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Conference Report 107-772 - National Defense Authorization Act for Fiscal Year 2003

Conference Report Section

Legislative History

(a) USE OF PROCUREMENT AND ADVANCE PROCUREMENT FUNDS- Section 2306b(i) of title 10, United States Code, is amended by adding at the end the following new paragraph:

(4)(A) The Secretary of Defense may obligate funds for procurement of an end item under a multiyear contract for the purchase of property only for procurement of a complete and usable end item.

(B) The Secretary of Defense may obligate funds appropriated for any fiscal year for advance procurement under a contract for the purchase of property only for the procurement of those long-lead items necessary in order to meet a planned delivery schedule for complete major end items that are programmed under the contract to be acquired with funds appropriated for a subsequent fiscal year (including an economic order quantity of such long-lead items when authorized by law).'.

(b) EFFECTIVE DATE- (1) Paragraph (4) of section 2306b(i) of title 10, United States Code, as added by subsection (a), shall not apply with respect to any contract awarded before the date of the enactment of this Act.

(2) Nothing in this section shall be construed to authorize the expenditure of funds under any contract awarded before the date of the enactment of this Act for any purpose other than the purpose for which such funds have been authorized and appropriated.

Conference Report 107-772

The House bill contained a provision (sec. 141) that would amend section 2306b of title 10, United States Code, to clarify that: (1) funds available for a multiyear contract may be used only for the procurement of complete and usable end items; and (2) funds available for advance procurement may be used only for the procurement of long-lead items necessary to meet a planned delivery schedule for complete major end items. (See H. R. 4546 - House Bill and House Report 107-436 below)

The Senate amendment contained no similar provision. 

The Senate recedes with an amendment that would permit the purchase of economic order quantities of long-lead items where authorized by law. The conference amendment would also clarify that nothing in the section authorizes the use of funds available under contracts awarded prior to the effective date of the provision for any purpose other than the purpose for which such funds were authorized and appropriated. Consequently, although the section would not apply to contracts awarded before the date of enactment, funds available under such contracts could not be used in a manner that would be inconsistent with the requirements of the section unless such funds were authorized and appropriated for such purposes.

H. R. 4546 - House Bill

SEC. 141. REVISIONS TO MULTIYEAR CONTRACTING AUTHORITY.

(a) USE OF PROCUREMENT AND ADVANCE PROCUREMENT FUNDS- Section 2306b(i) of title 10, United States Code, is amended by adding at the end the following new paragraph:

`(4)(A) Unless otherwise authorized by law, the Secretary of Defense may obligate funds for procurement of an end item under a multiyear contract for the purchase of property only for procurement of a complete and usable end item.

`(B) Unless otherwise authorized by law, the Secretary of Defense may obligate funds appropriated for any fiscal year for advance procurement under a multiyear contract for the purchase of property only for the procurement of those long-lead items necessary in order to meet a planned delivery schedule for complete major end items that are programmed under the contract to be acquired with funds appropriated for a subsequent fiscal year.'.

(b) EFFECTIVE DATE- Paragraph (4) of section 2306b(i) of title 10, United States Code, as added by subsection (a), shall not apply with respect to any multiyear contract authorized by law before the date of the enactment of this Act.

House Report 107-436

SECTION 141--REVISIONS TO MULTIYEAR CONTRACTING AUTHORITY RELATING TO STRUCTURING OF CONTRACTS

This section would change section 2306b(i) of title 10, United States Code to require the Department of Defense to structure multiyear procurement contracts so that complete end items are procured through yearly appropriated amounts, and would restrict advance procurement to those long-lead items necessary in order to meet the planned delivery schedule for complete major end items programmed under the contract to be acquired with funds appropriated in a subsequent fiscal year.