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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 109-702

SEC. 805. ADJUSTMENT OF ORIGINAL BASELINE ESTIMATE FOR MAJOR DEFENSE ACQUISITION PROGRAMS EXPERIENCING COST GROWTH RESULTING FROM DAMAGE CAUSED BY HURRICANES KATRINA, RITA, AND WILMA.

(a) ADJUSTMENT AUTHORIZED- Notwithstanding any limitations under section 2435(d) of title 10, United States Code, the Secretary of Defense may adjust the original Baseline Estimate for a major defense acquisition program that is carried out primarily in the Hurricane Katrina disaster area, Hurricane Rita disaster area, or Hurricane Wilma disaster area for the sole purpose of addressing cost growth in such program that, as determined by the Secretary, is directly attributable to damage caused by Hurricane Katrina, Hurricane Rita, or Hurricane Wilma.

(b) NOTICE TO CONGRESS- The Secretary shall identify any adjustment to the original Baseline Estimate of a major defense acquisition program under subsection (a), and provide an explanation of the basis for such adjustment, in the first Selected Acquisition Report that is submitted under section 2432 of title 10, United States Code, after such adjustment is made.

(c) SUNSET- The authority to adjust an original Baseline Estimate for a major defense acquisition program under subsection (a) shall expire on the date that is one year after the date of the enactment of this Act.

(d) DEFINITIONS- In this section:

(1) The term `major defense acquisition program' has the meaning given that term in section 2430 of title 10, United States Code.

(2) The term `original Baseline Estimate', in the case of a major defense acquisition program, means the first baseline description for the program established under section 2435(a) of title 10, United States Code.

(3) The terms `Hurricane Katrina disaster area', `Hurricane Rita disaster area', and `Hurricane Wilma disaster area' have the meaning given such terms in section 1400M of the Internal Revenue Code of 1986.

The Senate amendment contained a provision (sec. 805) that would allow the Department of Defense to adjust the original baseline estimate under section 2435(d) of title 10, United States Code, for a major defense program that is carried out primarily in the areas affected by hurricanes Katrina, Rita, and Wilma for the sole purpose of addressing cost growth that is directly attributable to damage caused by those hurricanes.

The House bill contained no similar provision.

The Senate recedes.

The conferees acknowledge that funds appropriated in division B of the Department of Defense Appropriations Act for Fiscal Year 2006 (Public Law 109–148) for shipbuilding programs affected by hurricanes Katrina, Rita, and Wilma will likely cause the programs to breach Nunn-McCurdy thresholds. The conferees expect the Department to submit an abbreviated Selected Acquisition Report under section 2435(d) if Nunn-McCurdy thresholds are breached solely because of costs due to increases caused by hurricanes Katrina, Rita, and Wilma.

SEC. 808. AVAILABILITY OF FUNDS FOR PERFORMANCE-BASED LOGISTICS CONTRACTS FOR WEAPON SYSTEMS LOGISTICS SUPPORT.

(a) AVAILABILITY OF OPERATION AND MAINTENANCE FUNDS-

(1) IN GENERAL- Amounts available to the Department of Defense for operation and maintenance--

(A) are available for performance-based logistics contracts for weapon systems; and

 

(B) subject to paragraph (2), may be used in accordance with the terms of such contracts to implement engineering changes that result in a reduction of the operation and maintenance costs to the Government of such systems.

(2) LIMITATION- Funds may not be used for a performance-based logistics contract to implement engineering changes the total cost of which is expected to exceed $20,000,000.

(b) NOTICE TO CONGRESS ON ENTRY INTO CONTRACTS-

(1) IN GENERAL- Not later than 30 days before entering into a performance-based logistics contract under this section, the Secretary of a military department shall submit to Congress a notice of intent to enter into such contract.

