US (United States) Code. Title 10. Subtitle A. Part IV. Chapter 146: Contracting for performance of civilian type

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-CITE-

10 USC CHAPTER 146 - CONTRACTING FOR PERFORMANCE OF

CIVILIAN COMMERCIAL OR INDUSTRIAL TYPE

FUNCTIONS 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle A - General Military Law

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 146 - CONTRACTING FOR PERFORMANCE OF CIVILIAN COMMERCIAL OR

INDUSTRIAL TYPE FUNCTIONS

.

-HEAD-

CHAPTER 146 - CONTRACTING FOR PERFORMANCE OF CIVILIAN COMMERCIAL OR

INDUSTRIAL TYPE FUNCTIONS

-MISC1-

Sec.

2460. Definition of depot-level maintenance and repair.

2461. Commercial or industrial type functions: required studies and

reports before conversion to contractor performance.

2461a. Development of system for monitoring cost savings resulting

from workforce reductions.

2462. Contracting for certain supplies and services required when

cost is lower.

2463. Collection and retention of cost information data on

converted services and functions.

2464. Core logistics capabilities.

2465. Prohibition on contracts for performance of firefighting or

security-guard functions.

2466. Limitations on the performance of depot-level maintenance of

materiel.

2467. Cost comparisons: inclusion of retirement costs; consultation

with employees; waiver of comparison.

(2468. Repealed.)

2469. Contracts to perform workloads previously performed by

depot-level activities of the Department of Defense: requirement

of competition.

(2469a. Repealed.)

2470. Depot-level activities of the Department of Defense:

authority to compete for maintenance and repair workloads of

other Federal agencies.

(2471. Repealed.)

2472. Management of depot employees.

2473. Procurements from the small arms production industrial base.

2474. Centers of Industrial and Technical Excellence: designation;

public-private partnerships.

2475. Consolidation, restructuring, or reengineering of

organizations, functions, or activities: notification

requirements.

AMENDMENTS

2002 - Pub. L. 107-314, div. A, title III, Sec. 333(b), Dec. 2,

2002, 116 Stat. 2514, struck out item 2469a ''Use of competitive

procedures in contracting for performance of depot-level

maintenance and repair workloads formerly performed at certain

military installations''.

2001 - Pub. L. 107-107, div. A, title X, Sec. 1048(e)(10)(B),

Dec. 28, 2001, 115 Stat. 1228, struck out item 2468 ''Military

installations: authority of base commanders over contracting for

commercial activities''.

2000 - Pub. L. 106-398, Sec. 1 ((div. A), title III, Sec.

341(g)(2), 353(b), 354(b)), Oct. 30, 2000, 114 Stat. 1654,

1654A-64, 1654A-73, 1654A-75, added items 2461a and 2475 and struck

out item 2471 ''Persons outside the Department of Defense: lease of

excess depot-level equipment and facilities by''.

1999 - Pub. L. 106-65, div. A, title III, Sec. 342(b)(2), Oct.

5, 1999, 113 Stat. 569, added item 2467 and struck former item 2467

''Cost comparisons: requirements with respect to retirement costs

and consultation with employees''.

1997 - Pub. L. 105-85, div. A, title III, Sec. 355(c)(1),

356(b), 359(a)(2), 361(a)(2), 385(b), Nov. 18, 1997, 111 Stat.

1694, 1695, 1699, 1701, 1712, added item 2460, substituted

''Collection and retention of cost information data on converted

services and functions'' for ''Reports on savings or costs from

increased use of DOD civilian personnel'' in item 2463 and

''capabilities'' for ''functions'' in item 2464, and added items

2469a and 2474.

1996 - Pub. L. 104-201, div. A, title VIII, Sec. 832(b), Sept.

23, 1996, 110 Stat. 2616, added item 2473.

Pub. L. 104-106, div. A, title III, Sec. 312(d), Feb. 10, 1996,

110 Stat. 251, added item 2472.

Pub. L. 104-106, div. A, title III, Sec. 311(f)(2), Feb. 10,

1996, 110 Stat. 248, which directed striking out items 2466 and

2469, was repealed by Pub. L. 105-85, div. A, title III, Sec. 363,

Nov. 18, 1997, 111 Stat. 1702.

1994 - Pub. L. 103-337, div. A, title III, Sec. 335(b), 336(b),

Oct. 5, 1994, 108 Stat. 2717, added items 2470 and 2471.

1992 - Pub. L. 102-484, div. A, title III, Sec. 353(b), Oct. 23,

1992, 106 Stat. 2379, added item 2469.

1991 - Pub. L. 102-190, div. A, title III, Sec. 314(a)(2), Dec.

5, 1991, 105 Stat. 1337, substituted ''Limitations on the

performance of depot-level maintenance of materiel'' for

''Prohibition on certain depot maintenance workload competitions''

in item 2466.

1989 - Pub. L. 101-189, div. A, title XI, Sec. 1131(a)(2), Nov.

29, 1989, 103 Stat. 1561, added item 2468.

1988 - Pub. L. 100-456, div. A, title III, Sec. 326(b), 331(b),

Sept. 29, 1988, 102 Stat. 1956, 1958, added items 2466 and 2467.

-CITE-

10 USC Sec. 2460 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle A - General Military Law

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 146 - CONTRACTING FOR PERFORMANCE OF CIVILIAN COMMERCIAL OR

INDUSTRIAL TYPE FUNCTIONS

-HEAD-

Sec. 2460. Definition of depot-level maintenance and repair

-STATUTE-

(a) In General. - In this chapter, the term ''depot-level

maintenance and repair'' means (except as provided in subsection

(b)) material maintenance or repair requiring the overhaul,

upgrading, or rebuilding of parts, assemblies, or subassemblies,

and the testing and reclamation of equipment as necessary,

regardless of the source of funds for the maintenance or repair or

the location at which the maintenance or repair is performed. The

term includes (1) all aspects of software maintenance classified by

the Department of Defense as of July 1, 1995, as depot-level

maintenance and repair, and (2) interim contractor support or

contractor logistics support (or any similar contractor support),

to the extent that such support is for the performance of services

described in the preceding sentence.

(b) Exceptions. - (1) The term does not include the procurement

of major modifications or upgrades of weapon systems that are

designed to improve program performance or the nuclear refueling of

an aircraft carrier. A major upgrade program covered by this

exception could continue to be performed by private or public

sector activities.

(2) The term also does not include the procurement of parts for

safety modifications. However, the term does include the

installation of parts for that purpose.

-SOURCE-

(Added Pub. L. 105-85, div. A, title III, Sec. 355(a), Nov. 18,

1997, 111 Stat. 1693; amended Pub. L. 105-261, div. A, title III,

Sec. 341, Oct. 17, 1998, 112 Stat. 1973.)

-MISC1-

AMENDMENTS

1998 - Subsec. (a). Pub. L. 105-261 inserted ''or the location at

which the maintenance or repair is performed'' before period at end

of first sentence.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 2581 of this title.

-CITE-

10 USC Sec. 2461 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle A - General Military Law

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 146 - CONTRACTING FOR PERFORMANCE OF CIVILIAN COMMERCIAL OR

INDUSTRIAL TYPE FUNCTIONS

-HEAD-

Sec. 2461. Commercial or industrial type functions: required

studies and reports before conversion to contractor performance

-STATUTE-

(a) Reporting and Analysis Requirements as Precondition to Change

in Performance. - A commercial or industrial type function of the

Department of Defense that, as of October 1, 1980, was being

performed by Department of Defense civilian employees may not be

changed to performance by the private sector until the Secretary of

Defense fully complies with the reporting and analysis requirements

specified in subsections (b) and (c).

(b) Notification and Elements of Analysis. - (1) Before

commencing to analyze a commercial or industrial type function

described in subsection (a) for possible change to performance by

the private sector, the Secretary of Defense shall submit to

Congress a report containing the following:

(A) The function to be analyzed for possible change.

(B) The location at which the function is performed by

Department of Defense civilian employees.

(C) The number of civilian employee positions potentially

affected.

(D) The anticipated length and cost of the analysis, and a

specific identification of the budgetary line item from which

funds will be used to cover the cost of the analysis.

(E) A certification that a proposed performance of the

commercial or industrial type function by persons who are not

civilian employees of the Department of Defense is not a result

of a decision by an official of a military department or Defense

Agency to impose predetermined constraints or limitations on such

employees in terms of man years, end strengths, full-time

equivalent positions, or maximum number of employees.

(2) The duty to prepare a report under paragraph (1) may be

delegated. A report prepared below the major command or claimant

level of a military department, or below the equivalent level in a

Defense Agency, pursuant to any such delegation shall be reviewed

at the major command, claimant level, or equivalent level, as the

case may be, before submission to Congress.

(3) An analysis of a commercial or industrial type function for

possible change to performance by the private sector shall include

the following:

(A) An examination of the cost of performance of the function

by Department of Defense civilian employees and by one or more

private contractors to demonstrate whether change to performance

by the private sector will result in savings to the Government

over the life of the contract, including in the examination the

following:

(i) The cost to the Government, estimated by the Secretary of

Defense (based on offers received), for performance of the

function by the private sector.

(ii) The estimated cost to the Government of Department of

Defense civilian employees performing the function.

(iii) In addition to the costs referred to in clause (i), an

estimate of all other costs and expenditures that the

Government would incur because of the award of such a contract.

(B) An examination of the potential economic effect of

performance of the function by the private sector on the

following:

(i) Employees of the Department of Defense who would be

affected by such a change in performance.

(ii) The local community and the Government, if more than 50

employees of the Department of Defense perform the function.

(C) An examination of the effect of performance of the function

by the private sector on the military mission associated with the

performance of the function.

(4)(A) A representative individual or entity at a facility where

a commercial or industrial type function is analyzed for possible

change in performance may submit to the Secretary of Defense an

objection to the analysis on the grounds that the report required

by paragraph (1) has not been submitted or that the certification

required by paragraph (1)(E) is not included in the report

submitted as a condition for the analysis. The objection shall be

in writing and shall be submitted within 90 days after the

following date:

(i) In the case of a failure to submit the report when

required, the date on which the representative individual or an

official of the representative entity authorized to pose the

objection first knew or should have known of that failure.

(ii) In the case of a failure to include the certification in a

submitted report, the date on which the report was submitted to

Congress.

(B) If the Secretary determines that the report required by

paragraph (1) was not submitted or that the required certification

was not included in the submitted report, the commercial or

industrial type function covered by the analysis to which objected

may not be the subject of a solicitation of offers for, or award

of, a contract until, respectively, the report is submitted or a

report containing the certification in full compliance with the

certification requirement is submitted.

(c) Submission of Analysis Results. - (1) Upon the completion of

an analysis of a commercial or industrial type function described

in subsection (a) for possible change to performance by the private

sector, the Secretary of Defense shall submit to Congress a report

containing the results of the analysis, including the results of

the examinations required by subsection (b)(3).

(2) The report shall also contain the following:

(A) The date when the analysis of the function was commenced.

(B) The Secretary's certification that the Government

calculation of the cost of performance of the function by

Department of Defense civilian employees is based on an estimate

of the most cost effective manner for performance of the function

by Department of Defense civilian employees.

(C) The number of Department of Defense civilian employees who

were performing the function when the analysis was commenced and

the number of such employees whose employment was or will be

terminated or otherwise affected by changing to performance of

the function by the private sector or by implementation of the

most efficient organization of the function.

(D) The Secretary's certification that the factors considered

in the examinations performed under subsection (b)(3), and in the

making of the decision regarding changing to performance of the

function by the private sector or retaining performance in the

most efficient organization of the function, did not include any

predetermined personnel constraint or limitation in terms of man

years, end strength, full-time equivalent positions, or maximum

number of employees.

(E) A statement of the potential economic effect of

implementing the decision regarding changing to performance of

the function by the private sector or retaining performance in

the most efficient organization of the function on each affected

local community, as determined in the examination under

subsection (b)(3)(B)(ii).

(F) A schedule for completing the change to performance of the

function by the private sector or implementing the most efficient

organization of the function.

(G) In the case of a commercial or industrial type function

performed at a Center of Industrial and Technical Excellence

designated under section 2474(a) of this title or an Army

ammunition plant, a description of the effect that the manner of

performance of the function, and administration of the resulting

contract if any, will have on the overhead costs of the center or

ammunition plant, as the case may be.

(H) The Secretary's certification that the entire analysis is

available for examination.

