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PUBLIC LAW 99-500—OCT. 18, 1986 "(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

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. "(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 Act is amended— (1) by inserting "(D" 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 surveytc - ing 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.

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"(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 DATE.—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 (f)) 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, and ending on September 30, 1986, and shall be completed not later than 180 days after the date of the enactment of this Act. (3) If the Administrator of the Small Business Administration determines, on the basis of the review referred to in paragraph (2), that contracts awarded under the set-aside programs under sections 8(a) and 15(a) of the Small Business Act in any industry category subject to that review exceed 30 percent of the dollar value of the total contract awards for that industry category, as determined in accordance with the last sentence of section 15(a)(3) of such Act, the Administrator shall propose adjustments to 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. The Administrator shall publish such proposed adjustments in the Federal Register for public comment. The Administrator may not issue final regulations implementing revised size standards for an industry category under section 3(a)(3) of such Act (as added by subsection (f)) until October 1, 1987. (i) REPORT ON EFFECT OF AMENDMENTS MADE BY THIS SECTION.—(1)

The Administrator of the Small Business Administration shall submit to the Committees on Armed Services and the Committees on Small Business of the Senate and House of Representatives a report on the amendments made by this section. The report shall include the Administrator's views on the advisability and feasibility of implementing such amendments. (2) The report shall also include— (B) the Administrator's findings and determinations under the review of size standards for businesses that qualify as small businesses carried out pursuant to section 3(a)(2)(B) of the Small Business Act (as amended by subsection (f)); (B) a determination of whether or not the amendments made by subsection (f) will further the interests of the set-aside program; and (C) recommendations for furthering the interests described in subparagraphs (A) and (B) in a more efficient or more effective manner than provided in such amendments. (3) In preparing the report required by paragraph (1), the Administrator of the Small Business Administration shall seek the views of all affected agencies of the Government and the views of the public, including the views of business concerns of all sizes and of trade, business^ and professional organizations. The views of such

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agencies, and a summary of the views of the public, shall be included in the report. (4) The report shall be submitted not later than July 15, 1987. (j) LIMITATION RESPECTING GREAT LAKES NAS.—Of the total dollar amount of the contracts awarded for fiscal year 1987 for construction and of refuse systems and related services at Great Lakes Naval Training Station, ILL, not more than 30 percent of such dollar amount may be under contracts awarded through the so-called small business set-aside programs under sections 8 and 15 of the Small Business Act. SEC. 922. THRESHOLDS FOR CERTAIN REQUIREMENTS RELATING TO SMALL PURCHASES (a) SMALL BUSINESS ACT NOTICE THRESHOLDS.—Section 8(e)(1) of the Small Business Act (15 U.S.C. 637(e)(1)) is amended— (1) in subparagraph (A)— (A) by striking out "$10,000" both places such term .. appears and inserting in lieu thereof "$25,000"; ',• (B) by striking out "or" at the end of clause (i); (C) by striking out the comma at the end of clause (ii) and '.' inserting in lieu thereof "; or"; (D) by inserting after clause (ii) the following new clause: "(iii) solicit bids or proposals for a contract for property or, r services for a price expected to exceed $10,000, if there is ,' not a reasonable expectation that at least two offers will be received from responsive and responsible offerors,"; and ,J^ (E) by striking out "subsection (b); and" and inserting in lieu thereof "subsection (f);"; (2) by redesignating subparagraph (B) as subparagraph (C); and (3) by inserting after subparagraph (A) the following new subparagraph (B): "(B) an executive agency intending to solicit bids or proposals for a contract for property or services shall post, for a period of not less than ten days, in a public place at the contracting office issuing the solicitation a notice of solicitation described in subsection (f)— "(i) in the case of an executive agency other than the Department of Defense, if the contract is for a price expected to exceed $10,000, but not to exceed $25,000; and "(ii) in the case of the Department of Defense, if the contract is for a price expected to exceed $5,000, but not to exceed $25,000; and". (b) OFFICE OF FEDERAL PROCUREMENT POLICY ACT NOTICE THRESH-

OLDS.—Section 18(a)(1) of the Office of Federal Procurement Policy Act (41 U.S.C. 416(a)(1)(A)) is amended— (1) in subparagraph (A)— (A) by striking out "$10,000" both places such term appears in and inserting in lieu thereof "$25,000"; I (B) by striking out "or" at the end of clause (i); (C) by striking out the comma at the end of clause (ii) and inserting in lieu thereof "; or"; ^,. (D) by inserting after clause (ii) the following new clause: "(iii) solicit bids or proposals for a contract for property or

services for a price expected to exceed $10,000, if there is L not a reasonable expectation that at least two offers will be If * received from responsive and responsible offerors,"; and

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(E) by striking out "and" at the end; (2) by redesignating subparagraph (B) as subparagraph (C); and (3) by inserting after subparagraph (A) the following new subparagraph (B): "(B) an executive agency intending to solicit bids or proposals for a contract for property or services shall post, for a period of not less than ten days, in a public place at the contracting office issuing the solicitation a notice of solicitation described in \ subsection (f)— "(i) in the case of an executive agency other than the Department of Defense, if the contract is for a price expected to exceed $10,000, but not to exceed $25,000; and sl3 "(ii) in the case of the Department of Defense, if the contract is for a price expected to exceed $5,000, but not to exceed $25,000; and". (c) SMALL BUSINESS SET-ASIDES.—The first sentence of section 150') of the Small Business Act (15 U.S.C. 644(j)) is amended by striking out "$10,000" and inserting in lieu thereof "25,000". (d) CONFORMING AMENDMENTS.—(1) Section 8(f) of the Small Business Act is amended by striking out "subsection (e)(1)(A)" and inserting in lieu thereof "subparagraph (A) or (B) of subsection (e)(1)". (2) Section 18(b) of the Office of Federal Procurement Policy Act is amended by striking out "subsection (a)(1)(A)" and inserting in lieu thereof "subparagraph (A) or (B) of subsection (a)(1)". SEC. 923. REQUIREMENTS RELATING TO PROCEDURES OTHER THAN COMPETITIVE PROCEDURES (a) LIMITED SOURCES.—Section 2304(c)(1) of title 10, United States Code, is amended by inserting "or only from a limited number of responsible sources" after "only one responsible source". (b) UNSOLICITED PROPOSALS FOR SERVICE.—Subparagraph (A) of

section 2304(d)(1) of such title is amended by striking out "a unique and innovative concept" and all that follows and inserting in lieu thereof "a concept— "(i) that is unique and innovative or, in the case of a capability of the source to provide the service; and "(ii) the substance of which is not otherwise available to the United States, and does not resemble the substance of a pending competitive procurement; and". (c) FOLLOW-ON CONTRACTS.—Subparagraph (B) of such section is amended— (1) by inserting ", or the continued provision of highly specialized services, such property or services may be deemed to be available only from the original source and may be procured g through procedures other than competitive procedures" after "highly specialized equipment"; (2) by inserting a one-em dash after "would result in"; (3) by paragraphing clauses (i) and (ii) and aligning their margins so as to be cut in four ems; (4) by striking out the comma after "competition" at the end of clause (i) and inserting in lieu thereof a semicolon; and (5) by striking out ", such property" and all that follows and inserting in lieu thereof a period.
 * ,;4,,, service, for which the source demonstrates a unique

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(d) EFFECTIVE DATES.—(1) The amendment made by subsection (a) shall apply with respect to contracts for which solicitations are issued after the end of the 180-day period beginning on the date of the enactment of this Act. (2) The amendment made by subsection (b) shall apply with respect to contracts awarded on the basis of unsolicited research proposals after the end of the 180-day period beginning on the date of the enactment of this Act. (3) The amendments made by subsection (c) shall apply with respect to follow-on contracts awarded after the end of the 180-day period beginning on the date of the enactment of this Act. SEC. 924. EVALUATION FACTORS IN AWARD OF CONTRACTS

'

(a) EVALUATION FACTORS.—Subsection (a) of section 2305 of title 10, United States Code, is amended— (1) in paragraph (2)(A)(i)— ,; ,,;, (A) by striking out "(including price)"; jj'fji, (B) by inserting "(including price)" after "sealed bids"; and tarli (^) ^y inserting "(including cost or price)" after "competitive proposals"; and (2) by adding at the end the following new paragraph: "(3) In prescribing the evaluation factors to be included in each solicitation for competitive proposals, the head of an agency shall clearly establish the relative importance assigned to the quality of the services to be provided (including technical capability, management capability, and prior experience of the offeror).". (b) CONFORMING AMENDMENT.—Subsection (b) of such section is amended by inserting "cost or" in paragraph (4)(B) before "price". (c) EFFECTIVE DATE.—The amendments made by this section shall apply with respect to solicitations for sealed bids or competitive proposals issued after the end of the 180-day period beginning on the date of the enactment of this Act. ^ SEC. 925. COMPUTATION OF CONTRACT BID PRICES

(a) IN GENERAL.—Section 2301(a) of title 10, United States Code, is amended— ' (1) by striking out "and" at the end of paragraph (5); (2) by striking out the period at the end of paragraph (6) and ^ inserting in lieu thereof "; and"; and ^'* (3) by adding at the end the following new paragraph: "(7) the head of an agency, in issuing a solicitation for a . contract to be awarded using sealed-bid procedures, not in^•' eluded in such solicitation a clause providing for the evaluation I of prices under the contract for options to purchase additional supplies or services under the contract unless the head of the agency has determined that there is a reasonable likelihood that the options will be exercised.". (b) EFFECTIVE DATE.—Section 2301(a)(7) of title 10, United States Code (as added by subsection (a)), shall not apply to solicitations for sealed bids issued before the end of the 180-day period beginning on the date of the enactment of this Act. SEC. 926. PRICES FOR SPARE OR REPAIR PARTS SOLD COMMERCIALLY (a) ESTABLISHMENT OF COMMERCIAL PRICING REQUIREMENT.—(1)

