PILOT PROGRAM ON ACQUISITION OF MILITARY PURPOSE NONDEVELOPMENTAL ITEMS.

SEC. 866. PILOT PROGRAM ON ACQUISITION OF MILITARY PURPOSE NONDEVELOPMENTAL ITEMS.(a) Pilot Program Authorized.—(1) In general.—The Secretary of Defense may carry out a pilot program to assess the feasability and advisability of acquiring military purpose nondevelopmental items in accordance with this section.(2) Scope of program.—Under the pilot program, the Secretary may enter into contracts with nontraditional defense contractors for the acquisition of military purpose nondevelopmental items in accordance with the requirements set forth in subsection (b).(b) Contract Requirements.—Each contract entered into under the pilot program—(1) shall be a firm, fixed price contract, or a firm, fixed price contract with an economic price adjustment clause awarded using competitive procedures in accordance with chapter 137 of title 10, United States Code;(2) shall be in an amount not in excess of $50,000,000, including all options;(3) shall provide—(A) for the delivery of an initial lot of production quantities of completed items not later than nine months after the date of the award of such contract; and(B) that failure to make delivery as provided for under subparagraph (A) may result in the termination of such contract for default; and(4) shall be—(A) exempt from the requirement to submit certified cost or pricing data under section 2306a of title 10, United States Code, and the cost accounting standards under section 26 of the Office of Federal Procurement Policy Act (41 U.S.C. 422); and(B) subject to the requirement to provide data other than certified cost or pricing data for the purpose of price 124 STAT. 4297 reasonableness determinations, as provided in section 2306a(d) of title 10, United States Code.(c) Regulations.—If the Secretary establishes the pilot program authorized under subsection (a), the Secretary shall prescribe regulations governing such pilot program. Such regulations shall be included in regulations of the Department of Defense prescribed as part of the Federal Acquisition Regulation and shall include the contract clauses and procedures necessary to implement such program.(d) Reports.—(1) Reports on program activities.—Not later than 60 days after the end of any fiscal year in which the pilot program is in effect, the Secretary shall submit to the congressional defense committees a report on the pilot program. The report shall be in unclassified form but may include a classified annex. Each report shall include, for each contract entered into under the pilot program in the preceding fiscal year, the following:(A) The contractor.(B) The item or items to be acquired.(C) The military purpose to be served by such item or items.(D) The amount of the contract.(E) The actions taken by the Department of Defense to ensure that the price paid for such item or items is fair and reasonable.(2) Program assessment.—If the Secretary establishes the pilot program authorized under subsection (a), not later than four years after the date of the enactment of this Act, the Comptroller General of the United States shall submit to the congressional defense committees a report setting forth the assessment of the Comptroller General of the extent to which the pilot program—(A) enabled the Department to acquire items that otherwise might not have been available to the Department;(B) assisted the Department in the rapid acquisition and fielding of capabilities needed to meet urgent operational needs; and(C) protected the interests of the United States in paying fair and reasonable prices for the item or items acquired.(e) Definitions.—In this section:(1) The term “military purpose nondevelopmental item” means a nondevelopmental item that meets a validated military requirement, as determined in writing by the responsible program manager, and has been developed exclusively at private expense. For purposes of this paragraph, an item shall not be considered to be developed exclusively at private expense if development of the item was paid for in whole or in part through—(A) independent research and development costs or bid and proposal costs that have been reimbursed directly or indirectly by a Federal agency or have been submitted to a Federal agency for reimbursement; or(B) foreign government funding.(2) The term “nondevelopmental item”—124 STAT. 4298(A) has the meaning given that term in section 4(13) of the Office of Federal Procurement Policy Act (41 U.S.C. 403(13)); and(B) also includes previously developed items of supply that require modifications other than those customarily available in the commercial marketplace if such modifications are consistent with the requirement in subsection (b)(3)(A).(3) The term “nontraditional defense contractor” has the meaning given that term in section 2302(9) of title 10, United States Code (as added by subsection (g)).(4) The terms “independent research and developments costs” and “bid and proposal costs” have the meaning given such terms in section 31.205–18 of the Federal Acquisition Regulation.(f) Sunset.—(1) In general.—The authority to carry out the pilot program shall expire on the date that is five years after the date of the enactment of this Act.(2) Continuation of current contracts.—The expiration under paragraph (1) of the authority to carry out the pilot program shall not affect the validity of any contract awarded under the pilot program before the date of the expiration of the pilot program under that paragraph.(g) Statutory Definition of Nontraditional Defense Contractor.—(1) Nontraditional defense contractor.—Section 2302 of title 10, United States Code, is amended by adding at the end the following:“(9) The term ‘nontraditional defense contractor’, with respect to a procurement or with respect to a transaction authorized under section 2371(a) of this title, means an entity that is not currently performing and has not performed, for at least the one-year period preceding the solicitation of sources by the Department of Defense for the procurement or transaction, any of the following for the Department of Defense:“(A) Any contract or subcontract that is subject to full coverage under the cost accounting standards prescribed pursuant to section 26 of the Office of Federal Procurement Policy Act (41 U.S.C. 422) and the regulations implementing such section.“(B) Any other contract in excess of $500,000 under which the contractor is required to submit certified cost or pricing data under section 2306a of this title.”.(2) Conforming amendment.—Section 845(f) of the National Defense Authorization Act for Fiscal Year 1994 (10 U.S.C. 2371 note) is amended to read as follows:“(f) Nontraditional Defense Contractor Defined.—In this section, the term ‘nontraditional defense contractor’ has the meaning provided by section 2302(9) of title 10, United States Code.”.124 STAT. 4299