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100 STAT. 3899

(A) in the case of inpatient treatments, after September 30, 1987; and (B) in the case of outpatient treatments, after September 30, 1988. SEC. 702. CHAMPUS REFORM INITIATIVE (a) DEMONSTRATION PROJECT.—(1) The Secretary of Defense shall conduct a project designed to demonstrate the feasibility of improving the effectiveness of the Civilian Health and Medical Program of the Uniformed Services (CHAMPUS) through the competitive selection of contractors to financially underwrite the delivery of health care services under the program. (2) The demonstration project required by paragraph (1)— (A) shall begin not later than September 30, 1988, and continue for not less than one year; (B) shall include not more than one-third of covered beneficiaries; and (C) shall include a health care enrollment system that meets the requirements specified in section 1099 of title 10, United States Code (as added by section 701(a)(1)). (3)(A) The Secretary shall submit to the Committees on Armed Services of the Senate and House of Representatives a report on the development of the demonstration project required by paragraph (1). Such report shall include— (i) a description of the scope and structure of the project; (ii) an estimate of the costs of the care to be provided under the project; and (iii) a description of the health care enrollment system included in the project. (B) The report required by subparagraph (A) shall be submitted— (i) not later than 60 days before the initiation of the project, if the project is to be restricted to a contiguous area of the United States; or (ii) not later than 60 days before a solicitation for bids or proposals with respect to such project is issued, if the project will not be restricted to a contiguous area of the United States.

10 USC 1073 note. Contracts.

Reports

(b) STUDY OF HEALTH CARE ALTERNATIVES.—(1) The demonstration

project required by subsection (a)(1) shall include a study of— (A) methods to guarantee the maintenance of competition among providers of health care to persons under the jurisdiction of the Secretary; (B) the merits of the use of a voucher system or a fee schedule for provision of health care to such persons; and (C) methods to guarantee that community hospitals are given Hospitals. equal consideration with other health care providers for provi- Contracts. sion of health care services under contracts with the Department of Defense. (2) The Secretary shall submit to Congress a report discussing the Reports. matters evaluated in the study required by paragraph (1) before the end of the 90-day period beginning on the date of the enactment of this Act. (c) PHASED IMPLEMENTATION OF CHAMPUS REFORM INITIATIVE.—

(1) The Secretary of Defense may proceed with implementation of the CHAMPUS reform initiative, to be carried out in two phases during a period of not less than two years, if—

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(A) the Secretary determines, based on the results of the demonstration project required by subsection (a)(1), that such I' initiative should be implemented; (B) not less than one year elapses after the date on which the demonstration project required by subsection (a)(1) is initiated;

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(C) 90 days elapse after the date on which the Secretary submits to the Committees on Armed Services of the Senate and House of Representatives a report that includes— (i) a description of the results of the demonstration V. project; (ii) a description of any changes the Secretary intends to make in the initiative during the proposed implementation; h-t and

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(iii) a comparison of the costs of providing health care .,,. f under CHAMPUS with the costs of providing health care . under the demonstration project and the estimated costs of providing health care under the CHAMPUS reform initiative if fully implemented, (d) DEFINITIONS.—In this section: (1) The term "CHAMPUS reform initiative" means the competitive selection of contractors to financially underwrite the delivery of health care services under the Civilian Health and Medical Program of the Uniformed Services. (2) The term "Civilian Health and Medical Program of the Uniformed Services" has the meaning given such term in section 1072(4) of title 10, United States Code (as added by section 701(b)). It; (3) The term "covered beneficiary" has the meaning given such term in section 1072(5) of title 10, United States Code (as added by section 701(b)). SEC. 703. CHAMPUS CATCHMENT AREAS

Section 1079(a)(7) of title 10, United States Code, is amended by striking out "pays for at least 75 percent of the services" and inserting in lieu thereof "provides primary coverage for the services". SEC. 704. MEDICAL INFORMATION SYSTEMS ACQUISITION (a)

LiMiTATipN

ON

ACQUISITION

OF

MEDICAL

U> INFORMATION

SYSTEM,—(1) The Secretary of Defense may not acquire a medical information system for use in all military medical treatment facilities until— (A) the testing required by subsection (b) is completed; (B) the report required by subsection (d)(2) is submitted; and (C) 30 days elapse after the Secretary submits to the Committees on Armed Services of the Senate and House of Representatives the report described in paragraph (2). (2) The report required by paragraph (1)(B) shall be submitted after the completion of the testing required by subsection (b) and shall include— (A) an evaluation of the competing medical information systems, based on the extended benchmark test, operational test, ^ and incremental price and delivery schedules described in subsection (b); (B) an evaluation of the hospital management computer system of the Veterans' Administration known as the Veterans'

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license: Creative Commons - Attribution Share-Alike - https://creativecommons.org/licenses/by-sa/4.0/


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100 STAT. 3901

Administration Decentralized Hospital Computer Program based on the demonstration project described in subsection (c); and (C) the decision of the Secretary with respect to acquiring a medical information system for use in all military medical treatment facilities. (b) TESTING OF MEDICAL INFORMATION SYSTEMS.—(1) The Secretary

shall carry out an extended benchmark test of competing medical information systems using the testing specifications described in Solicitation No. DAHC 26-85-R-0009 (relating to acquisition of the Composite Health Care System). (2) The Secretary shall carry out an operational test of competing medical information systems. Such test shall— (A) be conducted in medium-to-large military medical treatment facilities; and (B) shall be not less than nine months and not more than one year in duration. (3) Each vendor that submits a medical information system for testing under paragraphs (1) and (2) shall provide to the Secretary incremental price and delivery schedules for each function described in I, II, IID, and III of Solicitation No. DAHC26-85-R-0009. Such schedules shall be provided before the end of the one-year period beginning on the date on which the operational test described in paragraph (2) is initiated. (c) VETERANS' ADMINISTRATION DECENTRALIZED HOSPITAL COM-

PUTER PROGRAM.—(1) The Secretary shall continue to carry out the demonstration project required by section 1203 of the Department of Defense Authorization Act, 1986 (Public Law 99-145; 99 Stat. 718), with respect to the Veterans' Administration Decentralized Hospital Computer Program. Such project shall be completed not later than October 1, 1987. (2) Section 1203(c) of the Department of Defense Authorization Act, 1986, is amended— (A) by striking out "available"; and (B) by inserting "that are available at least three months before the date on which the demonstration project is expected to be completed" after "software)". (d) EVALUATION AND REPORT BY COMPTROLLER GENERAL.—The

Comptroller General shall— (1) monitor the testing required by subsection (b); and (2) submit to the Committees on Armed Services of the Senate and House of Representatives a report evaluating such testing before the end of the 30-day period beginning on the date that such testing is completed. (e) DEFINITIONS.—In this section: (1) The term "medical information system" means a computer-based information system that— (A) receives data normally recorded concerning patients; (B) creates and maintains from such data a computerized medical record for each patient; and (C) provides access to data for patient care, hospital administration, research, and medical care resource planning. (2) The term "military medical treatment facility" means a hospital, medical center, or clinic under the jurisdiction of the Secretary of a military department or the Secretary of Defense.

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 100 STAT. 3902

PUBLIC LAW 99-661—NOV. 14, 1986

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(3) The term "medium-to-large military medical treatment facility" means a military medical treatment facility with 150 or more beds. .,.^. (4) The term "Secretary" means the Secretary of Defense. SEC. 705. CONFIDENTIALITY OF MEDICAL QUALITY ASSURANCE RECORDS

(a) IN GENERAL.—Chapter 55 of title 10, United States Code (as amended by section 701), is further amended by adding at the end the following new section: 10 USC 1102.

"§1102. Confidentiality of medical quality assurance records: qualified immunity for participants "(a) CONFIDENTIALITY OF RECORDS.—Medical quality assurance records created by or for the Department of Defense as part of a medical quality assurance program are confidential and privileged. Such records may not be disclosed to any person or entity, except as provided in subsection (c). "(b) PROHIBITION ON DISCLOSURE AND TESTIMONY.—(1) No part of any medical quality assurance record described in subsection (a) may be subject to discovery or admitted into evidence in any judicial or administrative proceeding, except as provided in subsection (c). "(2) A person who reviews or creates medical quality assurance records for the Department of Defense or who participates in any proceeding that reviews or creates such records may not be permitted or required to testify in any judicial or administrative proceeding with respect to such records or with respect to any finding, recommendation, evaluation, opinion, or action taken by such person or body in connection with such records except as provided in this section. "(c) AUTHORIZED DISCLOSURE AND TESTIMONY.—(1) Subject to paragraph (2), a medical quality assurance record described in subsection (a) may be disclosed, and a person referred to in subsection (b) may give testimony in connection with such a record, only as follows: "(A) To a Federal executive agency or private organization, if such medical quality assurance record or testimony is needed by p such agency or organization to perform licensing or accreditation functions related to Department of Defense health care facilities or to perform monitoring, required by law, of Departstil ment of Defense health care facilities. "(B) To an administrative or judicial proceeding commenced by a present or former Department of Defense health care provider concerning the termination, suspension, or limitation I of clinical privileges of such health care provider. i. "(C) To a governmental board or agency or to a professional health care society or organization, if such medical quality assurance record or testimony is needed by such board, agency, ni'^: society, or organization to perform licensing, credentialing, or the monitoring of professional standards with respect to any health care provider who is or was a member or an employee of the Department of Defense. "(D) To a hospital, medical center, or other institution that provides health care services, if such medical quality assurance -. record or testimony is needed by such institution to assess the professional qualifications of any health care provider who is or was a member or employee of the Department of Defense and who has applied for or been granted authority or employment to provide health care services in or on behalf of such institution.

