle cost savings that the U.S. Government would realize by early completion of destruction operations and facility closure. The provision would require that this authority be exercised consistent with the Secretary’s obligation under law to provide for maximum protection for the environment, the general public, and the personnel who are involved in the destruction of the lethal chemical agents and munitions. The authority to include an incentives clause in a contract would be subject to the availability of appropriations for that purpose.

The House bill contained no similar provision.

The House recedes.

The conferees note that this authority is intended to be available for all elements of the chemical demilitarization program, including the Chemical Stockpile Disposal Project, the Alternative Technologies and Approaches Project, and the Assembled Chemical Weapons Alternative Program.

The conferees express their disappointment in the notification from the Secretary of Defense dated April 10, 2006, that the United States will not be able to meet the Chemical Weapons Convention extended destruction deadline of April 29, 2012, for the complete destruction of the U.S. chemical weapons stockpile. The conferees note the Secretary’s commitment in the notification that ‘‘The Department will continue working diligently to minimize the time to complete destruction without sacrificing safety and security. We will also continue requesting resources needed to complete destruction as close to April 2012 as practicable.’’ The conferees strongly concur in those sentiments and urge the Department to uphold the commitment expressed in the Secretary’s notification letter.

Senate Armed Services Committee Report 109-254

The committee recommends a provision that would provide the Secretary of Defense authority to include an incentives clause in any contract for the destruction of the U.S. stockpile of lethal chemical agents and munitions in order to accelerate the safe elimination of the U.S. chemical weapons stockpile and to reduce the total cost of the chemical demilitarization program by affording the contractor an opportunity to share in the life cycle cost savings that the U.S. government would realize by early completion of destruction operations and facility closure. The provision would limit the amount of incentive payments at each facility to $110.0 million for completion of destruction operations within the specified target incentive range, and to $55.0 million for completion of facility closure activities within the specified target incentive range. The provision would require that this authority be exercised consistent with the Secretary's obligation under law to provide for maximum protection for the environment, the general public, and the personnel who are involved in the destruction of the lethal chemical agents and munitions. The authority to include an incentives clause in a contract would be subject to the availability of appropriations for that purpose.

The committee notes that this authority is intended to be available for all elements of the chemical demilitarization program, including the Chemical Stockpile Disposal Project, the Alternative Technologies and Approaches Project, and the Assembled Chemical Weapons Alternative Program.

The committee notes its deep disappointment in the notification from the Secretary dated April 10, 2006, that the United States will not be able to meet the Chemical Weapons Convention extended destruction deadline of April 29, 2012, for the complete destruction of the U.S. chemical weapons stockpile. The committee notes the Secretary's commitment in the notification that `The Department will continue working diligently to minimize the time to complete destruction without sacrificing safety and security. We will also continue requesting resources needed to complete destruction as close to April 2012 as practicable.' The committee strongly concurs in those sentiments and expects the Department to live up to them. The committee is providing the authority in this provision to give the Department the authority it has said it needs to incentivize the chemical demilitarization contractors to expedite their work in a safe manner. The committee urges the Department to continue to request the resources and authorities needed to redouble the Department's efforts to meet the Treaty's deadlines or, failing that, to come as close to them as possible. It is imperative that the international community understand that the United States is doing everything in its power to honor its international commitments and comply with this critical Treaty obligation.