CONTRACTOR BUSINESS SYSTEMS.

SEC. 893. CONTRACTOR BUSINESS SYSTEMS.(a) Improvement Program.—Not later than 270 days after the date of the enactment of this Act, the Secretary of Defense shall develop and initiate a program for the improvement of contractor business systems to ensure that such systems provide timely, reliable information for the management of Department of Defense programs by the contractor and by the Department.(b) Approval or Disapproval of Business Systems.—The program developed pursuant to subsection (a) shall—(1) include system requirements for each type of contractor business system covered by the program;(2) establish a process for reviewing contractor business systems and identifying significant deficiencies in such systems;(3) identify officials of the Department of Defense who are responsible for the approval or disapproval of contractor business systems;(4) provide for the approval of any contractor business system that does not have a significant deficiency; and(5) provide for—(A) the disapproval of any contractor business system that has a significant deficiency; and124 STAT. 4312(B) reduced reliance on, and enhanced scrutiny of, data provided by a contractor business system that has been disapproved.(c) Remedial Actions.—The program developed pursuant to subsection (a) shall provide the following:(1) In the event a contractor business system is disapproved pursuant to subsection (b)(5), appropriate officials of the Department of Defense will be available to work with the contractor to develop a corrective action plan defining specific actions to be taken to address the significant deficiencies identified in the system and a schedule for the implementation of such actions.(2) An appropriate official of the Department of Defense may withhold up to 10 percent of progress payments, performance-based payments, and interim payments under covered contracts from a covered contractor, as needed to protect the interests of the Department and ensure compliance, if one or more of the contractor business systems of the contractor has been disapproved pursuant to subsection (b)(5) and has not subsequently received approval.(3) The amount of funds to be withheld under paragraph (2) shall be reduced if a contractor adopts an effective corrective action plan pursuant to paragraph (1) and is effectively implementing such plan.(d) Guidance and Training.—The program developed pursuant to subsection (a) shall provide guidance and training to appropriate government officials on the data that is produced by contractor business systems and the manner in which such data should be used to effectively manage Department of Defense programs.(e) Rule of Construction.—Nothing in this section shall be construed to prohibit an official of the Department of Defense from reviewing, approving, or disapproving a contractor business system pursuant to any applicable law or regulation in force as of the date of the enactment of this Act during the period between the date of the enactment of this Act and the date on which the Secretary implements the requirements of this section with respect to such system.(f) Definitions.—In this section:(1) The term “contractor business system” means an accounting system, estimating system, purchasing system, earned value management system, material management and accounting system, or property management system of a contractor.(2) The term “covered contractor” means a contractor that is subject to the cost accounting standards under section 26 of the Office of Federal Procurement Policy Act (41 U.S.C. 422).(3) The term “covered contract” means a cost-reimbursement contract, incentive-type contract, time-and-materials contract, or labor-hour contract that could be affected if the data produced by a contractor business system has a significant deficiency.(4) The term “significant deficiency”, in the case of a contractor business system, means a shortcoming in the system that materially affects the ability of officials of the Department of Defense and the contractor to rely upon information produced by the system that is needed for management purposes.124 STAT. 4313(g) Defense Contract Audit Agency Legal Resources and Expertise.—(1) Requirement.—The Secretary of Defense shall ensure that—(A) the Defense Contract Audit Agency has sufficient legal resources and expertise to conduct its work in compliance with applicable Department of Defense policies and procedures; and(B) such resources and expertise are provided in a manner that is consistent with the audit independence of the Defense Contract Audit Agency.(2) Report.—Not later than 180 days after the date of the enactment of this Act, the Secretary shall submit to the Committees on Armed Services of the Senate and the House of Representatives a report on the steps taken to comply with the requirements of this subsection.