Section 2323 of title 10, United States Code, is amended to read as follows:

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"§ 2323. Commercial pricing for spare or repair parts "(a) LIMITATION ON PRICE OF COMMERCIALLY AVAILABLE PARTS.—

Except in the case of an offer submitted with a written statement under subsection G5)(2) and except as provided in subsection (c), if the head of an agency, using procedures other than competitive procedures, enters into a contract with a contractor for the purchase of spare or repair parts which the contractor also offers for sale to the general public, the price charged the United States for such parts under the contract may not exceed the lowest commercial price charged by the contractor in sales of such parts during a period described in subsection (b)(1). "(b) REQUIREMENTS FOR INCLUSION IN OFFER.—The head of an agency, with respect to an offeror who submits an offer to the head of an agency to enter into a contract for the supply of spare or repair parts under a contract awarded using procedures other than competitive procedures, and who also offers such parts for sale to the general public, shall require that the offeror— "(1) certify in such offer that, to the best of the knowledge and belief of the offeror, the price proposed in the offer does not exceed the lowest commercial price at which such offeror sold such parts during the most recent regular monthly, quarterly, or other period for which sales data are reasonably available; or "(2) submit with such offer a written statement— "(A) specifying the amount of the difference between the price proposed in the offer and the lowest commercial price r, at which such offeror sold such parts during a period described in paragraph (1); and "(B) providing a justification for that difference. "(c) EXCEPTION TO LIMITATION.—Subsections (a) and

(b) do

not

apply in the case of a contract with respect to which the contracting officer includes in the file on the contract a written determination by such officer that the use of the lowest commercial price with respect to such contract is not appropriate because of— "(1) national security considerations; or "(2) significant differences between the terms of the commercial sales of the parts to be acquired under such contract and the terms of such contract, including differences in— "(A) quantity; "(B) quality; "(C) delivery requirements; or "(D) other terms and conditions. "(d) AUDITING.—(1) In order to verify any certification or statement made under subsection (b) with respect to a contract, the contracting officer who awards such contract (or any representative of the contracting officer who is an employee of the United States or a member of the armed forces), during the time period specified in paragraph (2), may examine and audit all records of sales (including contract terms and conditions) maintained by or for the contractor that are directly pertinent to sales by the contractor of spare or repair parts identical to those covered by the contract during the period covered by such certification or statement. "(2) The head of an agency shall require an offeror who submits a certification or written statement under subsection (b) to make available the records, books, data, and documents described in paragraph (1) for examination, audit, or reproduction for the purposes of such paragraph during the three-year period beginning on

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the date that the offeror submits such certification or statement to such head of an agency. "(3) The authority provided by this subsection is in addition to the authority of the head of an agency under section 2306a of this title. "(e) REGULATIONS.—The Secretary of Defense, after consultation with the Secretary of Transportation and the Administrator of the National Aeronautics and Space Administration, shall prescribe regulations to carry out this section. Such regulations may not require the disclosure or submission of any data related to any element underlying the price of a commercial product not otherwise required by law. "(f) DEFINITIONS.—In this section: "(1) The term 'spare or repair part' means any individual piece, part, subassembly, or component which is furnished for the logistic support or repair of an end item and not as an end item itself. "(2) The term 'lowest commercial price' means the lowest price at which a sale was made to the general public of a particular part. Such term does not include the price at which a sale was made— "(A) to any agency of the United States; "(B) to any person for resale by such person after such person performs a service or function in connection with such part that increases the cost of the part, unless the agency procuring the part can demonstrate that the agency is procuring the part before such service or function has been performed by any such person; "(C) to a subsidiary, affiliate, or parent business organiza' tion of the contractor, or any other branch of the same business entity; "(D) to any person at a price that, for the purpose of making a donation, has been substantially discounted below the fair market value or regular price of such part; or "(E) to a customer located outside the United States. "(g) APPLICABILITY.—This section does not apply to a contract entered into using simplified small purchase procedures established under section 2304(g) of this title.". (2) The item relating to section 2323 at the beginning of chapter 137 is amended to read as follows: "2323. Commercial pricing for spare or repair parts.".

(b) EFFECTIVE DATE.—Regulations prescribed under section 2323(e) of title 10, United States Code (as amended by subsection (a)(1)), shall take effect on the date of the enactment of this Act. SEC. 927. ALLOCATION OF OVERHEAD TO PARTS TO WHICH CONTRACTOR HAS ADDED LITTLE VALUE

(a) IN GENERAL.—Section 2304 of of title 10, United States Code, is amended by adding at the end the following new subsection: "(i)(l) The Secretary of Defense shall prescribe by regulation the manner in which the Department of Defense negotiates prices for supplies to be obtained through the use of procedures other than competitive procedures, as defined in section 2302(2) of this title. "(2) The regulations required by paragraph (1) shall— "(A) specify the incurred overhead a contractor may appropriately allocate to supplies referred to in that paragraph; and

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"(B) require the contractor to identify those supplies which it did not manufacture or to which it did not contribute significant value. "(3) Such regulations shall not apply to an item of supply included in a contract or subcontract for which the price is based on established catalog or market prices of commercial items sold in substantial quantities to the general public". (b) DEADLINE.—The Secretary of Defense shall prescribe the regulations required by section 2304(i) of such title (as added by subsection (a)) not later than 180 days after the date of the enactment of this Act. (c) REPEAL.—Section 1245 of the Department of Defense Authorization Act, 1985 (Public Law 98-525, 98 Stat. 2609), is repealed. SEC. 928. CLARIFICATION OF REQUIREMENTS TO MARK SUPPLIES TO IDENTIFY SUPPLIERS AND SOURCES

(a) EXCEPTION FOR CERTAIN COMMERCIAL ITEMS.—Section 2384(b) of title 10, United States Code, is amended— (1) by redesignating paragraphs (1), (2), and (3) as subparagraphs (A), (B), and (C), respectively; (2) by inserting "(1)" after "(b)"; (3) by inserting "(other than a contract described in paragraph (2))" after "delivery of supplies"; and (4) by adding at the end the following new paragraph: "(2) Paragraph (1) does not apply to a contract that requires the delivery of supplies that are commercial items sold in substantial quantities to the general public if the contract— "(A) provides for the acquisition of such supplies by the Department of Defense at established catalog or market prices; or "(B) is awarded through the use of competitive procedures.". (b) EFFECTIVE DATE.—The amendments made by subsection (a) shall apply with respect to contracts entered into after the end of the 180-day period beginning on the date of the enactment of this Act. PART C—PROCUREMENT PERSONNEL POLICY SEC. 93L CONFLICT-OF-INTEREST IN DEFENSE PROCUREMENT

(a) IN GENERAL.—(1) Chapter 141 of title 10, United States Code, is amended by inserting after section 2397a the following new sections: "§ 2397b. Certain former Department of Defense procurement officials: limitations on employment by contractors "(a)(1) Subject to subsections (c) and (d), a person who is a former officer or employee of the Department of Defense or a former or retired member of the armed forces may not accept compensation from a contractor during the two-year period beginning on the date of such person's separation from service in the Department of Defense if— "(A) on a majority of the person's working days during the two-year period ending on the date of such person's separation from service in the Department of Defense, the person performed a procurement function (relating to a contract of the Department of Defense) at a site or plant that is owned or

71-194 0 - 89 - 28: QL. 3 Part 2

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operated by the contractor and that was the principal location "', of such person's performance of that procurement function; ^' "(B) the person performed, on a majority of the person's working days during such two-year period, procurement func" tions relating to a major defense system and, in the performance of such functions, participated personally and " ' substantially, and in a manner involving decisionmaking responsibilities, with respect to a contract for that system through contact with the contractor; or "(C) during such two-year period the person acted as a pri•' mary representative of the United States— "(i) in the negotiation of a Department of Defense contract in an amount in excess of $10,000,000 with the i '• contractor; or "(ii) in the negotiation of a settlement of an unresolved claim of the contractor in an amount in excess of $10,000,000 under a Department of Defense contract. "(2) In the application of paragraph (1) to a former officer or employee of the Department of Defense or a former or retired member of the armed forces, a person's status as a contractor shall be determined as of the date of the separation from service in the Department of Defense of the officer or employee or member or former member involved. "(b)(1) Any person who knowingly violates subsection (a)(1) shall be subject to a civil fine, in an amount not to exceed $250,000, in a civil action brought by the United States in the appropriate district court of the United States. "(2) Any person who knowingly offers or provides any compensation to another person, and who knew or should have known that the acceptance of such compensation is or would be in violation of subsection (a)(1), shall be subject to a civil fine, in an amount not to exceed $500,000, in a civil action brought by the United States in the appropriate district court of the United States. "(c) This section does not apply to any person with respect to— "(1) duties described in clause (A) or (B) of subsection (a)(1) ^.; which were performed while such person was serving— "(A) in a civilian position for which the rate of pay is less than the minimum rate of pay payable for grade GS-13 of the General Schedule; or "(B) as a member of the armed forces in a pay grade below pay grade 0-4; or "(2) duties described in clause (C) of subsection (a)(1) which ft were performed while such person was serving— "(A) in a civilian position for which the rate of pay is less 01 than the minimum rate of pay payable for a Senior Executive Service position; or, p..: "(B) as a member of the armed forces in a pay grade below pay grade 0-7. "(d) This section does not prohibit any person from accepting compensation from any contractor that, during the fiscal year preceding the fiscal year in which such compensation is accepted, was not a Department of Defense contractor or was a contractor under Department of Defense contracts in a total amount less than $10,000,000. "(e)(1) Any person may, before accepting any compensation, request the appropriate designated agency ethics official to advise such person on the applicability of this section to the acceptance of

