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NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEARS 1990

AND 1991

(P.L. 101-189, approved Nov. 20, 1989)

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

PART A-PROCEDURES FOR MAJOR DEFENSE ACQUISITION
PROGRAMS

SEC. 801. [10 U.S.C. 2399 note] ASSESSMENT OF RISK IN CONCURRENT DEVELOPMENT OF MAJOR DEFENSE ACQUISITION SYS

TEMS

(a) ESTABLISHMENT OF POLICY.-The Secretary of Defense shall establish guidelines for

(1) determining the degree of concurrency that is appropriate for the development of major defense acquisition systems; and

(2) assessing the degree of risk associated with various degrees of concurrency.

(b) REPORT ON GUIDELINES.-The Secretary shall submit to Congress a report that describes the guidelines established under subsection (a) and the method used for assessing risk associated with concurrency.

(c) REPORT ON CONCURRENCY IN MAJOR ACQUISITION PROGRAMS. (1) The Secretary shall also submit to Congress a report outlining the risk associated with concurrency for each major defense acquisition program that is in either full-scale development or low-rate initial production as of January 1, 1990.

(2) The report shall include consideration of the following matters with respect to each such program:

(A) The degree of confidence in the enemy threat assessment for establishing the system's requirements.

(B) The type of contract involved.

(C) The degree of stability in program funding.

(D) The level of maturity of technology involved in the system.

(E) The availability of adequate test assets, including facilities and ranges.

(F) The plans for transition from development to production.

(d) SUBMISSION OF REPORTS.-The reports under subsections (b) and (c) shall be submitted to Congress not later than March 1, 1990.

(e) DEFINITION.-For purposes of this section, the term "concurrency" means the degree of overlap between the development and production processes of an acquisition program.

PART D-PROVISIONS RELATING TO SMALL AND SMALL
DISADVANTAGED BUSINESSES

SEC. 834. [15 U.S.C. 637 note] TEST PROGRAM FOR NEGOTIATION OF COMPREHENSIVE SMALL BUSINESS SUBCONTRACTING

PLANS

(a) TEST PROGRAM. (1) The Secretary of Defense shall establish a test program under which one contracting activity in each military department and Defense Agency is authorized to undertake one or more demonstration projects to determine whether the negotiation and administration of comprehensive small business subcontracting plans will result in an increase in opportunities provided for small business concerns under Department of Defense

contracts.

(2) In developing the test program, the Secretary of Defense shall

(A) consult with the Administrator of the Small Business Administration; and

COMPREHENSIVE

(B) provide an opportunity for public comment on the test program. (b) SMALL BUSINESS SUBCONTRACTING PLAN. (1) In a demonstration project under the test program, the Secretary of a military department or head of a Defense Agency shall negotiate, monitor, and enforce compliance with a comprehensive subcontracting plan with a Department of Defense contractor described in paragraph (3).

(2) The comprehensive subcontracting plan

(A) shall provide for small business concerns to participate as subcontractors in the contracts awarded by the Secretary or agency head to the contractor (or any division or operating element of the contractor) to which the subcontracting plan applies; and

(B) shall apply to the entire business organization of the contractor or to one or more of the contractor's divisions or operating elements, as specified in the subcontracting plan. (3) A Department of Defense contractor referred to in paragraph (1) is, with respect to a comprehensive subcontracting plan, a business concern that, during the fiscal year ending on September 30, 1989

(A) pursuant to at least five Department of Defense contracts, furnished supplies or services (including professional services) to the Department of Defense, engaged in research and development for the Department, or performed construction for the Department; and

(B) was paid $25,000,000 or more for such contract activities.

(c) WAIVER OF CERTAIN SMALL BUSINESS ACT SUBCONTRACTING PLAN REQUIREMENTS.-A Department of Defense contractor is not required to negotiate or submit a subcontracting plan under paragraph (4) or (5) of section 8(d) of the Small Business Act (15 U.S.C. 637(d)) with respect to a Department of Defense contract if—

(1) the contractor has negotiated a comprehensive subcontracting plan under the test program that includes the mat

ters specified in section 8(d)(6) of the Small Business Act (15) U.S.C. 637(d)(6));

(2) such matters have been determined acceptable by the Secretary of the military department or head of a Defense Agency negotiating such comprehensive subcontracting plan; and

(3) the comprehensive subcontracting plan applies to the contract.

(d) FAILURE TO MAKE A GOOD FAITH EFFORT TO COMPLY WITH A COMPANY-WIDE SUBCONTRACTING PLAN.-A contractor that has negotiated a comprehensive subcontracting plan under the test program shall be subject to section_8(d)(4)(F) of the Small Business Act (15 U.S.C. 637(d)(4)(F)) regarding the assessment of liquidated damages for failure to make a good faith effort to comply with its company-wide plan and the goals specified in that plan. 2

(e) TEST PROGRAM PERIOD.-The test program authorized by subsection (a) shall begin on October 1, 1990, unless Congress adopts a resolution disapproving the test program. The test program shall terminate on September 30, 1998.

(f) REPORT. (1) Not later than March 1, 1994, the Secretary of Defense shall submit a report on the results of the test program to the Committees on Armed Services and on Small Business of the Senate and the House of Representatives.