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100 STAT. 3903

"(E) To an officer, employee, or contractor of the Department of Defense who has a need for such record or testimony to perform official duties. "(F) To a criminal or civil law enforcement agency or instrumentality charged under applicable law with the protection of the public health or safety, if a qualified representative of such agency or instrumentality makes a written request that such record or testimony be provided for a purpose authorized by law. "(G) In an administrative or judicial proceeding commenced by a criminal or civil law enforcement agency or instrumentality referred to in subparagraph (F), but only with respect to the subject of such proceeding, "(2) With the exception of the subject of a quality assurance action, the identity of any person receiving health care services from the Department of Defense or the identity of any other person associated with such department for purposes of a medical quality assurance program that is disclosed in a medical quality assurance record described in subsection (a) shall be deleted from that record or document before any disclosure of such record is made outside the Department of Defense. Such requirement does not apply to the release of information pursuant to section 552a of title 5, United States Code. "(d) DISCLOSURE FOR CERTAIN PURPOSES.—(1) Nothing in this section shall be construed as authorizing or requiring the withholding from any person or entity aggregate statistical information regarding the results of Department of Defense medical quality assurance programs. "(2) Nothing in this section shall be construed as authority to withhold any medical quality assurance record from a committee of either House of Congress, any joint committee of Congress, or the General Accounting Office if such record pertains to any matter within their respective jurisdictions. "(e) PROHIBITION ON DISCLOSURE OF RECORD OR TESTIMONY.—A

person or entity having possession of or access to a record or testimony described by this section may not disclose the contents of such record or testimony in any manner or for any purpose except as provided in this section.

j. '

"(f) EXEMPTION FROM FREEDOM OF INFORMATION ACT.—Medical

quality assurance records described in subsection (a) may not be made available to any person under section 552 of title 5. "(g) LIMITATION ON CIVIL LIABILITY.—A person who participates in

or provides information to a person or body that reviews or creates medical quality assurance records described in subsection (a) shall not be civilly liable for such participation or for providing such information if the participation or provision of information was in good faith based on prevailing professional standards at the time the medical quality assurance program activity took place. "(h) APPLICATION TO INFORMATION IN CERTAIN OTHER RECORDS.—

Nothing in this section shall be construed as limiting access to the information in a record created and maintained outside a medical quality assurance program, including a patient's medical records, on the grounds that the information was presented during meetings of a review body that are part of a medical quality assurance program. "(i) REGULATIONS.—The Secretary of Defense shall prescribe regulations to implement this section. "(j) DEFINITIONS.—In this section:

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 100 STAT. 3904

PUBLIC LAW 99-661—NOV. 14, 1986

"(1) The term 'medical quality assurance program' means any activity carried out before, on, or after the date of the enactment of this section by or for the Department of Defense to assess the quality of medical care, including activities conducted by individuals, military medical or dental treatment facility committees, or other review bodies responsible for quality assurance, credentials, infection control, patient care assessment (including treatment procedures, blood, drugs, and therapeutics), medical records, health resources management review and identification and prevention of medical or dental incidents and risks. "(2) The term 'medical quality assurance record' means the proceedings, records, minutes, and reports that emanate from quality assurance program activities described in paragraph (1) and are produced or compiled by the Department of Defense as part of a medical quality assurance program. "(3) The term 'health care provider' means any military or civilian health care professional who, under regulations of a military department, is granted clinical practice privileges to provide health care services in a military medical or dental treatment facility or who is licensed or certified to perform health care services by a governmental board or agency or professional health care society or organization. "(k) PENALTY.—Any person who willfully discloses a medical quality assurance record other than as provided in this section, knowing that such record is a medical quality assurance record, shall be fined not more than $3,000 in the case of a first offense and not more than $20,000 in the case of a subsequent offense.". (2) The table of sections at the beginning of such chapter (as amended by sections 701 and 702) is amended by adding at the end the following new item: "1102. Confidentiality of medical quality assurance records: qualified immunity for participants.".

10 USC 1102 note.

(b) EFFECTIVE DATE.—Section 1102 of title 10, United States Code, as added by subsection (a), shall apply to all records created before, on, or after the date of the enactment of this Act by or for the Department of Defense as part of a medical quality assurance program.

10 USC 1074

(c) RESTRICTION ON USE OF INFORMATION OBTAINED DURING CER-p^jjj EPIDEMIOLOGIC-ASSESSMENT INTERVIEWS.—(1) Information

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obtained by the Department of Defense during or as a result of an epidemiologic-assessment interview with a serum-positive member of the Armed Forces may not be used to support any adverse personnel action against the member. (2) For purposes of paragraph (1): (A) The term "epidemiologic-assessment interview" means questioning of a serum-positive member of the Armed Forces for purposes of medical treatment or counseling or for epidemiologic or statistical purposes. (B) The term "serum-positive member of the Armed Forces" means a member of the Armed Forces who has been identified ^ as having been exposed to a virus associated with the acquired •'<• immune deficiency syndrome. (i) a court-martial; (ii) non-judicial punishment;
 * i (C) The term "adverse personnel action" includes—

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100 STAT. 3905

(iii) involuntary separation (other than for medical reasons); (iv) administrative or punitive reduction in grade; (v) denial of promotion; (vi) an unfavorable entry in a personnel record; (vii) a bar to reenlistment; and (viii) any other action considered by the Secretary concerned to be an adverse personnel action.

SEC. 706. USE OF PUBLIC HEALTH SERVICE HOSPITALS AS FACILITIES OF THE UNIFORMED SERVICES

Section 1252(e) of the Department of Defense Authorization Act, 1984 (42 U.S.C. 248d(e)), is amended by striking out "December 31, 1987" in the first sentence and inserting in lieu thereof "December 31, 1988". SEC. 707. LIMITATION ON DENTAL INSURANCE PROGRAM

(a) AMOUNT OF PREMIUM.—Subsection (b)(2) of section 1076a of title 10, United States Code, is amended to read as follows: "(2) A member enrolled in a plan under this section shall pay a premium of not more than $10 per month for the member and the family of the member.".

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(b) ANNUAL COST OF PROGRAM.—Such section is further amended

by adding at the end the following new subsection; "(h) The Secretary of Defense may not spend more than $105,000,000 (in fiscal year 1986 dollars) for a plan under this section during any fiscal year.". (c) AUTHORIZATION OF APPROPRIATIONS.—Of amounts authorized to be appropriated for fiscal year 1987 for Operations and Maintenance, Defense Agencies, not more than $18,000,000 may be used for the purpose of providing a dental insurance program under section 1076a of title 10, United States Code (as amended by this section). TITLE VIII—UNIFORM CODE OF MILITARY JUSTICE

Military Justice

SEC. 801. SHORT TITLE; REFERENCES TO UNIFORM CODE OF MILITARY JUSTICE

Amendments of 1986. 10 USC 801 note.

(a) SHORT TITLE.—This title may be cited as the "Military Justice Amendments of 1986". (b) REFERENCES TO UCMJ.—Except as otherwise expressly provided, whenever in this title an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of chapter 47 of title 10, United States Code (the Uniform 10 USC 801 et Code of Military Justice). seq. SEC. 802. DEFENSE OF LACK OF MENTAL RESPONSIBILITY

(a) IN GENERAL.—(1) Subchapter VII is amended by inserting after section 850 (article 50) the following new section (article): "§ 850a. Art. 50a. Defense of lack of mental responsibility "(a) It is an affirmative defense in a trial by court-martial that, at the time of the commission of the acts constituting the offense, the accused, as a result of a severe mental disease or defect, was unable to appreciate the nature and quality or the wrongfulness of the acts. Mental disease or defect does not otherwise constitute a defense.

10 USC 850a.

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 100 STAT. 3906

10 USC 852.

PUBLIC LAW 99-661—NOV. 14, 1986

"(b) The accused has the burden of proving the defense of lack of mental responsibility by clear and convincing evidence. "(c) Whenever lack of mental responsibility of the accused with respect to an offense is properly at issue, the military judge, or the president of a court-martial without a military judge, shall instruct the members of the court as to the defense of lack of mental responsibility under this section and charge them to find the accused— "(1) guilty; "(2) not guilty; or '"(3) not guilty only by reason of lack of mental responsibility. "(d) Subsection (c) does not apply to a court-martial composed of a military judge only. In the case of a court-martial composed of a military judge only, whenever lack of mental responsibility of the accused with respect to an offense is properly at issue, the military judge shall find the accused— "(Dguilty; "(2) not guilty; or "(3) not guilty only by reason of lack of mental responsibility. "(e) Notwithstanding the provisions of section 852 of this title (article 52), the accused shall be found not guilty only by reason of lack of mental responsibility if— "(1) a majority of the members of the court-martial present at the time the vote is taken determines that the defense of lack of mental responsibility has been established; or "(2) in the case of a court-martial composed of a military judge only, the military judge determines that the defense of lack of mental responsibility has been established.". (2) The table of sections at the beginning of such subchapter is amended by inserting after the item relating to section 850 (article 50) the following new item: "850a. 50a. Defense of lack of mental responsibility.".

