Defense Cost Reduction Act of 1985

Defense Cost Reduction Act of 1985 - Directs the Secretary of Defense to provide for the development, use, and joint use of standard equipment, including systems, components, parts, weapons, and automated data processing systems, throughout the Department of Defense. Requires the Secretary to consider cost, performance, reliability, and field maintainability.

Directs the Secretary to review and adjust equipment specifications and to require defense contracts to specify functional or performance characteristics rather than method-of-manufacture or design.

Directs the Secretary to simplify procurement procedures by replacing regulations with policy guidelines, simplifying contract language, limiting contractor to subcontractor flow down of terms, training procurement personnel, and centralizing procurement.

Directs the Secretary to modernize and standardize existing automated data processing systems used for inventory management and control, including changes which would improve the readiness of the armed forces.

Directs the Secretary to report to the Congress by December 1 of every year after 1984 on the progress of equipment standardization, procurement simplification, and inventory and management, including information on which equipment has been standardized and training improvements.

Revises the commencement dates of military pensions for certain members of the uniformed services.

Sets forth a formula for the computation of the military pension of a person who first became a member of a uniformed service after the enactment of this Act. Reduces the amount of such pension for a person who has completed fewer than 30 years of service and elects to receive such pension on the first day of entitlement.