CONTINUATION AND EXPANSION OF DEMONSTRATION PROGRAM TO IDENTIFY OVERPAYMENTS MADE TO VENDORS.

SEC. 388. CONTINUATION AND EXPANSION OF DEMONSTRATION PROGRAM TO IDENTIFY OVERPAYMENTS MADE TO VENDORS. (a) Scope of Program.—Section 354 of the National Defense Authorization Act for Fiscal Year 1996 (Public Law 104–106; 110 Stat. 268; 10 U.S.C. 2461 note) is amended— (1) in subsection (a), by striking out the second sentence; and (2) in subsection (b)(1), by striking out “of the Defense Logistics Agency that relate to (at least) fiscal years 1993, 1994, and 1995” and inserting in lieu thereof “relating to fiscal years after fiscal year 1993 of the working-capital funds and industrial, commercial, and support type activities managed through the Defense Business Operations Fund, except the Defense Logistics Agency to the extent such records have already been audited”.111 STAT. 1714 (b) Collection Method; Contractor Payments.—Such section is further amended by striking out subsections (d) and (e) and inserting in lieu thereof the following new subsections: “(d) Collection Method.—(1) In the case of an overpayment to a vendor identified under the demonstration program, the Secretary shall consider the use of the procedures specified in section 32.611 of the Federal Acquisition Regulation, regarding a setoff against existing invoices for payment to the vendor, as the first method by which the Department seeks to recover the amount of the overpayment (and any applicable interest and penalties) from the vendor. “(2) The Secretary of Defense shall be solely responsible for notifying a vendor of an overpayment made to the vendor and identified under the demonstration program and for recovering the amount of the overpayment (and any applicable interest and penalties) from the vendor. “(e) Fees for Contractor.—The Secretary shall pay to the contractor under the contract entered into under the demonstration program an amount not to exceed 25 percent of the total amount recovered by the Department (through the collection of overpayments and the use of setoffs) solely on the basis of information obtained as a result of the audits performed by the contractor under the program. When an overpayment is recovered through the use of a setoff, amounts for the required payment to the contractor shall be derived from funds available to the working-capital fund or industrial, commercial, or support type activity for which the overpayment is recovered.”. (c) GAO Review.—Not later than December 31, 1998, the Comptroller General shall submit to Congress a report containing the results of a review by the Comptroller General of the demonstration program conducted under section 354 of the National Defense Authorization Act for Fiscal Year 1996 (Public Law 104–106; 10 U.S.C. 2461 note). In the review, the Comptroller General shall— (1) assess the success of the methods used in the demonstration program to identify overpayments made to vendors; (2) consider the types of overpayments identified and the feasibility of avoiding such overpayments through contract adjustments; (3) determine the total amount of overpayments recovered under the demonstration program; and (4) develop recommendations for improving the process by which overpayments are recovered by the Department of Defense.