Overview
Title
To promote defense innovation, and for other purposes.
ELI5 AI
The Fostering Reform and Government Efficiency in Defense Act is like a plan to make buying tools for the military quicker and easier, but it could also make it so that not enough people are checking to see that money is spent wisely.
Summary AI
The Fostering Reform and Government Efficiency in Defense Act seeks to enhance defense innovation through various measures. It proposes to streamline the defense acquisition process, transition certain roles to improve portfolio management, and implement new strategies for rapid acquisition and procurement. Additionally, the bill encourages competition within the defense industrial base and seeks to optimize the budgeting and funding of defense programs.
Published
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Bill Statistics
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AnalysisAI
The proposed legislation, called the “Fostering Reform and Government Efficiency in Defense Act” or the “FoRGED Act” introduced in the U.S. Senate, seeks to reform the defense acquisition process. It aims to simplify existing laws, promote innovation, improve efficiency, and reduce bureaucracy within the Department of Defense. The bill includes a broad range of provisions affecting how defense programs are managed, the procurement process, budget allocations, and the roles of various defense officials.
General Summary of the Bill
The FoRGED Act proposes comprehensive changes to streamline the defense acquisition process. Primarily, it repeals outdated or potentially cumbersome laws and regulations that govern how the Department of Defense acquires new technologies and equipment. It introduces modifications to existing statutory requirements, procedural reforms, and new mechanisms for rapid procurement and commercial contracting. The bill establishes enhanced roles and responsibilities for acquisition executives, encourages more dynamic budgeting processes, and promotes competition in the defense industrial sector.
Summary of Significant Issues
One of the key issues with the bill is its widespread repeals and amendments to the current legal framework guiding defense acquisitions. There is concern that these changes could lead to reduced oversight and accountability, possibly opening the door to inefficiencies and favoritism. The substantial increase in procurement thresholds, as proposed, might also lead to wasteful spending under less scrutiny.
The bill notably offers exemptions for nontraditional defense contractors and introduces an automatic expiration for some reporting requirements, potentially hindering transparency over time. There is also uncertainty regarding changes to the roles of key acquisition officials, which may cause confusion within the Department of Defense about decision-making processes and authority.
Impact on the Public Broadly
For the general public, the implications of the FoRGED Act may ultimately reflect in how efficiently defense spending is managed. A streamlined and efficient acquisition process has the potential to reduce unnecessary government spending, improve national security capabilities, and ensure taxpayer money is used effectively. However, there is an inherent risk of reduced transparency and oversight, which could lead to spending inefficiencies and a lack of accountability for how funds are allocated.
Impact on Specific Stakeholders
For defense contractors, especially nontraditional ones, the bill could offer new opportunities and reduced regulatory hurdles. These changes may foster innovation and introduce new defense solutions more rapidly. However, traditional contractors might face challenges as they are potentially sidelined in favor of newer players under the revised provisions.
Within the Department of Defense, shifts in roles and responsibilities could improve management and accountability but might initially cause some confusion as officials adjust to new structures and expectations. For government watchdogs and oversight bodies, the reduction in obligatory reporting and the potential for less stringent procurement processes could make it harder to track and evaluate how defense funds are being utilized.
In conclusion, while the FoRGED Act aims to bring agility, innovation, and efficiency to the defense acquisition process, it raises critical questions about how these changes will affect oversight, transparency, and fair competition. Policymakers must consider both the benefits of modernization and the risks of reduced regulatory checks as they deliberate on this legislation.
Financial Assessment
The proposed Fostering Reform and Government Efficiency in Defense Act contains several financial references and monetary allocations that merit close examination. Below is an analysis of these aspects and how they relate to the identified issues within the bill.
Financial Allocations and Spending
The bill presents a comprehensive approach to modifying financial thresholds related to defense acquisition processes:
Simplified Procedures and Acquisition Thresholds: Section 307 proposes significant changes to financial thresholds. It updates the Simplified Acquisition Threshold to $10,000,000 from previous amounts. For small purchases, it modifies criteria to include purchases up to $50,000,000. These amendments prompt concerns about potential overspending and reduced oversight, aligning with the issue of increased discretionary spending without adequate accountability.