(3)(A) If a decision is made to change the commercial or

industrial type function that was the subject of the analysis to

performance by the private sector, the change of the function to

contractor performance may not begin until after the submission of

the report required by paragraph (1).

(B) Notwithstanding subparagraph (A), in the case of a commercial

or industrial type function performed at a Center of Industrial and

Technical Excellence designated under section 2474(a) of this title

or an Army ammunition plant, the change of the function to

contractor performance may not begin until at least 60 days after

the submission of the report.

(d) Waiver for Small Functions. - Subsections (a) through (c) and

subsection (g) shall not apply to a commercial or industrial type

function of the Department of Defense that is being performed by 50

or fewer Department of Defense civilian employees.

(e) Waiver for the Purchase of Products and Services of the Blind

and Other Severely Handicapped Persons. - Subsections (a) through

(c) and subsection (g) shall not apply to a commercial or

industrial type function of the Department of Defense that -

(1) is included on the procurement list established pursuant to

section 2 of the Javits-Wagner-O'Day Act (41 U.S.C. 47); or

(2) is planned to be changed to performance by a qualified

nonprofit agency for the blind or by a qualified nonprofit agency

for other severely handicapped persons in accordance with that

Act.

(f) Additional Limitations. - (1) A commercial or industrial type

function of the Department of Defense that on October 1, 1980, was

being performed by Department of Defense civilian employees may not

be changed to performance by a private contractor to circumvent a

civilian personnel ceiling.

(2) In no case may a commercial or industrial type function being

performed by Department of Defense personnel be modified,

reorganized, divided, or in any way changed for the purpose of

exempting from the requirements of subsection (a) the change of all

or any part of such function to performance by a private

contractor.

(g) Annual Reports. - Not later than June 30 of each fiscal year,

the Secretary of Defense shall submit to Congress a written report

describing the extent to which commercial and industrial type

functions were performed by Department of Defense contractors

during the preceding fiscal year. The Secretary shall include in

each such report an estimate of the percentage of commercial and

industrial type functions of the Department of Defense that will be

performed by Department of Defense civilian employees, and the

percentage of such functions that will be performed by private

contractors, during the fiscal year during which the report is

submitted.

(h) Inapplicability During War or Emergency. - The provisions of

this section shall not apply during war or during a period of

national emergency declared by the President or Congress.

-SOURCE-

(Added Pub. L. 100-370, Sec. 2(a)(1), July 19, 1988, 102 Stat. 851;

amended Pub. L. 101-189, div. A, title XI, Sec. 1132, Nov. 29,

1989, 103 Stat. 1561; Pub. L. 104-106, div. D, title XLIII, Sec.

4321(b)(19), Feb. 10, 1996, 110 Stat. 673; Pub. L. 105-85, div. A,

title III, Sec. 384, Nov. 18, 1997, 111 Stat. 1711; Pub. L.

105-261, div. A, title III, Sec. 342(a)-(c), Oct. 17, 1998, 112

Stat. 1974-1976; Pub. L. 106-65, div. A, title III, Sec. 341, Oct.

5, 1999, 113 Stat. 568; Pub. L. 106-398, Sec. 1 ((div. A), title

III, Sec. 351, 352), Oct. 30, 2000, 114 Stat. 1654, 1654A-71,

1654A-72; Pub. L. 107-107, div. A, title III, Sec. 344, Dec. 28,

2001, 115 Stat. 1061; Pub. L. 107-314, div. A, title III, Sec.

331, Dec. 2, 2002, 116 Stat. 2512.)

-MISC1-

HISTORICAL AND REVISION NOTES

Section is based on Pub. L. 96-342, title V, Sec. 502, Sept. 8,

1980, 94 Stat. 1086, as amended by Pub. L. 97-252, title XI, Sec.

1112(a), Sept. 8, 1982, 96 Stat. 747; Pub. L. 99-145, title XII,

Sec. 1234(a), Nov. 8, 1985, 99 Stat. 734; Pub. L. 99-661, div. A,

title XII, Sec. 1221, Nov. 14, 1986, 100 Stat. 3976.

-REFTEXT-

REFERENCES IN TEXT

The Javits-Wagner-O'Day Act, referred to in subsec. (e), is act

June 25, 1938, ch. 697, 52 Stat. 1196, as amended, which is

classified to sections 46 to 48c of Title 41, Public Contracts. For

complete classification of this Act to the Code, see Short Title

note set out under section 46 of Title 41 and Tables.

-MISC2-

AMENDMENTS

2002 - Subsec. (c). Pub. L. 107-314 amended heading and text of

subsec. (c) generally. Prior to amendment, text related to the

report to Congress by the Secretary of Defense upon a decision to

change the commercial or industrial type function that was the

subject of the analysis to performance by the private sector, with

requirements for contents of the report and submission of the

report prior to the change of the function to contractor

performance.

2001 - Subsec. (g). Pub. L. 107-107 substituted ''June 30'' for

''February 1''.

2000 - Subsec. (b)(1)(D). Pub. L. 106-398, Sec. 1 ((div. A),

title III, Sec. 351(a)), inserted before period '', and a specific

identification of the budgetary line item from which funds will be

used to cover the cost of the analysis''.

Subsec. (c)(1). Pub. L. 106-398, Sec. 1 ((div. A), title III,

Sec. 351(b)), added subpars. (A), (D), (E), and (G) and

redesignated former subpars. (A), (B), (C), (D), and (E) as (B),

(C), (F), (H), and (I), respectively.

Subsec. (c)(2), (3). Pub. L. 106-398, Sec. 1 ((div. A), title

III, Sec. 352), added par. (2) and redesignated former par. (2) as

(3).

1999 - Subsec. (b)(3)(B)(ii). Pub. L. 106-65 substituted ''50

employees'' for ''75 employees''.

1998 - Subsec. (a). Pub. L. 105-261, Sec. 342(a)(2), added

subsec. (a) and struck out former subsec. (a) which provided that

commercial or industrial type functions of the Department of

Defense that on Oct. 1, 1980, were being performed by Department of

Defense civilian employees could not be converted to performance by

private contractors unless the Secretary of Defense provided

certain notices, information, certifications, and reports to

Congress.

Subsec. (b). Pub. L. 105-261, Sec. 342(a)(2), added subsec. (b)

and struck out heading and text of former subsec. (b). Text read as

follows: ''If, after completion of the studies required for

completion of the certification and report required by paragraphs

(3) and (4) of subsection (a), a decision is made to convert the

function to contractor performance, the Secretary of Defense shall

notify Congress of such decision. The notification shall include

the timetable for completing conversion of the function to

contractor performance.''

Subsec. (c). Pub. L. 105-261, Sec. 342(a)(2), added subsec. (c).

Former subsec. (c) redesignated (g).

Subsec. (d). Pub. L. 105-261, Sec. 342(b), (c)(1), substituted

''50'' for ''20'' and inserted ''and subsection (g)'' after

''Subsections (a) through (c)''.

Subsec. (e). Pub. L. 105-261, Sec. 342(c)(1), (2), inserted ''and

subsection (g)'' after ''Subsections (a) through (c)'' in

introductory provisions and substituted ''changed'' for

''converted'' in par. (2).

Subsec. (f). Pub. L. 105-261, Sec. 342(c)(2), (3), substituted

''changed'' for ''converted'' in par. (1) and ''change'' for

''conversion'' in par. (2).

Subsecs. (g), (h). Pub. L. 105-261, Sec. 342(a)(1), redesignated

subsecs. (c) and (g) as (g) and (h), respectively.

1997 - Subsec. (a)(1). Pub. L. 105-85, Sec. 384(a), inserted

''and the anticipated length and cost of the study'' before

semicolon at end.

Subsec. (b). Pub. L. 105-85, Sec. 384(b), inserted at end ''The

notification shall include the timetable for completing conversion

of the function to contractor performance.''

Subsec. (d). Pub. L. 105-85, Sec. 384(c), substituted ''20 or

fewer'' for ''45 or fewer''.

1996 - Subsec. (e)(1). Pub. L. 104-106 substituted ''the

Javits-Wagner-O'Day Act (41 U.S.C. 47)'' for ''the Act of June 25,

1938 (41 U.S.C. 47), popularly referred to as the Wagner-O'Day

Act''.

1989 - Subsecs. (e) to (g). Pub. L. 101-189 added subsec. (e) and

redesignated former subsecs. (e) and (f) as (f) and (g),

respectively.

EFFECTIVE DATE OF 1998 AMENDMENT

Pub. L. 105-261, div. A, title III, Sec. 342(d), Oct. 17, 1998,

112 Stat. 1976, provided that: ''The amendments made by this

section (amending this section) shall take effect on the date of

the enactment of this Act (Oct. 17, 1998), but the amendments shall

not apply with respect to a conversion of a function of the

Department of Defense to performance by a private contractor

concerning which the Secretary of Defense provided to Congress,

before the date of the enactment of this Act, a notification under

paragraph (1) of section 2461(a) of title 10, United States Code,

as in effect on the day before the date of the enactment of this

Act.''

EFFECTIVE DATE OF 1996 AMENDMENT

For effective date and applicability of amendment by Pub. L.

104-106, see section 4401 of Pub. L. 104-106, set out as a note

under section 251 of Title 41, Public Contracts.

PILOT MANPOWER REPORTING SYSTEM IN DEPARTMENT OF THE ARMY

Pub. L. 107-107, div. A, title III, Sec. 345(a)-(c), Dec. 28,

2001, 115 Stat. 1061, 1062, provided that:

''(a) Annual Reporting Requirement. - Not later than March 1 of

each of the fiscal years 2002 through 2004, the Secretary of the

Army shall submit to Congress a report describing the use during

the previous fiscal year of non-Federal entities to provide

services to the Department of the Army.

''(b) Content of Report. - Using information available from

existing data collection and reporting systems available to the

Department of the Army and the non-Federal entities referred to in

subsection (a), the report shall -

''(1) specify the number of work year equivalents performed by

individuals employed by non-Federal entities in providing

services to the Department;

''(2) categorize the information by Federal supply class or

service code; and

''(3) indicate the appropriation from which the services were

funded and the major organizational element of the Department

procuring the services.

''(c) Limitation on Requirement for Non-Federal Entities To

Provide Information. - For the purposes of meeting the requirements

set forth in subsection (b), the Secretary of the Army may not

require the provision of information beyond the information that is

currently provided to the Department of the Army by the non-Federal

entities referred to in subsection (a), except for the number of

work year equivalents associated with Department of the Army

contracts, identified by contract number, to the extent this

information is available to the contractor from existing data

collection systems.''

PILOT PROGRAM FOR COMMERCIAL SERVICES

Pub. L. 106-65, div. A, title VIII, Sec. 814, Oct. 5, 1999, 113

Stat. 711, provided that:

''(a) Program Authorized. - The Secretary of Defense may carry

out a pilot program to treat procurements of commercial services as

procurements of commercial items.

''(b) Designation of Pilot Program Categories. - The Secretary of

Defense may designate the following categories of services as

commercial services covered by the pilot program:

''(1) Utilities and housekeeping services.

''(2) Education and training services.

''(3) Medical services.

''(c) Treatment as Commercial Items. - A Department of Defense

contract for the procurement of commercial services designated by

the Secretary for the pilot program shall be treated as a contract

for the procurement of commercial items, as defined in section

4(12) of the Office of Federal Procurement Policy Act (41 U.S.C.

403(12)), if the source of the services provides similar services

contemporaneously to the general public under terms and conditions

similar to those offered to the Federal Government.

''(d) Guidance. - Not later than 90 days after the date of the

enactment of this Act (Oct. 5, 1999), the Secretary shall issue

guidance to procurement officials on contracting for commercial

services under the pilot program. The guidance shall place

particular emphasis on ensuring that negotiated prices for

designated services, including prices negotiated without

competition, are fair and reasonable.

''(e) Unified Management of Procurements. - The Secretary of

Defense shall develop and implement procedures to ensure that,

whenever appropriate, a single item manager or contracting officer

is responsible for entering into all contracts from a single

contractor for commercial services under the pilot program.

''(f) Duration of Pilot Program. - (1) The pilot program shall

begin on the date that the Secretary issues the guidance required

by subsection (d) and may continue for a period, not in excess of

five years, that the Secretary shall establish.

''(2) The pilot program shall cover Department of Defense

contracts for the procurement of commercial services designated by

the Secretary under subsection (b) that are awarded or modified

during the period of the pilot program, regardless of whether the

contracts are performed during the period.