10 USC 850a "ote.

(b) EFFECTIVE DATE.—Section 850a of title 10, United States Code, as added by subsection (a)(1), shall apply only to offenses committed on or after the date of the enactment of this Act. SEC. 803. APPLICATION FOR ENLISTED MEMBERS TO SERVE ON COURTMARTIAL (a) IN GENERAL.—Section 825(c)(1) (article 25(c)(1)) is amended by striking out "has requested in writing" and inserting in lieu thereof "has requested orally on the record or in writing". 10 USC 825 note. (b) EFFECTIVE DATE.—The amendment made by subsection (a) shall apply only to a case in which arraignment is completed on or after the effective date of this title. SEC. 804. COURT-MARTIAL JURISDICTION OVER RESERVE MEMBERS (a) JURISDICTION OVER RESERVE MEMBERS UNDER CERTAIN CIR-

CUMSTANCES.—(1) Paragraph (3) of section 802(a) (article 2(a)) is amended to read as follows: "(3) Members of a reserve component while on inactive-duty training, but in the case of members of the Army National Guard of the United States or the Air National Guard of the United States only when in Federal service.". (2) Section 802 (article 2) is further amended by adding at the end the following new subsection: K

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100 STAT. 3907

"(d)(1) A member of a reserve component who is not on active duty and who is made the subject of proceedings under section 815 (article 15) or section 830 (article 30) with respect to an offense against this chapter may be ordered to active duty involuntarily for the purpose of— "(A) investigation under section 832 of this title (article 32); "(B) trial by court-martial; or "(C) nonjudicial punishment under section 815 of this title (article 15). "(2) A member of a reserve component may not be ordered to active duty under paragraph (1) except with respect to an offense committed while the member was— "(A) on active duty; or "(B) on inactive-duty training, but in the case of members of the Army National Guard of the United States or the Air National Guard of the United States only when in Federal service. "(3) Authority to order a member to active duty under paragraph (1) shall be exercised under regulations prescribed by the President. "(4) A member may be ordered to active duty under paragraph (1) only by a person empowered to convene general courts-martial in a regular component of the armed forces. "(5) A member ordered to active duty under paragraph (1), unless the order to active duty was approved by the Secretary concerned, may not— "(A) be sentenced to confinement; or "(B) be required to serve a punishment consisting of any restriction on liberty during a period other than a period of inactive-duty training or active duty (other than active duty ordered under paragraph (1)).". (b) CONTINUED AMENABILITY TO JURISDICTION.—Section 803 (article 3) is amended by adding at the end the following new subsection: "(d) A member of a reserve component who is subject to this chapter is not, by virtue of the termination of a period of active duty or inactive-duty training, relieved from amenability to the jurisdiction of this chapter for an offense against this chapter committed during such period of active duty or inactive-duty training,". (c) AUTHORITY TO ADMINISTER OATHS.—Section 936 (article 136) is amended by inserting "or performing inactive-duty training" in subsections (a) and (b) after "active duty". (d) ARTICLES TO B E EXPLAINED.—The text of section 937 (article 137) is amended to read as follows: "(a)(1) The sections of this title (articles of the Uniform Code of Military Justice) specified in paragraph (3) shall be carefully explained to each enlisted member at the time of (or within six days after)— "(A) the member's initial entrance on active duty; or "(B) the member's initial entrance into a duty status with a reserve component. "(2) Such sections (articles) shall be explained again— "(A) after the member has completed six months of active duty or, in the case of a member of a reserve component, after the member has completed basic or recruit training; and "(B) at the time when the member reenlists. "(3) This subsection applies with respect to sections 802, 803, 807815, 825, 827, 831, 837, 838, 855, 877-934, and 937-939 of this title (articles 2, 3, 7-15, 25, 27, 31, 37, 38, 55, 77-134, and 137-139).

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 100 STAT. 3908

PUBLIC LAW 99-661—NOV. 14, 1986

"(b) The text of the Uniform Code of Military Justice and of the regulations prescribed by the President under such Code shall be made available to a member on active duty or to a member of a reserve component, upon request by the member, for the member's personal examination.". 10 USC 802 note. (e) EFFECTIVE DATE,—The amendments made by subsections (a) and (b) shall apply only to an offense committed on or after the effective date of this title. SEC. 805. STATUTE OF LIMITATIONS

i

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(a) REVISION OF STATUTES OF LIMITATION.—Subsections (a), (b), and

(c) of section 843 (article 43) are amended to read as follows: "(a) A person charged with absence without leave or missing movement in time of war, or with any offense punishable by death, may be tried and punished at any time without limitation. "(b)(1) Except as otherwise provided in this section (article), a person charged with an offense is not liable to be tried by courtmartial if the offense was committed more than five years before the receipt of sworn charges and specifications by an officer exercising summary court-martial jurisdiction over the command. "(2) A person charged with an offense is not liable to be punished under section 815 of this title (article 15) if the offense was committed more than two years before the imposition of punishment. "(c) Periods in which the accused is absent without authority or fleeing from justice shall be excluded in computing the period of limitation prescribed in this section (article).". (b) TIME FOR REINSTATEMENT OF CHARGES.—Such section is further

amended by adding at the end the following new subsection: "(g)(1) If charges or specifications are dismissed as defective or insufficient for any cause and the period prescribed by the applicable statute of limitations— "(A) has expired; or "(B) will expire within 180 days after the date of dismissal of the charges and specifications, trial and punishment under new charges and specifications are not barred by the statute of limitations if the conditions specified in paragraph (2) are met. "(2) The conditions referred to in paragraph (1) are that the new charges and specifications must— "(A) be received by an officer exercising summary courtmartial jurisdiction over the command within 180 days after the dismissal of the charges or specifications; and "(B) allege the same acts or omissions that were alleged in the dismissed charges or specifications (or allege acts or omissions that were included in the dismissed charges or specifications)." 10 USC 843 note. (c) EFFECTIVE DATE.—The amendments made by this section shall apply to an offense committed on or after the date of the enactment of this Act. SEC. 806. TIME FOR DEFENSE POST-TRIAL SUBMISSIONS (a) SIMPLIFICATION OF TIME FOR SUBMISSION.—Subsection (b) of

section 860 (article 60) is amended— (1) by striking out paragraph (3); (2) by redesignating paragraph (2) as paragraph (3) and inserting a comma in that paragraph after "case"; and (3) by striking out paragraph (1) and inserting in lieu thereof the following:

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 PUBLIC LAW 99-661—NOV. 14, 1986

100 STAT. 3909

"(1) The accused may submit to the convening authority matters for consideration by the convening authority with respect to the findings and the sentence. Except in a summary court-martial case, such a submission shall be made within 10 days after the accused has been given an authenticated record of trial and, if applicable, the recommendation of the staff judge advocate or legal officer under subsection (d). In a summary court-martial case, such a submission shall be made within seven days after the sentence is announced. "(2) If the accused shows that additional time is required for the accused to submit such matters, the convening authority or other person taking action under this section, for good cause, may extend the applicable period under paragraph (1) for not more than an additional 20 days.".

.

(b) RECOMMENDATIONS OF STAFF JUDGE ADVOCATE.—Subsection

(c)(2) of such section is amended by striking out "and, if applicable, under subsection (d),". (c) CONFORMING AMENDMENTS.—Subsection (d) of such section is amended— (1) in the third sentence, by striking out "who shall have five days from the date of receipt in which to submit any matter in response" and inserting in lieu thereof "who may submit any matter in response under subsection (b)"; and (2) by striking out the fourth sentence. (c) EFFECTIVE DATE.—The amendments made by this section shall apply in cases in which the sentence is adjudged on or after the effective date of this title.

10 USC 860 note,

SEC. 807. DETAIL OF JUDGE ADVOCATES (a) REPRESENTATION OF UNITED STATES INTERESTS.—Section 806

(article 6) is amended by adding at the end the following new subsection: "{d)(l) A judge advocate who is assigned or detailed to perform the functions of a civil office in the Government of the United States under section 973(b)(2)(B) of this title may perform such duties as may be requested by the agency concerned, including representation of the United States in civil and criminal cases. "(2) The Secretary of Defense, and the Secretary of Transportation with respect to the Coast Guard when it is not operating as a service in the Navy, shall prescribe regulations providing that reimbursement may be a condition of assistance by judge advocates assigned or detailed under section 973(b)(2)(B) of this title.". (b) EFFECTIVE DATE.—The amendment made by subsection (a)— (1) shall take effect on the date of the enactment of this Act; and (2) may not be construed to invalidate an action taken by a judge advocate, pursuant to an assignment or detail under section 973(b)(2)(B) of title 10, United States Code, before the date of the enactment of this Act. SEC. 808. EFFECTIVE DATE Except as provided in sections 802(b), 805(c), and 807(b), this title and the amendments made by this title shall take effect on the earlier of— (1) the last day of the 120-day period beginning on the date of the enactment of this Act; or

10 USC 973. Regulations,

10 USC 806 note.

10 USC 802 note. 10 USC 802, 805, 807.

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 100 STAT. 3910

PUBLIC LAW 99-661—NOV. 14, 1986 (2) the date specified in an Executive order for such amendments to take effect.

Defense Acquisition Improvement Act of 1986.

10 USC 101 note.

TITLE IV—PROCUREMENT POLICY REFORM SEC. 900. SHORT TITLE „,,..,,.

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^

This title may be cited as the Defense Acquisition Improvement Act of 1986". PART A—MANAGEMENT OF THE ACQUISITION PROCESS

SEC. 901. DUTIES AND PRECEDENCE OF UNDER SECRETARY OF DEFENSE FOR ACQUISITION Section 133 of title 10, United States Code (as redesignated by section 101(a) of the Gold water-Nichols Department of Defense Reorganization Act of 1986 (Public Law 99-433)), is amended to read as follows: "§ 133. Under Secretary of Defense for Acquisition "(a) There is an Under Secretary of Defense for Acquisition, appointed from civilian life by the President, by and with the advice and consent of the Senate. The Under Secretary shall be appointed from among persons who have an extensive management background in the private sector. "(b) Subject to the authority, direction, and control of the Secretary of Defense, the Under Secretary of Defense for Acquisition shall perform such duties and exercise such powers relating to acquisition as the Secretary of Defense may prescribe, including— "(1) supervising Department of Defense acquisition; ^ "(2) establishing policies for acquisition (including procurement, research and development, logistics, developmental testing, and contract administration) for all elements of the Department of Defense; ' "(3) establishing policies of the Department of Defense for maintenance of the defense industrial base of the United States;

 * ]»8i

t

•jeH

Contracts.

and

"(4) the authority to direct the Secretaries of the military departments and the heads of all other elements of the Department of Defense with regard to matters for which the Under Secretary has responsibility., "(c) The Under Secretary— "(1) is the senior procurement executive for the Department of Defense for the purposes of section 16(3) of the Office of Federal Procurement Policy Act (41 U.S.C. 414(3)); '^ "(2) is the Defense Acquisition Executive for purposes of regulations and procedures of the Department providing for a ^ Defense Acquisition Executive; and "(3) to the extent directed by the Secretary, exercises overall ' supervision of all personnel (civilian and military) in the Office of the Secretary of Defense with regard to matters for which the Under Secretary has responsibility, unless otherwise provided by law. "(d)(1) The Under Secretary shall prescribe policies to ensure that audit and oversight of contractor activities are coordinated and carried out in a manner to prevent duplication by different elements of the Department. "(2) In carrying out this subsection, the Under Secretary shall consult with the Inspector General of the Department of Defense.

