S.Amdt. 5388

1. Adds SEC. 1083. REPORTS ON THE ACQUISITION OF MAJOR SYSTEMS at the end of subtitle G of title X

   Adds a section

   In S. 3001 · Placed on Calendar Senate

   (2) in paragraph (2), by striking "implemented" and inserting "developed".

   Inserted: SEC. 1083. REPORTS ON THE ACQUISITION OF MAJOR SYSTEMS.

   Inserted: (a) Content of Reports.--Clause (ii) of section 102A(q)(1)(C) of the National Security Act of 1947 (50 U.S.C. 403-1(q)(1)(C)) is amended by striking the period at the end and inserting "that includes--

   Inserted: "(I) the current total acquisition cost for such system, and the history of such cost from the date the system was first included in a report under this clause to the end of the calendar quarter immediately proceeding the submittal of the report;

   Inserted: "(II) the current development schedule for such system, including an estimate of annual development costs until development is completed;

   Inserted: "(III) the planned procurement schedule for such system, including the best estimate of the Director of National Intelligence of the annual costs and units to be procured until procurement is completed;

   Inserted: "(IV) a full life-cycle cost analysis for such system;

   Inserted: "(V) the result of any significant test and evaluation of such system as of the date of the submittal of the report, or, if a significant test and evaluation has not been conducted, a statement of the reasons therefor and the results of any other test and evaluation that has been conducted of such system;

   Inserted: "(VI) the reasons for any change in acquisition cost, or schedule, for such system from the previous report under this clause, if applicable;

   Inserted: "(VII) each major contract related to such system; and

   Inserted: "(VIII) if there is any cost or schedule variance under a contract referred to in subclause (VII) since the previous report under this clause, the reasons for such cost or schedule variance.".

   Inserted: (b) Determination of Increase in Costs.--Subsection (q) of section 102A of the National Security Act of 1947 (50 U.S.C. 403-1) is amended--

   Inserted: (1) by redesignating paragraphs (3) and (4) as paragraph (4) and (5), respectively; and

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   Inserted: (2) by inserting after paragraph (2) the following:

   Inserted: "(3) Any determination of a percentage increase in the acquisition costs of a major system for which a report is filed under paragraph (1)(C)(ii) shall be stated in terms of constant dollars from the first fiscal year in which funds are appropriated for such system.".

   Inserted: (c) Definitions.--Paragraph (5) of such subsection (q), as redesignated by subsection (b)(1) of this section, is amended to read as follows:

   Inserted: "(5) In this subsection:

   Inserted: "(A) The term 'acquisition cost', with respect to a major system, means the amount equal to the total cost for development and procurement of, and system-specific construction for, such system.

   Inserted: "(B) The term 'full life-cycle cost', with respect to the acquisition of a major system, means all costs of development, procurement, construction, deployment, and operation and support for such program, without regard to funding source or management control, including costs of development and procurement required to support or utilize such system.

   Inserted: "(C) The term 'intelligence program', with respect to the acquisition of a major system, means a program that--

   Inserted: "(i) is carried out to acquire such major system for an element of the intelligence community; and

   Inserted: "(ii) is funded in whole out of amounts available for the National Intelligence Program.

   Inserted: "(D) The term 'major contract,' with respect to a major system acquisition, means each of the 6 largest prime, subordinate, or government-furnished equipment contracts under the program that is in excess of $40,000,000 and that is not a firm, fixed price contract.

   Inserted: "(E) The term 'major system' has the meaning given that term in section 4 of the Office of Federal Procurement Policy Act (41 U.S.C. 403).

   Inserted: "(F) The term 'significant test and evaluation' means the functional or environmental testing of a major system or of the subsystems that combine to create a major system.".

   Inserted: SEC. 1084. EXCESSIVE COST GROWTH OF MAJOR SYSTEMS.

   Inserted: (a) Notification.--Title V of the National Security Act of 1947 (50 U.S.C. 413 et seq.) is amended by inserting after section 506A the following new section:

   Inserted: "excessive cost growth of major systems

   Inserted: "Sec. 506B. (a) Cost Increases of at Least 25 Percent.--(1)(A) On a continuing basis, and separate from the submission of any other report on a major system required by this Act, the program manager shall determine if the acquisition cost of such major system has increased by at least 25 percent as compared to the baseline cost of such major system.

   Inserted: "(B) Not later than 10 days after the date that a program manager determines that an increase described in subparagraph (A) has occurred, the program manager shall submit to the Director of National Intelligence notification of such increase.

   Inserted: "(2)(A) If, after receiving a notification described in paragraph (1)(B), the Director of National Intelligence determines that the acquisition cost of a major system has increased by at least 25 percent, the Director shall submit to the congressional intelligence committees a written notification of such determination as described in subparagraph (B), a description of the amount of the increase in the acquisition cost of such major system, and a certification as described in subparagraph (C).

