To modify and extend the pilot program on share-in-savings contracts.

1. Adds SEC. __. MODIFICATION AND EXTENSION OF PILOT PROGRAM ON SHARE-IN-SAVINGS CONTRACTS at the end of subtitle A of title VIII

   Adds a section

   In S. 1042 · Public Print

   It is the sense of the Senate that the amendment made by section 806 of the Ronald W. Reagan National Defense Authorization Act for Fiscal Year 2005 (Public Law 108-375; 118 Stat. 2010) permits the Secretary of Defense to provide financial assistance to the Army National Guard for the performance of additional duties specified in section 113(a) of title 32, United States Code, without the use of competitive procedures under the standard exceptions to the use of such procedures in accordance with section 2304(c) of title 10, United States Code.

   Inserted: SEC. __. MODIFICATION AND EXTENSION OF PILOT PROGRAM ON SHARE-IN-SAVINGS CONTRACTS.

   Inserted: (a) Inclusion of Information Technology Improvements in Share-In-Savings.--Paragraph (1) of subsection (a) of section 2332 of title 10, United States Code, is amended by adding at the end the following new sentence: "Each such contract shall provide that the contractor shall incur the cost of implementing information technology improvements, including costs incurred in acquiring, installing, maintaining, and upgrading information technology equipment and training personnel in the use of such equipment, in exchange for a share of any savings directly resulting from the implementation of such improvements during the term of the contract.".

   Inserted: (b) Contract Performance Evaluation.--Such subsection is further amended--

   Inserted: (1) in paragraph (3), by striking ", to the maximum extent practicable,";

   Inserted: (2) by striking paragraph (4);

   Inserted: (3) by redesignating paragraph (5) as paragraph (7); and

   Inserted: (4) inserting after paragraph (3) the following new paragraphs:

   Inserted: "(4) The head of an agency that enters into contracts pursuant to the authority of this section shall establish a panel of employees of such agency, independent of any program office or contracting office responsible for awarding and administering such contracts, for the purpose of verifying performance baselines and methodologies for calculating savings resulting from the implementation of information technology improvements under such contracts. Employees assigned to any such panel shall have experience and expertise appropriate for the duties of such panel.

   Inserted: "(5) Each contract awarded pursuant to the authority of this section shall include a provision containing a quantifiable baseline of current and projected costs, a methodology for calculating actual costs during the period of performance, and a savings share ratio governing the amount of payments the contractor is to receive under such contract that are certified by a panel established pursuant to paragraph (4) to be financially sound and based on the best available information.

   Inserted: "(6) Each contract awarded pursuant to the authority of this section shall--

   Inserted: "(A) provide that aggregate payments to the contractor may not exceed the amount the agency would have paid, in accordance with the baseline of current and projected costs incorporated in such contract, during the period covered by such contract; and

   Inserted: "(B) require an independent annual audit of actual costs in accordance with the methodology established under paragraph (5)(B), which shall serve as a basis for annual payments based on savings share ratio established in such contract.".

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   Inserted: (c) Extension of Pilot Program.--Such section is further amended--

   Inserted: (1) in subsection (b)(3)(B), by striking "fiscal years 2003, 2004, and 2005" and inserting "fiscal years 2003 through 2007"; and

   Inserted: (2) in subsection (d), by striking "September 30, 2005" and inserting "September 30, 2007".

   Inserted: (d) Reports to Congress.--

   Inserted: (1) Secretary of defense reports.--Not later than March 31, 2006, and each year thereafter until the year after the termination of the pilot program under section 2332 of title 10, United States Code (as amended by subsection (a)), the Secretary of Defense shall submit to Congress a report containing a list of each contract entered into by each Federal agency under such section during the preceding year that contains terms providing for the contractor to implement information technology improvements in exchange for a share of the savings derived from the implementation of such improvements. The report shall set forth, for each contract listed--

   Inserted: (A) the information technology performance acquired by reason of the improvements concerned;

   Inserted: (B) the total amount of payments made to the contractor during the year covered by the report; and

   Inserted: (C) the total amount of savings or other measurable benefits realized by the Federal agency during such year as a result of such improvements.

   Inserted: (2) Comptroller general reports.--Not later than two months after the Secretary submits a report required by paragraph (1), the Comptroller General of the United States shall submit to Congress a report on the costs and benefits to the United States of the implementation of the technology improvements under the contracts covered by such report, together with such recommendations as the Comptroller General considers appropriate.

   Original wording

   At the end of subtitle A of title VIII, add the following:

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As printed