(2) ELEMENTS- The notice on a performance-based logistics contract under paragraph (1) shall include the following:

(A) A statement that the military department concerned--

(i) has performed a business case analysis for such contract;

(ii) has determined, based on such analysis, that there is a reasonable expectation that such contract will result in an overall reduction of operation and maintenance costs with respect to a weapon system; and

(iii) has specific plans in place to--

(I) update such analysis at appropriate decision points when sufficient cost and performance data have been collected to validate the assumptions used in developing such analysis; and

(II) periodically review and validate the propriety and integrity of program performance measures, and verify the reliability of contractor cost and performance data, with respect to such contract.

(B) An estimate of the projected cost and savings from such contract, together with an explanation of the basis for such estimates.

(c) PERFORMANCE-BASED LOGISTICS CONTRACT DEFINED- In this section, the term `performance-based logistics contract' means a contract for the acquisition of logistics support (whether at the system, subsystem, or major assembly level) for a weapon system that combines logistics support in an integrated, affordable, performance package designed to optimize system readiness and meet performance goals for the weapon system through long-term support arrangements with clear lines of authority and responsibility for the provision of such support.

(d) REPORT-

(1) IN GENERAL- Not later than March 1, 2012, the Secretary of Defense shall submit to the congressional defense committees a report on the status of all performance-bases logistics contracts entered into pursuant to this section.

(2) ELEMENTS- The report under paragraph (1) shall include, for each contract covered by such report, a comparison of the projected cost and savings of such contract (as estimated in the notice to Congress under subsection (b)(2)(B)) with the actual cost and savings of such contract (as determined in accordance with the plan for such contract under subsection (b)(2)(A)(iii)).

(e) SUNSET-

(1) IN GENERAL- The authority to enter contracts under this section shall terminate on September 30, 2012.

(2) EFFECT ON EXISTING CONTRACTS- The termination under paragraph (1) of the authority to enter contracts under this section shall not affect the use of funds for purposes authorized by subsection (a) under contracts entered on or before the date specified in that paragraph.

The Senate amendment contained a provision (sec. 808) that would authorize the Secretary of Defense to use operation and maintenance (O&M) funds for performance-based logistics contracts to finance costs associated with the implementation of engineering changes that result in a reduction of government O&M costs. The House bill contained no similar provision. The Senate recedes.

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 amend section 808(e)(2) of the National Defense Authorization Act for Fiscal Year 1998 (Public Law 105–85) to clarify that the underlying provision is prospective from the date of enactment. The Senate amendment contained no similar provision. The House recedes.

SEC. 812. PROHIBITION ON PROCUREMENT FROM BENEFICIARIES OF FOREIGN SUBSIDIES.

(a) Prohibition- The Secretary of Defense may not enter into a contract for the procurement of goods or services from any foreign person to which the government of a foreign country that is a member of the World Trade Organization has provided a subsidy if--

(1) the United States has requested consultations with that foreign country under the Agreement on Subsidies and Countervailing Measures on the basis that the subsidy is a prohibited subsidy under that Agreement; and

(2) either--

(A) the issue before the World Trade Organization has not been resolved; or

(B) the World Trade Organization has ruled that the subsidy provided by the foreign country is a prohibited subsidy under the Agreement on Subsidies and Countervailing Measures.

(b) Joint Ventures- The prohibition under subsection (a) with respect to a foreign person also applies to any joint venture, cooperative organization, partnership, or contracting team of which that foreign person is a member.

(c) Subcontracts and Task Orders- The prohibition under subsection (a) with respect to a contract also applies to any subcontracts at any tier entered into under the contract and any task orders at any tier issued under the contract.

(d) Definitions- In this section:

(1) The term `Agreement on Subsidies and Countervailing Measures' means the agreement described in section 101(d)(12) of the Uruguay Round Agreements Act (19 U.S.C. 3501(d)(12)).

(2) The term `foreign person' means--

(A) an individual who is not a United States person or an alien lawfully admitted for permanent residence into the United States; or

(B) a corporation, partnership, or other nongovernmental entity which is not a United States person.

(3) The term `United States person' means--

(A) a natural person who is a citizen of the United States or who owes permanent allegiance to the United States; and

(B) a corporation or other legal entity which is organized under the laws of the United States, any State or territory thereof, or the District of Columbia, if natural persons described in subparagraph (A) own, directly or indirectly, more than 50 percent of the outstanding capital stock or other beneficial interest in such legal entity.