''(g) Report to Congress. - (1) The Secretary shall submit to

Congress a report on the impact of the pilot program on -

''(A) prices paid by the Federal Government under contracts for

commercial services covered by the pilot program;

''(B) the quality and timeliness of the services provided under

such contracts; and

''(C) the extent of competition for such contracts.

''(2) The Secretary shall submit the report -

''(A) not later than 90 days after the end of the third full

fiscal year for which the pilot program is in effect; or

''(B) if the period established for the pilot program under

subsection (f)(1) does not cover three full fiscal years, not

later than 90 days after the end of the designated period.

''(h) Price Trend Analysis. - The Secretary of Defense shall

apply the procedures developed pursuant to section 803(c) of the

Strom Thurmond National Defense Authorization Act for Fiscal Year

1999 (Public Law 105-261; 112 Stat. 2081; 10 U.S.C. 2306a note) to

collect and analyze information on price trends for all services

covered by the pilot program and for the services in such

categories of services not covered by the pilot program to which

the Secretary considers it appropriate to apply those procedures.''

PUBLIC AVAILABILITY OF OPERATING AGREEMENTS BETWEEN MILITARY

INSTALLATIONS AND FINANCIAL INSTITUTIONS

Pub. L. 105-261, div. A, title III, Sec. 379, Oct. 17, 1998, 112

Stat. 1995, provided that: ''With respect to an agreement between

the commander of a military installation in the United States (or

the designee of such an installation commander) and a financial

institution that permits, allows, or otherwise authorizes the

provision of financial services by the financial institution on the

military installation, nothing in the terms or nature of such an

agreement shall be construed to exempt the agreement from the

provisions of sections 552 and 552a of title 5, United States

Code.''

DEVELOPMENT OF STANDARD FORMS REGARDING PERFORMANCE WORK STATEMENT

AND REQUEST FOR PROPOSAL FOR CONVERSION OF CERTAIN OPERATIONAL

FUNCTIONS OF MILITARY INSTALLATIONS

Section 389 of Pub. L. 105-85, as amended by Pub. L. 105-261,

div. A, title X, Sec. 1069(b)(1), Oct. 17, 1998, 112 Stat. 2136,

provided that:

''(a) Standardization of Requirements. - The Secretary of Defense

is authorized and encouraged to develop standard forms (to be known

as a 'standard performance work statement' and a 'standard request

for proposal') for use in the consideration for conversion to

contractor performance of commercial services and functions at

military installations. A separate standard form shall be

developed for each service and function.

''(b) Relationship to OMB Requirements. - A standard performance

work statement or a standard request for proposal developed under

subsection (a) must fulfill the basic requirements of the

performance work statement or request for proposal otherwise

required under the procedures and requirements of Office of

Management and Budget Circular A-76 (or any successor

administrative regulation or policy) in effect at the time the

standard form will be used.

''(c) Priority Development of Certain Forms. - In developing

standard performance work statements and standard requests for

proposal, the Secretary shall give first priority to those

commercial services and functions that the Secretary determines

have been successfully converted to contractor performance on a

repeated basis.

''(d) Incentive for Use. - Beginning not later than October 1,

1998, if a standard performance work statement or a standard

request for proposal is developed under subsection (a) for a

particular service and function, the standard form may be used in

lieu of the performance work statement or request for proposal

otherwise required under the procedures and requirements of Office

of Management and Budget Circular A-76 in connection with the

consideration for conversion to contractor performance of that

service or function at a military installation.

''(e) Exclusion of Multifunction Conversion. - If a commercial

service or function for which a standard form is developed under

subsection (a) is combined with another service or function (for

which such a form has not yet been developed) for purposes of

considering the services and functions at the military installation

for conversion to contractor performance, a standard performance

work statement or a standard request for a proposal developed under

subsection (a) may not be used in the conversion process in lieu of

the procedures and requirements of Office of Management and Budget

Circular A-76.

''(f) Effect on Other Laws. - Nothing in this section shall be

construed to supersede any other requirements or limitations,

specifically contained in chapter 146 of title 10, United States

Code, on the conversion to contractor performance of activities

performed by civilian employees of the Department of Defense.

''(g) GAO Report. - Not later than June 1, 1999, the Comptroller

General shall submit to Congress a report reviewing the

implementation of this section.

''(h) Military Installation Defined. - For purposes of this

section, the term 'military installation' means a base, camp, post,

station, yard, center, homeport facility for any ship, or other

activity under the jurisdiction of the Department of Defense,

including any leased facility.''

(Pub. L. 105-261, div. A, title X, Sec. 1069(b), Oct. 17, 1998,

112 Stat. 2136, provided that the amendment made by that section to

section 389 of Pub. L. 105-85, set out above, is effective as of

Nov. 18, 1997, and as if included in the National Defense

Authorization Act for Fiscal Year 1998, Pub. L. 105-85, as

enacted.)

PRIVATE-SECTOR OPERATION OF CERTAIN PAYROLL, FINANCE, AND

ACCOUNTING FUNCTIONS OF DEPARTMENT OF DEFENSE; PLAN; REPORT

Section 353(a) of Pub. L. 104-106 provided that:

''(1) Not later than October 1, 1996, the Secretary of Defense

shall submit to Congress a plan for the performance by

private-sector sources of payroll functions for civilian employees

of the Department of Defense other than employees paid from

nonappropriated funds.

''(2)(A) The Secretary shall implement the plan referred to in

paragraph (1) if the Secretary determines that the cost of

performance by private-sector sources of the functions referred to

in that paragraph does not exceed the cost of performance of those

functions by employees of the Federal Government.

''(B) In computing the total cost of performance of such

functions by employees of the Federal Government, the Secretary

shall include the following:

''(i) Managerial and administrative costs.

''(ii) Personnel costs, including the cost of providing

retirement benefits for such personnel.

''(iii) Costs associated with the provision of facilities and

other support by Federal agencies.

''(C) The Defense Contract Audit Agency shall verify the costs

computed for the Secretary under this paragraph by others.

''(3) At the same time the Secretary submits the plan required by

paragraph (1), the Secretary shall submit to Congress a report on

other accounting and finance functions of the Department that are

appropriate for performance by private-sector sources.''

PILOT PROGRAM FOR PRIVATE-SECTOR OPERATION OF NAFI FUNCTIONS

Section 353(b) of Pub. L. 104-106 provided that:

''(1) The Secretary shall carry out a pilot program to test the

performance by private-sector sources of payroll and other

accounting and finance functions of nonappropriated fund

instrumentalities and to evaluate the extent to which cost savings

and efficiencies would result from the performance of such

functions by those sources.

''(2) The payroll and other accounting and finance functions

designated by the Secretary for performance by private-sector

sources under the pilot program shall include at least one major

payroll, accounting, or finance function.

''(3) To carry out the pilot program, the Secretary shall enter

into discussions with private-sector sources for the purpose of

developing a request for proposals to be issued for performance by

those sources of functions designated by the Secretary under

paragraph (2). The discussions shall be conducted on a schedule

that accommodates issuance of a request for proposals within 60

days after the date of the enactment of this Act (Feb. 10, 1996).

''(4) A goal of the pilot program is to reduce by at least 25

percent the total costs incurred by the Department annually for the

performance of a function referred to in paragraph (2) through the

performance of that function by a private-sector source.

''(5) Before conducting the pilot program, the Secretary shall

develop a plan for the program that addresses the following:

''(A) The purposes of the program.

''(B) The methodology, duration, and anticipated costs of the

program, including the cost of an arrangement pursuant to which a

private-sector source would receive an agreed-upon payment plus

an additional negotiated amount not to exceed 50 percent of the

dollar savings achieved in excess of the goal specified in

paragraph (4).

''(C) A specific citation to any provisions of law, rule, or

regulation that, if not waived, would prohibit the conduct of the

program or any part of the program.

''(D) A mechanism to evaluate the program.

''(E) A provision for all payroll, accounting, and finance

functions of nonappropriated fund instrumentalities of the

Department of Defense to be performed by private-sector sources,

if determined advisable on the basis of a final assessment of the

results of the program.

''(6) The Secretary shall act through the Under Secretary of

Defense (Comptroller) in the performance of the Secretary's

responsibilities under this subsection.''

DEMONSTRATION PROGRAM TO IDENTIFY OVERPAYMENTS MADE TO VENDORS

Section 388(c) of Pub. L. 105-85 provided that: ''Not later than

December 31, 1998, the Comptroller General shall submit to Congress

a report containing the results of a review by the Comptroller

General of the demonstration program conducted under section 354 of

the National Defense Authorization Act for Fiscal Year 1996 (Public

Law 104-106; 10 U.S.C. 2461 note). In the review, the Comptroller

General shall -

''(1) assess the success of the methods used in the

demonstration program to identify overpayments made to vendors;

''(2) consider the types of overpayments identified and the

feasibility of avoiding such overpayments through contract

adjustments;

''(3) determine the total amount of overpayments recovered

under the demonstration program; and

''(4) develop recommendations for improving the process by

which overpayments are recovered by the Department of Defense.''

Section 354 of Pub. L. 104-106, as amended by Pub. L. 105-85,

div. A, title III, Sec. 388(a), (b), Nov. 18, 1997, 111 Stat.

1713, 1714, provided that:

''(a) In General. - The Secretary of Defense shall conduct a

demonstration program to evaluate the feasibility of using private

contractors to audit accounting and procurement records of the

Department of Defense in order to identify overpayments made to

vendors by the Department.

''(b) Program Requirements. - (1) Under the demonstration

program, the Secretary shall, by contract, provide for one or more

persons to audit the accounting and procurement records relating to

fiscal years after fiscal year 1993 of the working-capital funds

and industrial, commercial, and support type activities managed

through the Defense Business Operations Fund, except the Defense

Logistics Agency to the extent such records have already been

audited. The Secretary may enter into more than one contract under

the program.

''(2) A contract under the demonstration program shall require

the contractor to use data processing techniques that are generally

used in audits of private-sector records similar to the records

audited under the contract.

''(c) Audit Requirements. - In conducting an audit under the

demonstration program, a contractor shall compare Department of

Defense purchase agreements (and related documents) with invoices

submitted by vendors under the purchase agreements. A purpose of

the comparison is to identify, in the case of each audited purchase

agreement, the following:

''(1) Any payments to the vendor for costs that are not

allowable under the terms of the purchase agreement or by law.

''(2) Any amounts not deducted from the total amount paid to

the vendor under the purchase agreement that should have been

deducted from that amount on account of goods and services

provided to the vendor by the Department.

''(3) Duplicate payments.

''(4) Unauthorized charges.

''(5) Other discrepancies between the amount paid to the vendor

and the amount actually due the vendor under the purchase

agreement.

''(d) Collection Method. - (1) In the case of an overpayment to a

vendor identified under the demonstration program, the Secretary

shall consider the use of the procedures specified in section

32.611 of the Federal Acquisition Regulation, regarding a setoff

against existing invoices for payment to the vendor, as the first

method by which the Department seeks to recover the amount of the

overpayment (and any applicable interest and penalties) from the

vendor.

''(2) The Secretary of Defense shall be solely responsible for

notifying a vendor of an overpayment made to the vendor and

identified under the demonstration program and for recovering the

amount of the overpayment (and any applicable interest and

penalties) from the vendor.

''(e) Fees for Contractor. - The Secretary shall pay to the

contractor under the contract entered into under the demonstration

program an amount not to exceed 25 percent of the total amount

recovered by the Department (through the collection of overpayments

and the use of setoffs) solely on the basis of information obtained

as a result of the audits performed by the contractor under the

program. When an overpayment is recovered through the use of a

setoff, amounts for the required payment to the contractor shall be

derived from funds available to the working-capital fund or

industrial, commercial, or support type activity for which the

overpayment is recovered.''

PROGRAM FOR IMPROVED TRAVEL PROCESS FOR DEPARTMENT OF DEFENSE

Section 356 of Pub. L. 104-106, as amended by Pub. L. 105-85,

div. A, title X, Sec. 1073(d)(1)(B), Nov. 18, 1997, 111 Stat.

1905, provided that:

''(a) In General. - (1) The Secretary of Defense shall conduct a

program to evaluate options to improve the Department of Defense

travel process. To carry out the program, the Secretary shall

compare the results of the tests conducted under subsection (b) to

determine which travel process tested under such subsection is the

better option to effectively manage travel of Department personnel.