(2) Before submitting such report to the committees referred to in paragraph (1), the Secretary shall transmit the proposed report to the Administrator of the Small Business Administration. The report submitted to the committees shall include any comments and recommendations relating to the report that are transmitted to the Secretary by the Administrator before the date specified in such paragraph.

(g) FISCAL YEAR 1994 PARTICIPANTS.-Only those contracting activities and contractors who negotiated subcontracting plans under demonstration projects conducted under the test program before October 1, 1993, may participate in demonstration projects conducted under the test program in fiscal year 1994.

(h) DEFINITIONS.-As used in this section:

(1) The term "small business concern" shall have the same meaning as is provided in section 8(d)(3)(C) of the Small Business Act (15 U.S.C. 637(d)(3)(C)), and includes a small business concern owned and controlled by socially and economically disadvantaged individuals.

(2) The term "small business concern owned and controlled by socially and economically disadvantaged individuals" shall have the same meaning as is provided in section 8(d)(3)(C) of the Small Business Act (15 U.S.C. 637(d)(3)(C)).

2 Section 402 of P.L. 101–574 (15 U.S.C. 637 note) provides:

SEC. 402. SUSPENSION OF LIQUIDATED DAMAGES UNDER COMPREHENSIVE SMALL BUSINESS SUBCONTRACTING PLANS.

To facilitate participation in the test program for the negotiation of comprehensive small business subcontracting plans pursuant to section 834 of the National Defense Authorization Act for Fiscal Years 1990 and 1991 (Public Law 101-189; 103 Stat. 1510), subsection (d) of such section is hereby suspended for the period of the test program as specified in subsection (e) of such section.

PART F-MISCELLANEOUS

SEC. 851. [19 U.S.C. 2242 note] AUTHORITY TO CONTRACT WITH UNI-
VERSITY PRESSES FOR PRINTING, PUBLISHING, AND

SALE OF HISTORY OF THE OFFICE OF THE SECRETARY OF
DEFENSE

The Government Printing Office, on behalf of the Secretary of Defense, shall contract for services for the printing, publishing, and sale of volumes III and IV of the publication entitled "History of the Office of the Secretary of Defense" using procurement procedures that exclude sources other than university presses.

SEC. 852. [103 Stat. 1517] PROCUREMENT FROM COUNTRIES THAT DENY ADEQUATE AND EFFECTIVE PROTECTION OF INTELLECTUAL PROPERTY RIGHTS

(a) SENSE OF CONGRESS.-It is the sense of Congress that it should be a very important consideration in the procurement of property, services, or technology by the Department of Defense whether such procurement is from any person of any country which has been identified by the United States Trade Representative, on the advice of the Commissioner of Patents and Trademarks in the Department of Commerce and the Register of Copyrights, pursuant to section 182(a)(2) of the Trade Act of 1974 (19 U.S.C. 2242) as denying adequate and effective protection of intellectual property rights or fair and equitable market access to United States persons that rely upon intellectual property protection.

(b) REPORT. (1) If the Secretary of Defense takes any action, upon the direction of the United States Trade Representative (in consultation with the Commissioner of Patents and Trademarks and the Register of Copyrights), with respect to the procurement of property, services, or technology by the Department of Defense on the basis of the consideration set forth in subsection (a), the Secretary shall submit promptly to the committees described in paragraph (2) a report describing the nature of such action and the reasons for such action.

(2) The committees to which the report required by paragraph (1) shall be submitted are the Committees on Armed Services, on Finance, and on the Judiciary of the Senate and the Committees on Armed Services, on Ways and Means, and on the Judiciary of the House of Representatives.

NATIONAL DEFENSE AUTHORIZATION ACT, FISCAL YEAR 1989

(P.L. 100-456, approved Sept. 29, 1988)

TITLE VIII—ACQUISITION POLICY AND MANAGEMENT PART A-ACQUISITION MANAGEMENT

SEC. 807. [10 U.S.C. 2304 note] REGULATIONS ON USE OF FIXED-PRICE DEVELOPMENT CONTRACTS

(a) IN GENERAL.-(1) Not later than 120 days after the date of the enactment of this Act [September 29, 1988], the Secretary of Defense shall revise the Department of Defense regulations that provide for the use of fixed-price type contracts in a development program. The regulations shall provide that a fixed-price contract may be awarded in such a program only if—

(A) the level of program risk permits realistic pricing; and (B) the use of a fixed-price contract permits an equitable and sensible allocation of program risk between the United States and the contractor.

(2) [Paragraph (2) ceased to be in effect on September 29, 1990.]

(b) DEFINITIONS.-[Defined "major system", a term used in paragraph (2) of subsection (a).]

(c) EXPIRATION.-[Provided for expiration of paragraph (2) of subsection (a).]

PART B-DEFENSE INDUSTRIAL BASE

SEC. 825. [10 U.S.C. 2501 note] DEPARTMENT OF DEFENSE OFFSET POLICY

(a) FINDINGS.-Congress makes the following findings:

(1) Many contracts entered into by United States firms for the supply of weapon systems or defense-related items to foreign countries and foreign firms are subject to contractual arrangements under which United States firms must agree

(A) to have a specified percentage of work under, or monetary amount of, the contract performed by one or more foreign firms;

(B) to purchase a specified amount or quantity of unrelated goods or services from domestic sources of such foreign countries; or

(C) to invest a specified amount in domestic businesses of such foreign countries.

Such contractual arrangements, known as "offsets", are a component of international trade and could have an impact on

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