(e) Applicability-

(1) PROGRAMS WITH MILESTONE B APPROVAL NOT COVERED- The prohibition under subsection (a) shall not apply to any contract under a major defense acquisition program that has received Milestone B approval as of the date of the enactment of this Act.

(2) DEFINITIONS- In this subsection:

(A) The term `major defense acquisition program' means a Department of Defense acquisition program that is a major defense acquisition program for purposes of section 2430 of title 10, United States Code.

(B) The term `Milestone B approval' has the meaning provided that term in section 2366(e)(7) of such title.

The House bill contained a provision (sec. 812) that would prohibit the Secretary of Defense from entering into a contract with a foreign person (including a joint venture, cooperative organization, partnership, or contracting team), who has received a subsidy from the government of a foreign country that is a member of the World Trade Organization, if the United States has requested a consultation with that foreign country on the basis that the subsidy is prohibited under the Agreement on Subsidies and Countervailing Measures. The Senate amendment contained no similar provision. The House recedes.

SEC. 821. REMOVAL OF HAND AND MEASURING TOOLS FROM CERTAIN REQUIREMENTS.

(a) IN GENERAL- Subsection (b) of section 2533a of title 10, United States Code, is amended by striking paragraph (3).

(b) CONFORMING AMENDMENT- Subsection (d) of such section is amended by striking `(b)(1)(A), (b)(2), or (b)(3)' each place it appears and inserting `(b)(1)(A) or (b)(2)'.

The Senate amendment contained a provision (sec. 821) that would remove hand and measuring tools from the requirement to buy certain articles from American sources. The House bill contained no similar provision. The Senate recedes.

SEC. 823. WAIVER AUTHORITY FOR DOMESTIC SOURCE OR CONTENT REQUIREMENTS.

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

`Sec. 2539c. Waiver of domestic source or content requirements

`(a) AUTHORITY- Except as provided in subsection (f), the Secretary of Defense may waive the application of any domestic source requirement or domestic content requirement referred to in subsection (b) and thereby authorize the procurement of items that are grown, reprocessed, reused, produced, or manufactured--

`(1) in a foreign country that has a Declaration of Principles with the United States;

`(2) in a foreign country that has a Declaration of Principles with the United States substantially from components and materials grown, reprocessed, reused, produced, or manufactured in the United States or any foreign country that has a Declaration of Principles with the United States; or

`(3) in the United States substantially from components and materials grown, reprocessed, reused, produced, or manufactured in the United States or any foreign country that has a Declaration of Principles with the United States.

`(b) 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.

`(c) APPLICABILITY- The authority of the Secretary to waive the application of a domestic source or content requirements under subsection (a) applies to the procurement of items for which the Secretary of Defense determines that--

`(1) application of the requirement would impede the reciprocal procurement of defense items under a Declaration of Principles with the United States; and

`(2) such country does not discriminate against defense items produced in the United States to a greater degree than the United States discriminates against defense items produced in that country.

`(d) LIMITATION ON DELEGATION- The authority of the Secretary 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 Under Secretary of Defense for Acquisition, Technology, and Logistics.

`(e) CONSULTATIONS- The Secretary 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.

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

`(4) Section 2533a of this title.

`(g) 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.

`(h) 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.

`(i) 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.

`(j) DECLARATION OF PRINCIPLES-

(1) In this section, the term `Declaration of Principles' means a written understanding (including any Statement of Principles) between the Department of Defense and its counterpart in a foreign country signifying a cooperative relationship between the Department and its counterpart to standardize or make interoperable defense equipment used by the armed forces and the armed forces of the foreign country across a broad spectrum of defense activities, including--

`(A) harmonization of military requirements and acquisition processes;

`(B) security of supply;

`(C) export procedures;

`(D) security of information;

`(E) ownership and corporate governance;

`(F) research and development;

`(G) flow of technical information; and

`(H) defense trade.