''(2) The program shall be conducted at not less than three and

not more than six military installations, except that an

installation may be the subject of only one test conducted under

the program.

''(3) The Secretary shall act through the Under Secretary of

Defense (Comptroller) in the performance of the Secretary's

responsibilities under this section.

''(b) Conduct of Tests. - (1) The Secretary shall conduct a test

at an installation referred to in subsection (a)(2) under which the

Secretary -

''(A) implements the changes proposed to be made with respect

to the Department of Defense travel process by the task force on

travel management that was established by the Secretary in July

1994;

''(B) manages and uniformly applies that travel process

(including the implemented changes) throughout the Department;

and

''(C) provides opportunities for private-sector sources to

provide travel reservation services and credit card services to

facilitate that travel process.

''(2) The Secretary shall conduct a test at an installation

referred to in subsection (a)(2) under which the Secretary -

''(A) enters into one or more contracts with a private-sector

source pursuant to which the private-sector source manages the

Department of Defense travel process (except for functions

referred to in subparagraph (B)), provides for responsive,

reasonably priced services as part of the travel process, and

uniformly applies the travel process throughout the Department;

and

''(B) provides for the performance by employees of the

Department of only those travel functions, such as travel

authorization, that the Secretary considers to be necessary to be

performed by such employees.

''(3) Each test required by this subsection shall begin not later

than 60 days after the date of the enactment of this Act (Feb. 10,

1996) and end two years after the date on which it began. Each

such test shall also be conducted in accordance with the guidelines

for travel management issued for the Department by the Under

Secretary of Defense (Comptroller).

''(c) Evaluation Criteria. - The Secretary shall establish

criteria to evaluate the travel processes tested under subsection

(b). The criteria shall, at a minimum, include the extent to which

a travel process provides for the following:

''(1) The coordination, at the time of a travel reservation, of

travel policy and cost estimates with the mission which

necessitates the travel.

''(2) The use of fully integrated travel solutions envisioned

by the travel reengineering report of the Department of Defense

dated January 1995.

''(3) The coordination of credit card data and travel

reservation data with cost estimate data.

''(4) The elimination of the need for multiple travel approvals

through the coordination of such data with proposed travel plans.

''(5) A responsive and flexible management information system

that enables the Under Secretary of Defense (Comptroller) to

monitor travel expenses throughout the year, accurately plan

travel budgets for future years, and assess, in the case of

travel of an employee on temporary duty, the relationship between

the cost of the travel and the value of the travel to the

accomplishment of the mission which necessitates the travel.

''(d) Plan for Program. - Before conducting the program, the

Secretary shall develop a plan for the program that addresses the

following:

''(1) The purposes of the program, including the achievement of

an objective of reducing by at least 50 percent the total cost

incurred by the Department annually to manage the Department of

Defense travel process.

''(2) The methodology and anticipated cost of the program,

including the cost of an arrangement pursuant to which a

private-sector source would receive an agreed-upon payment plus

an additional negotiated amount that does not exceed 50 percent

of the total amount saved in excess of the objective specified in

paragraph (1).

''(3) A specific citation to any provision of law, rule, or

regulation that, if not waived, would prohibit the conduct of the

program or any part of the program.

''(4) The evaluation criteria established pursuant to

subsection (c).

''(5) A provision for implementing throughout the Department

the travel process determined to be the better option to

effectively manage travel of Department personnel on the basis of

a final assessment of the results of the program.

''(e) Report. - After the first full year of the conduct of the

tests required by subsection (b), the Secretary shall submit to the

Committee on Armed Services of the Senate and the Committee on

National Security of the House of Representatives a report on the

implementation of the program. The report shall include an

analysis of the evaluation criteria established pursuant to

subsection (c).''

INCREASED RELIANCE ON PRIVATE-SECTOR SOURCES FOR COMMERCIAL

PRODUCTS AND SERVICES

Section 357 of Pub. L. 104-106 provided that:

''(a) In General. - The Secretary of Defense shall endeavor to

carry out through a private-sector source any activity to provide a

commercial product or service for the Department of Defense if -

''(1) the product or service can be provided adequately through

such a source; and

''(2) an adequate competitive environment exists to provide for

economical performance of the activity by such a source.

''(b) Applicability. - (1) Subsection (a) shall not apply to any

commercial product or service with respect to which the Secretary

determines that production, manufacture, or provision of that

product or service by the Government is necessary for reasons of

national security.

''(2) A determination under paragraph (1) shall be made in

accordance with regulations prescribed under subsection (c).

''(c) Regulations. - The Secretary shall prescribe regulations to

carry out this section. Such regulations shall be prescribed in

consultation with the Director of the Office of Management and

Budget.

''(d) Report. - (1) The Secretary shall identify activities of

the Department (other than activities specified by the Secretary

pursuant to subsection (b)) that are carried out by employees of

the Department to provide commercial-type products or services for

the Department.

''(2) Not later than April 15, 1996, the Secretary shall transmit

to the congressional defense committees (Committees on Armed

Services and on Appropriations of the Senate and Committees on

National Security and Appropriations of the House of

Representatives) a report on opportunities for increased use of

private-sector sources to provide commercial products and services

for the Department.

''(3) The report required by paragraph (2) shall include the

following:

''(A) A list of activities identified under paragraph (1)

indicating, for each activity, whether the Secretary proposes to

convert the performance of that activity to performance by

private-sector sources and, if not, the reasons why.

''(B) An assessment of the advantages and disadvantages of

using private-sector sources, rather than employees of the

Department, to provide commercial products and services for the

Department that are not essential to the warfighting mission of

the Armed Forces.

''(C) A specification of all legislative and regulatory

impediments to converting the performance of activities

identified under paragraph (1) to performance by private-sector

sources.

''(D) The views of the Secretary on the desirability of

terminating the applicability of OMB Circular A-76 to the

Department.

''(4) The Secretary shall carry out paragraph (1) in consultation

with the Director of the Office of Management and Budget and the

Comptroller General of the United States. In carrying out that

paragraph, the Secretary shall consult with, and seek the views of,

representatives of the private sector, including organizations

representing small businesses.''

-CITE-

10 USC Sec. 2461a 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle A - General Military Law

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 146 - CONTRACTING FOR PERFORMANCE OF CIVILIAN COMMERCIAL OR

INDUSTRIAL TYPE FUNCTIONS

-HEAD-

Sec. 2461a. Development of system for monitoring cost savings

resulting from workforce reductions

-STATUTE-

(a) Workforce Review Defined. - In this section, the term

''workforce review'', with respect to a function of the Department

of Defense performed by Department of Defense civilian employees,

means a review conducted under Office of Management and Budget

Circular A-76 (or any successor administrative regulation or

policy), the Strategic Sourcing Program Plan of Action (or any

successor Department of Defense guidance or directive), or any

other authority to determine whether the function -

(1) should be performed by a workforce composed of Department

of Defense civilian employees or by a private sector workforce;

or

(2) should be reorganized or otherwise reengineered to improve

the efficiency or effectiveness of the performance of the

function, with a resulting decrease in the number of Department

of Defense civilian employees performing the function.

(b) System for Monitoring Performance. - (1) The Secretary of

Defense shall establish a system for monitoring the performance,

including the cost of performance, of each function of the

Department of Defense that, after October 30, 2000, is the subject

of a workforce review.

(2) The monitoring system shall be designed to compare the

following:

(A) The costs to perform a function before the workforce review

to the costs actually incurred to perform the function after

implementing the conversion, reorganization, or reengineering

actions recommended by the workforce review.

(B) The anticipated savings to the actual savings, if any,

resulting from conversion, reorganization, or reengineering

actions undertaken in response to the workforce review.

(3) The monitoring of a function shall continue under this

section for at least five years after the conversion,

reorganization, or reengineering of the function.

(c) Waiver for Certain Workforce Reviews. - Subsection (b) shall

not apply to a workforce review that would result in a manpower

reduction affecting fewer than 50 Department of Defense civilian

employees.

(d) Annual Report. - Not later than February 1 of each fiscal

year, the Secretary of Defense shall submit to Congress a report on

the results of the monitoring performed under the system

established under subsection (b). For each function subject to

monitoring during the previous fiscal year, the report shall

indicate the following:

(1) The cost of the workforce review.

(2) The cost of performing the function before the workforce

review compared to the costs incurred after implementing the

conversion, reorganization, or reengineering actions recommended

by the workforce review.

(3) The actual savings derived from the implementation of the

recommendations of the workforce review, if any, compared to the

anticipated savings that were to result from the conversion,

reorganization, or reengineering actions.

(e) Consideration in Preparation of Future-Years Defense Program.

- In preparing the future-years defense program under section 221

of this title, the Secretary of Defense shall, for the fiscal years

covered by the program, estimate and take into account the costs to

be incurred and the savings to be derived from the performance of

functions by workforces selected in workforce reviews. The

Secretary shall consider the results of the monitoring under this

section in making the estimates.

-SOURCE-

(Added Pub. L. 106-398, Sec. 1 ((div. A), title III, Sec. 354(a)),

Oct. 30, 2000, 114 Stat. 1654, 1654A-73; amended Pub. L. 107-107,

div. A, title X, Sec. 1048(a)(21), (c)(11), Dec. 28, 2001, 115

Stat. 1224, 1226.)

-MISC1-

AMENDMENTS

2001 - Subsec. (a)(2). Pub. L. 107-107, Sec. 1048(a)(21),

substituted ''efficiency'' for ''effeciency''.

Subsec. (b)(1). Pub. L. 107-107, Sec. 1048(c)(11), substituted

''October 30, 2000,'' for ''the date of the enactment of this

section,''.

-CITE-

10 USC Sec. 2462 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle A - General Military Law

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 146 - CONTRACTING FOR PERFORMANCE OF CIVILIAN COMMERCIAL OR

INDUSTRIAL TYPE FUNCTIONS

-HEAD-

Sec. 2462. Contracting for certain supplies and services required

when cost is lower

-STATUTE-

(a) In General. - Except as otherwise provided by law, the

Secretary of Defense shall procure each supply or service necessary

for or beneficial to the accomplishment of the authorized functions

of the Department of Defense (other than functions which the

Secretary of Defense determines must be performed by military or

Government personnel) from a source in the private sector if such a

source can provide such supply or service to the Department at a

cost that is lower (after including any cost differential required

by law, Executive order, or regulation) than the cost at which the

Department can provide the same supply or service.

(b) Realistic and Fair Cost Comparisons. - For the purpose of

determining whether to contract with a source in the private sector

for the performance of a Department of Defense function on the

basis of a comparison of the costs of procuring supplies or

services from such a source with the costs of providing the same

supplies or services by the Department of Defense, the Secretary of

Defense shall ensure that all costs considered (including the costs

of quality assurance, technical monitoring of the performance of

such function, liability insurance, employee retirement and

disability benefits, and all other overhead costs) are realistic

and fair.

-SOURCE-

(Added Pub. L. 100-370, Sec. 2(a)(1), July 19, 1988, 102 Stat.

853.)

-MISC1-

HISTORICAL AND REVISION NOTES

Section is based on Pub. L. 99-661, div. A, title XII, Sec.

1223, Nov. 14, 1986, 100 Stat. 3977.

-CITE-

10 USC Sec. 2463 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle A - General Military Law

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 146 - CONTRACTING FOR PERFORMANCE OF CIVILIAN COMMERCIAL OR

INDUSTRIAL TYPE FUNCTIONS

-HEAD-

Sec. 2463. Collection and retention of cost information data on

converted services and functions

-STATUTE-

(a) Requirements in Connection With Conversion to Contractor

Performance. - With respect to each contract converting the

performance of a service or function of the Department of Defense

to contractor performance (and any extension of such a contract),

the Secretary of Defense shall collect, during the term of the

contract or extension, but not to exceed five years, cost

information data regarding performance of the service or function

by private contractor employees.

(b) Requirements in Connection With Return to Employee

Performance. - Whenever the performance of a commercial or

industrial type activity of the Department of Defense that is being

performed by 50 or more employees of a private contractor is

changed to performance by civilian employees of the Department of

Defense, the Secretary of Defense shall collect, for a five-year

period, cost information data comparing -

(1) the estimated costs of continued performance of such

activity by private contractor employees; and

(2) the costs of performance of such activity by civilian

employees of the Department of Defense.