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100 STAT. 3911

"(3) Nothing in this subsection shall affect the authority of the Inspector General of the Department of Defense to establish audit policy for the Department of Defense under the Inspector General Act of 1978 and otherwise to carry out the functions of the Inspector General under that Act. "(e)(1) With regard to all matters for which he has responsibility by law or by direction of the Secretary of Defense, the Under Secretary of Defense for Acquisition takes precedence in the Department of Defense after the Secretary of Defense and the Deputy Secretary of Defense. "(2) With regard to all matters other than matters for which he has responsibility by law or by direction of the Secretary of Defense, the Under Secretary takes precedence in the Department of Defense after the Secretary of Defense, the Deputy Secretary of Defense, and the Secretaries of the military departments.".

5 USC app.

„

SEC. 902. ESTABLISHMENT OF POSITION OF DEPUTY UNDER SECRETARY OF DEFENSE FOR ACQUISITION

(a) ESTABLISHMENT OF POSITION.—(1) Chapter 4 of title 10, United States Code (as amended by title I of the Goldwater-Nichols Department of Defense Reorganization Act of 1986 (Public Law 99-433)), is amended by inserting after section 133 the following new section: "§ 133a. Deputy Under Secretary of Defense for Acquisition "(a) There is a Deputy Under Secretary of Defense for Acquisition, appointed from civilian life by the President, by and with the advice and consent of the Senate. "(b) The Deputy Under Secretary of Defense for Acquisition shall assist the Under Secretary of Defense for Acquisition in the performance of his duties. The Deputy Under Secretary shall act for, and exercise the powers of, the Under Secretary when the Under Secretary is absent or disabled.". (2) The table of sections at the beginning of such chapter is amended by inserting after the item relating to section 133 the following new item:

10 USC I33a.

"133a. Deputy Under Secretary of Defense for Acquisition."

(b) PAY GRADE.—Section 5314 of title 5, United States Code, is amended by adding at the end the following; "Deputy Under Secretary of Defense for Acquisition.". SEC. 903. OTHER SENIOR CIVILIAN ACQUISITION OFFICIALS (a) PRECEDENCE OF UNDER SECRETARY FOR POLICY.—Section 134 of

title 10, United State Code (as designated by section 105 of the Goldwater-Nichols Department of Defense Reorganization Act of 1986 (Public Law 99-433)), is amended by inserting "the Under Secretary of Defense for Acquisition," in subsection (c) after "Deputy Secretary of Defense,".

Ante, p. 997.

(b) FUNCTIONS AND GRADE OF DIRECTOR OF DEFENSE RESEARCH AND

ENGINEERING.—(1) Section 135 of title 10, United States Code (as amended by section 105 of the Goldwater-Nichols Department of Defense Reorganization Act of 1986 (Public Law 99-433)), is amended— (A) by striking out subsection (b) and inserting in lieu thereof the following: "(b) Except as otherwise prescribed by the Secretary of Defense, the Director of Defense Research and Engineering shall perform

Ante, p. 997.

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 100 STAT. 3912

f

X;

PUBLIC LAW 99-661—NOV. 14, 1986

such duties relating to research and engineering as the Under Secretary of Defense for Acquisition may prescribe."; and (B) by striking out subsection (c). (2)(A) Section 5314 of title 5, United States Code, is amended by striking out "Director of Defense Research and Engineering.". (B) Section 5315 of such title is amended by adding at the end the following: "Director of Defense Research and Engineering.". (c) INDEPENDENCE AND STAFF OF DIRECTOR OF OPERATIONAL TEST

AND EVALUATION.—Section 138 of title 10, United States Code (as redesignated by section 101(a), of the Goldwater-Nichols Department Ante, p. 994. of Defense Reorganization Act of 1986 (Public Law 99-433)) is amended— (1) by inserting "and the Under Secretary of Defense for Acquisition" after "Secretary of Defense" in the first sentence of subsection (b); (2) by inserting "and the Under Secretary of Defense for Acquisition" after "Secretary of Defense" in subsection (b)(2); (3) by inserting ", to the Under Secretary of Defense for Acquisition," in subsection (b)(5) after "Secretary of Defense"; (4) by inserting ", to the Under Secretary of Defense for Acquisition," in subsection (c) after "Secretary of Defense" the nKt l?i • 01 first place such term appears; (5) by inserting "personally" in the first sentence of subsection (d) after "Secretary of Defense"; (6) by inserting ", the Under Secretary of Defense for Acquisition," in the second sentence of subsection (g)(1) after "Secretary of Defense"; and (7) by adding at the end the following new subsection: "(i) The Director shall have sufficient professional staff of military and civilian personnel to enable the Director to carry out the duties and responsibilities of the Director prescribed by law.". (d) DIRECTOR OF OFFICE OF SMALL AND DISADVANTAGED BUSINESS

UTILIZATION.—Section 15(k)(3) of the Small Business Act (15 U.S.C. 644(k)(3)) is amended by inserting ", except that in the case of the Department of Defense the Director of the Office of Small and Disadvantaged Business Utilization shall be responsible to, and report directly to, the Under Secretary of Defense for Acquisition". (e) CONFORMING AMENDMENT FOR ARMED FORCES POLICY COUNCIL

':>*-iih

MEMBERSHIP.—Section 171(a) of title 10, United States Code is amended— (1) by redesignating paragraphs (3) through (11) as paragraphs (4), (5), (6), (7), (9), (10), (11), (12), and (13), respectively; (2) by inserting after paragraph (2) the following new paragraph (3): "(3) the Under Secretary of Defense for Acquisition;"; and (3) by striking out paragraph (7) (as so redesignated) and inserting in lieu thereof the following: "(7) the Under Secretary of Defense for Policy; "(8) the Deputy Under Secretary of Defense for Acquisition;". SEC. 904. ENHANCED PROGRAM STABILITY ACQUISITION PROGRAMS

FOR

MAJOR DEFENSE

(a) PROGRAM STABILITY.—(1) Chapter 144 of title 10, United States Code, is amended by adding after section 2434 (as redesignated by section 101(a) of the Goldwater-Nichols Department of Defense

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100 STAT. 3913

Reorganization Act of 1986 (Public Law 99-433)) the following new section: "§ 2435. Enhanced program stability

10 USC 2435.

"(a) BASELINE DESCRIPTION REQUIREMENT.—(1) The Secretary of a

military department shall establish a baseline description for a major defense acquisition program under the jurisdiction of such Secretary— "(A) before such program enters full-scale engineering development; and "(B) before such program enters full-rate production. "(2) A baseline description required under paragraph (1) shall include the following: "(A) In the case of the full-scale development stage— j,?,^'..^ "(i) a description of the performance goals for the weapy? ons system to be acquired under the program; "(ii) a description of the technical characteristics and configuration of such system; "(iii) total development costs for such stage by fiscal year; and "(iv) the schedule of development milestones. "(B) In the case of the production stage— "(i) a description of the performance of the weapons system to be acquired under the program;
 * .;''< T
 * .2J.•;

"(ii) a description of the technical characteristics and configuration of such system; "(iii) number of end items by fiscal year; "(iv) the schedule of development milestones; HHi: "^^^ testing; "(vi) initial training; "(vii) initial provisioning; and "(viii) total procurement costs for such stage (including the cost of all elements included in the baseline description) by fiscal year, which may not exceed the amount of the independent cost estimate for that program submitted to the Secretary of Defense under section 2434 of this title. 10 USC 2434. "(b) PROGRAM DEVIATION REPORTS.—(1) The program manager of a major defense acquisition program shall immediately submit a program deviation report for such program to the Secretary of the military department concerned and to the senior procurement executive of such military department (designated pursuant to section 16(3) of the Office of Federal Procurement Policy Act (41 U.S.C. - ^ f-' 414(3))) if such manager determines at any time during the full-scale engineering development stage or the production stage that there is reasonable cause to believe that— "(A) the total cost of completion of the program will be more than the amount specified in the baseline description established under subsection (a) for such stage; "(B) any milestone specified in such baseline description will not be completed as scheduled; or "(C) the system to be acquired under the program will not fulfill the description of performance, technical characteristics, or configuration specified in such baseline description. "(2) The Secretary of the military department concerned shall, with respect to any major defense acquisition program for which a program deviation report is received under paragraph (1)— "(A) establish a review panel to review such program; and

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 100 STAT. 3914

-

10 USC 2432.

PUBLIC LAW 99-661—NOV. 14, 1986

"(B) submit a report containing the program deviation report and the results of such review to the Under Secretary of Defense for Acquisition before the end of the 45-day period beginning on the date that the program deviation report is submitted under paragraph (1). "(c) DEFINITION.—In this section, the term 'major defense acquisition program' has the meaning given that term in section 2432(a)(1) of this title.". (2) The table of sections at the beginning of such chapter is amended by adding after the item relating to section 2434 the following new item: . . "2435. Enhanced program stability.".

10 USC 2435 no<*-

(b) EFFECTIVE DATE.—Section 2435 of title 10, United States Code (as added by subsection (a)(1)), shall apply to major defense acquisi-

tion programs that enter full-scale engineering development or fullrate production after the date of the enactment of this Act. SEC. 905. DEFENSE ENTERPRISE PROGRAMS

(a) IN GENERAL.—(1) Chapter 144 of title 10, United States Code, is amended by adding after section 2435 (as added by section 904) the following new section: 10 USC 2436.

