PROMULGATION OF REGULATIONS.

SEC. 402. PROMULGATION OF REGULATIONS. Within one hundred and eighty days after the completion of the acquisition policy assessment required by section 401, the Administrator, in coordination as necessary with the Office of Federal Procurement Policy, consistent with section 15 of the Office of Federal Procurement Policy Act (41 U.S.C. 413), and the Federal Acquisition Regulation Council, shall initiate a rulemaking proceeding under section 22 of such Act (41 U.S.C. 418b), on the administration of research and development contracts which propose specific changes to National Aeronautics and Space Administration Procurement Regulations and, as necessary. Federal Acquisition Regulations to consider implementing the recommendations of the assessment required by section 401, as well as— (1) the establishment of policies and procedures for the use of performance-based contracts, incorporating positive and/ or negative fee incentives to the maximum extent practicable; and (2) the establishment of policies and procedures— (A) for limiting the use of clauses of the Federal Acquisition Regulations which otherwise obligate the Government to pay the cost of correction of defects in materials and workmanship and work which otherwise fails to conform to contract requirements, and eliminating the use of such clauses where the defect or failure is within the control of the contractor; and (B) to provide for less than full cost recovery for work determined to be defective in materials and workmanship or which otherwise fails to conform to contract requirements.