JOINT EXPLANATORY STATEMENT OF THE COMMITTEE OF CONFERENCE The managers on the part of the House and the Senate at the conference on the disagreeing votes of the two Houses on the amendment of the Senate to the bill (H.R 2810), to authorize appropriations for fiscal year 2018 for military activities of the Department of Defense, for military construction, and for defense activities of the Department of Energy, to prescribe military personnel strengths for such fiscal year, and for other purposes, submit the following joint statement to the House and the Senate in explanation of the effect of the action agreed upon by the managers and recommended in the accompanying conference report: The Senate amendment struck all of the House bill after the enacting clause and inserted a substitute text. The House recedes from its disagreement to the amendment of the Senate with an amendment that is a substitute for the House bill and the Senate amendment. The differences between the House bill, the Senate amendment, and the substitute agreed to in conference are noted below, except for clerical corrections, conforming changes made necessary by agreements reached by the conferees, and minor drafting and clarifying changes. Compliance with rules of the House of Representatives and Senate regarding earmarks and congressionally directed spending items Pursuant to clause 9 of rule XXI of the Rules of the House of Representatives and Rule XLIV(3) of the Standing Rules of the Senate, neither this conference report nor the accompanying joint statement of managers contains any congressional earmarks, congressionally directed spending items, limited tax benefits, or limited tariff benefits, as defined in such rules. Summary of discretionary authorizations and budget authority implication The budget request for national defense discretionary programs within the jurisdiction of the Committees on Armed Services of the Senate and the House of Representatives for fiscal year 2018 was $665.7 billion. Of this amount, $579.3 billion was requested for base Department of Defense programs, $65.8 billion was requested for overseas contingency operations, $20.5 billion was requested for national security programs in the Department of Energy and the Defense Nuclear Facilities Safety Board, and $210.0 million for defense-related activities. The total request of $665.7 billion also includes the additional amounts from the November 2017 budget amendment. The conference agreement would authorize $692.1 billion in fiscal year 2018, including $605.5 billion for base Department of Defense programs, $65.7 billion for overseas contingency operations, $20.6 billion for national security programs in the Department of Energy and the Defense Nuclear Facilities Safety Board, and $300.0 million for defense-related activities. The two tables preceding the detailed program adjustments in Division D of the accompanying joint statement of managers summarize the discretionary authorizations in the agreement and the equivalent budget authority levels for fiscal year 2018 defense programs. Budgetary effects of this Act (sec. 4) The Senate amendment contained a provision (sec. 4) that would require that the budgetary effects of this Act be determined in accordance with the procedures established in the Statutory Pay-As-You-Go Act of 2010 (title I of Public Law 111- 139). The House bill contained no similar provision. The House recedes. DIVISION A—DEPARTMENT OF DEFENSE AUTHORIZATIONS TITLE I—PROCUREMENT BUDGET ITEMS Virginia-class submarine advanced procurement The budget request included $1.9 billion in line item 5 of Shipbuilding and Conversion, Navy for Virginia-class submarine advance procurement. The House bill would authorize an increase of $943.0 million above the request. The Senate amendment would authorize an increase of $1.2 billion above the request. The agreement authorizes an increase of $698.0 million above the request. The conferees direct the Secretary of the Navy to use this increase for: (1) procurement of a third Virginia-class submarine in fiscal year 2020; (2) economic order quantity for the fiscal year 2019 through 2023 multiyear Virginia-class submarine procurement; or (3) to expand second and third tier contractors in the submarine industrial base to support planned increased production requirements. If the Secretary pursues option (3), the Secretary shall notify the congressional defense committees within 30 days of obligating funds for such purpose of the: obligation date, contractor name or names, location, description of the shortfall to be addressed, actions to be undertaken, desired end state, usable end items to be procured, period of performance, dollar amount, projected associated savings including business case analysis if applicable, contract name, and contract number. The conferees believe that utilizing greater economic order quantity procurement, procuring an additional submarine, or expanding the capabilities of the supplier base should lead to greater cost savings and improved efficiency as production increases to meet the Columbia-class schedule and higher requirement for attack submarines in the Navy’s latest Force Structure Assessment. SUBTITLE A—AUTHORIZATION OF APPROPRIATIONS Authorization of appropriations (sec. 101) The House bill contained a provision (sec. 101) that would authorize the appropriations for procurement activities at the levels identified in section 4101 of division D of this Act. The Senate amendment contained an identical provision (sec. 101). The conference agreement includes this provision. SUBTITLE B—ARMY PROGRAMS Authority to expedite procurement of 7.62mm rifles (sec. 111) The Senate amendment contained a provision (sec. 10101) that would authorize the Secretary of the Army to expedite acquiring a commercially available off-the-shelf item, non- developmental item, or Government-off-the-shelf materiel solution for a 7.62mm rifle capability. The House bill contained no similar provision. The House recedes with an amendment that would authorize the Secretary of the Army to expedite procurement under full and open competition, to the maximum practicable, of up to 7,000 7.62mm rifles, ammunition, and related equipment given emerging threats. The House amendment would also require the Secretary of the Army to submit a report to the congressional defense committees before entering into a contract, should the Secretary of the Army decide to exercise existing sole source authority to procure up to 7,000 7.62mm rifles. Additionally, the House amendment stipulates that any contract awarded shall be awarded through a full and open competition for the next generation squad weapon program. The conferees expect the Secretary of the Army to allow for sufficient time for the congressional defense committees to review the findings from the required report before entering into a contract for a 7.62mm rifle. Further, the conferees expect the Secretary of the Army, in consultation with the Chief of Staff of the Army, to develop options for accelerating the next generation squad weapon system given current and emerging threats. Limitation on availability of funds for Increment 2 of the Warfighter Information Network-Tactical program (sec. 112) The House bill contained a provision (sec. 111) that would require the Secretary of the Army to submit a report to the congressional defense committees by January 30, 2018, detailing potential options for the acceleration of procurement and fielding of the Warfighter Information Network-Tactical Increment 2 program. The Senate amendment contained a provision (sec. 112) that would require the Secretary of the Army to report to the congressional defense committees detailing how the Army intends to implement the recommendations of the Director of Cost Assessment and Program Evaluation (CAPE) for the Army's Air-Land Mobile Tactical Communications and Data Network to include the Warfighter Information Network-Tactical (WIN-T) program. The provision would also prohibit the Secretary of the Army from obligating any funds available in Other Procurement, Army for the WIN-T, Increment 2 (Inc 2) program subject to the submission of the Army's report. The House recedes with an amendment that would authorize not more than 50 percent of fiscal year 2018 funds to enter into, or to prepare to enter into, a contract until the Army submits a report detailing their tactical network modernization strategy to include reporting elements from both the House and Senate provisions. The amendment would also require the Army to include as part of this report detailed budget justification for this strategy. The conferees are concerned about the continued suitability, effectiveness, security, and survivability of all aspects of the Army Air-Land Mobile Tactical Communications and Data Networks to include WIN-T given demonstrated threat capabilities of peer adversaries in electronic warfare attack, electronic reconnaissance, and massed fire strikes. The conferees continue to encourage the Army to repair identified problems and to more carefully redefine its requirements for the tactical network. The conferees encourage the Army to leverage its new acquisition authorities to seek non-developmental technologies when practicable to repair and improve the legacy network. This effort is key given investments to date. Limitation on availability of funds for upgrade of M113 vehicles (sec. 113) The Senate amendment contained a provision (sec. 5102) that would require the Secretary of the Army to submit to the congressional defense