   Inserted: "(B) The notification required by subparagraph (A) shall include--

   Inserted: "(i) an updated cost estimate;

   Inserted: "(ii) the date on which the determination covered by such notification was made;

   Inserted: "(iii) contract performance assessment information with respect to each significant contract or sub-contract related to such major system, including the name of the contractor, the phase of the contract at the time of the report, the percentage of work under the contract that has been completed, any change in contract cost, the percentage by which the contract is currently ahead or behind schedule, and a summary explanation of significant occurrences, such as cost and schedule variances, and the effect of such occurrences on future costs and schedules;

   Inserted: "(iv) the prior estimate of the full life-cycle cost for such major system, expressed in constant dollars and in current year dollars;

   Inserted: "(v) the current estimated full life-cycle cost of such major system, expressed in constant dollars and current year dollars;

   Inserted: "(vi) a statement of the reasons for any increases in the full life-cycle cost of such major system;

   Inserted: "(vii) the current change and the total change, in dollars and expressed as a percentage, in the full life-cycle cost applicable to such major system, stated both in constant dollars and current year dollars;

   Inserted: "(viii) the completion status of such major system expressed as the percentage-- "(I) of the total number of years for which funds have been appropriated for such major system compared to the number of years for which it is planned that such funds will be appropriated; and "(II) of the amount of funds that have been appropriated for such major system compared to the total amount of such funds which it is planned will be appropriated;

   Inserted: "(ix) the action taken and proposed to be taken to control future cost growth of such major system; and

   Inserted: "(x) any changes made in the performance or schedule of such major system and the extent to which such changes have contributed to the increase in full life-cycle costs of such major system.

   Inserted: "(C) The certification described in this subparagraph is a written certification made by the Director and submitted to the congressional intelligence committees that--

   Inserted: "(i) the acquisition of such major system is essential to the national security;

   Inserted: "(ii) there are no alternatives to such major system that will provide equal or greater intelligence capability at equal or lesser cost to completion;

   Inserted: "(iii) the new estimates of the full life-cycle cost for such major system are reasonable; and

   Inserted: "(iv) the management structure for the acquisition of such major system is adequate to manage and control full life-cycle cost of such major system.

   Inserted: "(b) Cost Increases of at Least 50 Percent.--(1)(A) On a continuing basis, and separate from the submission of any report on a major system required by section 506B of this Act, the program manager shall determine if the acquisition cost of such major system has increased by at least 50 percent as compared to the baseline cost of such major system.

   Inserted: "(B) Not later than 10 days after the date that a program manager determines that an increase described in subparagraph (A) has occurred, the program manager shall submit to the Director of National Intelligence notification of such increase.

   Inserted: "(2) If, after receiving a notification described in paragraph (1)(B), the Director of National Intelligence determines that the acquisition cost of a major system has increased by at least 50 percent as compared to the baseline cost of such major system, the Director shall submit to the congressional intelligence committees a written certification stating that--

   Inserted: "(A) the acquisition of such major system is essential to the national security;

   Inserted: "(B) there are no alternatives to such major system that will provide equal or greater intelligence capability at equal or lesser cost to completion;

   Inserted: "(C) the new estimates of the full life-cycle cost for such major system are reasonable;

   Inserted: "(D) the management structure for the acquisition of such major system is adequate to manage and control the full life-cycle cost of such major system; and

   Inserted: "(E) if milestone decision authority had been delegated to the program manager, such authority is revoked and returned to the Director, except with respect to Department of Defense programs, such authority is revoked and returned to the Director and the Secretary of Defense, jointly.

   Inserted: "(3) In addition to the certification required by paragraph (2), the Director of National Intelligence shall submit to the congressional intelligence committees an updated notification, with current accompanying information, as required by subsection (a)(2).

   Inserted: "(c) Prohibition on Obligation of Funds.--(1) If a written certification required under subsection (a)(2)(A) is not submitted to the congressional intelligence committees within 60 days of the determination made under subsection (a)(1), funds appropriated for the acquisition of a major system may not be obligated for a major contract under the program. Such prohibition on the obligation of funds shall cease to apply at the end of the 30-day period of a continuous session of Congress that begins on the date on which Congress receives the notification required under subsection (a)(2)(A).

   Inserted: "(2) If a written certification required under subsection (b)(2) is not submitted to the congressional intelligence committees within 60 days of the determination made under subsection (b)(2), funds appropriated for the acquisition of a major system may not be obligated for a major contract under the program. Such prohibition on the obligation of funds for the acquisition of a major system shall cease to apply at the end of the 30-day period of a continuous session of Congress that begins on the date on which Congress receives the notification required under subsection (b)(3).

   Inserted: "(d) Definitions.--In this section:

   Inserted: "(1) The term 'acquisition cost', with respect to a major system, means the amount equal to the total cost for development and procurement of, and system-specific construction for, such system.

   Inserted: "(2) The term 'baseline cost', with respect to a major system, means the projected acquisition cost of such system that is approved by the Director of National Intelligence at Milestone B or an equivalent acquisition decision for the development, procurement, and construction of such system. The baseline cost may be in the form of an independent cost estimate.

   Inserted: "(3) The term 'full life-cycle cost', with respect to the acquisition of a major system, means all costs of development, procurement, construction, deployment, and operation and support for such program, without regard to funding source or management control, including costs of development and procurement required to support or utilize such system.

   Inserted: "(4) The term 'independent cost estimate' has the meaning given that term in section 506A(e).

   Inserted: "(5) The term 'major system' has the meaning given that in section 4 of the Office of Federal Procurement Policy Act (41 U.S.C. 403).

   Inserted: "(6) The term 'Milestone B' means a decision to enter into system development, integration, and demonstration pursuant to guidance prescribed by the Director of National Intelligence.

   Inserted: "(7) The term 'program manager', with respect to a major system, means--

   Inserted: "(A) the head of the element of the intelligence community which is responsible for the budget, cost, schedule, and performance of the major system; or

   Inserted: "(B) in the case of a major system within the Office of the Director of National Intelligence, the deputy who is responsible for the budget, cost, schedule, and performance of the major system.".

   Inserted: (b) Clerical Amendment.--The table of contents in the first section of the National Security Act of 1947 is amended by inserting after the item relating to section 506A the following:

   Inserted: "Sec. 506B. Excessive cost growth of major systems.".

   Original wording

   At the end of subtitle G of title X, add the following:

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As printed