Micro-Purchase Threshold: The bill revises the Micro-Purchase threshold to $100,000. This increase is intended to streamline procurement processes but might lead to excessive spending with diminished scrutiny, thus raising concerns about the integrity of procurements as indicated in the issues.
Automatic Sunset Clause for Reports: Section 103 introduces an automatic sunset clause for indefinite-duration reports after five years unless specified otherwise. This could result in cost savings from reducing the burden of indefinite report generation but might impact transparency and accountability without clear guidelines for continuation or termination of important oversight reports.
Relationship to Identified Issues
Reduced Oversight and Accountability: The increased acquisition thresholds highlighted in Section 307 could potentially lead to greater expenditure without sufficient checks, aligning with concerns about reduced oversight and potential favoritism. Without stringent controls and informed strategic planning, these financial changes might facilitate wasteful spending or undue influence by larger businesses over smaller entities.
Exemption of Nontraditional Contractors: Sections 303 and 315 offer exemptions to nontraditional defense contractors from certain regulations. While these exemptions may encourage innovation and engagement with new technology providers, the absence of rigorous controls could provide loopholes, leading to favoritism—a major concern raised among the expressed issues.
Spending Without Completion: The introduction of mandatory expenditure percentages within Section 402's industrial expansion program could lead to enforced spending irrespective of necessity or strategic priority, suggesting potential financial inefficiencies. The emphasis on mandatory minimum spending—not less than 2% and 3% in subsequent fiscal years—could lead to overspending in periods when less might be beneficial.
Transparency Concerns: The repealing of multiple budgetary requirements as seen in Section 503 raises potential issues for transparency, possibly weakening the defense sector's financial accountability in prioritizing sustainability and strategic acquisition finances.
Conclusion
In summary, the bill's financial aspects aim to streamline and modernize the defense acquisition process but require careful consideration to ensure they do not compromise oversight or transparency. Addressing the potential gaps in accountability and favoritism will be critical to ensure that financial allocations remain effective and fair in advancing defense innovation and efficiency.
Issues
The repeals and modifications in Sections 101 and 102 lack clarity and justification about their impact on the defense acquisition process, potentially leading to reduced oversight and accountability. This could cause significant changes in policy without enough understanding of the consequences, raising concerns about strategic planning, financial implications, and potential favoritism toward certain industries.
The substantial increase in procurement thresholds in Section 307, including raising the Simplified Acquisition Threshold and Micro-Purchase threshold, may result in higher spending with less oversight, potentially leading to wasteful spending and favoritism toward larger businesses, calling into question the integrity of the procurement process.
The exemption for nontraditional defense contractors in Sections 303 and 315 raises concerns about the potential for regulatory loopholes and unfair advantages that could favor these contractors without transparent justification, possibly resulting in wasteful spending or favoritism.
The automatic sunset for report requirements in Section 103 could impact transparency and accountability by reducing required reporting over time without clear guidelines on extending these requirements, potentially allowing important reports to lapse without oversight mechanisms.
The amendments in Sections 201 and 202 regarding changes to the roles and responsibilities of acquisition executives and the Joint Requirements Oversight Council respectively, may cause confusion and variability in implementation, without offering a clear rationale or demonstrating how these changes will improve efficiency.
The increase in discretionary power in defining and revising requirements in Section 205's "Capstone requirements" for acquisition portfolios could lead to inconsistent applications and decision-making that do not align with broader defense goals, potentially resulting in inefficient resource allocation.
The modifications in Section 320 allowing follow-on production contracts without competitive procedures may reduce competition and lead to favoritism or unnecessary expenditures if not carefully monitored, impacting fairness in the procurement process.
Section 402 outlines an industrial expansion program with mandatory expenditure requirements, which might lead to potential overspending in unnecessary years, lacking flexibility to adapt to varying defense industry needs, potentially causing financial inefficiencies.
The repeal of numerous sections related to budgetary requirements in Section 503 could lead to reduced transparency in defense spending and undermine efforts to prioritize sustainability and operational capabilities within the military, raising ethical and financial concerns.
Sections
Sections are presented as they are annotated in the original legislative text. Any missing headers, numbers, or non-consecutive order is due to the original text.
