Consumption-based solutions

Chapter 253 of title 10, United States Code, is amended by adding at the end the following new section: 3605. Authority to acquire consumption-based solutions (a) Authority The Secretary of Defense and the Secretaries of the military departments may acquire technology-supported capabilities through consumption-based solutions. (b) Guidance required The Secretary of Defense shall amend the Defense Federal Acquisition Regulation Supplement to implement the authority under subsection (a), including creating a new subcategory of services under part 237 of the Defense Federal Acquisition Regulation Supplement, entitled Consumption-based solutions that— (1) is any combination of hardware, equipment, software, labor, or services that together provides a seamless capability; (2) has the ability to be metered and billed based on actual usage; (3) has predetermined pricing at fixed price units; (4) requires the awardee to notify the Department of Defense contracting officer when consumption under the contract reaches 75 percent and 90 percent of the funded amount, respectively, of the contract; and (5) treats modifications to a contract entered into under the authority established in subsection (a) to add new features or capabilities in an amount less than or equal to 25 percent of the total value of such contract, as originally awarded, as competitive procurements under chapter 221 of this title. (c) Funding Amounts authorized to be appropriated for acquisitions using the authority under subsection (a)— (1) may be used for expenses for— (A) research, development, test and evaluation; (B) procurement; (C) production; (D) modification; and (E) operation and maintenance; and (2) may be used to enter into incrementally funded contracts or other agreements, including advanced payments. (d) Consumption-based solution defined In this section, the term consumption-based solution means a model under which a technology-supported capability is provided to the Department of Defense and may utilize any combination of software, hardware or equipment, data, and labor or services that provides a capability that is metered and billed based on actual usage at fixed price units. (e) Rule of construction Nothing in this section shall be construed to prohibit the use of the authority created under this section in combination with another contract type provided for under the Defense Federal Acquisition Regulation Supplement..