(c) Retention of Information. - With regard to the conversion to

or from contractor performance of a particular service or function

of the Department of Defense, the Secretary of Defense shall

provide for the retention of information collected under this

section for at least a 10-year period beginning at the end of the

final year in which the information is collected.

-SOURCE-

(Added Pub. L. 100-370, Sec. 2(a)(1), July 19, 1988, 102 Stat. 853;

amended Pub. L. 101-189, div. A, title XVI, Sec. 1622(c)(7), Nov.

29, 1989, 103 Stat. 1604; Pub. L. 101-510, div. A, title XIII,

Sec. 1301(14), Nov. 5, 1990, 104 Stat. 1668; Pub. L. 105-85, div.

A, title III, Sec. 385(a), Nov. 18, 1997, 111 Stat. 1712.)

-MISC1-

HISTORICAL AND REVISION NOTES

Section is based on Pub. L. 99-661, div. A, title XII, Sec.

1224, Nov. 14, 1986, 100 Stat. 3977.

AMENDMENTS

1997 - Pub. L. 105-85 amended section generally, substituting

provisions relating to collection and retention of cost information

data on converted services and functions for provisions relating to

reports on savings or costs from increased use of DOD civilian

personnel.

1990 - Subsecs. (b), (c). Pub. L. 101-510 redesignated subsec.

(c) as (b) and struck out former subsec. (b) which read as follows:

''Semiannual Report on Costs and Savings. - As soon as practicable

after the end of the first six months, and after the end of the

second six months, of a fiscal year to which this section applies,

the Secretary of Defense shall submit to the Committees on Armed

Services and the Committees on Appropriations of the Senate and

House of Representatives a report showing the estimated savings or

loss to the United States, during the preceding six-month period,

that is reflected in the data maintained under subsection (a).''

1989 - Subsec. (b). Pub. L. 101-189 substituted ''Committees on

Appropriations'' for ''Committee on Appropriations''.

-CITE-

10 USC Sec. 2464 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle A - General Military Law

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 146 - CONTRACTING FOR PERFORMANCE OF CIVILIAN COMMERCIAL OR

INDUSTRIAL TYPE FUNCTIONS

-HEAD-

Sec. 2464. Core logistics capabilities

-STATUTE-

(a) Necessity for Core Logistics Capabilities. - (1) It is

essential for the national defense that the Department of Defense

maintain a core logistics capability that is Government-owned and

Government-operated (including Government personnel and

Government-owned and Government-operated equipment and facilities)

to ensure a ready and controlled source of technical competence and

resources necessary to ensure effective and timely response to a

mobilization, national defense contingency situations, and other

emergency requirements.

(2) The Secretary of Defense shall identify the core logistics

capabilities described in paragraph (1) and the workload required

to maintain those capabilities.

(3) The core logistics capabilities identified under paragraphs

(1) and (2) shall include those capabilities that are necessary to

maintain and repair the weapon systems and other military equipment

(including mission-essential weapon systems or materiel not later

than four years after achieving initial operational capability, but

excluding systems and equipment under special access programs,

nuclear aircraft carriers, and commercial items described in

paragraph (5)) that are identified by the Secretary, in

consultation with the Chairman of the Joint Chiefs of Staff, as

necessary to enable the armed forces to fulfill the strategic and

contingency plans prepared by the Chairman of the Joint Chiefs of

Staff under section 153(a) of this title.

(4) The Secretary of Defense shall require the performance of

core logistics workloads necessary to maintain the core logistics

capabilities identified under paragraphs (1), (2), and (3) at

Government-owned, Government-operated facilities of the Department

of Defense (including Government-owned, Government-operated

facilities of a military department) and shall assign such

facilities sufficient workload to ensure cost efficiency and

technical competence in peacetime while preserving the surge

capacity and reconstitution capabilities necessary to support fully

the strategic and contingency plans referred to in paragraph (3).

(5) The commercial items covered by paragraph (3) are commercial

items that have been sold or leased in substantial quantities to

the general public and are purchased without modification in the

same form that they are sold in the commercial marketplace, or with

minor modifications to meet Federal Government requirements.

(b) Limitation on Contracting. - (1) Except as provided in

paragraph (2), performance of workload needed to maintain a

logistics capability identified by the Secretary under subsection

(a)(2) may not be contracted for performance by non-Government

personnel under the procedures and requirements of Office of

Management and Budget Circular A-76 or any successor administrative

regulation or policy (hereinafter in this section referred to as

OMB Circular A-76).

(2) The Secretary of Defense may waive paragraph (1) in the case

of any such logistics capability and provide that performance of

the workload needed to maintain that capability shall be considered

for conversion to contractor performance in accordance with OMB

Circular A-76. Any such waiver shall be made under regulations

prescribed by the Secretary and shall be based on a determination

by the Secretary that Government performance of the workload is no

longer required for national defense reasons. Such regulations

shall include criteria for determining whether Government

performance of any such workload is no longer required for national

defense reasons.

(3)(A) A waiver under paragraph (2) may not take effect until the

expiration of the first period of 30 days of continuous session of

Congress that begins on or after the date on which the Secretary

submits a report on the waiver to the Committee on Armed Services

and the Committee on Appropriations of the Senate and the Committee

on Armed Services and the Committee on Appropriations of the House

of Representatives.

(B) For the purposes of subparagraph (A) -

(i) continuity of session is broken only by an adjournment of

Congress sine die; and

(ii) the days on which either House is not in session because

of an adjournment of more than three days to a day certain are

excluded in the computation of any period of time in which

Congress is in continuous session.

(c) Notification of Determinations Regarding Certain Commercial

Items. - The first time that a weapon system or other item of

military equipment described in subsection (a)(3) is determined to

be a commercial item for the purposes of the exception contained in

that subsection, the Secretary of Defense shall submit to Congress

a notification of the determination, together with the

justification for the determination. The justification for the

determination shall include, at a minimum, the following:

(1) The estimated percentage of commonality of parts of the

version of the item that is sold or leased in the commercial

marketplace and the Government's version of the item.

(2) The value of any unique support and test equipment and

tools that are necessary to support the military requirements if

the item were maintained by the Government.

(3) A comparison of the estimated life cycle logistics support

costs that would be incurred by the Government if the item were

maintained by the private sector with the estimated life cycle

logistics support costs that would be incurred by the Government

if the item were maintained by the Government.

-SOURCE-

(Added Pub. L. 100-370, Sec. 2(a)(1), July 19, 1988, 102 Stat. 853;

amended Pub. L. 101-189, div. A, title XVI, Sec. 1622(c)(7), Nov.

29, 1989, 103 Stat. 1604; Pub. L. 104-106, div. A, title III, Sec.

314, Feb. 10, 1996, 110 Stat. 251; Pub. L. 105-85, div. A, title

III, Sec. 356(a), Nov. 18, 1997, 111 Stat. 1694; Pub. L. 105-261,

div. A, title III, Sec. 343(a), Oct. 17, 1998, 112 Stat. 1976;

Pub. L. 106-65, div. A, title X, Sec. 1067(1), Oct. 5, 1999, 113

Stat. 774.)

-MISC1-

HISTORICAL AND REVISION NOTES

Section is based on Pub. L. 98-525, title III, Sec. 307, Oct. 19,

1984, 98 Stat. 2514, as amended by Pub. L. 99-145, title XII, Sec.

1231(f), Nov. 8, 1985, 99 Stat. 733.

AMENDMENTS

1999 - Subsec. (b)(3)(A). Pub. L. 106-65 substituted ''and the

Committee on Armed Services'' for ''and the Committee on National

Security''.

1998 - Subsec. (c). Pub. L. 105-261 added subsec. (c).

1997 - Pub. L. 105-85 substituted ''capabilities'' for

''functions'' in section catchline and amended text generally.

Prior to amendment, text related to necessity for core logistics

capabilities and restricted contracting out of certain logistics

activities and functions of the Department of Defense to

non-Government personnel.

1996 - Subsec. (b)(3), (4). Pub. L. 104-106 added par. (3) and

struck out former pars. (3) and (4) which read as follows:

''(3) A waiver under paragraph (2) may not take effect until -

''(A) the Secretary submits a report on the waiver to the

Committees on Armed Services and the Committees on Appropriations

of the Senate and House of Representatives; and

''(B) a period of 20 days of continuous session of Congress or

40 calendar days has passed after the receipt of the report by

those committees.

''(4) For purposes of paragraph (3)(B), the continuity of a

session of Congress is broken only by an adjournment sine die, and

the days on which either House is not in session because of an

adjournment of more than three days to a day certain are excluded

in the computation of such 20-day period.''

1989 - Subsec. (b)(3)(A). Pub. L. 101-189 substituted

''Committees on Appropriations'' for ''Committee on

Appropriations''.

EFFECTIVE DATE OF 1998 AMENDMENT

Pub. L. 105-261, div. A, title III, Sec. 343(b), Oct. 17, 1998,

112 Stat. 1976, provided that: ''Subsection (c) of section 2464 of

title 10, United States Code (as added by subsection (a)), shall

apply with respect to determinations made after the date of the

enactment of this Act (Oct. 17, 1998).''

CONDITIONS ON EXPANSION OF FUNCTIONS PERFORMED UNDER PRIME VENDOR

CONTRACTS FOR DEPOT-LEVEL MAINTENANCE AND REPAIR

Pub. L. 105-261, div. A, title III, Sec. 346, Oct. 17, 1998, 112

Stat. 1979, as amended by Pub. L. 106-65, div. A, title III, Sec.

336, Oct. 5, 1999, 113 Stat. 568, provided that:

''(a) Conditions on Expanded Use. - The Secretary of Defense or

the Secretary of a military department, as the case may be, may not

enter into a prime vendor contract for depot-level maintenance and

repair of a weapon system or other military equipment described in

section 2464(a)(3) of title 10, United States Code, before the end

of the 30-day period beginning on the date on which the Secretary

submits to Congress a report, specific to the proposed contract,

that -

''(1) describes the competitive procedures to be used to award

the prime vendor contract;

''(2) contains an analysis of costs and benefits that

demonstrates that use of the prime vendor contract will result in

savings to the Government over the life of the contract;

''(3) contains an analysis of the extent to which the contract

conforms to the requirements of section 2466 of title 10, United

States Code; and

''(4) describes the measures taken to ensure that the contract

does not violate the core logistics policies, requirements, and

restrictions set forth in section 2464 of that title.

''(b) Definitions. - In this section:

''(1) The term 'prime vendor contract' means an innovative

contract that gives a defense contractor the responsibility to

manage, store, and distribute inventory, manage and provide

services, or manage and perform research, on behalf of the

Department of Defense on a frequent, regular basis, for users

within the Department on request. The term includes contracts

commonly referred to as prime vendor support contracts, flexible

sustainment contracts, and direct vendor delivery contracts.

''(2) The term 'depot-level maintenance and repair' has the

meaning given such term in section 2460 of title 10, United

States Code.

''(c) Relationship to Other Laws. - Nothing in this section shall

be construed to exempt a prime vendor contract from the

requirements of section 2461 of title 10, United States Code, or

any other provision of chapter 146 of such title.''

POLICY REGARDING PERFORMANCE OF DEPOT-LEVEL MAINTENANCE AND REPAIR

FOR DEPARTMENT OF DEFENSE

Section 311 of Pub. L. 104-106, as amended by Pub. L. 105-85,

div. A, title III, Sec. 363, Nov. 18, 1997, 111 Stat. 1702,

provided that:

''(a) Findings. - Congress makes the following findings:

''(1) The Department of Defense does not have a comprehensive

policy regarding the performance of depot-level maintenance and

repair of military equipment.

''(2) The absence of such a policy has caused the Congress to

establish guidelines for the performance of such functions.

''(3) It is essential to the national security of the United

States that the Department of Defense maintain an organic

capability within the department, including skilled personnel,

technical competencies, equipment, and facilities, to perform

depot-level maintenance and repair of military equipment in order

to ensure that the Armed Forces of the United States are able to

meet training, operational, mobilization, and emergency

requirements without impediment.

''(4) The organic capability of the Department of Defense to

perform depot-level maintenance and repair of military equipment

must satisfy known and anticipated core maintenance and repair

requirements across the full range of peacetime and wartime

scenarios.

''(5) Although it is possible that savings can be achieved by

contracting with private-sector sources for the performance of

some work currently performed by Department of Defense depots,

the Department of Defense has not determined the type or amount

of work that should be performed under contract with

private-sector sources nor the relative costs and benefits of

contracting for the performance of such work by those sources.