1. Short title; table of contents Read Opens in new tab
Summary AI
The Fostering Reform and Government Efficiency in Defense Act, also known as the FoRGED Act, proposes several changes to the defense acquisition process. It includes sections aimed at simplifying existing laws, adjusting acquisition roles and responsibilities, promoting rapid procurement and commercial contracting, enhancing competition in the defense industry, and reviewing the defense budgeting process for better funding of acquisition programs.
101. Repeals of existing law to streamline the defense acquisition process Read Opens in new tab
Summary AI
The document outlines numerous sections of U.S. law that are being repealed in order to simplify the defense acquisition process. It also includes amendments to update related tables of sections in the United States Code to reflect these repeals.
102. Modifications to current defense acquisition requirements Read Opens in new tab
Summary AI
The document outlines numerous modifications to various sections of U.S. defense-related laws, such as the United States Code and different National Defense Authorization Acts. These changes involve redefining terms, amending financial thresholds, updating procedural requirements, and altering reporting obligations to enhance efficiency and flexibility in defense acquisition and management processes.
Money References
- (b) Modifications to title 10.—Title 10, United States Code, is amended— (1) in section 2222— (A) by striking subsections (e) through (g); and (B) by redesignating subsections (h) and (i) as subsections (e) and (f), respectively; and (C) in subsection (f), as redesignated by subparagraph (B) by striking paragraphs (9), (10), and (11); (2) in section 3012(3)(B), by striking “lowest overall cost alternative” and inserting “best value”; (3) in section 3069— (A) in subsection (a), by striking “if that head of an agency” and all that follows through “a complete end item”; (B) by striking subsections (b) through (d); and (C) by redesignating subsection (e) as subsection (b); (4) in section 3204— (A) in subsection (a)— (i) by redesignating paragraphs (2) through (7) as paragraphs (3) through (8), respectively; (ii) by inserting after paragraph (1), the following: “(2) market research indicates that the property or service needed by the agency provides differentiated capabilities, accelerated delivery schedules, or continuous improvements;”. (B) by striking subsections (b), (c), (d), and (g); (C) by redesignating subsections (e) and (f) as subsections (b) and (c), respectively; (D) in subsection (b), as redesignated by subparagraph (C)— (i) in paragraph (1)— (I) in subparagraph (A), by striking “and certifies the accuracy and completeness of the justification” and inserting “in a manner that provides an accurate and complete justification”; and (II) in subparagraph (B)— (aa) by striking “$10,000,000” each place it appears and inserting “$100,000,000”; (bb) in clause (i), by striking “$500,000” and inserting “$10,000,000”; and (cc) in clause (iii), by striking “$75,000,000” and inserting “$500,000,000”; (ii) in paragraph (3), by striking “by subsection (a)(2)” and inserting “by paragraphs (3) or (4)(A) of subsection (a)”; and (iii) in paragraph (4)— (I) in subparagraph (C), by striking “subsection (a)(7)” and inserting “subsection (a)(8)”; and (II) in subparagraph (E), by striking “subsection (a)(4)” and inserting “subsection (a)(5)”; and (E) in paragraph (1) of subsection (c), as redesignated by subparagraph (C)— (i) in subparagraph (A), by striking “subsection (e)(1)” and inserting “subsection (b)(1)”; and (ii) in subparagraph (B), by striking “subsection (a)(2)” and inserting “subsection (a)(3)”; (5) in section 3226— (A) in subsection (a), by striking “and other program purposes conducted pursuant to subsection (b)(6) of such section”; and (B) by striking subsection (d); (6) in section 3243(d)— (A) by striking paragraph (2); (B) by redesignating paragraph (3) as paragraph (2); and (C) in paragraph (1)(B), by striking “subject to paragraph (2),”; (7) in section 3374, by inserting “with significant contract financing” after “undefinitized contractual action” each place it appears.; (8) in section 3601(c)(3)— (A) in subparagraph (A), by striking “Subject to subparagraph (C), in any” and inserting “In any”; (B) in subparagraph (B), by striking “acquire capability” and all that follows through “$50,000,000 during any fiscal year” and inserting “acquire capability in an amount aggregating not more than $3,000,000,000”; and (C) by striking subparagraph (C); (9) in section 3703— (A) in subsection (a)(1)(A), by striking “that results in at least two or more responsive and viable competing bids”; (B) in subsection (c), by striking “or 5 percent” and inserting “or 25 percent”; and (C) in subsection (f), by striking “under subsection (a)(1) from such requirement” and inserting “from such requirement under paragraphs (1) or (2) of subsection (a)”; (10) in section 3705— (A) by striking subsection (b); and (B) by redesignating subsection (c) as subsection (b); (11) by amending section 3774 to read as follows: “§ 3774.
