COST ESTIMATES FOR PROGRAM BASELINES AND CONTRACT NEGOTIATIONS FOR MAJOR DEFENSE ACQUISITION AND MAJOR AUTOMATED INFORMATION SYSTEM PROGRAMS.

SEC. 811. COST ESTIMATES FOR PROGRAM BASELINES AND CONTRACT NEGOTIATIONS FOR MAJOR DEFENSE ACQUISITION AND MAJOR AUTOMATED INFORMATION SYSTEM PROGRAMS. Section 2334 of title 10, United States Code, is amended—(1) in subsection (d)—(A) in paragraph (1)—(i) by striking “paragraph (2)” and inserting “paragraph (3)”; and(ii) by striking “, the rationale for selecting such confidence level, and, if such confidence level is less than 80 percent, the justification for selecting a confidence level of less than 80 percent; and” and inserting “and the rationale for selecting such confidence level;”;(B) by redesignating paragraph (2) as paragraph (3); and(C) by inserting after paragraph (1) the following new paragraph (2):“(2) ensure that such confidence level provides a high degree of confidence that the program can be completed without the need for significant adjustment to program budgets; and”;(2) by redesignating subsections (e) and (f) as subsections (f) and (g), respectively; and(3) by inserting after subsection (d) the following new subsection (e):“(e) Estimates for Program Baseline and Analyses and Targets for Contract Negotiation Purposes.—(1) The policies, procedures, and guidance issued by the Director of Cost Assessment and Program Evaluation in accordance with the requirements of subsection (a) shall provide that—“(A) cost estimates developed for baseline descriptions and other program purposes conducted pursuant to subsection (a)(6) are not to be used for the purpose of contract negotiations or the obligation of funds; and“(B) cost analyses and targets developed for the purpose of contract negotiations and the obligation of funds are based on the Government’s reasonable expectation of successful contractor performance in accordance with the contractor’s proposal and previous experience.“(2) The Program Manager and contracting officer for each major defense acquisition program and major automated information system program shall ensure that cost analyses and targets developed for the purpose of contract negotiations and the obligation of funds are carried out in accordance with the requirements of paragraph (1) and the policies, procedures, and guidance issued by the Director of Cost Assessment and Program Evaluation.124 STAT. 4264“(3) Funds that are made available for a major defense acquisition program or major automated information system program in accordance with a cost estimate conducted pursuant to subsection (a)(6), but are excess to a cost analysis or target developed pursuant to paragraph (2), shall remain available for obligation in accordance with the terms of applicable authorization and appropriations Acts.“(4) Funds described in paragraph (3)—“(A) may be used—“(i) to cover any increased program costs identified by a revised cost analysis or target developed pursuant to paragraph (2);“(ii) to acquire additional end items in accordance with the requirements of section 2308 of this title; or“(iii) to cover the cost of risk reduction and process improvements; and“(B) may be reprogrammed, in accordance with established procedures, only if determined to be excess to program needs on the basis of a cost estimate developed with the concurrence of the Director of Cost Assessment and Program Evaluation.”.