''(b) Sense of Congress. - It is the sense of Congress that there

is a compelling need for the Department of Defense to articulate

known and anticipated core maintenance and repair requirements, to

organize the resources of the Department of Defense to meet those

requirements economically and efficiently, and to determine what

work should be performed by the private sector and how such work

should be managed.

''(c) Requirement for Policy. - Not later than March 31, 1996,

the Secretary of Defense shall develop and report to the Committee

on Armed Services of the Senate and the Committee on National

Security of the House of Representatives (now Committee on Armed

Services of the House of Representatives) a comprehensive policy on

the performance of depot-level maintenance and repair for the

Department of Defense that maintains the capability described in

section 2464 of title 10, United States Code.

''(d) Content of Policy. - In developing the policy, the

Secretary of Defense shall do each of the following:

''(1) Identify for each military department, with the

concurrence of the Secretary of that military department, those

depot-level maintenance and repair activities that are necessary

to ensure the depot-level maintenance and repair capability as

required by section 2464 of title 10, United States Code.

''(2) Provide for performance of core depot-level maintenance

and repair capabilities in facilities owned and operated by the

United States.

''(3) Provide for the core capabilities to include sufficient

skilled personnel, equipment, and facilities that -

''(A) is of the proper size (i) to ensure a ready and

controlled source of technical competence and repair and

maintenance capability necessary to meet the requirements of

the National Military Strategy and other requirements for

responding to mobilizations and military contingencies, and

(ii) to provide for rapid augmentation in time of emergency;

and

''(B) is assigned sufficient workload to ensure cost

efficiency and technical proficiency in time of peace.

''(4) Address environmental liability.

''(5) In the case of depot-level maintenance and repair

workloads in excess of the workload required to be performed by

Department of Defense depots, provide for competition for those

workloads between public and private entities when there is

sufficient potential for realizing cost savings based on adequate

private-sector competition and technical capabilities.

''(6) Address issues concerning exchange of technical data

between the Federal Government and the private sector.

''(7) Provide for, in the Secretary's discretion and after

consultation with the Secretaries of the military departments,

the transfer from one military department to another, in

accordance with merit-based selection processes, workload that

supports the core depot-level maintenance and repair capabilities

in facilities owned and operated by the United States.

''(8) Require that, in any competition for a workload (whether

among private-sector sources or between depot-level activities of

the Department of Defense and private-sector sources), bids are

evaluated under a methodology that ensures that appropriate costs

to the Government and the private sector are identified.

''(9) Provide for the performance of maintenance and repair for

any new weapons systems defined as core, under section 2464 of

title 10, United States Code, in facilities owned and operated by

the United States.

''(e) Considerations. - In developing the policy, the Secretary

shall take into consideration the following matters:

''(1) The national security interests of the United States.

''(2) The capabilities of the public depots and the

capabilities of businesses in the private sector to perform the

maintenance and repair work required by the Department of

Defense.

''(3) Any applicable recommendations of the Defense Base

Closure and Realignment Commission that are required to be

implemented under the Defense Base Closure and Realignment Act of

1990 (part A of title XXIX of div. B of Pub. L. 101-510, set out

as a note under section 2687 of this title).

''(4) The extent to which the readiness of the Armed Forces

would be affected by a necessity to construct new facilities to

accommodate any redistribution of depot-level maintenance and

repair workloads that is made in accordance with the

recommendation of the Defense Base Closure and Realignment

Commission, under the Defense Base Closure and Realignment Act of

1990, that such workloads be consolidated at Department of

Defense depots or private-sector facilities.

''(5) Analyses of costs and benefits of alternatives, including

a comparative analysis of -

''(A) the costs and benefits, including any readiness

implications, of any proposed policy to convert to contractor

performance of depot-level maintenance and repair workloads

where the workload is being performed by Department of Defense

personnel; and

''(B) the costs and benefits, including any readiness

implications, of a policy to transfer depot-level maintenance

and repair workloads among depots.

''((f), (g) Repealed. Pub. L. 105-85, div. A, title III, Sec.

363, Nov. 18, 1997, 111 Stat. 1702.)

''(h) Review by General Accounting Office. - (1) The Secretary

shall make available to the Comptroller General of the United

States all information used by the Department of Defense in

developing the policy under subsections (c) through (e) of this

section.

''(2) Not later than 45 days after the date on which the

Secretary submits to Congress the report required by subsection

(c), the Comptroller General shall transmit to Congress a report

containing a detailed analysis of the Secretary's proposed policy

as reported under such subsection.

''(i) Report on Depot-Level Maintenance and Repair Workload. -

Not later than March 31, 1996, the Secretary of Defense shall

submit to Congress a report on the depot-level maintenance and

repair workload of the Department of Defense. The report shall, to

the maximum extent practicable, include the following:

''(1) An analysis of the need for and effect of the requirement

under section 2466 of title 10, United States Code, that no more

than 40 percent of the depot-level maintenance and repair work of

the Department of Defense be contracted for performance by

non-Government personnel, including a description of the effect

on military readiness and the national security resulting from

that requirement and a description of any specific difficulties

experienced by the Department of Defense as a result of that

requirement.

''(2) An analysis of the distribution during the five fiscal

years ending with fiscal year 1995 of the depot-level maintenance

and repair workload of the Department of Defense between

depot-level activities of the Department of Defense and

non-Government personnel, measured by direct labor hours and by

amounts expended, and displayed, for that five-year period and

for each year of that period, so as to show (for each military

department (and separately for the Navy and Marine Corps)) such

distribution.

''(3) A projection of the distribution during the five fiscal

years beginning with fiscal year 1997 of the depot-level

maintenance and repair workload of the Department of Defense

between depot-level activities of the Department of Defense and

non-Government personnel, measured by direct labor hours and by

amounts expended, and displayed, for that five-year period and

for each year of that period, so as to show (for each military

department (and separately for the Navy and Marine Corps)) such

distribution that would be accomplished under a new policy as

required under subsection (c).

''(j) Other Review by General Accounting Office. - (1) The

Comptroller General of the United States shall conduct an

independent audit of the findings of the Secretary of Defense in

the report under subsection (i). The Secretary of Defense shall

provide to the Comptroller General for such purpose all information

used by the Secretary in preparing such report.

''(2) Not later than 45 days after the date on which the

Secretary of Defense submits to Congress the report required under

subsection (i), the Comptroller General shall transmit to Congress

a report containing a detailed analysis of the report submitted

under that subsection.''

-CITE-

10 USC Sec. 2465 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle A - General Military Law

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 146 - CONTRACTING FOR PERFORMANCE OF CIVILIAN COMMERCIAL OR

INDUSTRIAL TYPE FUNCTIONS

-HEAD-

Sec. 2465. Prohibition on contracts for performance of firefighting

or security-guard functions

-STATUTE-

(a) Except as provided in subsection (b), funds appropriated to

the Department of Defense may not be obligated or expended for the

purpose of entering into a contract for the performance of

firefighting or security-guard functions at any military

installation or facility.

(b) The prohibition in subsection (a) does not apply -

(1) to a contract to be carried out at a location outside the

United States (including its commonwealths, territories, and

possessions) at which members of the armed forces would have to

be used for the performance of a function described in subsection

(a) at the expense of unit readiness;

(2) to a contract to be carried out on a Government-owned but

privately operated installation; or

(3) to a contract (or the renewal of a contract) for the

performance of a function under contract on September 24, 1983.

-SOURCE-

(Added Pub. L. 99-661, div. A, title XII, Sec. 1222(a)(1), Nov.

14, 1986, 100 Stat. 3976, Sec. 2693; amended Pub. L. 100-180, div.

A, title XI, Sec. 1112(a)-(b)(2), Dec. 4, 1987, 101 Stat. 1147;

renumbered Sec. 2465, Pub. L. 100-370, Sec. 2(b)(1), July 19, 1988,

102 Stat. 854; Pub. L. 104-106, div. A, title XV, Sec.

1503(a)(25), Feb. 10, 1996, 110 Stat. 512.)

-MISC1-

AMENDMENTS

1996 - Subsec. (b)(3). Pub. L. 104-106 substituted ''under

contract on September 24, 1983'' for ''under contract or September

24, 1983''.

1988 - Pub. L. 100-370 renumbered section 2693 of this title as

this section.

1987 - Pub. L. 100-180 inserted ''or security-guard'' before

''functions'' in section catchline and subsec. (a), and substituted

''a function'' for ''the function'' in subsec. (b)(1).

TEMPORARY AUTHORITY TO CONTRACT WITH LOCAL AND STATE GOVERNMENTS

FOR PERFORMANCE OF SECURITY FUNCTIONS AT UNITED STATES MILITARY

INSTALLATIONS

Pub. L. 107-56, title X, Sec. 1010, Oct. 26, 2001, 115 Stat. 395,

provided that:

''(a) In General. - Notwithstanding section 2465 of title 10,

United States Code, during the period of time that United States

armed forces are engaged in Operation Enduring Freedom, and for the

period of 180 days thereafter, funds appropriated to the Department

of Defense may be obligated and expended for the purpose of

entering into contracts or other agreements for the performance of

security functions at any military installation or facility in the

United States with a proximately located local or State government,

or combination of such governments, whether or not any such

government is obligated to provide such services to the general

public without compensation.

''(b) Training. - Any contract or agreement entered into under

this section shall prescribe standards for the training and other

qualifications of local government law enforcement personnel who

perform security functions under this section in accordance with

criteria established by the Secretary of the service concerned.

''(c) Report. - One year after the date of enactment of this

section (Oct. 26, 2001), the Secretary of Defense shall submit a

report to the Committees on Armed Services of the Senate and the

House of Representatives describing the use of the authority

granted under this section and the use by the Department of Defense

of other means to improve the performance of security functions on

military installations and facilities located within the United

States.''

PERFORMANCE OF EMERGENCY RESPONSE FUNCTIONS AT CHEMICAL WEAPONS

STORAGE INSTALLATIONS

Pub. L. 106-398, Sec. 1 ((div. A), title III, Sec. 355), Oct. 30,

2000, 114 Stat. 1654, 1654A-75, provided that:

''(a) Restriction on Conversion. - The Secretary of the Army may

not convert to contractor performance the emergency response

functions of any chemical weapons storage installation that, as of

the date of the enactment of this Act (Oct. 30, 2000), are

performed for that installation by employees of the United States

until the certification required by subsection (c) has been

submitted in accordance with that subsection.

''(b) Covered Installations. - For the purposes of this section,

a chemical weapons storage installation is any installation of the

Department of Defense on which lethal chemical agents or munitions

are stored.

''(c) Certification Requirement. - The Secretary of the Army

shall certify in writing to the Committee on Armed Services of the

Senate and the Committee on Armed Services of the House of

Representatives that, to ensure that there will be no lapse of

capability to perform the chemical weapon emergency response

mission at a chemical weapons storage installation during any

transition to contractor performance of those functions at the

installation, the plan for conversion of the performance of those

functions -

''(1) is consistent with the recommendation contained in

General Accounting Office Report NSIAD-00-88, entitled 'DoD

Competitive Sourcing', dated March 2000;

''(2) provides for a transition to contractor performance of

emergency response functions which ensures an adequate transfer

of the relevant knowledge and expertise regarding chemical weapon

emergency response to the contractor personnel; and

''(3) complies with section 2465 of title 10, United States

Code.''

-CITE-

10 USC Sec. 2466 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle A - General Military Law

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 146 - CONTRACTING FOR PERFORMANCE OF CIVILIAN COMMERCIAL OR

INDUSTRIAL TYPE FUNCTIONS

-HEAD-

Sec. 2466. Limitations on the performance of depot-level

maintenance of materiel

-STATUTE-

(a) Percentage Limitation. - Not more than 50 percent of the

funds made available in a fiscal year to a military department or a

Defense Agency for depot-level maintenance and repair workload may

be used to contract for the performance by non-Federal Government

personnel of such workload for the military department or the

Defense Agency. Any such funds that are not used for such a

contract shall be used for the performance of depot-level

maintenance and repair workload by employees of the Department of

Defense.

(b) Waiver of Limitation. - The Secretary of Defense may waive

the limitation in subsection (a) for a fiscal year if -

(1) the Secretary determines that the waiver is necessary for

reasons of national security; and

(2) the Secretary submits to Congress a notification of the

waiver together with the reasons for the waiver.