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such compensation. For purposes of the preceding sentence, the appropriate designated agency ethics official is the designated agency ethics official of the agency in which such person was serving at the time such person separated from service in the Department of Defense. "(2) A request for advice under paragraph (1) shall contain all information that is relevant to a determination by the designated agency ethics official on such request. "(3) Not later than 30 days after the date on which a designated agency ethics official receives a request for advice under paragraph (1), such official shall issue a written opinion on the applicability of this section to the acceptance of compensation covered by the request. "(4) If a designated agency ethics official, on the basis of a complete disclosure as required by paragraph (2), states in a written opinion furnished to any person under this subsection that this section is inapplicable to the acceptance of compensation by such person from a contractor in a particular case, there shall be a conclusive presumption in favor of such person, for the purposes of this section, that the person's acceptance of such compensation in such case is not a violation of subsection (a)(1). "(f) In this section: "(1) The term 'compensation' includes any payment, gift, benefit, reward, favor, or gratuity— s "(A) which is provided, directly or indirectly, for services rendered by the person accepting such payment, gift, benek) fit, reward, favor, or gratuity; and ^ "(B) which is valued in excess of $250 at the prevailing market price. "(2)(A) The term 'contractor' means a person— "(i) that contracts to supply the Department of Defense with goods or services; 1 >b; • u

"(ii) that controls or is controlled by a person described in clause (i); or

ii r "(iii) that is under common control with a person dea rtoc^^ scribed in clause (i). "(B) Such term does not include— "(i) an affiliate or subsidiary of a person described in subparagraph (A) that is clearly not engaged in the performance of a Department of Defense contract; or "(ii) a State or local government. 9.< "(3) The term 'procurement function' includes, with respect to a contract, any function relating to— x'c "(A) the negotiation, award, administration, or approval of the contract;

"(B) the selection of a contractor; f "(C) the approval of changes in the contract; "(D) quality assurance, operational and developmental testing, the approval of payment, or auditing under the contract; or "(E) the management of the procurement program. to "(4) The term 'armed forces' does not include the Coast Guard. " "(5) The term 'major defense system' has the meaning given the term 'major system' in section 2302(5) of this title. "(g) For the purposes of this section, a person who is a retired member or a former member of the armed forces shall be considered

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to have been separated from service in the Department of Defense upon the date of the person's discharge or release from active duty. "§ 2397c. Defense contractors: requirements concerning former Department of Defense officials "(a)(1) Each contract for the procurement of goods or services in excess of $100,000 entered into by the Department of Defense shall include a provision under which the contractor agrees not to provide compensation to a person if the acceptance of such compensation by such person would violate section 2397b(a)(l) of this title. "(2) Such a contract shall also provide that if the contractor knowingly violates a contract provision required by paragraph (1) the contractor shall pay to the United States, as liquidated damages under the contract, an amount equal to the greater of— "(A) $100,000; or "(B) three times the amount of the compensation paid by the contractor to the person in violation of such contract provision. "(b)(1)(A) Any contractor that was awarded one or more contracts by the Department of Defense during the preceding fiscal year in an aggregate amount of at least $10,000,000 that is subject during a calendar year to a contract provision described in subsection (a) shall submit to the Secretary of Defense, not later than April 1 of the next year, a written report covering the preceding calendar year. Each such report shall list the name of each person (together with other information adequate for the Government to identify the person) who— "(i) is a former officer or employee of the Department of •4;. Defense or a former or retired member of the armed forces; and "(ii) during the preceding calendar year was provided compensation by that contractor, if such compensation was provided i>5 within two years after such officer, employee, or member left service in the Department of Defense. "(B) In the case of each person named in a report submitted under subparagraph (A), the report shall— "(i) identify the agency in which the person was employed or served on active duty during the last two years of the person's service with the Department of Defense; "(ii) state the person's job title and identify each major defense system, if any, on which the person performed any work with the Department of Defense during the last two years of the person's service with the Department; c1 "(iii) contain a complete description of any work that the person is performing on behalf of the contractor; and "(iv) identify each major defense system on which the person has performed any work on behalf of the contractor. "(2) A person who knowingly fails to file a report required by paragraph (1) shall be subject to an administrative penalty, not to exceed $10,000, imposed by the Secretary of Defense after an opportunity for an agency hearing on the record pursuant to regulations prescribed by the Secretary of Defense. The determinations of the Secretary shall be included in such record. The determinations of the Secretary shall be subject to judicial review under chapter 7 of title 5. "(3) The Secretary of Defense shall review each report under paragraph (1) for the purposes of (A) assessing the accuracy and completeness of the report, and (B) identifying possible violations of section 2397b(a)(l) of this title or of a contract provision required by

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subsection (a). The Secretary shall report any such possible violation to the Attorney General. "(4) The Secretary shall make reports submitted under this subsection available to any Member of Congress upon request. "(d) Subsection (g) of section 2397b of this title, and the definitions prescribed in subsection (f) of such section, apply to this section.". (2) The table of sections at the beginning of chapter 141 of title 10, United States Code, is amended by inserting after the item relating to section 2397a the following new items: "2397b. Certain former Department of Defense procurement officials: limitations on employment by contractors. "2397c. Defense contractors: requirements concerning former Department of Defense officials.".

(b) REPEAL.—Section 921 of the Defense Procurement Improvement Act of 1985 (title IX of Public Law 99-145; 10 U.S.C. 2397a note) is repealed. (c) EFFECTIVE DATES.—(1) Subject to paragraph (2), this section and the amendments made by this section shall take effect 180 days after the date of the enactment of this Act. (2)(A) The amendments made by this section— (i) do not preclude the continuation of employment that began before the effective date of this section or the acceptance of compensation for such employment; and (ii) do not, except as provided in subparagraph (B), apply to a person whose service in the Department of Defense terminates before the effective date of this section. (B) Subparagraph (A)(ii) does not preclude the application of the amendments made by this section to a person with respect to service in the Department of Defense by such person on or after the effective date of this section. SEC. 932. PLAN FOR ENHANCEMENT OF PROFESSIONALISM OF ACQUISITION PERSONNEL

(a) DEVELOPMENT OF PLAN.—The Secretary of Defense shall develop a plan for a personnel initiative designed to enhance the professionalism of, and career opportunities available to, acquisition personnel of the Department of Defense. (b) REQUIREMENTS FOR PLAN.—The plan required to be developed under subsection (a) shall— (1) include standards for the examination, appointment, classification, training, and assignment of acquisition personnel; and (2) assess the feasibility and desirability of— i (A) the designation of certain acquisition positions of the Department of Defense as professional positions; and (B) the establishment of an alternative personnel system that would— (i) include acquisition positions that are designated as ., professional positions; and (ii) include quality of performance as a factor in promotions for persons in such positions. (c) REPORT.—(1) The Secretary shall submit to Congress a report— (A) describing the plan developed under subsection (a); and (B) recommending any changes in existing law that would facilitate the enhancement of the professionalism of, and career opportunities available to, acquisition personnel of the Department of Defense.

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PUBLIC LAW 99-500—OCT. 18, 1986

(2) The report required by subparagraph (A) shall be submitted not later than April 15, 1987. (d) EFFECTIVE DATE.—The report required by subsection (c) shall be submitted not later than the end of the one-year period beginning on the date of the enactment of this Act. SEC. 933. EDUCATIONAL REQUIREMENTS FOR ACQUISITION PERSONNEL

Section 1622(b)(1) of title 10, United States Code, is amended by striking out "attended" and inserting in lieu thereof "completed. SEC. 934. PLAN FOR COORDINATION OF DEFENSE ACQUISITION EDUCATIONAL PROGRAMS

(a) COORDINATION PLAN.—The Secretary of Defense shall submit to the Committees on Armed Services of the Senate and House of Representatives a report containing a plan for the coordination of educational programs managed by the Department of Defense for acquisition personnel of the Department. (b) REQUIREMENTS FOR PLAN.—The plan required by subsection (a) shall provide for— (1) the education of acquisition personnel of the Department , of Defense through programs offered by the Department or through educational courses offered by organizations other than the Department; J? (2) the education of acquisition personnel of the Department fcf in various acquisition specialties, including contracting, logistics, quality, program management, systems engineering, , production, and manufacturing; and (3) the elimination of duplication of functions and courses by 3: schools of the Department that provide educational courses for acquisition personnel of the Department. (c) EFFECTIVE DATE.—The report required by subsection (a) shall be submitted not later than the end of the one-year period beginning on the date of the enactment of this Act. ' PART D—REQUIREMENTS RELATING TO DEFENSE CONTRACTORS SEC. 941. CODIFICATION AND EXTENSION OF PROHIBITION ON PERSONS CONVICTED OF DEFENSE-CONTRACT RELATED FELONIES AND RELATED CRIMINAL PENALTY ON DEFENSE CONTRACTORS