- Preference for specially negotiated licenses.”; (13) in section 3805(c), by striking “15 percent” and inserting “50 percent”; (14) in section 4201— (A) in subsection (a)(2)— (i) in subparagraph (A), by striking “$300,000,000 (based on fiscal year 1990 constant dollars)” and inserting “$1,000,000,000 (based on fiscal year 2024 constant dollars)”; and (ii) in subparagraph (B), by striking “$1,800,000,000 (based on fiscal year 1990 constant dollars)” and inserting “$5,000,000,000 (based on fiscal year 2024 constant dollars)”; and (B) in subsection (b), by adding at the end the following: “(3) An acquisition program for a defense software program as described by section 800 of the National Defense Authorization Act for Fiscal Year 2020 (Public Law 116–92; 10 U.S.C. 4571 note).”; (15) in section 4202(a)(2)— (A) by striking subparagraph (B); and (B) redesignating subparagraphs (C) and (D) as subparagraphs (B) and (C), respectively; (16) in section 4882, by striking “the President, through the head of any department” each place it appears and inserting “the Secretary of Defense”; (17) in section 4884, by striking “The President” and inserting “The Secretary of Defense”; and (18) in section 8683— (A) in subsection (a)— (i) in paragraph (1), by striking “(1) Appropriations” and inserting “Appropriations”; and (ii) by striking paragraph (2); and (B) in subsection (c), by striking “$10,000,000” and inserting “$50,000,000”.
- (c) Modifications to National Defense Authorization Acts.— (1) Section 229(c)(2)(A)(ii) of the National Defense Authorization Act for Fiscal Year 2024 (Public Law 118–31; 10 U.S.C. 3601 note) is amended by striking “$100,000,000” and inserting “$300,000,000”.
- (3) Section 873 of the National Defense Authorization Act for Fiscal Year 2016 (Public Law 114–92; 10 U.S.C. 3702 note) is amended— (A) in subsection (a)— (i) by striking “valued at less than $7,500,000”; and (ii) by striking “pursuant to” and all that follows through “Transfer Program,”; (B) in subsection (b), by striking “pursuant to” and all that follows through “Research Program,”; (C) by striking subsections (c) and (f); and (D) by redesignating subsections (d), (e), and (g) as subsection (c), (d), and (e), respectively.
3774. Preference for specially negotiated licenses Read Opens in new tab
Summary AI
The Secretary of Defense is required to try, as much as possible, to make contracts with companies to get special licenses for technical data. This is to help with the support and maintenance of major weapon systems or their important parts.
103. Automatic sunset for future statutory reporting requirements Read Opens in new tab
Summary AI
Any new law that requires reports from the Department of Defense to Congress on an indefinite basis will stop requiring those reports five years after the law is enacted, unless the law specifically states that this rule does not apply.
480a. Reports to Congress: Termination of indefinite-duration reports after five years Read Opens in new tab
Summary AI
Any indefinite-duration reporting requirement enacted in new laws will automatically end after five years unless the law says otherwise. An "indefinite-duration report" is one that doesn't specify how long or how often reports must be submitted.
201. Transition of program executive officer role to portfolio acquisition executive Read Opens in new tab
Summary AI
The text describes amendments to various sections of U.S. law to change the term "program executive officer" to "portfolio acquisition executive." This change reflects an updated role that encompasses broader management duties and responsibilities within defense acquisition programs.
202. Amendments to the Joint Requirements Oversight Council Read Opens in new tab
Summary AI
The amendments to Section 181 of title 10, United States Code, change the responsibilities of the Joint Requirements Oversight Council by adjusting how they manage and approve joint requirements, including removing their ability to approve and prioritize them. Additionally, the amendments include technical changes to related sections in title 10 to ensure they are consistent with the updated responsibilities.
