Sec. 849. IMPROVED LIFE-CYCLE COST CONTROL

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## SEC. 849 IMPROVED LIFE-CYCLE COST CONTROL ###

(a)Modified Guidance for Rapid Fielding Pathway Section 804(c)(3) of the National Defense Authorization Act for Fiscal Year 2016 (Public Law 114-92; 10 U.S.C. 2302 note) is amended— ####

(1)in subparagraph (C), by striking “; and” and inserting a semicolon; ####

(2)in subparagraph (D), by striking the period at the end and inserting “; and”; and ####

(3)by adding at the end the following new subparagraph: > > ##### “(E) > > a process for identifying and exploiting opportunities to use the rapid fielding pathway to reduce total ownership costs.” > . ###

(b)Life-cycle Cost Management Section 805(2) of such Act (Public Law 114-92; 10 U.S.C. 2302 note) is amended by inserting “life-cycle cost management,” after “budgeting,”. ###

(c)Sustainment Reviews ####

(1)In general Chapter 144 of title 10, United States Code, is amended by adding at the end the following new section: > > ## “SEC. 2441 Sustainment reviews > > **[**[10 U.S.C. 2441](/us/usc/t10/s2441)**]** > > > ### “(a) In General > > The Secretary of each military department shall conduct a sustainment review of each major weapon system not later than five years after declaration of initial operational capability of a major defense acquisition program and throughout the life cycle of the weapon system to assess the product support strategy, performance, and operation and support costs of the weapon system. For any review after the first one, the Secretary concerned shall use availability and reliability thresholds and cost estimates as the basis for the circumstances that prompt such a review. The results of the sustainment review shall be documented in a memorandum by the relevant decision authority. > > > ### “(b) Elements > > At a minimum, the review required under subsection

(a)shall include the following elements: > > > #### “(1) > > An independent cost estimate for the remainder of the life cycle of the program. > > > #### “(2) > > A comparison of actual costs to the amount of funds budgeted and appropriated in the previous five years, and if funding shortfalls exist, an explanation of the implications on equipment availability. > > > #### “(3) > > A comparison between the assumed and achieved system reliabilities. > > > #### “(4) > > An analysis of the most cost-effective source of repairs and maintenance. > > > #### “(5) > > An evaluation of the cost of consumables and depot-level repairables. > > > #### “(6) > > An evaluation of the costs of information technology, networks, computer hardware, and software maintenance and upgrades. > > > #### “(7) > > As applicable, an assessment of the actual fuel efficiencies compared to the projected fuel efficiencies as demonstrated in tests or operations. > > > #### “(8) > > As applicable, a comparison of actual manpower requirements to previous estimates. > > > #### “(9) > > An analysis of whether accurate and complete data are being reported in the cost systems of the military department concerned, and if deficiencies exist, a plan to update the data and ensure accurate and complete data are submitted in the future. > > > ### “(c) Coordination > > The review required under subsection

(a)shall be conducted in coordination with the requirements of section 2337 of this title and section 832 of the National Defense Authorization Act for Fiscal Year 2012 (Public Law 112-81; 10 U.S.C. 2430 note).” > . ####

(2)Clerical amendment **[**[10 U.S.C. 2430](/us/usc/t10/s2430)**]** The table of sections at the beginning of such chapter is amended by adding at the end the following new item:" “2441. Sustainment reviews.” ". ###

(d)Commercial Operational and Support Savings Initiative **[**[10 U.S.C. 2337 note](/us/usc/t10/s2337)**]** ####

(1)In general The Secretary of Defense may establish a commercial operational and support savings initiative to improve readiness and reduce operations and support costs by inserting existing commercial products or technology into military legacy systems through the rapid development of prototypes and fielding of production items based on current commercial technology. ####

(2)Program priority The commercial operational and support savings initiative shall fund programs that— #####

(A)reduce the costs of owning and operating a military system, including the costs of personnel, consumables, goods and services, and sustaining the support and investment associated with the peacetime operation of a weapon system; #####

(B)take advantage of the commercial sector’s technological innovations by inserting commercial technology into fielded weapon systems; and #####

(C)emphasize prototyping and experimentation with new technologies and concepts of operations. ####

(3)Funding phases #####

(A)In general Projects funded under the commercial operational and support savings initiative shall consist of two phases, Phase I and Phase II. #####

(B)Phase i ######

(i)Funds made available during Phase I shall be used to perform the non-recurring engineering, testing, and qualification that are typically needed to adapt a commercial product or technology for use in a military system. ######

(ii)Phase I shall include— ######

(I)establishment of cost and performance metrics to evaluate project success; ######

(II)establishment of a transition plan and agreement with a military department or Defense Agency for adoption and sustainment of the technology or system; and ######

(III)the development, fabrication, and delivery of a demonstrated prototype to a military department for installation into a fielded Department of Defense system. ######

(iii)Programs shall be terminated if no agreement is established within two years of project initiation. ######

(iv)The Office of the Secretary of Defense may provide up to 50 percent of Phase I funding for a project. The military department or Defense Agency concerned may provide the remainder of Phase I funding, which may be provided out of operation and maintenance funding. ######

(v)Phase I funding shall not exceed three years. ######

(vi)Phase I projects shall be selected based on a merit-based process using criteria to be established by the Secretary of Defense. #####

(C)Phase ii ######

(i)Phase II shall include the purchase of limited production quantities of the prototype kits and transition to a program of record for continued sustainment. ######

(ii)Phase II awards may be made without competition if general solicitation competitive procedures were used for the selection of parties for participation in a Phase I project. ######

(iii)Phase II awards may be made as firm fixed-price awards. ####

(4)Treatment as competitive procedures The use of a merit-based process for selection of projects under the commercial operational and support savings initiative shall be considered to be the use of competitive procedures for purposes of chapter 137 of title 10, United States Code. ####

(5)Definition In this subsection, the term “**commercial product**” has the meaning given that term in section 103 of title 41.

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