(a) IN GENERAL.—(1) Chapter 141 of title 10, United States Code, is amended by adding at the end the following new section: "§ 2408. Prohibition on persons convicted of defense-contract related felonies and related criminal penalty on defense contractors "(a) PROHIBITION.—A person who is convicted of fraud or any other felony arising out of a contract with the Department of Defense shall be prohibited from working in a management or supervisory capacity on any defense contract, or serving on the board of directors of any defense contractor, for a period, as determined by the Secretary of Defense, of not less than one year from the date of the conviction. "(b) CRIMINAL PENALTY.—A defense contractor shall be subject to a criminal penalty of not more than $500,000 if such contractor is convicted of knowingly— "(1) employing a person under a prohibition under subsection (a); or

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"(2) allowing such a person to serve on the board of directors of such contractor.". (2) The table of sections at the beginning of such chapter is amended by adding at the end the following new item: "2408. Prohibition on persons convicted of defense-contract related felonies and related criminal penalty on defense contractors.". (b)

CONFORMING

AMENDMENT.—Section

932

of

the

Defense

Procurement Improvement Act of 1985 (title IX of Public Law 99145; 99 Stat. 699) is repealed. (c) EFFECTIVE DATE.—Section 2408 of title 10, United States Code (as added by subsection (a)(1)), shall apply with respect to employment or service on a board of directors after the date of the enactment of this Act. SEC. 942. PROTECTION OF CONTRACTOR EMPLOYEES FROM REPRISAL FOR DISCLOSURE OF CERTAIN INFORMATION

(a) IN GENERAL.—(1) Chapter 141 of title 10, United States Code, is amended by adding after section 2408 (as added by section 941) the following new section: "§ 2409. Contractor employees: protection from reprisal for disclosure of certain information "(a) PROHIBITION OF REPRISALS.—An employee of a defense contractor may not be discharged, demoted, or otherwise discriminated against as a reprisal for disclosing to a Member of Congress or an authorized official of the Department of Defense or the Department of Justice information relating to a substantial violation of law related to a defense contract (including the competition for or negotiation of a defense contract). "(b) INVESTIGATION OF COMPLAINTS.—A person who believes that the person has been subjected to a reprisal prohibited by subsection (a) may submit a complaint to the Inspector General of the Department of Defense. Unless the Inspector General determines that the complaint is frivolous, the Inspector General shall investigate the complaint and, upon completion of such investigation, submit a report of the findings of the investigation to the person, the contractor concerned, and the Secretary of Defense. "(c) CONSTRUCTION.—Nothing in this section may be construed to authorize the discharge of, demotion of, or discrimination against an employee for a disclosure other than a disclosure protected by subsection (a) or to modify or derogate from a right or remedy otherwise available to the employee.". (2) The table of sections at the beginning of such chapter is amended by adding after the item relating to section 2408 (as added by section 941) the following new item: "2409. Contractor employees: protection from reprisal for disclosure of certain information.". (b) EFFECTIVE DATE.—Section 2409 of title 10, United States Code

(as added by subsection (a)(1)), shall apply with respect to any reprisal action taken on or after the date of the enactment of this Act. SEC. 943. REVISION OF WORK MEASUREMENT PROVISIONS

(a) IN GENERAL.—(1) Section 2406 of title 10, United States Code, is amended to read as follows:

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"§ 2406. Availability of cost and pricing records "(a) REQUIREMENT.—(1) The head of an agency shall require a contractor under a covered contract with that agency to make available in a timely manner to any authorized representative of the head of the agency records of the contractor's cost and pricing data described in subsection (b) with respect to work under the covered contract. "(2) The head of the agency (or the representative of the head of the agency) shall be entitled to have access to records in the form and manner maintained by the contractor. "(b) COVERED RECORDS.—Records covered by subsection (a) include (for a covered contract and end items under such a contract) the following: "(1) Work measurement system data (and any revision to such data), including records of labor content expressed in standard hours of work content for— (A) the contractor's proposal for the contract; and ?. (B) the contract as negotiated. "(2) The costs described in subsection (c)— J "(A) as proposed by the contractor; "(B) as negotiated by the contractor with the head of the agency; and "(C) as incurred by the contractor. "(3) Bills of material. ^' "(c) COVERED COSTS.—Costs referred to in subsection (b)(2) are— "(1) labor costs; "(2) material costs; .: "(3) subcontract costs; "(4) overhead costs; "(5) general and administrative costs; and "(6) fee or profit. "(d) NATURE OF RECORDS TO B E MAINTAINED.—Nothing in this section shall require a contractor under a covered contract to— "(1) collect or maintain additional data not otherwise collected or maintained by the contractor, or "(2) maintain data in a form or manner different from that in which the contractor maintains such data. "(e) REGULATIONS.—The Secretary of Defense shall prescribe regulations to carry out this section. Such regulations shall specify the period for which records shall be covered by this section, which shall not be less than three years after final payment under the contract to which the records pertain. "(f) DEFINITIONS.—In this section: "(1) The term 'head of an agency' means the Secretary of Defense or the Secretary of a military department. "(2) The term 'covered contract' means a manufacturing contract— "(A) that is awarded under a major defense acquisition program (as such term is defined in 2432(a) of this title); and "(B) that is subject to the provisions of section 2306a of this title. "(3) The term 'work measurement system data' means— "(A) data generated from time standard setting, time monitoring, and variance analysis; and

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"(B) such data described in subparagraph (A) as included in planning, cost estimating, and productivity improvement. "(4) The term 'authorized representative' means a representative of the head of an agency who is an employee of the United States or a member of the armed forces.". (2) The item relating to such section in the table of sections at the beginning of chapter 141 of such title is amended to read as follows: "2406. Availability of cost and pricing records.".

(b) APPLICABILITY OF SECTION.—Section 2406 of title 10, United States Code, as amended by subsection (a), shall apply with respect to— (1) contracts entered into on or after the date of the enactment of this Act; and (2) contracts entered into before such date that are not completed before such date. (c) DEADLINE FOR REGULATIONS.—The Secretary of Defense shall prescribe regulations as required by section 2406(e) of title 10, United States Code (as amended by subsection (a)(1)), not later than the end of the 180-day period beginning on the date of the enactment of this Act. PART E—MISCELLANEOUS SEC. 951. CONTRACTING WITH FIRMS OWNED OR CONTROLLED BY GOVERNMENTS THAT SUPPORT TERRORISM (a) CONSIDERATION OF NATIONAL INTERESTS WITH RESPECT TO DE-

FENSE CONTRACTS.—(1) Chapter 137 of title 10, United States Code, is amended by adding after the item relating to section 2326 (as added by section 908) the following new section: "§ 2327. Contracts: consideration of national security objectives "(a) DISCLOSURE OF OWNERSHIP OR CONTROL BY A FOREIGN GOVERN-

MENT.—The head of an agency shall require a firm or a subsidiary of a firm that submits a bid or proposal in response to a solicitation issued by the Department of Defense to disclose in that bid or proposal any significant interest in such firm or subsidiary (or, in the case of a subsidiary, in the firm that owns the subsidiary) that is owned or controlled (whether directly or indirectly) by a foreign government or an agent or instrumentality of a foreign government, if such foreign government is the government of a country that the Secretary of State determines under section 6(j)(l)(A) of the Export Administration Act of 1979 (50 U.S.C. 2405(j)(l)(A)) has repeatedly provided support for acts of international terrorism. "(b) PROHIBITION ON ENTERING INTO CONTRACTS AGAINST THE INTERESTS OF THE UNITED STATES.—Except as provided in subsection

(c), the head of an agency may not enter into a contract with a firm or a subsidiary of a firm if^ "(1) a foreign government owns or controls (whether directly or indirectly) a significant interest in such firm or subsidiary (or, in the case of a subsidiary, in the firm that owns the subsidiary); and "(2) such foreign government is the government of a country that the Secretary of State determines under section 6(j)(l)(A) of the Export Administration Act of 1979 (50 U.S.C. 2405(j)(l)(A)) has repeatedly provided support for acts of international i terrorism.

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"(c) WAIVER.—(1)(A) If the Secretary of Defense determines under paragraph (2) that entering into a contract with a firm or a subsidiary of a firm described in subsection (b) is not inconsistent with the national security objectives of the United States, the head of an agency may enter into a contract with such firm or subsidiary after the date on which such head of an agency submits to Congress a report on the contract. "(B) A report under subparagraph (A) shall include the following: "(i) The identity of the foreign government concerned, "(ii) The nature of the contract. "(iii) The extent of ownership or control of the firm or subsidiary concerned (or, if appropriate in the case of a subsidiary, of, the firm that owns the subsidiary) by the foreign government concerned or the agency or instrumentality of such foreign government. "(iv) The reasons for entering into the contract. "(C) After the head of an agency submits a report to Congress under subparagraph (A) with respect to a firm or a subsidiary, such head of an agency is not required to submit a report before entering into any subsequent contract with such firm or subsidiary unless the information required to be included in such report under subparagraph (B) has materially changed since the submission of the previous report. "(2) Upon the request of the head of an agency, the Secretary of Defense shall determine whether entering into a contract with a firm or subsidiary described in subsection (b) is inconsistent with the national security objectives of the United States. In making such a determination, the Secretary of Defense shall consider the following: "(A) The relationship of the United States with the foreign government concerned. "(B) The obligations of the United States under international agreements. "(C) The extent of the ownership or control of the firm or subsidiary (or, if appropriate in the case of a subsidiary, of the firm that owns the subsidiary) by the foreign government or an agent or instrumentality of the foreign government. "(D) Whether payments made, or information made available, to the firm or subsidiary under the contract could be used for purposes hostile to the interests of the United States. "(d) APPLICABILITY.—This section does not apply to a contract for an amount less than $100,000. "(2) This section does not apply to the Coast Guard or the National Aeronautics and Space Administration. "(e) REGULATIONS.—The Secretary of Defense, after consultation with the Secretary of State, shall prescribe regulations to carry out this section. Such regulations shall include a definition of the term 'significant interest'.". (2) The table of sections at the beginning of such chapter is amended by adding after the item relating to section 2326 (as added by section 908) the following new item: "2327. Contracts: consideration of national security objectives.".