"§ 2436. Defense enterprise programs "(a) IN GENERAL.—The Secretary of Defense shall conduct, through the Secretaries of the military departments, a program with respect to increasing the efficiency of the management structure of defense acquisition programs by reducing the number of officials through whom a program manager reports to the senior procurement executive of the military department concerned. "(b) DESIGNATION OF PARTICIPATING PROGRAMS.—The Secretary of

_ "' •' '^

Reports.

a military department may designate any defense acquisition program under the jurisdiction of the Secretary to participate in the program described in subsection (a). A program designated under this subsection shall be known as a 'defense enterprise program'. "(c) GUIDELINES.—The Secretary of Defense shall issue guidelines governing the management of defense enterprise programs. Such guidelines shall include the following requirements: "(1) The Secretary concerned shall designate a program executive officer for each program. "(2) The program manager for each program shall report with respect to such program directly, without intervening review or ' approval, to the program executive officer for the program. "" "(3) The program executive officer for a program shall report with respect to such program directly, without intervening review or approval, to the senior procurement executive of the military department concerned designated pursuant to section 16(3) of the Office of Federal Procurement Policy Act (41 U.S.C. 414(3)). "(4) The program executive officer to whom a defense enterprise program manager reports shall evaluate the job performance of such manager on an annual basis. In conducting an f evaluation under this paragraph, a program executive officer shall consider the extent to which the manager has achieved the objectives of the program for which the manager is responsible, f including quality, timeliness, and cost objectives.

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100 STAT. 3915

"(5) The manager of a defense enterprise program shall be authorized staff positions for a technical staff, including experts in business management, contracting, auditing, engineering, testing, and logistics. "(d) APPLICABLE RULES AND REGULATIONS.—(1) Except as specified

by the senior procurement executive of the military department concerned, a defense enterprise program shall not be subject to any regulation, policy, directive, or administrative rule or guideline relating to the acquisition activities of the Department of Defense other than the Federal Acquisition Regulation and the Department of Defense supplement to the Federal Acquisition Regulation. "(2) Paragraph (1) shall not be construed to limit or modify the application of Federal legislation relating to the acquisition activities of the Department of Defense. "(3) In this subsection the term 'Federal Acquisition Regulation' has the meaning given such term in section 2320(a)(4) of this title.". 10 USC 2320. (2) The table of sections at the beginning of such chapter is amended by adding after the item relating to section 2435 (as added by section 904) the following new item: "2436. Defense enterprise programs.".

(b) The Secretary of each military department shall designate for 10 USC 2436 fiscal year 1988 not less than three defense acquisition programs ^^o^under the jurisdiction of the Secretary to participate in the program described in section 2436(a) of title 10, United States Code (as added by subsection (a)(1)). SEC. 906. MILESTONE AUTHORIZATION PROGRAMS

OF

DEFENSE

ENTERPRISE

(a) IN GENERAL.—(1) Chapter 144 of title 10, United States Code, is amended by adding after section 2436 (as inserted by section 905) the following new section: "§ 2437. Defense enterprise programs: milestone authorization

10 USC 2437.

"(a) DESIGNATION OF PARTICIPATING PROGRAMS.—(1) The Secretary

of Defense may designate defense enterprise programs in each military department (as designated by the Secretary of the military department under section 2436 of this title) to be considered for milestone authorization under subsection (b). "(2) The Secretary may designate a defense enterprise program under paragraph (1) only if the program— "(A) is ready to proceed into the full-scale engineering development stage or the full-rate production stage; or "(B) is in either of such stages. "(b) SUBMISSION OF BASELINE DESCRIPTIONS.—Not later than the end of the 90-day period beginning on the date that a defense enterprise program is designated under subsection (a), the Secretary of Defense shall— "(1) in the case of a program that is subject to section 2435(a) of this title, submit to the Committees on Armed Services of the Ante, p. 3913. Senate and House of Representatives the baseline description, __,i for the program required to be submitted under such section; , "(2) in the case of a program that is not subject to such section— "(A) establish a baseline description that meets the requirements of such section; and

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 100 STAT. 3916

PUBLIC LAW 99-661—NOV. 14, 1986 "

"(B) submit the baseline description to such committees; and "(3) request from Congress the authority to obligate funds in a single amount sufficient to carry out the stage for which the baseline description is submitted. "(c) MILESTONE AUTHORIZATION.—Congress shall authorize funds for the full-scale engineering development stage or the full-rate production stage of a program designated by the Secretary of Defense under subsection (a) in a single aAiount sufficient to carry out that stage, but not for a period in excess of five years, if such program is approved by Congress to— "(1) proceed into or complete the full-scale engineering development stage; or "(2) proceed into or complete the full-rate production stage. "(d) PROGRAM DEVIATIONS.—(1)

If

the

Secretary

of

Defense

receives a program deviation report under section 2435(b) of this Ante, p. 3913. title with respect to a defense enterprise program for which funds are authorized under subsection (b)— "(A) the Secretary of Defense shall notify the Committees on Armed Services of the Senate and House of Representatives of . ,,,, the receipt of such report before the end of the 15-day period •' "'^!p^^,i^. beginning on the date on which the Secretary receives such report; and "(B) except as provided in paragraph (2), after the end of the 45-day period beginning on the date on which the Secretary of Defense receives such report, the Secretary concerned may not obligate amounts appropriated or otherwise made available to the Department of Defense for purposes of carrying out the program. "(2) Paragraph (1)(B) does not apply if the Secretary of Defense notifies Congress that the Secretary intends to— "(A) convene a board to formally review the program; and •:* I?.U •( "(B) submit to Congress a revised baseline description for the program and the recommendations of the board convened under subparagraph (A) concurrent with the submission by the President of the budget for the next fiscal year under section 1105(a) of title 31. "(3) The Secretary concerned may not obligate, for the purpose of carrying out a program described in paragraph (1) for which a program deviation report is received, amounts appropriated or otherwise made available to the Department of Defense for the fiscal year following the fiscal year during which the program deviation report was received unless such amounts are authorized to be appropriated after the date on which such report was received.". (2) The table of sections at the beginning of such chapter is amended by adding after the item relating to section 2436 (as inserted by section 905) the following new item: "2437. Defense enterprise programs: milestone authorization.".

10 USC 2437
 * K^'

(b) INITIAL DESIGNATION OF PARTICIPATING PROGRAMS.—The Secretary of Defense shall designate for fiscal year 1988 not less than three defense enterprise programs to be considered for milestone authorization under subsection (b). The Secretary shall make such designations as part of the budget submission of the Department of Defense for such fiscal year.

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100 STAT. 3917

SEC. 907. PREFERENCE FOR NONDEVELOPMENTAL ITEMS

(a) IN GENERAL.—(1) Chapter 137 of title 10, United States Code, is amended by adding at the end the following new section: "§ 2325. Preference for nondevelopmental items 10 USC 2325. "(a) PREFERENCE.—The Secretary of Defense shall ensure that, to the maximum extent practicable— "(1) requirements of the Department of Defense with respect to a procurement of supplies are stated in terms of— "(A) functions to be performed; "(B) performance required; or "(C) essential physical characteristics; "(2) such requirements are defined so that nondevelopmental items may be procured to fulfill such requirements; and "(3) such requirements are fulfilled through the procurement of nondevelopmental items. '*"(b) IMPLEMENTATION.—The Secretary of Defense shall carry out this section through the Under Secretary of Defense for Acquisition, who shall have responsibility for its effective implementation. "(c) REGULATIONS.—The Secretary of Defense shall prescribe regulations to carry out this section. "(d) DEFINITION.—In this section, the term 'nondevelopmental item' means— "(1) any item of supply that is available in the commercial marketplace; "(2) any previously-developed item of supply that is in use by a department or agency of the United States, a State or local government, or a foreign government with which the United States has a mutual defense cooperation agreement; "(3) any item of supply described in paragraph (1) or (2) that requires only minor modification in order to meet the requirements of the procuring agency; or "(4) any item of supply that is currently being produced that does not meet the requirements of paragraph (1), (2), or (3) solely because the item— "(A) is not yet in use; or "(B) is not yet available in the commercial marketplace.". (2) The table of sections at the beginning of such chapter is amended by adding at the end the following new item: "2325. Preference for nondevelopmental items.".

(3) The Secretary of Defense shall prescribe regulations as 10 USC 2325 required by section 2325(c) of title 10, United States Code (as added ^°^by subsection (a)(1)), before the end of the 180-day period beginning on the date of the enactment of this Act. ^'''^' "; ^ (b) REMOVAL OF IMPEDIMENTS TO DEVELOPMENTAL ITEMS.—(1) The Secretary

ACQUISITION

OF

NON-

Reports.

of Defense shall submit to 10 USC 2325 the Committees on Armed Services of the Senate and House of "°*®Representatives a report— (A) identifying actions taken, including training of personnel and changes in regulations and procurement procedures, to ' '- implement the requirements of section 2325 of title 10, United States Code (as added by subsection (a)(1)); ^ ' ^ (B) identifying all statutes and regulations that are deter'^•' mined by the Secretary to impede the acquisition of nondevelopmental items by the Department of Defense; and

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 100 STAT. 3918

i"

>; '

PUBLIC LAW 99-661—NOV. 14, 1986

(C) recommending any legislation that the Secretary consid. ers necessary or appropriate to promote maximum procurement of nondevelopmental items to fulfill the supply requirements of the Department of Defense. (2) The Secretary shall take appropriate steps to remove any impediments identified by the Secretary under paragraph (I)(A) that are under the jurisdiction of the Secretary. (3) The report required by paragraph (1) shall be submitted before the end of the one-year period beginning on the date of the enactment of this Act. (c) EVALUATION BY COMPTROLLER GENERAL,—(1) The Comptroller

Reports.

General shall conduct an independent evaluation of the actions taken by the Secretary of Defense to carry out the requirements of section 2325 of title 10, United States Code (as added by subsection (a)(1)). (2) The Comptroller General shall submit to the Committees on Armed Services of the Senate and House of Representatives a report on the evaluation required by paragraph (1). Such report shall include— (A) an analysis of the effectiveness of the actions taken by the Secretary to carry out the requirements of section 2325 of title 10, United States Code (as added by subsection (a)(1)); (B) a description of any programs conducted to notify acquisition personnel of the Department of Defense of the requirements of such section and to train such personnel in the appropriate procedures for carrying out such section; (C) a description of each law, regulation, and procedure which prevents or restricts maximum practicable use of nondevelopmental items to fulfill the supply requirements of the Department of Defense; and (D) such recommendations for additional legislation as the Comptroller General considers necessary or appropriate to promote maximum procurement of nondevelopmental items to fulfill the supply requirements of the Department of Defense. (3) The report required by paragraph (2) shall be submitted before the end of the two-year period beginning on the date of the enactment of this Act. (d) DEFINITION.—For the purposes of subsections (b) and (c), the term "nondevelopmental items" has the meaning given such term in section 2325(d) of title 10, United States Code (as added by subsection (a)(1)).