`(2) A Declaration of Principles is underpinned by a memorandum of understanding or other agreement providing for the reciprocal procurement of defense items between the United States and the foreign country concerned without unfair discrimination in accordance with section 2531 of this title.'.

(b) CLERICAL AMENDMENT- The table of sections at the beginning of such subchapter is amended by inserting after the item relating to section 2539b the following new item:

`2539c. Waiver of domestic source or content requirements.'.

The Senate amendment contained a provision (sec. 823) that would provide the Secretary of Defense the authority to waive the application of statutory domestic source requirements and domestic content requirements under certain conditions. The House bill contained no similar provision. The Senate recedes.

SEC. 824. REPEAL OF REQUIREMENT FOR IDENTIFICATION OF ESSENTIAL MILITARY ITEMS AND MILITARY SYSTEM ESSENTIAL ITEM BREAKOUT LIST.

Section 813 of the National Defense Authorization Act for Fiscal Year 2004 (Public Law 108-136; 117 Stat. 1543) is repealed.

The Senate amendment contained a provision (sec. 824) that would repeal the requirement for identifying essential military items on a military system essential item breakout list. The House bill contained no similar provision. The Senate recedes.

SEC. 825. 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. 825) 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. 827. PROHIBITION ON DEFENSE CONTRACTORS REQUIRING LICENSES OR FEES FOR USE OF MILITARY LIKENESSES AND DESIGNATIONS.

The Secretary of Defense shall require that any contract entered into or renewed 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.

The House bill contained a provision (sec. 827) that would 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 or pay fees for the use of military likenesses or designations on items provided under the contract. The Senate amendment contained no similar provision. The House recedes. The conferees are aware that the use of military likenesses and designations in commerce involve issues of intellectual property and trademark law, constitutional takings, and the commercialization of defense technologies that are of great importance to the Department. The conferees are also aware that section 1004 of the Ronald W. Reagan National Defense Authorization Act for Fiscal Year 2005 (Public Law 108–375) authorized the Department to license trademarks, service marks, certification marks, and collective marks, and to operate a licensing program to raise funds for morale, welfare, and recreation activities. The conferees believe that clarification of the system for determining ownership of military likenesses and designations could reduce confusion, particularly among manufacturers of toy models and hobby items, regarding appropriate policy and process for collection of license fees. The conferees encourage the Department to work with appropriate Federal departments and agencies to study the legal, financial, and administrative issues surrounding the registration of intellectual property rights in the likenesses and designations of military items, and to report back to Congress as soon as practicable on any recommendations for modifications to existing polices or statutes. The report should include a discussion of how the registration and licensing program authorized by section 1004 could be used to streamline the procedures under which toy and hobby manufacturers obtain licenses for military likenesses and designations.

SEC. 845. REPORT ON DEPARTMENT OF DEFENSE CONTRACTING WITH CONTRACTORS OR SUBCONTRACTORS EMPLOYING MEMBERS OF THE SELECTIVE RESERVE.

(a) STUDY REQUIRED- The Secretary of Defense shall conduct a study on contracting with the Department of Defense by actual and potential contractors and subcontractors of the Department who employ members of the Selected Reserve of the reserve components of the Armed Forces.

(b) ELEMENTS- The study required by subsection (a) shall address the following:

(1) The extent to which actual and potential contractors and subcontractors of the Department, including small businesses, employ members of the Selective Reserve.

(2) The extent to which actual and potential contractors and subcontractors of the Department have been or are likely to be disadvantaged in the performance of contracts with the Department, or in competition for new contracts with the Department, when employees who are such members are mobilized as part of a United States military operation overseas.

(3) Any actions that, in the view of the Secretary, should be taken to address any such disadvantage, including--

(A) the extension of additional time for the performance of contracts to contractors and subcontractors of Department who employ members of the Selected Reserve who are mobilized as part of a United States military operation overseas; and

(B) the provision of assistance in forming contracting relationships with other entities to ameliorate the temporary loss of qualified personnel.