(b) CONFORMING AMENDMENT.—Section 503 of the Military Retire-

ment Reform Act of 1986 (Public Law 99-348; 100 Stat. 708) is repealed. (c) EFFECTIVE DATE.—Section 2327 of title 10, United States Code (as added by subsection (a)(1)), shall apply to contracts entered into

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100 STAT. 1783-166

by the Secretary of Defense after the end of the 90-day period beginning on the date of the enactment of this Act. SEC. 952. TRUTH-IN-NEGOTIATIONS ACT AMENDMENTS (a) STRENGTHENING OF PREVENTION OF UNEARNED AND EXCESSIVE CONTRACTOR PROFITS.—Chapter 137 of title 10, United States Code,

is amended by inserting after section 2306 the following new section: "§ 2306a. Cost or pricing data: truth in negotiations "(a) REQUIRED COST OR PRICING DATA AND CERTIFICATION.—(1) The

head of an agency shall require offerors, contractors, and subcontractors to make cost or pricing data available as follows: "(A) An offeror for a prime contract under this chapter to be entered into using procedures other than sealed-bid procedures shall be required to submit cost or pricing data before the award of the contract if the price of the contract to the United States is expected to exceed $100,000. "(B) The contractor for a contract under this chapter shall be required to submit cost or pricing data before the pricing of a change or modification to the contract if the price adjustment is expected to exceed $100,000 (or such lesser amount as may be prescribed by the head of the agency). "(C) An offeror for a subcontract (at any tier) of a contract under this chapter shall be required to submit cost or pricing data before the award of the subcontract if— "(i) the price of the subcontract is expected to exceed $100,000; and t "(ii) the prime contractor and each higher-tier sub• contractor have been required to make available cost or pricing data under this section. "(D) The subcontractor for a subcontract covered by subparagraph (C) shall be required to submit cost or pricing data before the pricing of a change or modification to the subcontract if the price adjustment is expected to exceed $100,000 (or such lesser amount as may be prescribed by the head of the agency). "(2) A person required, as an offeror, contractor, or subcontractor, to submit cost or pricing data under paragraph (1) (or required by the head of the agency concerned to submit such data under subsection (c)) shall be required to certify that, to the best of the person's knowledge and belief, the cost or pricing data submitted are accurate, complete, and current. "(3) Cost or pricing data required to be submitted under paragraph (1) (or under subsection (c)), and a certification required to be submitted under paragraph (2), shall be submitted— "(A) in the case of a submission by a prime contractor (or an offeror for a prime contract), to the contracting officer for the contract (or to a designated representative of the contracting officer); or "(B) in the case of a submission by a subcontractor (or an offeror for a subcontract), to the prime contractor. "(4) Except as provided under subsection (b), this section applies to contracts entered into by the head of an agency on behalf of a foreign government. "(5) The head of the agency may waive the requirement under this subsection for a contractor, subcontractor, or offeror to submit cost or pricing data. For purposes of paragraph (l)(C)(ii), a contractor or subcontractor granted such a waiver shall be considered as having

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been required to make available cost or pricing data under this section. "(b) EXCEPTIONS.—This section need not be applied to a contract or subcontract— "(1) for which the price agreed upon is based on— "(A) adequate price competition; ., "(B) established catalog or market prices of commercial items sold in substantial quantities to the general public; or "(C) prices set by law or regulation; or "(2) in an exceptional case when the head of the agency determines that the requirements of this section may be waived and states in writing his reasons for such determination. "(c) AUTHORITY To REQUIRE COST OR PRICING DATA.—When cost or pricing data are not required to be submitted by subsection (a), such data may nevertheless be required to be submitted by the head of the agency if the head of the agency determines that such data are necessary for the evaluation by the agency of the reasonableness of the price of the contract or subcontract. "(d) PRICE REDUCTIONS FOR DEFECTIVE COST OR PRICING DATA.—

(1)(A) A prime contract (or change or modification to a prime contract) under which a certificate under subsection (a)(2) is required shall contain a provision that the price of the contract to the United States, including profit or fee, shall be adjusted to exclude any significant amount by which it may be determined by the head of the agency that such price was increased because the contractor (or any subcontractor required to make available such a certificate) submitted defective cost or pricing data. "(B) For the purposes of this section, defective cost or pricing data are cost or pricing data which, as of the date of agreement on the price of the contract (or another date agreed upon between the parties), were inaccurate, incomplete, or noncurrent. If for purposes of the preceding sentence the parties agree upon a date other than the date of agreement on the price of the contract, the date agreed upon by the parties shall be as close to the date of agreement on the price of the contract as is practicable. "(2) In determining for purposes of a contract price adjustment under a contract provision required by paragraph (1) whether, and to what extent, a contract price was increased because the contractor (or a subcontractor) submitted defective cost or pricing data, it shall be a defense that the United States did not rely on the defective data submitted by the contractor or subcontractor. "(3) It is not a defense to an adjustment of the price of a contract under a contract provision required by paragraph (1) that— "(A) the price of the contract would not have been modified even if accurate, complete, and current cost or pricing data had been submitted by the contractor or subcontractor because the contractor or subcontractor— "(i) was the sole source of the property or services procured; or "(ii) otherwise was in a superior bargaining position with 0: respect to the property or services procured; H "(B) the contracting officer should have known that the cost and pricing data in issue were defective even though the contractor or subcontractor took no affirmative action to bring the character of the data to the attention of the contracting officer; "(C) the contract was based on an agreement between the contractor and the United States about the total cost of the

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contract and there was no agreement about the cost of each item procured under such contract; or "(D) the prime contractor or subcontractor did not submit a certification of cost and pricing data relating to the contract as required under subsection (a)(2). "(4)(A) A contractor shall be allowed to offset an amount against the amount of a contract price adjustment under a contract provision required by paragraph (1) if— "(i) the contractor certifies to the contracting officer (or to a designated representative of the contracting officer) that, to the best of the contractor's knowledge and belief, the contractor is entitled to the offset; and "(ii) the contractor proves that the cost or pricing data were available before the date of agreement on the price of the contract (or price of the modification) and that the data were not submitted as specified in subsection (a)(3) before such date. "(B) A contractor shall not be allowed to offset an amount otherwise authorized to be offset under subparagraph (A) if— (i) the certification under subsection (a)(2) with respect to the cost or pricing data involved was known to be false when signed; or (ii) the United States proves that, had the cost or pricing data referred to in subparagraph (A)(ii) been submitted to the United States before the date of agreement on the price of the contract (or price of the modification), the submission of such cost or pricing data would not have resulted in an increase in that price in the amount to be offset. "(e) INTEREST AND PENALTIES FOR CERTAIN OVERPAYMENTS.—(1) If

the United States makes an overpayment to a contractor under a contract with the Department of Defense subject to this section and the overpayment was due to the submission by the contractor of defective cost or pricing data, the contractor shall be liable to the United States— "(A) for interest on the amount of such overpayment, to be computed— "(i) for the period beginning on the date the overpayment was made to the contractor and ending on the date the contractor repays the amount of such overpayment to the United States; and "(ii) at the current rate prescribed by the Secretary of the Treasury under section 6621 of the Internal Revenue Code of 1954; and "(B) if the submission of such defective data was a knowing submission, for an additional amount equal to the amount of the overpayment. "(2) Except as provided under subsection (d), the liability of a contractor under this subsection shall not be affected by the contractor's refusal to submit a certification under subsection (a)(2) with respect to the cost or pricing data involved. "(f) RIGHT OF UNITED STATES TO EXAMINE CONTRACTOR RECORDS.—

(1) For the purpose of evaluating the accuracy, completeness, and currency of cost or pricing data required to be submitted by this section with respect to a contract or subcontract, the head of the agency, acting through any authorized representative of the head of the agency who is an employee of the United States or a member of the armed forces, shall have the right to examine all records of the contractor or subcontractor related to—

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 * i'.F

"(A) the proposal for the contract or subcontract; '• ' ' •"(B) the discussions conducted on the proposal; '

' ''• "(C) pricing of the contract or subcontract; or "(D) performance of the contract or subcontract. "(2) The right of the head of an agency under paragraph (1) shall expire three years after final payment under the contract or subcontract. "(3) In this subsection, the term 'records' includes books, documents, and other data. "(g) COST OR PRICING DATA DEFINED.—In this section, the term 'cost or pricing data' means all information that is verifiable and that, as of the date of agreement on the price of a contract (or the price of a contract modification), a prudent buyer or seller would reasonably expect to affect price negotiations significantly. Such term does not include information that is judgmental, but does include the factual information from which a judgment was derived.". (b) CONFORMING AMENDMENTS.—(1) Subsection (f) of section 2306 of such title is amended to read as follows: "(f) So-called 'truth-in-negotiations' provisions relating to cost or pricing data to be submitted by certain contractors and subcontractors are provided in section 2306a of this title.". (2) Section 934(a) of the Defense Procurement Improvement Act of 1985 (title IX of Public Law 99-145; 99 Stat. 700) is repealed. (c) CLERICAL AMENDMENTS.—(1) The heading of section 2306 of title 10, United States Code, is amended to read as follows: "§ 2306. Kinds of contracts". (2) The table of sections at the beginning of chapter 137 of such title is amended by striking out the item relating to section 2306 and inserting in lieu thereof the following: "2306. Kinds of contracts. "2306a. Cost or pricing data: truth in negotiations.".

