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

Subtitle A — Acquisition Policy and Management

NDAA Section

House Conference Report 110-477

SEC. 802. LEAD SYSTEMS INTEGRATORS.

(a) Prohibitions on the Use of Lead Systems Integrators-

(1) PROHIBITION ON NEW LEAD SYSTEMS INTEGRATORS- Effective October 1, 2010, the Department of Defense may not award a new contract for lead systems integrator functions in the acquisition of a major system to any entity that was not performing lead systems integrator functions in the acquisition of the major system prior to the date of the enactment of this Act.

(2) PROHIBITION ON LEAD SYSTEMS INTEGRATORS BEYOND LOW-RATE INITIAL PRODUCTION- Effective on the date of the enactment of this Act, the Department of Defense may award a new contract for lead systems integrator functions in the acquisition of a major system only if--

(A) the major system has not yet proceeded beyond low-rate initial production; or

(B) the Secretary of Defense determines in writing that it would not be practicable to carry out the acquisition without continuing to use a contractor to perform lead systems integrator functions and that doing so is in the best interest of the Department.

(3) REQUIREMENTS RELATING TO DETERMINATIONS- A determination under paragraph (2)(B)--

(A) shall specify the reasons why it would not be practicable to carry out the acquisition without continuing to use a contractor to perform lead systems integrator functions (including a discussion of alternatives, such as the use of the Department of Defense workforce, or a system engineering and technical assistance contractor);

(B) shall include a plan for phasing out the use of contracted lead systems integrator functions over the shortest period of time consistent with the interest of the national defense;

(C) may not be delegated below the level of the Under Secretary of Defense for Acquisition, Technology, and Logistics; and

(D) shall be provided to the Committees on Armed Services of the Senate and the House of Representatives at least 45 days before the award of a contract pursuant to the determination.

(b) Acquisition Workforce-

(1) REQUIREMENT- The Secretary of Defense shall ensure that the acquisition workforce is of the appropriate size and skill level necessary--

(A) to accomplish inherently governmental functions related to acquisition of major systems; and

(B) to effectuate the purpose of subsection (a) to minimize and eventually eliminate the use of contractors to perform lead systems integrator functions.

(2) REPORT- The Secretary shall include an update on the progress made in complying with paragraph (1) in the annual report required by section 820 of the John Warner National Defense Authorization Act for Fiscal Year 2007 (Public Law 109-364; 120 Stat. 2330).

(c) Exception for Contracts for Other Management Services- The Department of Defense may continue to award contracts for the procurement of services the primary purpose of which is to perform acquisition support functions with respect to the development or production of a major system, if the following conditions are met with respect to each such contract:

(1) The contract prohibits the contractor from performing inherently governmental functions.

(2) The Department of Defense organization responsible for the development or production of the major system ensures that Federal employees are responsible for--

(A) determining courses of action to be taken in the best interest of the government; and

(B) determining best technical performance for the warfighter.

(3) The contract requires that the prime contractor for the contract may not advise or recommend the award of a contract or subcontract for the development or production of the major system to an entity owned in whole or in part by the prime contractor.

(d) Definitions- In this section:

(1) LEAD SYSTEMS INTEGRATOR- The term `lead systems integrator' means--

(A) a prime contractor for the development or production of a major system, if the prime contractor is not expected at the time of award to perform a substantial portion of the work on the system and the major subsystems; or

(B) a prime contractor under a contract for the procurement of services the primary purpose of which is to perform acquisition functions closely associated with inherently governmental functions with respect to the development or production of a major system.

(2) MAJOR SYSTEM- The term `major system' has the meaning given such term in section 2302d of title 10, United States Code.

(3) LOW-RATE INITIAL PRODUCTION- The term `low-rate initial production' has the meaning given such term in section 2400 of title 10, United States Code.

The House bill contained a provision (sec. 806) that would prohibit the Department of Defense from awarding new contracts for lead systems integrator functions, effective October 1, 2011.

The Senate amendment contained no similar provision.

The Senate recedes with an amendment that would prohibit the Department of Defense from awarding new contracts for lead systems integrator functions, effective October 1, 2010, to any entity that was not performing lead system integrator functions for the same system prior to the date of the enactment of this Act. The provision would also prohibit the award of any new contract for lead system integrator functions for a major system that has proceeded beyond low-rate initial production, effective upon the date of enactment of this Act, absent a written waiver by the Secretary of Defense that meets conditions specified in the provision.

House Armed Services Committee Report 110-146

SECTION 806--LEAD SYSTEM INTEGRATORS

This section would prohibit the Department of Defense from awarding new contracts for lead systems integrator functions, effective October 1, 2011. This section would also require the Secretary of Defense to submit a report to the congressional defense committees by October 1, 2008, which would include a plan to adjust the acquisition workforce to identify positions and skills that are inherently governmental in nature; identify acquisition workforce skill gaps; create a plan for closing such skill gaps; develop a plan for matching acquisition personnel to programs based on program risk; and identify authorities that may be required on an interim basis until a sufficient number of qualified government personnel are available to perform inherently governmental functions. This section would allow the Department of Defense to continue to award contracts for acquisition support services, if the contractor does not perform inherently governmental functions or subcontract to an entity owned in whole or in part by the contractor. Finally, the section defines the terms `lead systems integrator' and `major system.'