(a) Cost Estimates Developed for Specified Purposes Not to Be Used for Contract Negotiations or Obligation of Funds.—The policies, procedures, and guidance issued by the Director of Cost Assessment and Program Evaluation in accordance with the requirements of section 3221 of this title shall provide that cost estimates developed for baseline descriptions and other program purposes conducted pursuant to subsection (b)(6) of such section are not to be used for the purpose of contract negotiations or the obligation of funds.

(b) Cost Estimates Developed for Specified Purposes Not to Be Used for Contract Negotiations or Obligation of Funds.—The Under Secretary of Defense for Acquisition and Sustainment shall, in consultation with the Director of Cost Assessment and Program Evaluation, develop policies, procedures, and guidance to ensure that cost analyses and targets developed for the purpose of contract negotiations and the obligation of funds are based on the Government's reasonable expectation of successful contractor performance in accordance with the contractor's proposal and previous experience.

(c) Program Manager and Contracting Officer.—The program manager and contracting officer for each major defense acquisition program and major subprogram shall ensure that cost analyses and targets developed for the purpose of contract negotiations and the obligation of funds are carried out in accordance with the requirements of subsection (a) and the policies, procedures, and guidance issued by the Under Secretary of Defense for Acquisition and Sustainment under subsection (b).

(d) Availability of Excess Funds.—

(1) Funds that are made available for a major defense acquisition program or major subprogram in accordance with a cost estimate conducted pursuant to section 3221(b)(6) of this title, but are excess to a cost analysis or target developed pursuant to subsection (b), shall remain available for obligation in accordance with the terms of applicable authorization and appropriations Acts.

(2) Funds described in paragraph (1)—

(A) may be used—

(i) to cover any increased program costs identified by a revised cost analysis or target developed pursuant to subsection (b);

(ii) to acquire additional end items in accordance with the requirements of section 3069 of this title; or

(iii) to cover the cost of risk reduction and process improvements; and

(B) may be reprogrammed, in accordance with established procedures, only if determined to be excess to program needs on the basis of a cost estimate developed with the concurrence of the Director of Cost Assessment and Program Evaluation.