"1

.„•. ^,!•

(d) EFFECTIVE DATES.—(1) Except as provided in paragraph (2), section 2306a of title 10, United States Code (as added by subsection (a)), and the amendment and repeal made by subsection (b), shall apply with respect to contracts or modifications on contracts entered into after the end of the 120-day period beginning on the date of the enactment of this Act. (2) Subsection (e) of such section shall apply with respect to contracts or modifications on contracts entered into after November 7, 1985. SEC. 953. RIGHTS IN TECHNICAL DATA

-

.

(a) RIGHTS IN TECHNICAL DATA.—Subsection (a) of section 2320 of title 10, United States Code, is amended to read as follows: "(a)(1) The Secretary of Defense shall prescribe regulations to define the legitimate interest of the United States and of a contractor or subcontractor in technical data pertaining to an item or process. Such regulations shall be included in regulations of the Department of Defense prescribed as part of the Federal Acquisition Regulation. Such regulations may not impair any right of the United States or of any contractor or subcontractor with respect to patents or copyrights or any other right in technical data otherwise established by law. "(2) Such regulations shall include the following provisions:

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"(A) In the case of an item or process that is developed by a contractor or subcontractor exclusively with Federal funds, the United States shall have the unlimited right to— "(i) use technical data pertaining to the item or process; or "(ii) release or disclose the technical data to persons outside the government or permit the use of the technical data by such persons. "(B) Except as provided in subparagraphs (C) and (D), in the case of an item or process that is developed by a contractor or subcontractor exclusively at private expense, the contractor or subcontractor may restrict the right of the United States to release or disclose technical data pertaining to the item or process to persons outside the government, or permit the use of the technical data by such persons. "(C) Subparagraph (B) does not apply to technical data that— "(i) constitutes a correction or change to data furnished by the United States; "(ii) relates to form, fit, or function; "(iii) is necessary for operation, maintenance, installation, or training (other than detailed manufacturing or process data); or "(iv) is otherwise publicly available or has been released or disclosed by the contractor or subcontractor without restriction on further release or disclosure. "(D) Notwithstanding subparagraph (B), the United States may release or disclose technical data to persons outside the Government, or permit the use of technical data by such persons, if— "(i) such release, disclosure, or use— "(I) is necessary for emergency repair and overhaul; or "(II) is a release or disclosure of technical data (other than detailed manufacturing or process data) to, or use of such data by, a foreign government that is in the interest of the United States and is required for evaluational or informational purposes; "(ii) such release, disclosure, or use is made subject to a prohibition that the person to whom the data is released or disclosed may not further release, disclose, or use such data; and "(iii) the contractor or subcontractor asserting the restriction is notified of such release, disclosure, or use. "(E) In the case of an item or process that is developed in part with Federal funds and in part at private expense, the respective rights of the United States and of the contractor or subcontractor in technical data pertaining to such item or process shall be agreed upon as early in the acquisition process as practicable (preferably during contract negotiations), based upon consideration of all of the following factors: "(i) The statement of congressional policy and objectives in section 200 of title 35, the statement of purposes in section 2(b) of the Small Business Innovation Development Act of 1982 (15 U.S.C. 638 note), and the declaration of policy in section 2 of the Small Business Act (15 U.S.C. 631).

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• •- • "(ii) The interest of the United States in increasing com.^ *^ petition and lowering costs by developing and locating alternative sources of supply and manufacture., r ' "(iii) The interest of the United States in encouraging contractors to develop at private expense items for use by the Government. "(F) A contractor or subcontractor (or a prospective contractor or subcontractor) may not be required, as a condition of being responsive to a solicitation or as a condition for the award of a contract, to sell or otherwise relinquish to the United States any rights in technical data except— "(i) rights in technical data described in subparagraph

(C); or "(ii) under the conditions described in subparagraph (D). "(G) The Secretary of Defense may— "(i) negotiate and enter into a contract with a contractor " or subcontractor for the acquisition of rights in technical data pertaining to an item or process developed by such contractor or subcontractor exclusively at private expense . if necessary to develop alternative sources of supply and ^^ manufacture; or '^ "(ii) agree to restrict rights of the United States in technical data pertaining to an item or process developed en''? tirely or in part with Federal funds if the United States Um. receives a royalty-free license to use, release, or disclose the data for purposes of the United States (including purposes of competitive procurement). "(3) The Secretary of Defense shall define the terms 'developed' and 'private expense' in regulations prescribed under paragraph (1). "(4) For purposes of this subsection, the term 'Federal Acquisition Regulation' means the single system of Government-wide procurement regulations as defined in section 4(4) of the Office of Federal Procurement Policy Act (41 U.S.C. 403(4)).". (b) VALIDATION OF PROPRIETARY DATA RESTRICTIONS.—Subsections

(a) and (b) of section 2321 of title 10, United States Code, are amended to read as follows: "(a) A contract for supplies or services entered into by the Department of Defense which provides for the delivery of technical data shall provide that a contractor or subcontractor at any tier shall be prepared to furnish to the contracting officer a written justification for any restriction asserted by the contractor or subcontractor on the right of the United States to use such technical data. "(b)(1) The Secretary of Defense shall ensure that there is a thorough review of the appropriateness of any restriction on the right of the United States to release or disclose technical data delivered under a contract to persons outside the Government, or to permit the use of such technical data by such persons. Such review shall be conducted before the end of the three-year period beginning on the date on which final payment is made on a contract under which technical data is required to be delivered, or the date on which the technical data is delivered under such contract, whichever is later. "(2)(A) If the Secretary determines, at any time before the end of the three-year period beginning on the date on which final payment is made on a contract under which technical data is required to be delivered, or the date on which the technical data is delivered under such contract, whichever is later, that a challenge to a restriction is

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warranted, the Secretary shall provide written notice to the contractor or subcontractor asserting the restriction. Such a determination shall be based on a finding by the Secretary that reasonable grounds exist to question the current validity of the asserted restriction and that the continued adherence to the asserted restriction by the United States would make it impracticable to procure the item competitively at a later time. Such notice shall— "(i) state the specific grounds for challenging the asserted restriction; "(ii) require a response within 60 days justifying the current validity of the asserted restriction; and "(iii) state that evidence of a validation by the Department of Defense of a restriction identical to the asserted restriction within the three-year period preceding the challenge shall serve as justification for the asserted restriction if— "(I) the validation occurred after a review of the validated restriction under this subsection; and "(ID the validated restriction was asserted by the same contractor or subcontractor (or any licensee of such contractor or subcontractor) to which such notice is being provided. "(B) Notwithstanding subparagraph (A), the United States may challenge a restriction on the release, disclosure, or use of technical data delivered under a contract at any time if such technical data— "(i) is publicly available; "(ii) has been furnished to the United States without restriction; or "(iii) has been otherwise made available without restriction.". (c) CONFORMING AMENDMENTS.—Section 1202 of the Department of Defense Authorization Act, 1985 (10 U.S.C. 2301 note), is amended— (1) by inserting "and" at the end of paragraph (4); (2) by striking out "; and" at the end of paragraph (5) and inserting in lieu thereof a period; and (3) by striking out paragraph (6). (d) DEADLINE FOR REVISION OF REGULATIONS.—(1) Proposed regulations under section 2320(a)(1) of title 10, United States Code (as amended by subsection (a)), shall be published in the Federal Register for comment not later than 90 days after the date of the enactment of this Act. (2) Proposed final regulations under such section shall be published in the Federal Register not later than 180 days after the date of the enactment of this Act. (e) EFFECTIVE DATE.—The amendments made by subsections (a) and (b) shall apply to contracts for which solicitations are issued after the end of the 210-day period beginning on the date of the enactment of this Act. SEC. 954. RECOVERY OF COSTS TO PROVIDE TECHNICAL DATA

(a) IN GENERAL.—(1) Chapter 137 of title 10, United States Code, is amended by adding after section 2327 (as added by section 951) the following new section: "§ 2328. Release of technical data "(a) IN GENERAL.—(1) The Secretary of Defense shall, if required to release technical data under section 552 of title 5 (relating to the Freedom of Information Act), release technical data to a person

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requesting such a release if the person pays all reasonable costs attributable to search and duplication. "(2) The Secretary of Defense shall prescribe regulations, pursuant to notice and receipt of public comment, specifying a uniform schedule of fees under this section. "(b) DISPOSITION OF COSTS.—An amount received under this section— "(1) shall be retained by the Department of Defense or the element of the Department of Defense receiving the amount; and "(2) shall be merged with and available for the same purpose and the same time period as the appropriation from which the costs incurred in complying with requests for technical data were paid. "(c) WAIVER.—The Secretary of Defense shall waive the payment of costs required by subsection (a) which are in an amount greater than the costs that would be required for such a release of information under section 552 of title 5 if— "(1) the request is made by a citizen of the United States or a United States corporation, and such citizen or corporation certifies that the technical data requested is required to enable such citizen or corporation to submit an offer or determine whether it is capable of submitting an offer to provide the product to which the technical data relates to the United States or a contractor with the United States (except that the Secretary may require the citizen or corporation to pay a deposit in an amount equal to not more than the cost of complying with the request, to be refunded upon submission of an offer by the citizen or corporation); "(2) the release of technical data is requested in order to comply with the terms of an international agreement; or "(3) the Secretary determines, in accordance with section 552(a)(4)(A) of title 5, that such a waiver is in the interests of the United States.". (2) The table of sections at the beginning of such chapter is amended by adding after the item relating to section 2327 (as added by section 971) the following new item: "2328. Release of technical data.".