(c) REPORT- Not later than one year after the date of the enactment of this Act, the Secretary shall submit to Congress a report on the study required by this section. The report shall set forth the findings and recommendations of the Secretary as a result of the study.

(d) REPEAL OF SUPERSEDED AUTHORITY- Section 819 of the National Defense Authorization Act for Fiscal Year 2006 (Public Law 109-163; 119 Stat. 3385; 10 U.S.C. 2305 note) is repealed.

The Senate amendment contained a provision (sec. 845) that would require the Secretary of Defense to conduct a study on actual or potential contractors or subcontractors who employ members of the Selected Reserve. The study would address the extent to which Department of Defense contractors employ members of the Selected Reserve; potential disadvantages to such contractors in competing for Department contracts if their employees are mobilized; and recommendations for any appropriate action to provide such contractors with time or assistance in meeting contract deadlines. The provision would also repeal section 819 of the National Defense Authorization Act for Fiscal Year 2006 (Public Law 109–163), which provided authorization for the Secretary to use employment of Selected Reserve members by a contractor as an evaluation factor for award of contracts. The House bill contained no similar provision. The Senate recedes.

SEC. 874. PILOT PROGRAM ON EXPANDED USE OF MENTOR-PROTEGE AUTHORITY.

(a) Pilot Program Authorized- The Secretary of Defense may carry out a pilot program to assess the feasibility and advisability of treating small business concerns described in subsection (b) as disadvantaged small business concerns under the Mentor-Protege Program under section 831 of the National Defense Authorization Act for Fiscal Year 1991 (10 U.S.C. 2302 note).

(b) Covered Small Business Concerns- The small business concerns described in this subsection are small business concerns that--

(1) are participants in the Small Business Innovative Research Program of the Department of Defense established pursuant to section 9 of the Small Business Act (15 U.S.C. 638); and

(2) as determined by the Secretary, are developing technologies that will assist in detecting or defeating Improvised Explosive Devices (IEDs) or other critical force protection measures.

(c) Treatment as Disadvantaged Small Business Concerns-

(1) IN GENERAL- For purposes of the pilot program, the Secretary may treat a small business concern described in subsection (b) as a disadvantaged small business concern under the Mentor-Protege Program.

(2) MENTOR-PROTEGE AGREEMENT- Any eligible business concerned approved for participation in the Mentor-Protege Program as a mentor firm may enter into a mentor-protege agreement and provide assistance described in section 831 of the National Defense Authorization Act for Fiscal Year 1991 with respect to a small business concern treated under paragraph (1) as a disadvantaged small business concern under the Mentor-Protege Program.

(d) Funding-

(1) IN GENERAL- Notwithstanding the limitation in section 9(f)(2) of the Small Business Act (15 U.S.C. 638(f)(2)), funds for any reimbursement provided to a mentor firm under section 831(g) of the National Defense Authorization Act for Fiscal Year 1991 with respect to a small business concern described in subsection (b) under the pilot program shall be derived from funds available for the Small Business Innovative Research Program of the Department of Defense.

(2) LIMITATION- The amount available under paragraph (1) for reimbursement described in that paragraph may not exceed the amount equal to one percent of the funds available for the Small Business Innovative Research Program.

(e) Sunset-

(1) AGREEMENTS- No mentor-protege agreement may be entered into under the pilot program after September 30, 2010.

(2) OTHER MATTERS- No reimbursement may be paid, and no credit toward the attainment of a subcontracting goal may be granted, under the pilot program after September 30, 2013.

(f) Report- Not later than March 1, 2009, the Secretary shall submit to the appropriate committees of Congress a report on the pilot program. The report shall--

(1) describe the extent to which mentor-protege agreements have been entered under the pilot program; and

(2) describe and assess the technological benefits arising under such agreements.

(g) Definitions- In this section:

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

(A) the Committees on Armed Services, Appropriations, and Small Business and Entrepreneurship of the Senate; and

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

(2) The term `small business concern' has the meaning given that term in section 831(m)(1) of the National Defense Authorization Act for Fiscal Year 1991.