203. Matters relating to the Director of Cost Assessment and Program Evaluation Read Opens in new tab
Summary AI
The amendments to title 10 of the United States Code modify the authority and procedures related to the Director of Cost Assessment and Program Evaluation by requiring concurrence from the Joint Requirements and Programming Board. Additionally, they involve the elimination and renumbering of certain functions and components surrounding aircraft procurement planning.
204. Establishment of Joint Requirements and Programming Board Read Opens in new tab
Summary AI
The text establishes a Joint Requirements and Programming Board within the Department of Defense that is led by specific military and defense officials. The Board is responsible for overseeing military requirements and program evaluations, making recommendations through majority votes, and organizing committees to address defense-related functions, with the Secretary of Defense ensuring the Board has adequate support.
186. Joint Requirements and Programming Board Read Opens in new tab
Summary AI
The section establishes a Joint Requirements and Programming Board within the Department of Defense, co-chaired by the Director of Cost Assessment and Program Evaluation and the Chairman of the Joint Requirements Oversight Council. The Board is responsible for reviewing military capabilities requirements and program evaluations, making recommendations by majority vote, and coordinating between various defense leaders. It features an executive committee and functional committees to address specific military needs, and members can nominate issues for review and vote by proxy.
205. Capstone requirements Read Opens in new tab
Summary AI
The new section added to Chapter 221 of Title 10, United States Code, mandates the establishment of a "capstone requirement approach" for military acquisition portfolios, aiming to increase speed, agility, and innovation in delivering military capabilities. It outlines various responsibilities, including developing general acquisition requirements, employing prototyping, using user feedback to manage requirements, and ensuring collaboration between operational forces and the acquisition community, all designed to improve operational impact and align with strategic needs.
3209. Capstone requirements Read Opens in new tab
Summary AI
The section outlines a plan for military departments to speed up and innovate military capability development by creating broad requirements for acquisition portfolios. It includes collaborative efforts with operational forces, emphasizes using prototypes and commercial products, and allows portfolio managers flexibility to adjust programs, while maintaining consultation with military boards and commands.
301. Milestone A Read Opens in new tab
Summary AI
The text outlines changes to United States Code regarding military program assessments. It repeals Section 4251, updates related clerical references, and requires an independent cost estimate before approving certain phases, specifying the need for cost estimates only for engineering, manufacturing, production, and deployment phases.
302. Modification to acquisition strategy Read Opens in new tab
Summary AI
The section updates parts of U.S. law about how the Department of Defense acquires new technology and systems. It changes the roles and responsibilities of decision-makers and provides a detailed strategy to deliver technology in stages, involve various stakeholders, and ensure continuous feedback and updates to acquisition plans.
303. Exemptions for nontraditional defense contractors Read Opens in new tab
Summary AI
Nontraditional defense contractors, as defined by U.S. law, are exempt from a list of specific regulations found in various parts of the Defense Federal Acquisition Regulation Supplement and the Federal Acquisition Regulation, as well as a section of U.S. Code Title 10.
304. Modifications to treatment of certain products and services as commercial products and commercial services Read Opens in new tab
Summary AI
The section modifies how certain products and services are classified as commercial by requiring that they must be treated as commercial, unless a waiver is provided with specific justifications. It also eliminates a subsection and renames another.
305. Modification to nontraditional defense contractor definitions Read Opens in new tab
Summary AI
The modification to the definition of a nontraditional defense contractor in Section 3014 of title 10, United States Code, clarifies that such a contractor is an entity that is not currently under a defense contract and meets additional criteria, such as having substantial revenue growth, reinvesting a significant portion of its revenue into research and development, or securing equity investment from third parties.
306. Alternative capability based pricing Read Opens in new tab
Summary AI
The section allows federal agencies to use an alternative capability-based analysis to assess whether the price proposed by a nontraditional defense contractor for a product or service is fair and reasonable. This analysis evaluates factors like the product's suitability, the contractor's technical expertise, their business model, potential cost savings, and feedback from military users on the value added by the product.
307. Modifications to certain procurement thresholds Read Opens in new tab
Summary AI
The section describes changes to the United States Code related to government contracting and procurement thresholds, significantly increasing many dollar limits that define simplified acquisition processes and associated thresholds. These adjustments impact various aspects, including planning, small business considerations, and contracting procedures for defense-related and other government acquisitions.