SiaSOB J

SEC. 908. REQUIREMENTS RELATING TO UNDEFINITIZED CONTRACTUAL ACTIONS

10 USC 2326 note.

(a) LIMITATION ON USE OF FUNDS FOR UNDEFINITIZED CONTRACTUAL ACTIONS.—(1) On the last day of each six-month period described in paragraph (4), the Secretary of Defense (with respect to the Defense Logistics Agency) and the Secretary of each military department shall determine— (A) the total amount of funds obligated for contractual actions during the six-month period; J (B) the total amount of funds obligated during the six-month period for undefinitized contractual actions; and (C) the total amount of funds obligated during the six-month >, period for undefinitized contractual actions that are not I, definitized on or before the last day of such period.

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 PUBLIC LAW 99-661—NOV. 14, 1986

100 STAT. 3919

(2) On the last day of each six-month period described in paragraph (4), the amount of funds obligated for undefinitized contractual actions entered into by the Secretary of Defense (with respect to the Defense Logistics Agency) or the Secretary of a military department during the six-month period that are not definitized on or before such day may not exceed 10 percent of the amount of funds obligated for all contractual actions entered into by the Secretary during the six-month period. (3) If on the last day of a six-month period described in paragraph (4) the total amount of funds obligated for undefinitized contractual actions under the jurisdiction of a Secretary that were entered into during the six-month period exceeds the limit established in paragraph (2), the Secretary— (A) shall, not later than the end of the 45-day period beginning on the first day following the six-month period, submit to the defense committees an unclassified report concerning— (i) the amount of funds obligated for contractual actions under the jurisdiction of the Secretary that were entered into during the six-month period with respect to which the report is submitted; and (ii) the amount of such funds obligated for undefinitized contractual actions; and (B) except with respect to the six-month period described in r paragraph (4)(A), may not enter into any additional undefinitized contractual actions until the date on which the Secretary certifies to Congress that such limit is not exceeded by the cumulative amount of funds obligated for undefinitized contractual actions under the jurisdiction of the Secretary that are not definitized on or before such date and were entered into— (i) during the six-month period for which such limit was exceeded; or (ii) after the end of such six-month period. (4) This subsection applies to the following six-month periods: (A) The period beginning on October 1, 1986, and ending -1 on March 31, 1987. (B) The period beginning on April 1, 1987, and ending on September 30, 1987. (C) The period beginning on October 1, 1987, and ending on March 31, 1988. (D) The period beginning on April 1, 1988, and ending on September 30, 1988. (E) The period beginning on October 1, 1988, and ending on March 31, 1989. 03) OVERSIGHT BY INSPECTOR GENERAL.—The Inspector General of the Department of Defense shall— (1) periodically conduct an audit of contractual actions under the jurisdiction of the Secretary of Defense (with respect to the Defense Logistics Agency) and the Secretaries of the military departments; and (2) after each audit, submit to Congress a report on the management of undefinitized contractual actions by each Secretary, including the amount of contractual actions under the jurisdiction of each Secretary that is represented by undefinitized contractual actions. (c) WAIVER AUTHORITY.—The Secretary of Defense may waive the application of this section for urgent and compelling considerations

Reports.

10 USC 2326 note.

Reports.

Defense and national security. 10 USC 2326 note.

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PUBLIC LAW 99-661—NOV. 14, 1986

relating to national security or public safety if the Secretary notifies the Committees on Armed Services of the Senate and House of Representatives of such waiver before the e n d of the 30-day period beginning on the date that the waiver is made. (d) ESTABLISHMENT O F REQUIREMENTS W I T H RESPECT TO UNDEFINITIZED CONTRACTUAL ACTIONS.—(I)(A) Chapter 137 of title

10, United States Code, is amended by adding after section 2325 (as added by section 907) the following new section: 10 USC 2326.

i; ri

" § 2326. Undefinitized contract u a l actions: restrictions "(a) IN GENERAL.—The head of a n agency may not enter into a n undefinitized contractual action unless the request to the h e a d of the agency for authorization of the contractual action includes a description of the anticipated effect on requirements of the military d e part m e n t concerned if a delay is incurred for purposes of determining contractual terms, specifications, and price before performance is begun under the contractual action. "(b) LIMITATIONS ON OBLIGATION AND EXPENDITURE OF FUNDS.—(1)

A contracting officer of the Department of Defense may not enter into a n undefinitized contractual action unless the contractual action provides for a g r e e m e n t upon contractual term s, specifications, and price by the earlier of— , "(A) the e n d of the 180-day period beginning on the date on which the contractor submits a qualifying proposal to definitize the contractual term s, specifications, and price; or "(B) the date on which the a m o u n t of funds obligated or ^ ^ expended under the contractual action is equal to more than 50 .' percent of the negotiated overall ceiling price for the contract u a l action. "(2) Except as provided in paragraph (3), the contracting officer for a n undefinitized contractual action may not expend with respect to such contractual action a n a m o u n t that is equal to more than 50 percent of the negotiated overall ceiling price until the contractual terms, specifications, and price a r e definitized for such contractual action. "(3) If a contractor submits a qualifying proposal (as defined in subsection (g)) to definitize a n undefinitized contractual action before a n a m o u n t equal to more than 50 percent of the negotiated overall ceiling price is expended on such action, the contracting officer for such action may not expend with respect to such contractual action a n a m o u n t that is equal to more than 75 percent of the negotiated overall ceiling price until the contractual term s, specifications, and price a r e definitized for such contractual action. "(4) This subsection does not apply to a n undefinitized contractual action for the purchase of initial spares.

"

"(c) INCLUSION OF N O N - U R G E N T REQUIREMENTS. — Requirements

'

8'

for spare part s and support equipment that a r e not needed on a n u r g e n t basis may not be included i n a n undefinitized contractual action for spare part s and support equipment that a r e needed on a n u r g e n t basis unless the head of the agency approves such inclusion a s being— "(1) good business practice; and • > "(2) in the best interests of the United States. "(d) MODIFICATION OF S C O P E. — The

scope

of a n

undefinitized

contractual action under which performance has begun may not be modified unless the head of the agency approves such modification as being—

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 PUBLIC LAW 99-661—NOV. 14, 1986

100 STAT. 3921

"(1) good business practice; and "(2) in the best interests of the United States. "(e) ALLOWABLE PROFIT.—The head of an agency shall ensure that the profit allowed on an undefinitized contractual action for which the final price is negotiated after a substantial portion of the performance required is completed reflects— "(1) the possible reduced cost risk of the contractor with respect to costs incurred during performance of the contract before the final price is negotiated; and "(2) the reduced cost risk of the contractor with respect to costs incurred during performance of the remaining portion of the contract. "(f) APPLICABILITY.—This section does not apply to the Coast Guard or the National Aeronautics and Space Administration. "(g) DEFINITIONS.—In this section: "(1) The term 'undefinitized contractual action' means a new procurement action entered into by the head of an agency for which the contractual terms, specifications, or price are not agreed upon before performance is begun under the action. Such term does not include contractual actions with respect to the following: "(A) Foreign military sales. "(B) Purchases of less than $25,000. "(C) Special access programs. "(D) Congressionally-mandated long-lead procurement contracts. "(2) The term 'qualifying proposal' means a proposal that contains sufficient information to enable the Department of Defense to conduct complete and meaningful audits of the information contained in the proposal and of any other information that the Department is entitled to review in connection with the contract, as determined by the contracting officer.". (B) The table of sections at the beginning of such chapter is amended by adding after the item relating to section 2325 (as added by section 907) the following new item:

'

-^

"2326. Undefinitized contractual actions: restrictions.".

(2) Section 2326 of title 10, United States Code (as added by subsection (d)(1)), applies to undefinitized contractual actions that are entered into after the end of the 180-day period beginning on the date of the enactment of this Act. (e) DEFINITION.—For purposes of this section, the term "undefinitized contractual action" has the meaning given such term in section 2325(g) of title 10, United States Code (as added by subsection (d)(1)).

10 USC 2326 note, 10 USC 2326 ^^te.

SEC. 909. COMPETITIVE PROTOTYPE STRATEGY REQUIREMENT FOR MAJOR DEFENSE ACQUISITION PROGRAMS

(a) ESTABLISHMENT OF REQUIREMENT.—(1) Chapter 139 of title 10, United States Code, is amended by adding after section 2364 (as added by section 234) the following new section: "§ 2365. Competitive prototype strategy defense acquisition programs

requirement:

major

"(a) COMPETITIVE PROTOTYPE STRATEGY REQUIREMENT.—Except as

provided in subsection (c), the Secretary of Defense shall require the

i lo USC 2365.