The Senate amendment contained a provision (sec. 874) that would enable the Secretary of Defense to use the authorities of the Department of Defense Mentor-Protege program to provide technical assistance to firms that develop new technologies related to force protection or countering the threat of improvised explosive devices under the Small Business Innovative Research program. The House bill contained no similar provision. The Senate recedes.

SEC. 904. MILITARY DEPUTIES TO THE ASSISTANT SECRETARIES OF THE MILITARY DEPARTMENTS FOR ACQUISITION, LOGISTICS, AND TECHNOLOGY MATTERS.

(a) Department of the Army-

(1) ESTABLISHMENT OF POSITION- There is hereby established within the Department of the Army the position of Military Deputy to the Assistant Secretary of the Army for Acquisition, Logistics, and Technology.

(2) LIEUTENANT GENERAL- The individual serving in the position of Military Deputy to the Assistant Secretary of the Army for Acquisition, Logistics, and Technology shall be a lieutenant general of the Army on active duty.

(3) EXCLUSION FROM GRADE AND NUMBER LIMITATIONS- An officer serving in the position of Military Deputy to the Assistant Secretary of the Army for Acquisition, Logistics, and Technology shall not be counted against the numbers and percentages of officers of the Army of the grade of lieutenant general.

(b) Department of the Navy-

(1) ESTABLISHMENT OF POSITION- There is hereby established within the Department of the Navy the position of Military Deputy to the Assistant Secretary of the Navy for Research, Development, and Acquisition.

(2) VICE ADMIRAL- The individual serving in the position of Military Deputy to the Assistant Secretary of the Navy for Research, Development, and Acquisition shall be a vice admiral on active duty.

(3) EXCLUSION FROM GRADE AND NUMBER LIMITATIONS- An officer serving in the position of Military Deputy to the Assistant Secretary of the Navy for Research, Development, and Acquisition shall not be counted against the numbers and percentages of officers of the grade of vice admiral.

(c) Department of the Air Force-

(1) ESTABLISHMENT OF POSITION- There is hereby established within the Department of the Air Force the position of Military Deputy to the Assistant Secretary of the Air Force for Acquisition.

(2) LIEUTENANT GENERAL- The individual serving in the position of Military Deputy to the Assistant Secretary of the Air Force for Acquisition shall be a lieutenant general of the Air Force on active duty.

(3) EXCLUSION FROM GRADE AND NUMBER LIMITATIONS- An officer serving in the position of Military Deputy to the Assistant Secretary of the Air Force for Acquisition shall not be counted against the numbers and percentages of officers of the Air Force of the grade of lieutenant general.

The Senate amendment contained a provision (sec. 904) that would establish positions within the military departments for military deputies to the assistant secretaries for acquisition in the Departments of the Army, Navy, and Air Force. The officers serving in these positions would hold the rank of lieutenant general or vice admiral while serving and would be excluded from limits on the numbers and percentages of officers in the respective services. The House bill contained no similar provision. The Senate recedes.

SEC. 1069. REPORTS ON DEPARTMENT OF JUSTICE EFFORTS TO INVESTIGATE AND PROSECUTE CASES OF CONTRACTING ABUSE IN IRAQ, AFGHANISTAN, AND THROUGHOUT THE WAR ON TERROR.

(a) Findings- Congress makes the following findings:

(1) Waste, fraud, and abuse in contracting are harmful to United States efforts to successfully win the conflicts in Iraq and Afghanistan and succeed in the war on terror. The act of stealing from our soldiers who are daily in harm's way is clearly criminal and must be actively prosecuted.

(2) It is a vital interest of United States taxpayers to be protected from theft of their tax dollars by corrupt contractors.

(3) Whistleblower lawsuits are an important tool for exposing waste, fraud, and abuse and can identify serious graft and corruption.

(4) This issue is of paramount importance to the United States taxpayer, and the Congress must be provided with information about alleged contractor waste, fraud, and abuse taking place in Iraq, Afghanistan, and throughout the war on terror and about the efforts of the Department of Justice to combat these crimes.

