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

Subtitle B — Provisions Relating to Major Defense Acquisition Programs

NDAA Section

House Conference Report 110-477

SEC. 812. CHANGES TO MILESTONE B CERTIFICATIONS.

Section 2366a of title 10, United States Code, is amended--

(1) by amending subsection (a) to read as follows:

`(a) Certification- A major defense acquisition program may not receive Milestone B approval, or Key Decision Point B approval in the case of a space program, until the milestone decision authority--

`(1) has received a business case analysis and certifies on the basis of the analysis that--

`(A) the program is affordable when considering the ability of the Department of Defense to accomplish the program's mission using alternative systems;

`(B) the program is affordable when considering the per unit cost and the total acquisition cost in the context of the total resources available during the period covered by the future-years defense program submitted during the fiscal year in which the certification is made;

`(C) reasonable cost and schedule estimates have been developed to execute the product development and production plan under the program; and

`(D) funding is available to execute the product development and production plan under the program, through the period covered by the future-years defense program submitted during the fiscal year in which the certification is made, consistent with the estimates described in subparagraph (C) for the program; and

`(2) further certifies that--

`(A) appropriate market research has been conducted prior to technology development to reduce duplication of existing technology and products;

`(B) the Department of Defense has completed an analysis of alternatives with respect to the program;

`(C) the Joint Requirements Oversight Council has accomplished its duties with respect to the program pursuant to section 181(b) of this title, including an analysis of the operational requirements for the program;

`(D) the technology in the program has been demonstrated in a relevant environment;

`(E) the program demonstrates a high likelihood of accomplishing its intended mission; and

`(F) the program complies with all relevant policies, regulations, and directives of the Department of Defense.';

(2) by redesignating subsections (b), (c), (d), and (e) as subsections (c), (d), (e), and (f), respectively;

(3) by inserting after subsection (a) the following new subsection (b):

`(b) Changes to Certification- (1) The program manager for a major defense acquisition program that has received certification under subsection (a) shall immediately notify the milestone decision authority of any changes to the program that--

`(A) alter the substantive basis for the certification of the milestone decision authority relating to any component of such certification specified in paragraph (1) or (2) of subsection (a); or

`(B) otherwise cause the program to deviate significantly from the material provided to the milestone decision authority in support of such certification.

`(2) Upon receipt of information under paragraph (1), the milestone decision authority may withdraw the certification concerned or rescind Milestone B approval (or Key Decision Point B approval in the case of a space program) if the milestone decision authority determines that such certification or approval is no longer valid.';

(4) in subsection (c), as redesignated by paragraph (1)--

(A) by inserting `(1)' before `The certification'; and

(B) by adding at the end the following new paragraph (2):

`(2) A summary of any information provided to the milestone decision authority pursuant to subsection (b) and a description of the actions taken as a result of such information shall be submitted with the first Selected Acquisition Report submitted under section 2432 of this title after receipt of such information by the milestone decision authority.';

(5) in subsection (d), as so redesignated--

(A) by striking `authority may waive' and inserting the following: `authority may, at the time of Milestone B approval (or Key Decision Point B approval in the case of a space program) or at the time that such milestone decision authority withdraws a certification or rescinds Milestone B approval (or Key Decision Point B approval in the case of a space program) pursuant to subsection (b)(2), waive'; and

(B) by striking `paragraph (1), (2), (3), (4), (5), (6), (7), (8), or (9)' and inserting `paragraph (1) or (2)'; and

(6) in subsection (e), as so redesignated, by striking `subsection (c)' and inserting `subsection (d)'.

The Senate amendment contained a provision (sec. 802) that would: (1) require that the milestone decision authority (MDA) receive a business case analysis before making a Milestone B certification under section 2366a of title 10, United States Code; and (2) require the program manager for a major defense acquisition program (MDAP) to immediately notify the MDA of significant changes to the MDAP after a Milestone B certification is made.

The House bill contained no similar provision.

The House recedes with an amendment that would clarify the requirements for Milestone B certifications.

Senate Armed Services Committee Report 110-77

The committee recommends a provision that would require the program manager for a major defense acquisition program (MDAP) that has received Milestone B certification under section 2366a of title 10, United States Code, to immediately notify the milestone decision authority of any changes to the program that are: (a) inconsistent with such certification; or (b) deviate significantly from the material provided to the milestone decision authority in support of such certification. The provision would also require that the milestone decision authority receive a business case analysis prior to making a certification under section 2366a.

Section 2366a prohibits Milestone B approval for an MDAP until the milestone decision authority certifies that the technology in the program has been demonstrated in a relevant environment and certain other key criteria have been met. However, many MDAPs undergo significant changes in technology, funding, or requirements after Milestone B approval. In some cases, such changes could result in the continuation of the program on a basis that would be inconsistent with the certification of the milestone decision authority.

The provision recommended by the committee would ensure that the milestone decision authority is promptly notified of any such changes and is in a position to take appropriate action including, if necessary, withdrawal of the certification or rescission of Milestone B approval.