Money References
- (a) Simplified procedures for small purchases.—Section 3205(a) of title 10, United States Code, is amended— (1) in paragraph (1), by striking “simplified acquisition threshold” and inserting “threshold specified in section 3571(a) of this title”; and (2) in paragraph (2), by striking “$5,000,000” and inserting “$50,000,000”.
- (b) Simplified acquisition threshold.—Section 3571 of title 10, United States Code, is amended— (1) in subsection (a), by striking “as specified in section 134 of title 41” and inserting “$10,000,000”; and (2) in subsection (b)— (A) by inserting “(1)” before “No law”; and (B) by adding at the end the following new paragraph: “(2) For purposes of acquisitions by agencies named in section 3063 of this title, the small business reservation established in section 15(j) of the Small Business Act (15 U.S.C. 644(j)) shall be $500,000.”. (c) Micro-Purchase threshold.—Section 3573 of title 10, United States Code, is amended by striking “$10,000” and inserting “$100,000”.
- (i) Preference for commercial services.—Section 876 of the National Defense Authorization Act for Fiscal Year 2017 (Public Law 114–328; 10 U.S.C. 3453 note) is amended— (1) by striking “$10,000,000” each place it appears and inserting “$50,000,000”; and (2) in paragraph (2), by striking “simplified acquisition threshold” and inserting “threshold specified in section 3571(a) of this title”.
308. Modifications to commercial solutions openings Read Opens in new tab
Summary AI
The section modifies Section 3458 of title 10, United States Code to allow the Department of Defense to use competitive proposals and reviews to acquire commercial products and services and issue follow-on contracts, including sole-source agreements, without further justification. It sets limits on the delegation of authority for contract approvals and encourages using nontraditional contractors for developing military capabilities under specific acquisition pathways.
309. Modifications to other transactions Read Opens in new tab
Summary AI
The section amends Section 4022 of title 10, U.S. Code, to clarify and expand the authority to conduct transactions for prototype projects and follow-on production for the Department of Defense, ensuring that these transactions can exceed $100 million only if specific requirements are met. It also defines key terms like "head of the contracting activity" and "follow-on production," and introduces a provision that allows for rapid production transactions to meet urgent military needs without always requiring competitive procedures.
Money References
- (a) In general.—Section 4022 of title 10, United States Code, is amended— (1) in subsection (a)— (A) by amending paragraph (2) to read as follows: “(2) The authority of this section may be exercised for a transaction for a prototype project, or for a transaction for a follow-on production contract or transaction that is awarded pursuant to subsection (f) or (g), that is expected to cost the Department of Defense in excess of $100,000,000 (including all options) only upon a written determination that the requirements of subsection (d) will be met by a head of the contracting activity, or, for the Defense Advanced Research Projects Agency, the Defense Innovation Unit, or the Missile Defense Agency, the director of the agency.”; and (B) by amending paragraph (3) to read as follows: “(3) The authority of the head of the contracting activity, the director of the Defense Advanced Research Projects Agency, the director of the Defense Innovation Unit, the director of the Missile Defense Agency, or the senior procurement executive, as applicable, under paragraph (2), may not be delegated.”; (2) in subsection (e)— (A) by amending paragraph (1) to read as follows: “(1) The term ‘head of the contracting activity’ means those officials within the organization who have responsibility for and manage an acquisition organization and usually hold unlimited procurement authority.”; and (B) by adding at the end the following new paragraph: “(6) The term ‘follow-on production’ means a contract or transaction that is intended to further develop, test, produce, deploy, operate, or sustain a capability that was successfully prototyped under the authority established in subsection (a).”; (3) by redesignating subsections (h) and (i) as subsections (i) and (j), respectively; and (4) by inserting after subsection (g) the following new subsection: “(h) Authority To award a production transaction To rapidly field an existing capability.—A production transaction may be awarded, with or without the use of competitive procedures, to acquire emergent and proven technologies and field production quantities of new or upgraded systems that do not require additional development and have been demonstrated in a relevant environment when the appropriate service or component acquisition executive determines in writing that exceptional circumstances justify the use of such a transaction to address a high priority warfighter need.”.