(c) Prohibition on Delegation of Waiver Authority. - The

authority to grant a waiver under subsection (b) may not be

delegated.

(d) Exception. - Subsection (a) shall not apply with respect to

the Sacramento Army Depot, Sacramento, California.

(e) Annual Reports. - (1) Not later than February 1 of each year,

the Secretary of Defense shall submit to Congress a report

identifying, for each of the armed forces (other than the Coast

Guard) and each Defense Agency, the percentage of the funds

referred to in subsection (a) that were expended during the

preceding two fiscal years for performance of depot-level

maintenance and repair workloads by the public and private sectors,

as required by this section.

(2) Not later than April 1 of each year, the Secretary of Defense

shall submit to Congress a report identifying, for each of the

armed forces (other than the Coast Guard) and each Defense Agency,

the percentage of the funds referred to in subsection (a) that are

projected to be expended during each of the next five fiscal years

for performance of depot-level maintenance and repair workloads by

the public and private sectors, as required by this section.

(3) Not later than 60 days after the date on which the Secretary

submits a report under this subsection, the Comptroller General

shall submit to Congress the Comptroller General's views on whether

-

(A) in the case of a report under paragraph (1), the Department

of Defense has complied with the requirements of subsection (a)

for the fiscal years covered by the report; and

(B) in the case of a report under paragraph (2), the

expenditure projections for future fiscal years are reasonable.

-SOURCE-

(Added Pub. L. 100-456, div. A, title III, Sec. 326(a), Sept. 29,

1988, 102 Stat. 1955; amended Pub. L. 101-189, div. A, title III,

Sec. 313, Nov. 29, 1989, 103 Stat. 1412; Pub. L. 102-190, div. A,

title III, Sec. 314(a)(1), Dec. 5, 1991, 105 Stat. 1336; Pub. L.

102-484, div. A, title III, Sec. 352(a)-(c), Oct. 23, 1992, 106

Stat. 2378; Pub. L. 103-337, div. A, title III, Sec. 332, Oct. 5,

1994, 108 Stat. 2715; Pub. L. 104-106, div. A, title III, Sec.

311(f)(1), 312(b), Feb. 10, 1996, 110 Stat. 248, 250; Pub. L.

105-85, div. A, title III, Sec. 357, 358, 363, Nov. 18, 1997, 111

Stat. 1695, 1702; Pub. L. 106-65, div. A, title III, Sec. 333,

Oct. 5, 1999, 113 Stat. 567; Pub. L. 107-107, div. A, title III,

Sec. 341, Dec. 28, 2001, 115 Stat. 1060.)

-MISC1-

AMENDMENTS

2001 - Subsecs. (b), (c). Pub. L. 107-107 added subsecs. (b) and

(c) and struck out heading and text of former subsec. (c). Text

read as follows: ''The Secretary of the military department

concerned and, with respect to a Defense Agency, the Secretary of

Defense may waive the applicability of subsection (a) for a fiscal

year, to a particular workload, or to a particular depot-level

activity if the Secretary determines that the waiver is necessary

for reasons of national security and notifies Congress regarding

the reasons for the waiver.''

1999 - Subsec. (e). Pub. L. 106-65 amended heading and text of

subsec. (e) generally. Text read as follows:

''(1) Not later than February 1 of each year, the Secretary of

Defense shall submit to Congress a report identifying, for each

military department and Defense Agency, the percentage of the funds

referred to in subsection (a) that were expended during the

preceding fiscal year for performance of depot-level maintenance

and repair workloads by the public and private sectors as required

by section 2466 of this title.

''(2) Not later than 90 days after the date on which the

Secretary submits the annual report under paragraph (1), the

Comptroller General shall submit to Congress the Comptroller

General's views on whether the Department of Defense has complied

with the requirements of subsection (a) for the fiscal year covered

by the report.''

1997 - Pub. L. 105-85, Sec. 363, repealed Pub. L. 104-106, Sec.

311(f)(1). See 1996 Amendment note below.

Subsec. (a). Pub. L. 105-85, Sec. 357, substituted ''50 percent''

for ''40 percent''.

Subsec. (e). Pub. L. 105-85, Sec. 358, reenacted heading without

change and amended text generally. Prior to amendment, text read

as follows: ''Not later than January 15, 1995, the Secretary of

Defense shall submit to Congress a report identifying, for each

military department and Defense Agency, the percentage of funds

referred to in subsection (a) that was used during fiscal year 1994

to contract for the performance by non-Federal Government personnel

of depot-level maintenance and repair workload.''

1996 - Pub. L. 104-106, Sec. 311(f)(1), which directed repeal of

this section, was repealed by Pub. L. 105-85, Sec. 363.

Subsec. (b). Pub. L. 104-106, Sec. 312(b), redesignated subsec.

(b) as section 2472(a) of this title.

1994 - Subsec. (a). Pub. L. 103-337, Sec. 332(a), amended heading

and text of subsec. (a) generally. Prior to amendment, text read

as follows:

''(1) Except as provided in paragraph (2), the Secretary of a

military department and, with respect to a Defense Agency, the

Secretary of Defense, may not contract for the performance by

non-Federal Government personnel of more than 40 percent of the

depot-level maintenance workload for the military department or the

Defense Agency.

''(2) The Secretary of the Army shall provide for the performance

by employees of the Department of Defense of not less than the

following percentages of Army aviation depot-level maintenance

workload:

''(A) For fiscal year 1993, 50 percent.

''(B) For fiscal year 1994, 55 percent.

''(C) For fiscal year 1995, 60 percent.''

Subsec. (b). Pub. L. 103-337, Sec. 332(b), inserted ''and

repair'' after ''maintenance'' in two places.

Subsec. (e). Pub. L. 103-337, Sec. 332(c), amended heading and

text of subsec. (e) generally. Prior to amendment, text read as

follows:

''(1) Not later than January 15, 1992, and January 15, 1993, the

Secretary of the Army and the Secretary of the Air Force shall

jointly submit to Congress a report describing the progress during

the preceding fiscal year to achieve and maintain the percentage of

depot-level maintenance required to be performed by employees of

the Department of Defense pursuant to subsection (a).

''(2) Not later than January 15, 1994, the Secretary of each

military department and the Secretary of Defense, with respect to

the Defense Agencies, shall jointly submit to Congress a report

described in paragraph (1).''

1992 - Subsec. (a). Pub. L. 102-484, Sec. 352(a), amended subsec.

(a) generally. Prior to amendment, subsec. (a) read as follows:

''Percentage Limitation. - Not less than 60 percent of the funds

available for each fiscal year for depot-level maintenance of

materiel managed for the Department of the Army and the Department

of the Air Force shall be used for the performance of such

depot-level maintenance by employees of the Department of

Defense.''

Subsec. (c). Pub. L. 102-484, Sec. 352(b), substituted ''The

Secretary of the military department concerned and, with respect to

a Defense Agency, the Secretary of Defense'' for ''The Secretary of

the Army, with respect to the Department of the Army, and the

Secretary of the Air Force, with respect to the Department of the

Air Force,''.

Subsec. (e). Pub. L. 102-484, Sec. 352(c), designated existing

provisions as par. (1) and added par. (2).

1991 - Pub. L. 102-190 substituted section catchline for one

which read ''Prohibition on certain depot maintenance workload

competitions'' and amended text generally. Prior to amendment,

text read as follows: ''The Secretary of Defense shall prohibit the

Secretary of the Army and the Secretary of the Air Force, in

selecting an entity to perform any depot maintenance workload, from

carrying out a competition for such selection -

''(1) between or among maintenance activities of the Department

of the Army and the Department of the Air Force; or

''(2) between a maintenance activity of either such department

and a private contractor.''

1989 - Pub. L. 101-189, in introductory provisions, substituted

''shall prohibit'' for ''may not require'', ''Army and'' for ''Army

or'', and ''from carrying out'' for ''to carry out''.

-TRANS-

TRANSFER OF FUNCTIONS

For transfer of authorities, functions, personnel, and assets of

the Coast Guard, including the authorities and functions of the

Secretary of Transportation relating thereto, to the Department of

Homeland Security, and for treatment of related references, see

sections 468(b), 551(d), 552(d), and 557 of Title 6, Domestic

Security, and the Department of Homeland Security Reorganization

Plan of November 25, 2002, as modified, set out as a note under

section 542 of Title 6.

-MISC5-

CONGRESSIONAL FINDINGS

Section 331 of Pub. L. 103-337 provided that: ''Congress makes

the following findings:

''(1) By providing the Armed Forces with a critical capacity to

respond to the needs of the Armed Forces for depot-level

maintenance and repair of weapon systems and equipment, the

depot-level maintenance and repair activities of the Department

of Defense play an essential role in maintaining the readiness of

the Armed Forces.

''(2) It is appropriate for the capability of the depot-level

maintenance and repair activities of the Department of Defense to

perform maintenance and repair of weapon systems and equipment to

be based on policies that take into consideration the readiness,

mobilization, and deployment requirements of the military

departments.

''(3) It is appropriate for the management of employees of the

depot-level maintenance and repair activities of the Department

of Defense to be based on the amount of workload necessary to be

performed by such activities to maintain the readiness of the

weapon systems and equipment of the military departments and on

the funds made available for the performance of such workload.''

REUTILIZATION INITIATIVE FOR DEPOT-LEVEL ACTIVITIES

Section 337 of Pub. L. 103-337 provided that:

''(a) Program Authorized. - The Secretary of Defense shall

conduct activities to encourage commercial firms to enter into

partnerships with depot-level activities of the military

departments for the purposes of -

''(1) demonstrating commercial uses of the depot-level

activities that are related to the principal mission of the

depot-level activities;

''(2) preserving employment and skills of employees currently

employed by the depot-level activities or providing for the

reemployment and retraining of employees who, as the result of

the closure, realignment, or reduced in-house workload of such

activities, may become unemployed; and

''(3) supporting the goals of other defense conversion,

reinvestment, and transition assistance programs while also

allowing the depot-level activities to remain in operation to

continue to perform their defense readiness mission.

''(b) Conditions. - The Secretary shall ensure that activities

conducted under this section -

''(1) do not interfere with the closure or realignment of a

depot-level activity of the military departments under a base

closure law; and

''(2) do not adversely affect the readiness or primary mission

of a participating depot-level activity.''

CONTINUATION OF PERCENTAGE LIMITATIONS ON PERFORMANCE OF

DEPOT-LEVEL MAINTENANCE

Pub. L. 103-160, div. A, title III, Sec. 343, Nov. 30, 1993, 107

Stat. 1624, provided that: ''The Secretary of Defense shall ensure

that the percentage limitations applicable to the depot-level

maintenance workload performed by non-Federal Government personnel

set forth in section 2466 of title 10, United States Code, are

adhered to.''

EFFECT OF 1992 AMENDMENTS ON EXISTING CONTRACTS

Section 352(d) of Pub. L. 102-484 provided that: ''The Secretary

of a military department and the Secretary of Defense, with respect

to the Defense Agencies, may not cancel a depot-level maintenance

contract in effect on the date of the enactment of this Act (Oct.

23, 1992) in order to comply with the requirements of section

2466(a) of title 10, United States Code, as amended by subsection

(a).''

PROHIBITION ON CANCELLATION OF CONTRACTS IN EFFECT ON DECEMBER 5,

1991

Section 314(a)(3) of Pub. L. 102-190 provided that: ''The

Secretary of the Army and the Secretary of the Air Force may not

cancel a depot-level maintenance contract in effect on the date of

the enactment of this Act (Dec. 5, 1991) in order to comply with

the requirements of section 2466(a) of such title, as amended by

subsection (a).''

COMPETITION PILOT PROGRAM; REVIEW AND REPORT

Section 314(b)-(d) of Pub. L. 102-190, as amended by Pub. L.

102-484, div. A, title III, Sec. 354, Oct. 23, 1992, 106 Stat.

2379, provided that:

''((b) Repealed. Pub. L. 102-484, div. A, title III, Sec. 354,

Oct. 23, 1992, 106 Stat. 2379.)

''(c) Review by Comptroller General. - Not later than February 1,

1994, the Comptroller General shall submit to Congress an

evaluation of all depot maintenance workloads of the Department of

Defense, including Navy depot maintenance workloads, that are

performed by an entity selected pursuant to competitive procedures.

