(2) the Secretary of the Navy and the Chief of Naval Operations have submitted to Congress a joint certification that they have reviewed the business case for the contract and the comments provided by the Comptroller of the Department of Defense and the Director of the Office of Management and Budget and that they have determined that the implementation of the contract is in the best interest of the Department of the Navy.

(b) PHASED IMPLEMENTATION.-(1) Upon the submission of the certification under subsection (a)(2), the Secretary of the Navy may commence a phased implementation of a Navy-Marine Corps Intranet contract.

(2) Not more than 15 percent of the total number of work stations to be provided under the Navy-Marine Corps Intranet program may be provided in the first increment of implementation of the Navy-Marine Corps Intranet contract.

(3) No work stations in excess of the number permitted by paragraph (2) may be provided under the program until—

(A) the Secretary of the Navy has conducted operational testing and cost review of the increment covered by that paragraph;

(B) the Chief Information Officer of the Department of Defense has certified to the Secretary of the Navy that the results of the operational testing of the Intranet are acceptable;

(C) the Comptroller of the Department of Defense has certified to the Secretary of the Navy that the cost review provides a reliable basis for forecasting the cost impact of continued implementation; and

(D) the Secretary of the Navy and the Chief of Naval Operations have submitted to Congress a joint certification that they have reviewed the certifications submitted under subparagraphs (B) and (C) and have determined that the continued implementation of the contract is in the best interest of the Department of the Navy.

(4) No increment of the Navy-Marine Corps Intranet that is implemented during fiscal year 2001 may include any activities of the Marine Corps, the naval shipyards, or the naval aviation depots. Funds available for fiscal year 2001 for activities of the Marine Corps, the naval shipyards, or the naval aviation depots may not be expended for any contract for the Navy-Marine Corps Intranet.

(c) PROHIBITION ON INCREASE OF RATES CHARGED.-The Secretary of the Navy shall ensure that rates charged by a working capital funded industrial facility of the Department of the Navy for goods or services provided by such facility are not increased during fiscal year 2001 for the purpose of funding the Navy-Marine Corps Intranet contract.

(d) APPLICABILITY OF STATUTORY AND REGULATORY REQUIREMENTS. The acquisition of a Navy-Marine Corps Intranet shall be managed by the Department of the Navy in accordance with the requirements of

(1) the Clinger-Cohen Act of 19965 (divisions D and E of Public Law 104-106), including the requirement for utilizing modular contracting in accordance with section 38 of the Office of Federal Procurement Policy Act (41 U.S.C. 434); and

(2) Department of Defense Directives 5000.1 and 5000.2R and all other directives, regulations, and management controls that are applicable to major investments in information technology and related services.

(e) IMPACT ON FEDERAL EMPLOYEES.-The Secretary shall mitigate any adverse impact of the implementation of the Navy-Marine Corps Intranet on civilian employees of the Department of the Navy who, as of the date of the enactment of this Act, are performing functions that are included in the scope of the Navy-Marine Corps Intranet program by

(1) developing a comprehensive plan for the transition of such employees to the performance of other functions within the Department of the Navy;

(2) taking full advantage of transition authorities available for the benefit of employees;

(3) encouraging the retraining of employees who express a desire to qualify for reassignment to the performance of other functions within the Department of the Navy; and

(4) including a provision in the Navy-Marine Corps Intranet contract that requires the contractor to provide a preference for hiring employees of the Department of the Navy who, as of the date of the enactment of this Act, are performing functions that are included in the scope of the contract.

(f) NAVY-MARINE CORPS INTRANET CONTRACT DEFINED.-In this section, the term "Navy-Marine Corps Intranet contract" means a contract providing for a long-term arrangement of the Department of the Navy with the commercial sector that imposes on the contractor a responsibility for, and transfers to the contractor the risk of, providing and managing the significant majority of desktop, server, infrastructure, and communication assets and services of the Department of the Navy.

SEC. 815. [114 Stat. 1654A-217] SENSE OF CONGRESS REGARDING INFORMATION TECHNOLOGY SYSTEMS FOR GUARD AND RESERVE COMPONENTS.

It is the sense of Congress

(1) that the Secretary of Defense should take appropriate steps to provide for upgrading information technology systems of the reserve components to ensure that those systems are capable, as required for mission purposes, of communicating with other relevant information technology systems of the military department concerned and of the Department of Defense in general; and

(2) that the Secretary of each military department should ensure that communications systems for the reserve components under the Secretary's jurisdiction receive appropriate

5 The Clinger-Cohen Act of 1996, referred to in subsection (d)(1), consisted of a division D, which amended other laws, and a division E, which was revised, codified, and reenacted without substantive change as subtitle III of title 40, United States Code, by Public Law 107-217.

funding for information technology systems in order to achieve the capability referred to in paragraph (1).

SUBTITLE C-OTHER ACQUISITION-RELATED MATTERS

SEC. 821. [10 U.S.C. 2302 note] IMPROVEMENTS IN PROCUREMENTS OF SERVICES.

(a) PREFERENCE FOR PERFORMANCE-BASED SERVICE CONTRACTING.—Not later than 180 days after the date of the enactment of this Act, the Federal Acquisition Regulation issued in accordance with sections 6 and 25 of the Office of Federal Procurement Policy Act (41 U.S.C. 405 and 421) shall be revised to establish a preference for use of contracts and task orders for the purchase of services in the following order of precedence:

(1) A performance-based contract or performance-based task order that contains firm fixed prices for the specific tasks to be performed.

(2) Any other performance-based contract or performancebased task order.

(3) Any contract or task order that is not a performancebased contract or a performance-based task order.