310. Modifications to commercial product and commercial service determinations by Department of Defense Read Opens in new tab
Summary AI
The text outlines changes to how the Department of Defense decides if a product or service is commercial. It states that products and services should normally be treated as commercial unless proven otherwise, and if a defense-specific product is needed, detailed justifications must be provided.
311. Commercially acceptable transaction and payment methods Read Opens in new tab
Summary AI
The section outlines that for Defense contracts, officials should use the fastest and most efficient payment methods. They can use the Government purchase card for deals up to $25 million but must follow specific rules, like avoiding certain types of contracts and limiting advance payments to 15%. Additionally, micro-purchase procedures can still be used for smaller transactions.
Money References
- (a) In general.—In the case contracts using commercial procedures or other transactions, procurement officials of the Department of Defense shall use the most efficient, expeditious, and commercially acceptable transaction and payment methods practicable. (b) Government purchase card.—In the case of an acquisition of commercial products, commercial services, nondevelopmental items, or other transactions agreements up to $25,000,000, a procurement official— (1) may use the Government purchase card as a transaction and payment method subject to the limitations of the contracting officer’s warrant and Department of Defense purchase card procedures and limitations; (2) may not use flexibly priced contracts that require the application of the Government’s cost accounting standards or cost principles; and (3) may not provide for advance payments or contract financing greater than 15 percent. (c) Micro-Purchase procedures.—Nothing in this section shall affect the ability of the Department of Defense to use micro-purchase procedures for acquisitions below the micro-purchase threshold.
312. Transparency and accountability of contract awards Read Opens in new tab
Summary AI
In Section 312, the bill requires that details of any contract awards or agreements be made publicly available shortly after they are finalized, while also considering security concerns. The public notice must include a record of the transaction, such as purchase orders, that lists the quantities and prices of the products or services obtained.
313. Limitation on required flowdown of contract clauses to subcontractors providing commercial products or commercial services Read Opens in new tab
Summary AI
The new section added to chapter 247 of title 10, United States Code, restricts the Secretary of Defense from requiring multiple contract clauses for subcontracts involving commercial products or services, only allowing those mandated by law. Instead, the Secretary must simplify by using one clause for commercial contracts and another for noncommercial ones, with these changes taking effect 120 days after the Act's enactment and updated regulations due within 180 days.
3459. Limitation on required flowdown of contract clauses to subcontractors providing commercial products or commercial services Read Opens in new tab
Summary AI
The section states that the Secretary of Defense cannot require subcontractors providing commercial products or services to include certain contract clauses, except those mandated by law. Instead, there should be one clause for commercial contracts and another for noncommercial contracts to streamline legal requirements.
314. Modifications to relationship of other provisions of law to procurement of commercial products and commercial services Read Opens in new tab
Summary AI
The section modifies the rules for how certain laws apply to Department of Defense contracts and subcontracts for buying commercial products and services. It states that new legal provisions after 1994 need special approval to apply, unless they involve penalties or require buying from U.S. sources for security reasons.
315. Nontraditional defense contractor commercial solutions opening Read Opens in new tab
Summary AI
The new subsection added to the United States Code allows the Secretary of Defense to set up groups called consortia, made up only of nontraditional defense contractors. These consortia are meant to work on prototype projects and follow-up production using different quick and adaptive methods, as described in the Department of Defense guidelines.
316. Program management office competition Read Opens in new tab
Summary AI
In this section, the Department of Defense is required to set up rules by April 1, 2025, for competitive prototype creation among separate program managers and contracting officers, ensuring each receives equal resources. Annually, at least three programs must use this process, with independent evaluations leading to a winner eligible for a sole-source contract, and exemptions are provided to streamline the procedures for program execution.
317. Middle tier of acquisition for rapid prototyping and rapid fielding Read Opens in new tab
Summary AI
The section introduces a new pathway for the U.S. Department of Defense to acquire technologies more quickly by enabling programs to rapidly prototype and field systems within five years. It outlines streamlined processes and decision-making authority to facilitate faster development and deployment of military capabilities, bypassing some traditional bureaucratic procedures.
3602. Middle tier of acquisition for rapid prototyping and rapid fielding Read Opens in new tab
Summary AI
The text outlines guidelines for the Department of Defense to create two quick acquisition processes: one for innovative technology prototypes and another for proven technology systems. These processes aim to quickly develop, test, and deploy new military capabilities within a two to five-year timeframe, involving streamlined procedures and flexible management to meet urgent military needs.