(b) EFFECTIVE DATE.—The amendments made by this section shall take effect at the end of the 90-day period beginning on the date of the enactment of this Act. SEC. 955. COMPARABLE BUDGETING FOR SIMILAR SYSTEMS (a) MATTERS TO B E INCLUDED IN ANNUAL DEFENSE BUDGETS.—In

preparing the defense budget for any fiscal year, the Secretary of Defense shall— (1) specifically identify each common procurement weapon system included in the budget; (2) take all feasible steps to minimize variations in procurement unit costs for any such system as shown in the budget requests of the different armed forces requesting procurement funds for the system; and (3) identify and justify in the budget all such variations in procurement unit costs for common procurement weapon systems.

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 PUBLIC LAW 99-500—OCT. 18, 1986 (b) ASSISTANT

SECRETARY

(COMPTROLLER).—The

100 STAT. 1783-174

Secretary

of

Defense shall carry out this section through the Assistant Secretary of Defense (Comptroller). (c) DEFINITIONS.—In this section: (1) The term "defense budget" means the budget of the Department of Defense included in the President's budget submitted to Congress under section 1105 of title 31 United States Code, for a fiscal year. (2) The term "common procurement weapon system" means a weapon system for which two or more of the Army, Navy, Air Force, and Marine Corps request procurement funds in a defense budget. SEC. 956. FUNDING OF PROCUREMENT TECHNICAL ASSISTANCE PROGRAMS SERVING DISTRESSED AREAS

(a) DEFINITIONS.—Section 2411 of title 10, United States Code, is amended to read as follows: "§ 2411. Definitions "In this chapter: "(1) The term 'eligible entity' means any of the following: "(A) A State. "(B) A local government. "(C) A private, nonprofit organization. "(2) The term 'distressed area' means the area of a unit of local government (or such area excluding the area of any defined political jurisdiction within the area of such unit of local government) that— "(A) has a per capita income of 80 percent or less of the State average; or "(B) has an unemployment rate that is one percent greater than the national average for the most recent 24^ month period for which statistics are available. "(3) The term 'Secretary' means the Secretary of Defense acting through the Director of the Defense Logistics Agency. "(4) The terms 'State' and 'local government' have the meaning given those terms in section 6302 of title 31.". (b) SERVICE AREAS.—Section 2413(b) of such title is amended— (1) by inserting "sponsor programs to" after "agree to"; (2) by inserting "under such programs" after "cost of furnishing such assistance"; (3) by striking out "an eligible entity that is a distressed entity" and inserting in lieu thereof "a program sponsored by such an entity that provides services solely in a distressed area"; and (3) by inserting "with respect to such program" before the period. SEC. 957. SUBCONTRACTOR INFORMATION TO BE PROCUREMENT OUTREACH CENTERS

PROVIDED TO

(a) CONTRACTORS TO FURNISH INFORMATION.—(1) Chapter 142 of

title 10, United States Code, is amended— (A) by redesignating section 2416 as section 2417; and (B) by inserting after section 2415 the following new section:

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"§ 2416. Subcontractor information "(a) The Secretary of Defense shall require that any defense contractor in any year shall provide ^o an eligible entity with which the Secretary has entered into a cooperative agreement under this chapter, on the request of such entity, the information specified in subsection (b). "(b) Information to be provided under subsection (a) is a listing of the name of each appropriate employee of the contractor who has responsibilities with respect to entering into contracts on behalf of such contractor that constitute subcontracts of contracts being performed by such contractor, together with the business address and telephone number and area of responsibility of each such employee. "(c) A defense contractor need not provide information under this section to a particular eligible entity more frequently than once a year. "(d) In this section, the term 'defense contractor', for any year, means a person awarded a contract with the Department of Defense in that year for an amount in excess of $500,000.". (2) The table of sections at the beginning of such chapter is amended by striking out the item relating to section 2416 and inserting in lieu thereof the following new items: "2416. Subcontractor information. "2417. Regulations.".

, '

'

Qo) EFFECTIVE DATE.—Section 2416 of title 10, United States Code, as added by subsection (a), shall take effect on January 1, 1987. SEC. 961. SELECTED ACQUISITION REPORTS

(a) REVISION OF REPORTING REQUIREMENTS.—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)), is amended— (1) by adding at the end of subsection (a)(3) the following new sentence: "If for any fiscal year the funds appropriated, or the number of fully-configured end items to be purchased, differ from those programmed, the procurement unit cost shall be revised to reflect the appropriated amounts and quantities."; (2) by striking out "$2,000,000" in subsection (a)(4) and inserting in lieu thereof "$40,000,000"; (3) by striking out "three-month" in subsection (b)(2)(B) and inserting in lieu thereof "six-month"; (4) by striking out paragraph (2) of subsection (c) and inserting in lieu thereof the following: "(2) Each Selected Acquisition Report for the first quarter of a fiscal year shall be designed to provide to the Committees on Armed Services of the Senate and House of Representatives the information such Committees need to perform their oversight functions. A change in the content of the Selected Acquisition Report for the first quarter of a fiscal year from the content as reported for the first quarter of the previous fiscal year may not be made until appropriate officials of the Department of Defense consult with such Committees regarding the proposed changes."; (5) by inserting "that is produced at a rate of six units or more per year" in subsection (c)(3)(C) after "report" in the matter preceding clause (i); and (6) by adding at the end the following new subsection:

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"(h)(1) Total program reporting under this section shall apply to a major defense acquisition program when funds have been appropriated for such and the Secretary of Defense has decided to proceed to full-scale engineering development of such program. Reporting may be limited to the development program as provided in paragraph (2) before a decision is made by the Secretary of Defense to proceed to full-scale engineering development if the Secretary notifies the Committees on Armed Services of the Senate and House of Representatives of the intention to submit a limited report under this subsection not less than 15 days before a report is due under this section. "(2) A limited report under this subsection shall include the following: "(A) The same information, in detail and summarized form, as is provided in reports submitted under subsections (c)(1) and (c)(3) of section 2431 of this title. "(B) Reasons for any change in the development cost and schedule. "(C) The major contracts under the development program and the reasons for any cost or schedule variances under those contracts since the last Selected Acquisition Report. "(D) The completion status of the development program expressed— "(i) as the percentage that the number of years for which funds have been appropriated for the development program is of the number of years for which it is planned that funds will be appropriated for the program; and "(ii) as the percentage that the amount of funds that have been appropriated for the development program is of the k| total amount of funds which it is planned will be appropriated for the program. "(E) Program highlights since the last Selected Acquisition Report. "(F) Other information as the Secretary of Defense considers appropriate. "(3) The submission requirements for a limited report under this subsection shall be the same as for quarterly Selected Acquisition Reports for total program reporting,". (b) U N I T COST REPORTS.—Section 2433 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)), is amended— (1) in subsection (b), by inserting "(excluding Saturdays, Sundays, and legal public holidays)" after "days" both places such term appears in the second sentence; and (2) by adding at the end the following new subsection: "(h) Reporting under this section shall not apply if a program has received a limited reporting waiver under section 2432(h) of this title.". (c) EFFECTIVE DATE.—The amendments made by subsections (a) and (b) shall take effect on January 1, 1987. SEC. 962. REPORT ON EFFORTS TO INCREASE DEFENSE CONTRACT AWARDS TO INDIAN-OWNED BUSINESSES

(a) REPORT.—The Secretary of Defense shall submit to Congress a report on the efforts by the Department of Defense. during fiscal years 1986 and 1987 to increase awards of defense contracts to

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Indian-owned businesses in accordance with the memorandum of understanding between the Department of Defense and the Small Business Administration of September 29, 1983. Such report shall include, to the maximum extent practicable, any data regarding the number and value of prime contracts awarded by the Department of Defense during such fiscal years to such businesses. (b) DEADLINE.—The report required by subsection (a) shall be submitted no later than March 31, 1988. (c) INDIAN-OWNED BUSINESS DEFINED.—For purposes of this section, the term "Indian-owned business" means a firm owned and controlled by American Indians, including a tribally owned forprofit entity. SEC. 963. REPORT ON INCREASED GEOGRAPHIC DISTRIBUTION OF DEFENSE CONTRACTORS

(a) IN GENERAL.—(1) The Secretary of Defense shall submit to Congress a report on the actions taken by the Department of Defense during fiscal years 1985 and 1986 to increase contract competition and the national defense industrial base by increasing the participation in defense contracts of contractors in all geographic areas of the United States. (2) Such report shall be submitted not later than March 31, 1987. (b) CONTENTS OF REPORTS.—The report required by subsection (a)(1)(1) shall include a description of the use of procurement technical assistance centers, procurement conferences sponsored or supported by the Department of Defense, and any other Department of Defense programs conducted for the purpose of expanding the base of defense contractors; and (2) shall categorize, by State and other appropriate geographic region, the actions described in the report. TITLE XI

-r '

ARMS CONTROL SEC. 1101. (a) LIMITATION ON TESTING OF ANTI-SATELLITE WEAP-

ONS.—The Secretary of Defense may not carry out a test of the Space Defense System (anti-satellite weapon) against an object in space until the President certifies to Congress that the Soviet Union has conducted, after the date of the enactment of this Act, a test against an object in space of a dedicated anti-satellite weapon. (b) EXPIRATION OF MORATORIUM.—The prohibition in subsection (a) expires on October 1, 1987. SEC.

