Page:United States Statutes at Large Volume 99 Part 1.djvu/711

 PUBLIC LAW 99-145—NOV. 8, 1985

99 STAT. 689

(b) REQUIREMENTS WITH RESPECT TO UNDEFINITIZED CONTRACTS.—

The Secretary shall ensure that progress payments referred to in subsection (a) are not made for more than 80 percent of the work accomplished under a defense contract so long as the Secretary has not made the contractual terms, specifications, and price definite. (c) WAIVER OF SMALL PURCHASES.—This section does not apply to contracts for amounts less than the threshold for small purchases applicable under section 2304(g)(2) of title 10, United States Code. (d) EFFECTIVE DATE.—This section shall apply only to contracts for which solicitations are issued on or after 150 days after the enactment of this Act.

98 Stat. 1187.

SEC. 917. COST AND PRICE MANAGEMENT IN DEFENSE PROCUREMENT

(a) IN GENERAL.—Chapter 141 of title 10, United States Code, is amended by adding at the end thereof the following new section: "§ 2406. Cost and price management 10 USC 2406. "(a) In this section: "(1) 'Covered contract' means a contract that is awarded by a defense agency using procedures as defined in chapter 137 of this title and that is subject to the provisions of section 2306(f) of 10 USC 2301 this title, including contracts for full-scale engineering, develop- ai%^;^, 98 Stat. 1192. ment, or production. "(2) 'Defense agency' means the Department of Defense, the Department of the Army, the Department of the Navy, the Department of the Air Force, and the Defense Logistics Agency. "(b)(1) A defense agency that is responsible for the acquisition of property (including major manufactured end items) or services under a covered contract shall cause to be* recorded the contractor's proposed and negotiated cost and pricing data acquired by the agency into appropriate categories. Such categories shall include labor costs, material costs, subcontract costs, overhead costs, general and administrative costs, fee or profit, recurring costs, and nonrecurring costs. "(2)(A) A defense agency that is responsible for the acquisition of major manufactured end items under a covered contract shall cause to be recorded the proposed and negotiated bills of labor for labor use by the prime contractor and each associate contractor in manufacturing the item and for labor used by each such contractor in performing routine testing relating to the item. The bill of labor relating to the labor used by any such contractor shall reflect such contractor's computation of the work required in manufacturing parts and subassemblies for the end item and in performing routine testing of such parts and subassemblies. "(B) Each contractor preparing a bill of labor referred to in subparagraph (A) shall specify in the bill of labor the current industrial engineering standard hours of work content (also known as 'should-take times') for the work included in a component of the bill of labor and for the total work included in the bill of labor. The contractor shall base the standard hours of work content specified in the bill of labor on the 'fair day's work' concept, as such term is understood in competitive commercial manufacturing industries in the United States. The contractor's standard hours of work content included in the bill of labor may not vary from time standards derived from commercially available predetermined time standard systems widely used in the United States, as determined by the defense agency, subject to verification by audit.