318. Revision and codification of software acquisition pathways Read Opens in new tab
Summary AI
The section revises and adds to U.S. Code, enabling the Secretary of Defense to create new pathways for the faster development and delivery of software and related hardware for defense purposes. These pathways aim to ensure more efficient use of technology, while excluding certain projects from being classified as major defense programs to expedite their implementation.
3603. Software acquisition pathways Read Opens in new tab
Summary AI
The section establishes pathways for acquiring and developing software and related hardware for the Department of Defense, emphasizing rapid development, integration, and delivery while not treating these acquisitions as major defense programs. It also outlines an expedited process and risk-based approach, exempting these pathways from certain traditional Defense Department requirements and directives.
319. Modifications to steps to identify and address potential unfair competitive advantage of technical advisors to acquisition officials Read Opens in new tab
Summary AI
The section requires the Secretary of Defense to issue guidance within 180 days to prevent unfair competitive advantages for entities advising on research and development awards. It defines what constitutes an unfair advantage and specifies how such entities must operate without performing acquisition functions or influencing testing or evaluations. It also requires a report to Congress on these policies and information on charges by science and technology labs, and repeals an outdated law.
320. Modifications to procurement for experimental purposes Read Opens in new tab
Summary AI
The changes to Section 4023 of title 10, United States Code, update the rules about buying items for experimental purposes. It expands the types of items that can be bought, allows for modifications during purchases, and permits follow-on contracts without competitive bidding if the item successfully completes its testing.
321. Consumption-based solutions Read Opens in new tab
Summary AI
The new section added to Chapter 247 of Title 10 in the United States Code allows the Secretary of Defense and military department Secretaries to acquire technology-related capabilities through consumption-based solutions, which means they can pay based on actual usage. This involves creating new categories and contract types for procuring these solutions, specifying how costs are determined and requiring contractors to report usage when it reaches certain levels of the contract's funded amount.
3459. Authority to acquire consumption-based solutions Read Opens in new tab
Summary AI
The section gives the Department of Defense and military branches the power to use "consumption-based solutions," which are services charged based on actual usage. These solutions must meet certain criteria, like having fixed pricing and reporting requirements when usage reaches 75% and 90% of the contract's funded amount, and allow modifications up to 25% of the total contract value to be treated as competitive procurements.
401. Program for enhancing secondary sources and supply chain management for the Department of Defense Read Opens in new tab
Summary AI
The Department of Defense is setting up a program to improve its supply chain by creating easier ways to qualify backup sources for parts and systems, especially during wars. This program involves creating templates and guidelines, managing costs, and offering workforce training, while ensuring necessary legal protections for those approving and managing these sources.
402. Administration of the industrial expansion program Read Opens in new tab
Summary AI
The section outlines the creation of an industrial expansion program by the Secretary of Defense, which will support various activities like updating military specifications and dealing with material shortages. It sets priorities for funding, specifies required spending percentages from 2026 onwards, exempts some existing regulations, and prefers using prototype authority for procurement.
501. Review of structure of the budget and appropriations for funding of defense acquisition programs Read Opens in new tab
Summary AI
The Secretary of Defense is required to review the budget structure of defense acquisition programs to find ways to improve management and efficiency, including combining similar programs into single budget items and aligning the budget more closely with management portfolios. Within a year, the Secretary must report the review's findings and suggest any changes or new legislation needed to Congress.
502. Modifications to the Defense Modernization Account Read Opens in new tab
Summary AI
The section modifies certain parts of the Defense Modernization Account rules in the United States Code; it removes specific wording related to savings and funding, and updates how some list items end, such as changing semicolons to periods.
503. Amendments and repeals to budgetary requirements for defense acquisition Read Opens in new tab
Summary AI
The section outlines various amendments and repeals to existing laws related to defense budget requirements. It includes changes like removing certain subsections for programs such as body armor procurement and unmanned surveillance systems, and it also repeals several provisions relating to defense budget displays, missile defense programs, and other departmental projects.
141. Body Armor Procurement Read Opens in new tab
Summary AI
The section requires the Secretary of Defense to use authorized funds to purchase body armor.