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TITLE VIII--ACQUISITION POLICY, ACQUISITION MANAGEMENT, AND RELATED MATTERS

Subtitle B Amendments To General Contracting Authorities, Procedures, And Limitations

P. L. 113-66

Explanatory Statement, H7894

SEC. 812. INCLUSION OF ADDITIONAL COST ESTIMATE INFORMATION IN CERTAIN REPORTS.

(a) Additional Information Required To Be Included in Selected Acquisition Reports- Section 2432(c)(1) of title 10, United States Code, is amended--

(1) by redesignating subparagraphs (B), (C), and (D) as subparagraphs (E), (F), and (G), respectively;

(2) by inserting after subparagraph (A) the following new subparagraphs (B), (C), and (D):

`(B) for each major defense acquisition program or designated major subprogram included in the report--

`(i) the Baseline Estimate (as that term is defined in section 2433(a)(2) of this title), along with the associated risk and sensitivity analysis of that estimate;

`(ii) the original Baseline Estimate (as that term is defined in section 2435(d)(1) of this title), along with the associated risk and sensitivity analysis of that estimate;

`(iii) if the original Baseline Estimate was adjusted or revised pursuant to section 2435(d)(2) of this title, such adjusted or revised estimate, along with the associated risk and sensitivity analysis of that estimate; and

`(iv) the primary risk parameters associated with the current procurement cost for the program (as that term is used in section 2432(e)(4) of this title);

`(C) a summary of the history of significant developments from the date each major defense acquisition program or designated major subprogram included in the report was first included in a Selected Acquisition Report and program highlights since the last Selected Acquisition Report;

`(D) the significant schedule and technical risks for each such program or subprogram, identified at each major milestone and as of the quarter for which the current report is submitted;';

(3) in subparagraph (E), as so redesignated--

(A) by striking `major defense acquisition program or designated major subprogram' and inserting `such program or subprogram';

(B) by inserting `program acquisition cost and' after `current';

(C) by striking `that cost' and inserting `those costs'; and

(D) by striking `date the program or subprogram was first included in a Selected Acquisition Report' and inserting `December 2001 reporting period'; and

(4) in subparagraph (F), as so redesignated--

(A) by striking `major defense acquisition program or designated major subprogram' and inserting `such program or subprogram'; and

(B) by striking `date the program or subprogram was first included in a Selected Acquisition Report' and inserting `December 2001 reporting period'.

(b) Phase-In of Additional Information Requirements- Section 2432(c)(1) of title 10, United States Code, as amended by subsection (a), shall apply to Selected Acquisition Reports after the date of the enactment of this Act as follows:

(1) For the December 2014 reporting period, to Selected Acquisition Reports for five major defense acquisition programs or designated major subprograms, as determined by the Secretary.

(2) For the December 2019 reporting period and each reporting period thereafter, to Selected Acquisition Reports for all major defense acquisition programs or designated major subprograms.

(c) Additional Duties of Director of Cost Assessment and Program Evaluation With Respect to Selected Acquisition Reports-

(1) REVIEW REQUIRED- Section 2334(a) of title 10, United States Code, is amended--

(A) by striking `and' at the end of paragraph (6);

(B) by striking the period and inserting `; and' at the end of paragraph (7); and

(C) by adding at the end the following new paragraph (8):

`(8) annually review the cost and associated information required to be included, by section 2432(c)(1) of this title, in the Selected Acquisition Reports required by that section.'.

(2) ADDITIONAL INFORMATION REQUIRED IN ANNUAL REPORT- Section 2334(f)(1) of such title is amended--

(A) by striking `report, an assessment of--' and inserting `report--';

(B) in each of subparagraphs (A), (B), and (C), by inserting `an assessment of' before the first word of the text;

(C) in subparagraph (B), by striking `and' at the end;

(D) in subparagraph (C), by striking the period at the end and inserting `; and'; and

(E) by adding at the end the following new subparagraph:

`(D) a summary of the cost and associated information reviewed under subsection (a)(8), an identification of any trends in that information, an aggregation of the cumulative risk of the portfolio of systems reviewed under that subsection, and recommendations for improving cost estimates on the basis of the review under that subsection.'.

Inclusion of additional cost estimate information in certain reports (sec. 812)

The House bill contained a provision (sec. 814) that would amend section 2432 of title 10, United States Code, to require that the program's baseline cost estimate, along with the associated risk curve and sensitivity of that estimate be provided in the quarterly selected acquisition reports. In addition, this section would require that the reports include the current point estimate bounded by the low-end and high-end estimates and the associated sensitivity of those estimates, and identification of the primary risk parameters associated with the estimate. Furthermore, this section would require reporting of estimated termination liability remaining on the contract. Finally, this section would amend section 2334(f) of title 10, United States Code, to require the Director, Cost Assessment and Program Evaluation, to review the information required by this section and to include trend information, a summary of findings and recommendations to improve the cost estimates of the Department of Defense in the annual report to Congress on cost assessment activities.

The Senate committee-reported bill contained no similar provision.

The agreement contains the provision with a technical amendment. We encourage the Secretary of Defense to include at least three programs designated as Acquisition Category I programs in the December 2014 reporting period.


House Report 113-102

SECTION 814--INCLUSION OF ADDITIONAL COST ESTIMATE INFORMATION IN CERTAIN REPORTS

This section would amend section 2432 of title 10, United States Code, to require that the program's baseline cost estimate, along with the associated risk curve and sensitivity of that estimate be provided in the quarterly selected acquisition reports. In addition, this section would require that the reports include the current point estimate bounded by the the low-end and high-end estimates and the associated sensitivity of those estimates, and identification of the primary risk parameters associated with that point estimate. Furthermore, this section would require reporting of estimated termination liability remaining on the contract. Finally, this section would amend section 2334(f) of title 10, United States Code, to require the Director, Cost Assessment and Program Evaluation, to review the information required by this section and to include trend information, a summary of findings and recommendations to improve the cost estimates of the Department of Defense in the annual report to Congress on cost assessment activities.

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