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 100 STAT. 3922

PUBLIC LAW 99-661—NOV. 14, 1986

use of a competitive prototype program strategy in the development of a major weapons system (or a subsystem of such system). Contracts. "(b) QUALIFYING STRATEGIES.—An acquisition Strategy qualifies as a competitive prototype strategy if it— "(1) requires that contracts be entered into with not less than two contractors, using the same combat performance requirements, for the competitive design and manufacture of a prototype system or subsystem for developmental test and evaluation; "(2) requires that all systems or subsystems developed under contracts described in paragraph (1) be tested in a comparative side-by-side test that is designed to— "(A) reproduce combat conditions to the extent practicable; and "(B) determine which system or subsystem is most effec*' tive under such conditions; and "(3) requires that each contractor that develops a prototype system or subsystem, before the testing described in subparagraph (B) is begun, submit— "(A) cost estimates for full-scale engineering development and the basis for such estimates; and "(B) production estimates, whenever practicable. "(c) EXCEPTION.—Subsection (a) shall not apply to the development of a major weapons system (or subsystem of such system) after— "(1) the Secretary submits to Congress— _. "(A) written notification that use of a competitive proto(v type program strategy is not practicable with respect to such system or subsystem; and Reports. "(B) a report that fully explains why use of such a strategy is not practicable, including cost estimates (and the bases for such estimates) comparing the total program cost i^j of the competitive prototype strategy with the total pro2 gram cost of the alternative acquisition strategy; and "(2) 30 days elapse after the Secretary submits the notification and report required by paragraph (1). "(d) DEFINITIONS.—In this section: "(1) The term 'major weapons system' means a major weapons system that is acquired under a program that is a major defense acquisition program. "(2) The term 'major defense acquisition program' means a J Department of Defense acquisition program that— ^, "(A) is not a highly sensitive classified program (as deter,} ' mined by the Secretary of Defense); and "(B) that is estimated by the Secretary of Defense tq require an eventual total expenditure for research, develop'* ment, test, and evaluation of more than $200,000,000 (based on fiscal year 1980 constant dollars). t; "(3) The term 'subsystem of such system' means a collection of components (such as the propulsion system, avionics, or weapon controls) for which the prime contractors, major subcontractors, or government entities have responsibility for system ':.)f':: ^c integration.". (2) The table of sections at the beginning of such chapter is amended by adding after the item relating to section 2364 (as added by section 234) the following new item:

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Page:United States Statutes at Large Volume 100 Part 5.djvu/449

 PUBLIC LAW 99-661—NOV. 14, 1986

100 STAT. 3923

"2365. Competitive prototype strategy requirement: major defense acquisition programs.".

(b) EFFECTIVE DATE.—Section 2365 of title 10, United States Code 10 USC 2365 (as added by subsection (a)(1)), shall apply to major weapons systems note, (as defined in subsection (c)(1) of such section) that enter the advanced development stage after September 30, 1986. SEC. 910. TESTING OF CERTAIN WEAPON SYSTEMS AND MUNITIONS (a) SURVIVABILITY AND LETHALITY TESTING AND OPERATIONAL TEST-

ING.—(1) Chapter 139 of title 10, United States Code, is amended by adding after section 2365 (as added by section 909) the following new section: "§ 2366. Major systems and munitions programs: survivability and 10 USC 2366. lethality testing; operational testing "(a) REQUIREMENTS.—The Secretary of Defense shall provide that' l l) a covered system may not proceed beyond low-rate initial production until realistic survivability testing of the system is completed in accordance with this section; "(2) a major munition program or a missile program may not ' proceed beyond low-rate initial production until realistic lethality testing of the program is completed in accordance with ' this section; and "(3) a major defense acquisition program may not proceed beyond low-rate initial production until initial operational test and evaluation of the program is completed in accordance with this section. "(b) TEST GUIDELINES.—(1) Survivability and lethality tests required under subsection (a) shall be carried out sufficiently early in the development phase of the system or program to allow any j,; design deficiency demonstrated by the testing to be corrected in the design of the system, munition, or missile before proceeding beyond low-rate initial production. "(2) In the case of a major defense acquisition program, no person employed by the contractor for the system being tested may be involved in the conduct of the operational test and evaluation required under subsection (a). "(3) The costs of all tests required under that subsection shall be ^ '_J; paid from funds available for the system being tested. " ^ "(c) WAIVER AUTHORITY.—The Secretary of Defense may waive the application of the survivability and lethality tests of this section to a covered system, munitions program, or missile program if the Secretary, before the system or program enters full-scale engineering development, certifies to Congress that live-fire testing of such system or program would be unreasonably expensive and impractical. "(d) WAIVER IN TIME OF WAR OR MOBILIZATION.—In time of war or President of U.S. mobilization, the President may suspend the operation of any provision of this section. .qii'i "(e) DEFINITIONS.—In this section: "(1) The term 'covered system' means a vehicle, weapon platform, or conventional weapon system— "(A) that includes features designed to provide some degree of protection to users in combat; and "(B) that is a major system within the meaning of that term in section 2303(5) of this title.

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 100 STAT. 3924

PUBLIC LAW 99-661—NOV. 14, 1986

x>'.

"(2) The term 'major munitions program'means— "(A) a munition program for which more than 1,000,000 r• >^. rounds are planned to be acquired; or "(B) a conventional munitions program that is a major system within the meaning of that term in section 2302(5) of this title. "(3) The term 'major defense acquisition program' means— "(A) a conventional weapons system that is a major system within the meaning of that term in section 2302(5) of this title; and "(B) is designed for use in combat. "(4) The term 'realistic survivability testing' means, in the '• ';^i;?: fjffj case of a covered system, testing for vulnerability and survivability of the system in combat by firing munitions likely to be ,;,; encountered in combat (or munitions with a capability similar to such munitions) at the system configured for combat, with ff r the primary emphasis on testing vulnerability with respect to potential user casualties and taking into equal consideration the operational requirements and combat performance of the system. "(5) The term 'realistic lethality testing' means, in the case of lethality by firing the munition or missile concerned at appropriate targets configured for combat. "(6) The term 'configured for combat', with respect to a weapon system, platform, or vehicle, means loaded or equipped with all dangerous materials (including all flammables and explosives) that would normally be on board in combat. "(7) The term 'operational test and evaluation' has the mean10 USC 138. ing given that term in section 138(a)(2)(A) of this title.". (2) The table of sections at the beginning of such chapter is amended by adding after the item relating to section 2365 (as added by section 909) the following new item: "2366. Major systems and munitions programs: survivability and lethality testing; operational testing.".
 * i~' a major munitions program or a missile program, testing for

10 USC 2366 "°*®-

(b) EFFECTIVE D A T E. — S e c t i o n 2366 of title 10, United States Code (as added by subsection (a)), shall apply with respect to any decision to proceed with a program beyond low-rate initial production that is made— (1) after May 31, 1987, in the case of a decision referred to in subsection (a)(1) or (a)(2) of such section; or (2) after the date of the enactment of this Act, in the case of a decision referred to in subsection (a)(3) of such section. (c)

•

&

Ante, p. 994.

TIME

FOR SUBMISSION

OF ANNUAL

REPORT

OF DIRECTOR

(OT&E).—Subsection (g)(1) of section 138 of such title (as redesignated by section 101(a) of the Gold water-Nichols Department of Defense Reorganization Act of 1986 (Public Law 99-433)) is amended by striking out "January 15" in the second sentence and all that follows through 'is prepared' and inserting in lieu thereof "10 days after the transmission of the budget for the next fiscal year under section 1105 of title 31".

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 PUBLIC LAW 99-661—NOV. 14, 1986

100 STAT. 3925

SEC. 911. GOALS FOR INCREASED USE OF MULTIYEAR CONTRACTING AUTHORITY IN FISCAL YEAR 1988

(a) IN GENERAL.—The Secretary of Defense shall take appropriate actions to ensure that the Department of Defense increases the use of multiyear contracting authority in fiscal year 1988. (b) MULTIYEAR PROCUREMENT GOAL.—The total amount obligated under multiyear contracts (authorized by section 2306(h) of title 10, United States Code) for Department of Defense procurement program eligible for multiyear contracting during fiscal year 1988 should be an amount that is not less than 10 percent of the total obligational authority used by the Department of Defense for procurement programs of the Department during such fiscal year. (c) APPORTIONMENT OF GOAL.—The Secretary of Defense shall specify the percentage of obligational authority of each military department and Defense Agency that is to be used for multiyear contracts to achieve the goal prescribed in subsection (b). (d) BASELINE REPORT.—Not l a t e r than January 1, 1987, the Secretary of Defense shall submit to the Committees on Armed Services and on Appropriations of the S e n a t e and the House of Representatives a w r i t t e n report which contains— ( D a list of all p r o c u r e m e n t programs which the Secretary determines to be p r o c u r e m e n t program s eligible for multiyear contracting that a r e subject to the requirements of section 2432 of title 10, United States Code (as redesignated by section 101(a) of the Goldwater-Nichols Department of Defense Reorganization Act of 1986 (Public Law 99-433));

(2) the Secretary's assessment of the feasibility and desirability of the multiyear procurement goal prescribed in subsection •r.ti: Oi); and (3) whether the Secretary expects to achieve the goal prescribed in subsection (b) for fiscal year 1988 and, if the Secretary does not expect to achieve such goal, the reasons why such goal will not be achieved. (e) DEFINITIONS.—As used in this section the term "procurement program eligible for multiyear contracting" means a procurement program of the Department of Defense— (1) which satisfies the conditions of clauses (A) through (F) of section 2306(h)(1) of title 10, United States Code; and (2) under which production of fully configured end items is planned for a period exceeding three fiscal years.

i-

•'

' • ''

HTJ, >'t>f

Ante, p. 994.

v. \. • '

SEC. 912. FEDERALLY FUNDED RESEARCH AND DEVELOPMENT CENTERS

(a) IN GENERAL.—(1) Chapter 139 of title 10, United States Code, is amended by adding after section 2366 (as added by section 910) the following new section: "§2367. Use of federally funded research and development centers "(a) LIMITATION ON USE OF CENTERS.—Except as provided in

subsection (b), the Secretary of Defense may not place work with a federally funded research and development center unless such work is within the purpose, mission, and general scope of effort of such center as established in the sponsoring agreement of the Department of Defense with such center. "(b) EXCEPTION FOR APPLIED SCIENTIFIC RESEARCH.—This section does not apply to a federally funded research and development center that performs applied scientific research under laboratory conditions.

10 USC 2367.

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 100 STAT. 3926

Reports.