(b) Reports-

(1) IN GENERAL- Not later than 90 days after the date of the enactment of this Act, and every 180 days thereafter, the Attorney General shall submit to the Committee on the Judiciary and the Committee on Homeland Security and Governmental Affairs of the Senate, the Committee on the Judiciary and the Committee on Government Reform of the House of Representatives, and the congressional defense committees a report on efforts to investigate and prosecute cases of waste, fraud, and abuse under sections 3729 and 3730(b) of title 31, United States Code, or any other related law that are related to Federal contracting in Iraq, Afghanistan, and throughout the war on terror.

(2) CONTENT- Each report submitted under paragraph (1) shall include the following:

(A) Information on organized efforts of the Department of Justice that have been created to ensure that the Department of Justice is investigating, in a timely and appropriate manner, claims of contractor waste, fraud, and abuse related to the activities of the United States Government in Iraq, Afghanistan, and throughout the war on terror.

(B) Information on the specific number of personnel, financial resources, and workdays devoted to addressing this waste, fraud, and abuse, including a complete listing of all of the offices across the United States and throughout the world that are working on these cases and an explanation of the types of additional resources, both in terms of personnel and finances, that the Department of Justice needs to ensure that all of these cases proceed on a timely basis.

(C) A detailed description of any internal Department of Justice task force that exists to work specifically on cases of contractor fraud and abuse in Iraq, Afghanistan, and throughout the war on terror, including a description of its action plan, the frequency of its meetings, the level and quantity of staff dedicated to it, its measures for success, the nature and substance of the allegations, and the amount of funds in controversy for each case. If there is a showing of extraordinary circumstances that disclosure of particular information would pose an imminent threat of harm to a relator and be detrimental to the public interest, then this information should be redacted in accordance with standard practices.

(D) A detailed description of any interagency task force that exists to work specifically on cases of contractor waste, fraud, and abuse in Iraq, Afghanistan, and throughout the war on terror, including its action plan, the frequency of its meetings, the level and quantity of staff dedicated to it, its measures for success, the type, nature, and substance of the allegations, and the amount of funds in controversy for each case. If there is a showing of extraordinary circumstances that disclosure of particular information would pose an imminent threat of harm to a relator and be detrimental to the public interest, then this information should be redacted in accordance with standard practices.

(E) The names of the senior officials directly responsible for oversight of the efforts to address these cases of contractor waste, fraud, and abuse in Iraq, Afghanistan, and throughout the war on terror.

(F) Specific information on the number of investigators and other personnel that have been provided to the Department of Justice by other Federal departments and agencies in support of the efforts of the Department of Justice to combat contractor waste, fraud, and abuse in Iraq, Afghanistan, and throughout the war on terror, including data on the quantity of time that these investigators have spent working within the Department of Justice structures dedicated to this effort.

(G) Specific information on the full number of investigations, including grand jury investigations currently underway, that are addressing these cases of contractor waste, fraud, and abuse in Iraq, Afghanistan, and throughout the war on terror.

(H) Specific information on the number and status of the criminal cases that have been launched to address contractor waste, fraud, and abuse in Iraq, Afghanistan, and throughout the war on terror.

(I) Specific information on the number of civil cases that have been filed to address contractor waste, fraud, and abuse in Iraq, Afghanistan, and throughout the war on terror, including specific information on the quantity of cases initiated by private parties, as well as the quantity of cases that have been referred to the Department of Justice by the Department of Defense, the Department of State, and other relevant Federal departments and agencies.

(J) Specific information on the resolved civil and criminal cases that have been filed to address contractor waste, fraud, and abuse in Iraq, Afghanistan, and throughout the war on terror, including the specific results of these cases, the types of waste, fraud, and abuse that took place, the amount of funds that were returned to the United States Government as a result of resolution of these cases, and a full description of the type and substance of the waste, fraud, and abuse that took place. If there is a showing of extraordinary circumstances that disclosure of particular information would pose an imminent threat of harm to a relator and be detrimental to the public interest, then this information should be redacted in accordance with standard practices.