(b) INCENTIVE FOR USE OF PERFORMANCE-BASED SERVICE CONTRACTS. (1) A Department of Defense performance-based service contract or performance-based task order may be treated as a contract for the procurement of commercial items if

(A) the contract or task order is valued at $5,000,000 or less;

(B) the contract or task order sets forth specifically each task to be performed and, for each task

(i) defines the task in measurable, mission-related terms;

(ii) identifies the specific end products or output to be achieved; and

(iii) contains a firm fixed price; and

(C) the source of the services provides similar services contemporaneously to the general public under terms and conditions similar to those offered to the Federal Government.

(2) The special simplified procedures provided in the Federal Acquisition Regulation pursuant to section 2304(g)(1)(B) of title 10, United States Code, shall not apply to a performance-based service contract or performance-based task order that is treated as a contract for the procurement of commercial items under paragraph (1).

(3) Not later than 2 years after the date of the enactment of this Act, the Comptroller General shall submit a report on the implementation of this subsection to the congressional defense committees.

(4) The authority under this subsection shall not apply to contracts entered into or task orders issued more than 3 years after the date of the enactment of this Act.

(c) CENTERS OF EXCELLENCE IN SERVICE CONTRACTING.-Not later than 180 days after the date of the enactment of this Act, the Secretary of each military department shall establish at least one center of excellence in contracting for services. Each center of excellence shall assist the acquisition community by identifying, and

serving as a clearinghouse for, best practices in contracting for services in the public and private sectors.

(d) ENHANCED TRAINING IN SERVICE CONTRACTING. (1) The Secretary of Defense shall ensure that classes focusing specifically on contracting for services are offered by the Defense Acquisition University and the Defense Systems Management College and are otherwise available to contracting personnel throughout the Department of Defense.

(2) The Secretary of each military department and the head of each Defense Agency shall ensure that the personnel of the department or agency, as the case may be, who are responsible for the awarding and management of contracts for services receive appropriate training that is focused specifically on contracting for services.

(e) DEFINITIONS.-In this section:

(1) The term "performance-based", with respect to a contract, a task order, or contracting, means that the contract, task order, or contracting, respectively, includes the use of performance work statements that set forth contract requirements in clear, specific, and objective terms with measurable out

comes.

(2) The term "commercial item" has the meaning given the term in section 4(12) of the Office of Federal Procurement Policy Act (41 U.S.C. 403(12)).

(3) The term "Defense Agency" has the meaning given the term in section 101(a)(11) of title 10, United States Code.

SEC. 824. [114 Stat. 1654A-219] EXTENSION OF WAIVER PERIOD FOR LIVE-FIRE SURVIVABILITY TESTING FOR MH-47E AND MH60K HELICOPTER MODIFICATION PROGRAMS.

(a) EXISTING WAIVER PERIOD NOT APPLICABLE.-Section 2366(c)(1) of title 10, United States Code, shall not apply with respect to survivability and lethality tests for the MH-47E and MH60K helicopter modification programs. Except as provided in the previous sentence, the provisions and requirements in section. 2366(c) of such title shall apply with respect to such programs, and the certification required by subsection (b) shall comply with the requirements in paragraph (3) of such section.

(b) EXTENDED PERIOD FOR WAIVER.-With respect to the MH47E and MH-60K helicopter modification programs, the Secretary of Defense may waive the application of the survivability and lethality tests described in section 2366(a) of title 10, United States Code, if the Secretary, before full materiel release of the MH-47E and MH-60K helicopters for operational use, certifies to Congress that live-fire testing of the programs would be unreasonably expensive and impracticable.

(c) CONFORMING AMENDMENT.-Section 142(a) of the National Defense Authorization Act for Fiscal Year 1993 (Public Law 102484; 106 Stat. 2338) is amended by striking "and survivability testing" in paragraphs (1) and (2).

SEC. 825. [114 Stat. 1654A-220] COMPLIANCE WITH EXISTING LAW REGARDING PURCHASES OF EQUIPMENT AND PRODUCTS.

(a) SENSE OF CONGRESS REGARDING PURCHASE BY THE DEPARTMENT OF DEFENSE OF EQUIPMENT AND PRODUCTS.—It is the sense of Congress that any entity of the Department of Defense, in expending funds authorized by this Act for the purchase of equipment or products, should fully comply with the Buy American Act (41 U.S.C. 10a et seq.) and section 2533 of title 10, United States Code.

(b) DEBARMENT OF PERSONS CONVICTED OF FRAUDULENT USE OF "MADE IN AMERICA" LABELS.-If the Secretary of Defense determines that a person has been convicted of intentionally affixing a label bearing a "Made in America" inscription, or another inscription with the same meaning, to any product sold in or shipped to the United States that is not made in the United States, the Secretary shall determine, in accordance with section 2410f of title 10, United States Code, whether the person should be debarred from contracting with the Department of Defense.

SEC. 826. [10 U.S.C. 2304 note] REQUIREMENT TO DISREGARD CERTAIN AGREEMENTS IN AWARDING CONTRACTS FOR THE PURCHASE OF FIREARMS OR AMMUNITION.

In accordance with the requirements contained in the amendments enacted in the Competition in Contracting Act of 1984 (title VII of division B of Public Law 98-369; 98 Stat. 1175), the Secretary of Defense may not, in awarding a contract for the purchase of firearms or ammunition, take into account whether a manufacturer or vendor of firearms or ammunition is a party to an agreement under which the manufacturer or vendor agrees to adopt limitations with respect to importing, manufacturing, or dealing in firearms or ammunition in the commercial market.