10 USC 2302.

PUBLIC LAW 99-661—NOV. 14, 1986

"(c) LIMITATION ON CREATION OF N E W CENTERS.—(1) The head of an agency may not obligate or expend amounts appropriated to the Department of Defense for purposes of operating a federally funded research center that was not in existence before June 2, 1986, until— "(A) the head of the agency submits to Congress a report with respect to such center that describes the purpose, mission, and general scope of effort of the center; and "(B) a period of 60 days beginning on the date such report is received by Congress has elapsed. "(2) In this subsection, the term 'head of an agency' has the meaning given such term in section 2302(1) of this title.". (2) The table of sections at the beginning of such chapter is amended by adding after the item relating to section 2366 (as added by section 910) the following new item: "2367. Use of Federally funded research and development centers.".

10 USC 2367 note.

Contracts.

(b) GAG STUDY.—The Comptroller General shall conduct a study of the national defense role of federally funded research and development centers. Such study shall consider the following: (1) The effectiveness of procedures in effect on the date of the enactment of this Act in ensuring that such centers are established on the basis of the criteria set forth in Office of Federal Procurement Policy Circular 84-1. (2) The effectiveness of such procedures in ensuring that work placed with such centers is within the purpose, mission, and general scope of effort of such center as established in the R sponsoring agreement with such center. (3) The growth in the size of such centers during fiscal years 1982 through 1986, measured— I (A) in dollar value of work placed with such centers; and it, (B) in man-years of effort required to complete work placed with such centers. (4) The effect of the exemption of contracts with such centers from the competitive procedures required by section 2304 of title 10, United States Code. (5) The relationship of such centers to their sponsors. (c) GAG REPORT.—(1) The Comptroller General shall submit to Congress a report on the study required by subsection (b). Such report shall include a discussion of each of the matters listed in subsection (b). (2) The report required by paragraph (1) shall be submitted not later than one year after the date of the enactment of this Act. PART B—REQUIREMENTS RELATING TO THE ACQUISITION PROCESS SEC. 921. SMALL BUSINESS SETASIDES (a) PROPORTION OF CONTRACTS SET ASIDE DETERMINED ON INDUSTRY CATEGORY BASIS.—Section 15(a) of the Small Business Act (15 U.S.C.

644(a)) is amended— (1) by inserting "in each industry category" in paragraph (3) after "Government", and (2) by adding at the end the following new sentences: "For purposes of clause (3) of the first sentence of this subsection, an industry category is a discrete group of similar goods and services. Such groups shall be determined by the Admini-

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 PUBLIC LAW 99-661—NOV. 14, 1986

100 STAT. 3927

stration in accordance with the four-digit standard industrial classification codes contained in the Standard Industrial Classification Manual published by the Office of Management and Budget, except that the Administration shall limit such an industry category to a greater extent than provided under such classification codes if the Administration receives evidence indicating that further segmentation for purposes of this paragraph is warranted due to special capital equipment needs or special labor or geographic requirements or to recognize a new industry. A market for goods or services may not be segmented under the preceding sentence due to geographic requirements unless the Government typically designates the area where work for contracts for such goods or services is to be performed and Government purchases comprise the major portion of the entire domestic market for such goods or services and, due to the fixed location of facilities, high mobilization costs, or similar economic factors, it is unreasonable to expect competition from business concerns located outside of the general areas where such concerns are located.". (b) AWARDING OF CONTRACTS AT FAIR MARKET PRICES.—(1) Section 15(a) of such Act (15 U.S.C. 644(a)) is further amended by adding at the end the following new sentence: "A contract may not be awarded under this subsection if the award of the contract would result in a cost to the awarding agency which exceeds a fair market price.". (2) Section 8(a)(1)(A) of such Act (15 U.S.C. 637(a)(1)(A)) is amended by striking out the semicolon at the end and adding in lieu thereof the following: ". A contract may not be awarded under this subsection if the award of the contract would result in a cost to the awarding agency which exceeds a fair market price;". (c) ASSURANCE AS TO COMPOSITION OF LABOR FORCE.—(1) Section 8(a) of such Act (15 U.S.C. 637(a)) is amended by adding at the end the following new paragraph: "(14)(A) A concern may not be awarded a contract under this subsection as a small business concern unless the concern agrees that— "(i) in the case of a contract for services (except construction), at least 50 percent of the cost of contract performance incurred for personnel shall be expended for employees of the concern; and "(ii) in the case of a contract for procurement of supplies 'i (other than procurement from a regular dealer in such supplies), the concern will perform work for at least 50 percent of the cost of manufacturing the supplies (not including the cost of materials). "(B) The Administrator may change the percentage under clause (i) or (ii) of subparagraph (A) if the Administrator determines that such change is necessary to reflect conventional industry practices among business concerns that are below the numerical size standard for businesses in that industry category. A percentage established under the preceding sentence may not differ from a percentage established under section 15(n). "(C) The Administration shall establish, through public rulemaking, requirements similar to those specified in subparagraph (A) to be applicable to contracts for general and specialty construction and to contracts for any other industry category not otherwise subject to the requirements of such subparagraph. The percentage

,

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 100 STAT. 3928

Contracts.

PUBLIC LAW 99-661—NOV. 14, 1986

applicable to any such requirement shall be determined in accordance with subparagraph (B), except that such a percentage may not differ from a percentage established under section 15(n) for the same industry category.". (2) Section 15 of such Act (15 U.S.C 644) is amended by adding at the end the following new subsection: "(o)(l) A concern may not be awarded a contract under this subsection as a small business concern unless the concern agrees that— "(A) in the case of a contract for services (except construction), the concern will perform at least 50 percent of the cost of the contract with its own employees; and "(B) in the case of a contract for procurement of supplies (other than procurement from a regular dealer in such supplies), the concern will perform work for at least 50 percent of the cost of manufacturing the supplies (not including the cost of materials). "(2) The Administrator may change the percentage under subparagraph (A) or (B) of paragraph (1) if the Administrator determines that such change is necessary to reflect conventional industry practices among business concerns that are below the numerical size standard for businesses in that industry category. "(3) The Administration shall establish, through public rulemaking, requirements similar to those specified in paragraph (1) to be applicable to contracts for general and specialty construction and to contracts for any other industry category not otherwise subject to the requirements of such subparagraph.". (d) EXPANSION OF ANNUAL PARTICIPATION GOALS.—Section 15(g) of

Disadvantaged persons.

such Act is amended— (1) by striking out "having values of $10,000 or more" in the first sentence; and (2) by adding at the end the following: "For the purpose of establishing goals under this subsection, the head of each Fed• •". eral agency shall make consistent efforts to annually expand participation by small business concerns from each industry category in procurement contracts of the agency, including participation by small business concerns owned and controlled by socially and economically disadvantaged individuals. The head of each Federal agency, in attempting to attain such participation, shall consider— "(1) contracts awarded as the result of unrestricted competition; and ' "(2) contracts awarded after competition restricted to eligible small business concerns under this section and under the program established under section 8(a).". (e) DISCLOSURE OF INFORMATION CONCERNING APPLICANTS FOR PROCUREMENT SET-ASIDES.—Section 15 of such Act is further

Defense and national security.

amended by adding at the end the following new subsection: "(p)(l) Except as provided in paragraphs (2) and (3), the head of any Federal agency shall, within five days of the agency's decision to set aside a procurement for small business concerns under this section, provide the names and addresses of the small business concerns expected to respond to the procurement to any person who requests such information. "(2) The Secretary of Defense may decline to provide information under paragraph (1) in order to protect national security interests.

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 PUBLIC LAW 99-661—NOV. 14, 1986

100 STAT. 3929

"(3) The head of a Federal agency is not required to release any information under paragraph (1) that is not required to be released under section 552 of title 5, United States Code.". (f) REVIEW OF SIZE STANDARDS.—Section 3 of the Small Business (1) by inserting "(1)" after "SEC. 3. (a)"; and (2) by adding at the end of subsection (a) the following: "(2)(A) The Small Business Administration shall establish a program for the review of the size standards for eligibility of business concerns in the industry categories described in subparagraph (B) for a procurement restricted to small business concerns under section 8(a) or 15(a). "(B) Subparagraph (A) shall apply only to business concerns in the following industry categories: "(i) Construction. "(ii) Architectural and engineering services (including surveying and mapping services). "(iii) Ship building and ship repair. "(iv) Refuse systems and related services. "(3) If the Administrator determines, on the basis of any such review, that contracts awarded under the set-aside programs under such sections exceed 30 percent of the dollar value of the total contract awards for that industry category, as determined under the last sentence of section 15(a)(3), the Administrator shall adjust the size standards for such industry category establishing eligibility for a set-aside program to a size that will likely reduce the number of contracts which may be set aside to approximately 30 percent of the value of contracts to be awarded under such sections. "(4)(A) An interested person may petition the Administrator at any time to review an adjustment to a size standard made under paragraph (3) or any designation of an industry category made under section 15(a)(3) if the petitioner presents credible evidence that any such adjustment or designation— "(i) is not likely to further the purposes of paragraph (3)(A) or section 15(a); and "(ii) has caused the petitioner to suffer severe financial loss. "(B) The Administrator shall render a final determination on any petition filed under subparagraph (A) before the end of the 30-day period beginning on the date that such petition is received by the Administration. Such determination shall be reviewable in the manner prescribed in chapter 7 of title 5, United States Code. "(C) The Administrator shall prescribe regulations to carry out the provisions of this subsection. "(5) The Administrator shall conduct a review under the program established under paragraph (2) at least once during every three years. Such review shall be completed and appropriate size standard adjustments made with the expiration of 180 days after each threeyear review period.". (g) EFFECTIVE DATES.—Except as otherwise provided in subsection (h), the amendments made by this section shall take effect on October 1, 1987. (h) INITIAL REVIEW OF SIZE STANDARDS.—(1) Paragraph (2) of

section 3(a) of the Small Business Act (as added by subsection (fj) shall take effect on the date of the enactment of this Act. (2) The first review conducted by the Administrator under such paragraph shall review the periods beginning on October 1, 1983,

15 USC 632.

15 USC 637, 644.

contracts

5 USC 701 et seq. Regulations.

15 USC 632 note. 15 USC 632 note.

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