1102

(a) REPORT BY THE SECRETARY OF DEFENSE ON I C B M

MODERNIZATION.—At the same time the Secretary of Defense submits to the Committees on Armed Services of the Senate and House of Representatives the report on the intercontinental ballistic missile (ICBM) modernization program required by section 1231(c) of the Department of Defense Authorization Act, 1984 (Public Law 98-94; 97 Stat. 614), the Secretary shall submit to such Committees a statement containing the basis of the Secretary's recommendation to the President, and any decisions of the President, regarding the following matters: (1) The configuration of a small intercontinental ballistic missile in terms of weight, number of warheads, and production schedule.

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(2) The selected options for more survivable follow-on basing modes and basing locations for MX (Peacekeeper) missiles. (3) The advisability of going forward with one or more selected basing modes to a full-scale engineering development decision. (b) LIMITATION ON DEPLOYMENT OF PEACEKEEPER (MX) MISSILE; DEVELOPMENT OF SMALL ICBM.—The limitations contained in sec-

tions 206 and 1231 of the Department of Defense Authorization Act, 1984 (Public Law 98-94; 97 Stat. 614), on the deployment of the MX missile and the development of a small intercontinental ballistic missile shall cease to apply when full-scale engineering development of a small mobile intercontinental ballistic missile begins. (c) LIMITATIONS ON FUNDING.—Of the

amounts

appropriated

herein for fiscal year 1987 for the ICBM Modernization Program— (1) $120,000,000 shall be available for research and development on follow-on basing options; (2) $290,000,000 shall be available for research and development of the Peacekeeper (MX) missile; and ..', (3) $1,200,000,000 shall be available for research and development of a small mobile intercontinental ballistic missile and basing for such missile. SEC. 1103. Of the amount appropriated by this Act for research, development, test, and evaluation for the Defense Agencies, not more than $3,213,000,000 is available for the Strategic Defense Initiative (SDI) program. SEC. 1104. Of the amounts appropriated in the Energy and Water Development Appropriations Act for fiscal year 1987 for national security programs for the Department of Energy, $317,000,000 is available for programs, projects, and activities of the Department of Energy relating to the Strategic Defense Initiative. SEC. 1105. (a) SENSE OF CONGRESS RELATING TO CONTINUED ADHERENCE TO SALT II NUMERICAL SUBLIMITS.—It is the sense of the

Congress that it is in the national security interests of the United States to continue voluntary compliance with the central numerical sublimits of the SALT II Treaty as long as the Soviet Union complies with such sublimits. (b) DEFINITION.—For purposes of this section, the central numerical sublimits of the SALT II Treaty include prohibitions on the deployment of the following: (1) Launchers for more than 820 intercontinental ballistic missiles carrying multiple independently-targetable reentry vehicles. (2) Launchers for an aggregate of more than 1,200 intercontinental ballistic missiles carrying multiple independently-targetable reentry vehicles and submarine-launched ballistic missiles carrying multiple independently-targetable reentry vehicles. (3) An aggregate of more than 1,320 launchers described in paragraph (2) and heavy bombers equipped for air-launched cruise missiles capable of a range in excess of 600 kilometers. SEC.

1106. (a) SENSE OF CONGRESS ON NUCLEAR TESTING.—The

Congress makes the following findings: (1) The United States is committed in the Limited Test Ban Treaty of 1963 and in the Non-Proliferation Treaty of 1968 to seek to achieve the discontinuance of all test explosions of nuclear weapons for all time. (2) A comprehensive test ban treaty would promote the security of the United States by constraining the United States-

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Soviet nuclear arms competition and by strengthening efforts to prevent the proUferation of nuclear weapons. (3) The Threshold Test Ban Treaty was signed in 1974 and the Peaceful Nuclear Explosions Treaty was signed in 1976, and both have yet to be considered by the full Senate for its advice and consent to ratification. (4) The entry into force of the Peaceful Nuclear Explosions Treaty and the Threshold Test Ban Treaty will ensure full implementation of significant new verification procedures and ' so make completion of a comprehensive test ban treaty more probable. (5) A comprehensive test ban treaty must be adequately verifiable, and significant progress has been made in methods for detection of underground nuclear explosions by seismological and other means. (6) At present, negotiations are not being pursued by the United States and the Soviet Union toward completion of a comprehensive test ban treaty. (7) The past five administrations have supported the achievement of a comprehensive test ban treaty. (b) SENSE OF CONGRESS.—It is the sense of Congress that, at the earliest possible date, the President should— (1) request the advice and consent of the Senate to ratification (with a report containing any plans the President may have to negotiate supplemental verification procedures, or if the President believes it necessary, any understanding or reservation on the subject of verification which should be attached to the treaty) of the Threshold Test Ban and Peaceful Nuclear Explosions Treaties, signed in 1974 and 1976, respectively; and (2) propose to the Soviet Union the immediate resumption of negotiations toward conclusion of a verifiable comprehensive test ban treaty. In accordance with international law, the United States shall have no obligation to comply with any bilateral arms control agreement with the Soviet Union that the Soviet Union is violating. SEC. 1107. (a) LIMITATION ON FISCAL YEAR 1987 FUNDS FOR THE BIGEYE BINARY CHEMICAL BOMB.—Before October 1, 1987, funds

appropriated for fiscal year 1987 for procurement of the BIGEYE binary chemical bomb may not be obligated— (1) for procurement (including procurement of components) of such bomb; or (2) for assembly of such bomb. (b) LIMITATION ON FINAL ASSEMBLY.—Before October 1,

1988,

funds appropriated or otherwise made available to the Department of Defense may not be obligated or expended for the final assembly of complete BIGEYE binary chemical bombs. (c) LIMITATION ON FISCAL YEAR 1986

FUNDS FOR PRODUCTION

FACILITIES.—(1) Of the funds appropriated for fiscal year 1986 for production facilities for the BIGEYE binary chemical bomb, not more than $90,000,000 may be obligated or expended. None of such amount may be obligated or expended until the President certifies to Congress that— (1) production of the BIGEYE binary chemical bomb is in the national security interests of the United States; and (2) the design, planning, and environmental requirements for such facilities have been satisfied.

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(d) GAO MONITORING AND REPORT.—(1) The Secretary of Defense

shall provide for the involvement of the Comptroller General in monitoring the operational testing of the BIGEYE bomb. (2) After any such testing is completed, the Comptroller General shall submit to the Committees on Armed Services of the Senate and House of Representatives a report on such testing. The report shall include an assessment of such testing and any comments the Comptroller General considers appropriate. (e) REPORT ON LONG-RANGE STANDOFF CHEMICAL MUNITIONS.—(1)

The Secretary of Defense shall submit to Congress a report on the military requirements for long-range standoff chemical weapons. The report shall address the military advantages and disadvantages of such weapons and the potential of such weapons to complement the currently planned binary chemical weapon systems. (2) Such report shall be submitted not later than March 15, 1987. SEC. 1108. Of the amount appropriated by this Act for research, development, test, and evaluation for the Air Force, not more than $200,000,000 is available for the Space Defense System. None of such amount may be used for the production verification of the Miniature Homing Vehicle. This Act may be cited as the "Department of Defense Appropriations Act, 1987".; (d) Such amounts as may be necessary for programs, projects, or activities provided for in the District of Columbia Appropriations Act, 1987, at a rate of operations and to the extent and in the manner provided as follows, to be effective as if it had been enacted into law as the regular appropriations Act: AN ACT Making appropriations for the government of the District of Columbia and other activities chargeable in whole or in part against the revenues of said District for the fiscal year ending September 30, 1987, and for other purposes.

TITLE I FISCAL YEAR 1987 APPROPRIATIONS FEDERAL PAYMENT TO THE DISTRICT OF COLUMBIA

For payment to the District of Columbia for the fiscal year ending September 30, 1987, $444,500,000: Provided, That none of these funds shall be made available to the District of Columbia until the number of full-time uniformed officers in permanent positions in the Metropolitan Police Department is at least 3,880, excluding any such officer appointed after August 19, 1982, under qualification standards other than those in effect on such date. FEDERAL PAYMENT FOR WATER AND SEWER SERVICES

For payment to the District of Columbia for the fiscal year ending September 30, 1987, in lieu of reimbursement for charges for water and water services and sanitary sewer services furnished to facilities of the United States Government, $28,810,000, as authorized by the Act of May 18, 1954, as amended (D.C. Code, secs. 43-1552 and 43-1612).

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