CERTAIN WEAPONS-RELATED PROTOTYPE PROJECTS.

SEC. 847. CERTAIN WEAPONS-RELATED PROTOTYPE PROJECTS.(a) Extension of Authority.—Subsection (g) of section 845 of the National Defense Authorization Act for Fiscal Year 1994 (10 U.S.C. 2371 note) is amended by striking “September 30, 2004” and inserting “September 30, 2008”.(b) Increased Scope of Authority.—Subsection (a) of such section is amended by inserting before the period at the end the following: “, or to improvement of weapons or weapon systems in use by the Armed Forces”.(c) Pilot Program for Transition to Follow-on Contracts.—Such section, as amended by subsection (a), is further amended—(1) by redesignating subsections (e), (f), and (g) as subsections (f), (g), and (h), respectively; and(2) by inserting after subsection (d) the following new subsection (e):“(e) Pilot Program for Transition to Follow-on Contracts.—(1) The Secretary of Defense is authorized to carry out a pilot program for follow-on contracting for the production of items or processes under prototype projects carried out under this section.“(2) Under the pilot program—“(A) a qualifying contract for the procurement of such an item or process, or a qualifying subcontract under a contract for the procurement of such an item or process, may be treated as a contract or subcontract, respectively, for the procurement of commercial items, as defined in section 4(12) of the Office of Federal Procurement Policy Act (41 U.S.C. 403(12)); and“(B) the item or process may be treated as an item or process, respectively, that is developed in part with Federal funds and in part at private expense for the purposes of section 2320 of title 10, United States Code.“(3) For the purposes of the pilot program, a qualifying contract or subcontract is a contract or subcontract, respectively, with a nontraditional defense contractor that—“(A) does not exceed $50,000,000; and“(B) is either—“(i) a firm, fixed-price contract or subcontract; or“(ii) a fixed-price contract or subcontract with economic price adjustment.“(4) The authority to conduct a pilot program under this subsection shall terminate on September 30, 2008. The termination of the authority shall not affect the validity of contracts or subcontracts that are awarded or modified during the period of the pilot program, without regard to whether the contracts or subcontracts are performed during the period.”.