(K) The best estimate by the Department of Justice of the scale of the problem of contractor waste, fraud, and abuse in Iraq, Afghanistan, and throughout the war on terror.

The Senate amendment contained a provision (sec. 1069) that would require the Attorney General to submit semiannual reports to the congressional defense committees and other relevant committees on Department of Justice efforts to investigate and prosecute cases of contracting abuse in Iraq, Afghanistan, and throughout the war on terror. Each report would be required to include: (1) a description of organized efforts of the Department to address such cases; (2) information on the specific number of personnel, financial resources, and workdays devoted; (3) a detailed description of any internal task force; (4) a detailed description of any interagency task force; (5) the names of senior officials directly responsible for oversight; (6) specific information on the numbers of investigators and other personnel working on these cases; (7) specific information on the number of investigations, including grand jury investigations, underway; (8) specific information on the number and status of criminal cases; (9) specific information on the number and status of civil cases; (10) Specific information on resolved civil and criminal cases on the issue; and (11) the Department’s best estimate of the scale of the problem. The House bill contained no similar provision. The Senate recedes. The conferees direct the Attorney General to provide the relevant congressional committees, by no later than 6 months after the date of the enactment of this Act, a written assessment of the level of resources dedicated by the Department to the investigation and prosecution of alleged fraud cases arising out of contracting abuses in Iraq, Afghanistan, and the global war on terrorism.

SEC. 1088. IMPROVED ACCOUNTABILITY FOR COMPETITIVE CONTRACTING IN HURRICANE RECOVERY.

The exceptions to full and open competition otherwise available under paragraphs (2), (3), (4), and (5) of section 303(c) of the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 253(c)) and paragraphs (2), (3), (4), and (5) of section 2304(c) of title 10, United States Code, shall not apply to Federal contracts worth over $500,000 for the procurement of property or services in connection with relief and recovery efforts related to Hurricane Katrina and the other hurricanes of the 2005 season.

The Senate amendment contained a provision (sec. 1088) that would prohibit the use of certain exceptions (including the urgent and compelling exception) to competition requirements under the Competition in Contracting Act in connection with relief and recovery efforts related to Hurricane Katrina and the other hurricanes of the 2005 season. The House bill contained no similar provision. The Senate recedes. The conferees recognize that the urgent and compelling exception to competition requirements under the Competition in Contracting Act (codified in 10 U.S.C. 2304(c)(2) and section 303(c)(2) of the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 253(c)(2)) is vulnerable to abuse in response to natural disasters, including hurricanes. The conferees are aware of cases in which sole-source contracts have been awarded on the basis of the urgent and compelling exception months after a natural disaster takes place. In other cases, urgent and compelling circumstances arising out of a natural disaster have been used as the basis for long-term, sole-source contracts that extend beyond what can be justified on the basis of the disaster. The potential for such problems is not unique to relief and recovery efforts related to Hurricane Katrina or to natural disasters. The conferees believe that this issue should be addressed in a systematic matter through the Federal Acquisition Regulation and other procurement guidance documents, rather than through legislation limited to a specific set of contracts. As a general rule, the urgent and compelling exception should be used to award a contract only on the basis of an event, or series of events, that is reasonably proximate in time to the event, or series of events, justifying the award. In addition, the term of a contract awarded on the basis of the urgent and compelling exception should not ordinarily exceed the period of time the agency reasonably believes to be necessary to award a follow-on competitive contract. The conferees direct the Secretary of Defense to: (1) issue guidance clarifying the appropriate use of the urgent and compelling exception to the Competition in Contracting Act for the Department of Defense; and (2) work with the Administrator for Federal Procurement Policy to issue appropriate regulations addressing the issue on a government- wide basis.

SEC. 1093. 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 2007'.

The Senate amendment contained a provision (sec. 1093) that would establish an immediate sunset date for the Small Business Competitive Demonstration Program. The House bill contained no similar provision. The Senate recedes.