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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. 818. REPORT ON IMPLEMENTATION OF RECOMMENDATIONS ON TOTAL OWNERSHIP COST FOR MAJOR WEAPON SYSTEMS.

(a) Report Required- Not later than 180 days after the date of the enactment of this Act, the Secretary of Defense shall submit to the congressional defense committees a report on the extent of the implementation of the recommendations set forth in the February 2003 report of the Government Accountability Office entitled `Setting Requirements Differently Could Reduce Weapon Systems' Total Ownership Costs'.

(b) Elements- The report required by subsection (a) shall include the following:

(1) For each recommendation described in subsection (a) that has been implemented, or that the Secretary plans to implement--

(A) a summary of all actions that have been taken to implement such recommendation; and

(B) a schedule, with specific milestones, for completing the implementation of such recommendation.

(2) For each recommendation that the Secretary has not implemented and does not plan to implement--

(A) the reasons for the decision not to implement such recommendation; and

(B) a summary of any alternative actions the Secretary plans to take to address the purposes underlying such recommendation.

(3) A summary of any additional actions the Secretary has taken or plans to take to ensure that total ownership cost is appropriately considered in the requirements process for major weapon systems.

The Senate amendment contained a provision (sec. 805) that would require the Secretary of Defense to report to the congressional defense committees on the implementation of recommendations by the Comptroller General regarding total ownership cost for major weapon systems.

The House bill contained no similar provision.

The House recedes.

Senate Armed Services Committee Report 110-77

The committee recommends a provision that would require the Secretary of Defense to report to the congressional defense committees on the extent to which the Department of Defense has implemented the recommendations set forth in the February 2003 report of the Government Accountability Office (GAO) entitled `Setting Requirements Differently Could Reduce Weapon Systems' Total Ownership Costs'.

The GAO report states that some major weapon systems, such as the Apache helicopter and the Abrams tank, have experienced costly maintenance problems and low readiness rates, which persisted even after the systems were fielded. The report recommends that the Department address this problem by: incorporating operating and support costs and weapon system readiness rates as key performance parameters in the requirements development process; requiring product developers to establish firm estimates of a weapon system's reliability by no later than the end of the system integration phase; and structuring contracts for major weapon systems so that at Milestone B, the product developer has incentives to ensure that proper trades are made between reliability and performance prior to the production decision.

The GAO report indicates that the Department `partially concurred' with each of these recommendations, but `for the most part, found no further action was needed to lower total ownership cost.' The elimination of readiness problems and the reduction of total ownership costs for major weapon systems would yield significant benefits for the Department. Accordingly, the provision recommended by the committee directs the Secretary to report to the congressional defense committees on specific measures taken to implement the GAO recommendations.