(a) In General.—The Secretary of Defense shall take such action as is necessary to reform the Department of Defense to improve the efficacy and efficiency of the Department, and to improve the ability of the Department to prioritize among and assess the costs and benefits of covered elements of reform.

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(b) Policy.—The Secretary shall develop a policy and issue guidance to implement reform within the Department and to improve the ability of the Department to prioritize among and assess the costs and benefits of covered elements of reform.

(c) Framework for Reform.—

(1) In general.—Not later than February 1, 2023, the Secretary shall establish policies, guidance, and a consistent reporting framework to measure the progress of the Department toward covered elements of reform, including by establishing categories of reform, consistent metrics, and a process for prioritization of reform activities.

(2) Scope.—The framework required by paragraph (1) may address duties under the following:

(A) Section 125 of this title.

(B) Section 192 of this title.

(C) Section 2222 of this title.

(D) Section 1124 of title 31.

(E) Section 11319 of title 40.

(3) Consultation.—The Secretary shall consult with the Deputy Secretary of Defense, the Performance Improvement Officer of the Department of Defense, the Chief Data Officer of the Department of Defense, the Chief Information Officer of the Department of Defense, the Director for Administration and Management of the Department of Defense, and the financial managers of the military departments in carrying out activities under this subsection.

(d) Covered Elements of Reform.—For purposes of this section and the policies, guidance, and reporting framework required by subsection (c), covered elements of reform may include the following:

(1) Business systems modernization.

(2) Enterprise business operations process re-engineering.

(3) Expanded and modernized collection, management, dissemination, and visualization of data to support decision-making at all levels of the enterprise.

(4) Improvements in workforce training and education and increasing capabilities of the Department workforce to support and execute reform activities and business processes.

(5) Improvements to decision-making processes to enable cost savings, cost avoidance, or investments to develop process improvements.

(6) Development and implementation of a uniform methodology for tracking and assessing cost savings and cost avoidance from reform initiatives.

(7) Implementation of reform-focused research to improve management and administrative science.

(8) Tracking and implementation of technological approaches to improve management decision-making, such as artificial intelligence tools.

(9) Such other elements as the Secretary considers appropriate.

(e) Annual Report.—At the same time the budget of the President for a fiscal year is submitted to Congress pursuant to section 1105 of title 31, the Secretary shall, using the policies, guidance, and reporting framework required by subsection (c), submit to the congressional defense committees a report, including detailed narrative justifications and tradeoff analyses between options, on the actions of the Department as follows:

(1) The activities, expenditures, and accomplishments carried out or made to effect reform under this section during the fiscal year in which such budget is submitted.

(2) The proposed activities, expenditures, and accomplishments to effect reform under this section, and consistent with priorities established by the Secretary, during the fiscal year covered by such budget and each of the four succeeding fiscal years.