''(d) Report by Secretary of Defense. - Not later than December

1, 1993, the Secretary of Defense shall submit to Congress a report

-

''(1) containing a five-year strategy of the Department of

Defense to use competitive procedures for the selection of

entities to perform depot maintenance workloads; and

''(2) describing the cost savings anticipated through the use

of those procedures.''

PILOT PROGRAM FOR DEPOT MAINTENANCE WORKLOAD COMPETITION

Pub. L. 101-510, div. A, title IX, Sec. 922, Nov. 5, 1990, 104

Stat. 1627, authorized a depot maintenance workload competition

pilot program during fiscal year 1991, outlined elements of the

program, and provided for a report not later than Mar. 31, 1992, to

congressional defense committees, prior to repeal by Pub. L.

102-190, div. A, title III, Sec. 314(b)(2), Dec. 5, 1991, 105

Stat. 1337.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 2474 of this title.

-CITE-

10 USC Sec. 2467 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle A - General Military Law

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 146 - CONTRACTING FOR PERFORMANCE OF CIVILIAN COMMERCIAL OR

INDUSTRIAL TYPE FUNCTIONS

-HEAD-

Sec. 2467. Cost comparisons: inclusion of retirement costs;

consultation with employees; waiver of comparison

-STATUTE-

(a) Requirement To Include Retirement Costs. - (1) In any

comparison conducted by the Department of Defense under Office of

Management and Budget Circular A-76 (or any successor

administrative regulation or policy) of the cost of performing

commercial activities by Department of Defense personnel and the

cost of performing such activities by contractor personnel, the

Secretary of Defense shall include retirement system costs (as

described in paragraphs (2) and (3)) of both the Department of

Defense and the contractor.

(2) The retirement system costs of the Department of Defense

shall include (to the extent applicable) the following:

(A) The cost of the Federal Employees' Retirement System,

valued by using the normal-cost percentage (as defined by section

8401(23) of title 5.

(B) The cost of the Civil Service Retirement System under

subchapter III of chapter 83 of title 5.

(C) The cost of the thrift savings plan under subchapter III of

chapter 84 of title 5.

(D) The cost of the old age, survivors, and disability

insurance taxes imposed under section 3111(a) of the Internal

Revenue Code of 1986.

(3) The retirement system costs of the contractor shall include

the cost of the old age, survivors, and disability insurance taxes

imposed under section 3111(a) of the Internal Revenue Code of 1986,

the cost of thrift or other retirement savings plans, and other

relevant retirement costs.

(b) Requirement To Consult DOD Employees. - (1) Each officer or

employee of the Department of Defense responsible for determining

under Office of Management and Budget Circular A-76 whether to

convert to contractor performance any commercial activity of the

Department -

(A) shall, at least monthly during the development and

preparation of the performance work statement and the management

efficiency study used in making that determination, consult with

civilian employees who will be affected by that determination and

consider the views of such employees on the development and

preparation of that statement and that study; and

(B) may consult with such employees on other matters relating

to that determination.

(2)(A) In the case of employees represented by a labor

organization accorded exclusive recognition under section 7111 of

title 5, consultation with representatives of that labor

organization shall satisfy the consultation requirement in

paragraph (1).

(B) In the case of employees other than employees referred to in

subparagraph (A), consultation with appropriate representatives of

those employees shall satisfy the consultation requirement in

paragraph (1).

(3) The Secretary of Defense shall prescribe regulations to carry

out this subsection. The regulations shall include provisions for

the selection or designation of appropriate representatives of

employees referred to in paragraph (2)(B) for purposes of

consultation required by paragraph (1).

(c) Congressional Notification of Cost Comparison Waiver. - (1)

Not later than 10 days after a decision is made to waive the cost

comparison study otherwise required under Office of Management and

Budget Circular A-76 as part of the process to convert to

contractor performance any commercial activity of the Department of

Defense, the Secretary of Defense shall submit to Congress a report

describing the commercial activity subject to the waiver and the

rationale for the waiver.

(2) The report shall also include the following:

(A) The total number of civilian employees or military

personnel currently performing the function to be converted to

contractor performance.

(B) A description of the competitive procedure used to award a

contract for contractor performance of the commercial activity.

(C) The anticipated savings to result from the waiver and

resulting conversion to contractor performance.

-SOURCE-

(Added Pub. L. 100-456, div. A, title III, Sec. 331(a), Sept. 29,

1988, 102 Stat. 1957; amended Pub. L. 106-65, div. A, title III,

Sec. 342(a), (b)(1), Oct. 5, 1999, 113 Stat. 569; Pub. L. 107-107,

div. A, title X, Sec. 1048(a)(22), Dec. 28, 2001, 115 Stat. 1224.)

-REFTEXT-

REFERENCES IN TEXT

Section 3111(a) of the Internal Revenue Code of 1986, referred to

in subsec. (a)(2)(D), (3), is classified to section 3111(a) of

Title 26, Internal Revenue Code.

-MISC2-

AMENDMENTS

2001 - Subsec. (a)(2)(A). Pub. L. 107-107, Sec.

1048(a)(22)(A)(i), struck out '', United States Code'' after

''title 5''.

Subsec. (a)(2)(B), (C). Pub. L. 107-107, Sec. 1048(a)(22)(A)(ii),

struck out ''such'' before ''title 5''.

Subsec. (b)(2)(A). Pub. L. 107-107, Sec. 1048(a)(22)(B), struck

out ''United States Code,'' after ''title 5,''.

1999 - Pub. L. 106-65, Sec. 342(b)(1), substituted ''Cost

comparisons: inclusion of retirement costs; consultation with

employees; waiver of comparison'' for ''Cost comparisons:

requirements with respect to retirement costs and consultation with

employees'' in section catchline.

Subsec. (c). Pub. L. 106-65, Sec. 342(a), added subsec. (c).

-CITE-

10 USC Sec. 2468 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle A - General Military Law

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 146 - CONTRACTING FOR PERFORMANCE OF CIVILIAN COMMERCIAL OR

INDUSTRIAL TYPE FUNCTIONS

-HEAD-

(Sec. 2468. Repealed. Pub. L. 107-107, div. A, title X, Sec.

1048(e)(10)(A), Dec. 28, 2001, 115 Stat. 1228)

-MISC1-

Section, added Pub. L. 101-189, div. A, title XI, Sec.

1131(a)(1), Nov. 29, 1989, 103 Stat. 1560; amended Pub. L. 101-510,

div. A, title IX, Sec. 921, Nov. 5, 1990, 104 Stat. 1627; Pub. L.

102-190, div. A, title III, Sec. 315(a), Dec. 5, 1991, 105 Stat.

1337; Pub. L. 103-160, div. A, title III, Sec. 370(c), Nov. 30,

1993, 107 Stat. 1634; Pub. L. 103-337, div. A, title III, Sec.

386(c), Oct. 5, 1994, 108 Stat. 2742, related to authority of

military base commanders over contracting for commercial

activities.

-CITE-

10 USC Sec. 2469 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle A - General Military Law

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 146 - CONTRACTING FOR PERFORMANCE OF CIVILIAN COMMERCIAL OR

INDUSTRIAL TYPE FUNCTIONS

-HEAD-

Sec. 2469. Contracts to perform workloads previously performed by

depot-level activities of the Department of Defense:

requirement of competition

-STATUTE-

(a) Requirement for Competition. - The Secretary of Defense shall

ensure that the performance of a depot-level maintenance and repair

workload described in subsection (b) is not changed to performance

by a contractor or by another depot-level activity of the

Department of Defense unless the change is made using -

(1) merit-based selection procedures for competitions among all

depot-level activities of the Department of Defense; or

(2) competitive procedures for competitions among private and

public sector entities.

(b) Scope. - Subsection (a) applies to any depot-level

maintenance and repair workload that has a value of not less than

$3,000,000 (including the cost of labor and materials) and is being

performed by a depot-level activity of the Department of Defense.

(c) Inapplicability of OMB Circular A-76. - Office of Management

and Budget Circular A-76 (or any successor administrative

regulation or policy) does not apply to a performance change to

which subsection (a) applies.

-SOURCE-

(Added Pub. L. 102-484, div. A, title III, Sec. 353(a), Oct. 23,

1992, 106 Stat. 2378; amended Pub. L. 103-160, div. A, title III,

Sec. 346, title XI, Sec. 1182(a)(7), Nov. 30, 1993, 107 Stat. 1625,

1771; Pub. L. 103-337, div. A, title III, Sec. 338, Oct. 5, 1994,

108 Stat. 2718; Pub. L. 104-106, div. A, title III, Sec.

311(f)(1), Feb. 10, 1996, 110 Stat. 248; Pub. L. 105-85, div. A,

title III, Sec. 355(b), 363, Nov. 18, 1997, 111 Stat. 1694, 1702;

Pub. L. 106-65, div. A, title III, Sec. 334, Oct. 5, 1999, 113

Stat. 568.)

-MISC1-

AMENDMENTS

1999 - Subsec. (b). Pub. L. 106-65 inserted ''(including the cost

of labor and materials)'' after ''$3,000,000''.

1997 - Pub. L. 105-85, Sec. 363, repealed Pub. L. 104-106, Sec.

311(f)(1). See 1996 Amendment note below.

Subsecs. (a), (b). Pub. L. 105-85, Sec. 355(b), substituted

''maintenance and repair'' for ''maintenance or repair''.

1996 - Pub. L. 104-106, Sec. 311(f)(1), which directed repeal of

this section, was repealed by Pub. L. 105-85, Sec. 363.

1994 - Pub. L. 103-337 amended section generally. Prior to

amendment, section read as follows:

''(a) Requirement for Competition. - The Secretary of Defense or

the Secretary of a military department may not change the

performance of a depot-level maintenance workload that has a value

of not less than $3,000,000 and is being performed by a depot-level

activity of the Department of Defense to performance by a

contractor unless the Secretary uses competitive procedures for the

selection of the contractor to perform such workload.

''(b) Inapplicability of OMB Circular A-76. - The use of Office

of Management and Budget Circular A-76 shall not apply to a

performance change under subsection (a).''

1993 - Pub. L. 103-160, Sec. 346, amended section, as amended by

Pub. L. 103-160, Sec. 1182(a)(7), (h), by designating existing

provisions as subsec. (a), inserting heading, striking out

''threshold'' before ''value'', substituting ''to performance by a

contractor unless the Secretary uses competitive procedures for the

selection of the contractor to perform such workload'' for ''unless

the Secretary uses competitive procedures to make the change'', and

adding subsec. (b).

Pub. L. 103-160, Sec. 1182(a)(7), struck out '', prior to any

such change,'' after ''Department of Defense unless''.

-CITE-

10 USC Sec. 2469a 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle A - General Military Law

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 146 - CONTRACTING FOR PERFORMANCE OF CIVILIAN COMMERCIAL OR

INDUSTRIAL TYPE FUNCTIONS

-HEAD-

(Sec. 2469a. Repealed. Pub. L. 107-314, div. A, title III, Sec.

333(a), Dec. 2, 2002, 116 Stat. 2514)

-MISC1-

Section, added Pub. L. 105-85, div. A, title III, Sec.

359(a)(1), Nov. 18, 1997, 111 Stat. 1696; amended Pub. L. 106-65,

div. A, title III, Sec. 335, title X, Sec. 1066(a)(20), Oct. 5,

1999, 113 Stat. 568, 771, related to use of competitive procedures

in contracting for performance of depot-level maintenance and

repair workloads formerly performed at closed or realigned military

installations.

-CITE-

10 USC Sec. 2470 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle A - General Military Law

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 146 - CONTRACTING FOR PERFORMANCE OF CIVILIAN COMMERCIAL OR

INDUSTRIAL TYPE FUNCTIONS

-HEAD-

Sec. 2470. Depot-level activities of the Department of Defense:

authority to compete for maintenance and repair workloads of

other Federal agencies

-STATUTE-

A depot-level activity of the Department of Defense shall be

eligible to compete for the performance of any depot-level

maintenance and repair workload of a Federal agency for which

competitive procedures are used to select the entity to perform the

workload.

-SOURCE-

(Added Pub. L. 103-337, div. A, title III, Sec. 335(a), Oct. 5,

1994, 108 Stat. 2716.)

-CITE-

10 USC Sec. 2471 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle A - General Military Law

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 146 - CONTRACTING FOR PERFORMANCE OF CIVILIAN COMMERCIAL OR

INDUSTRIAL TYPE FUNCTIONS

-HEAD-

(Sec. 2471.Repealed. Pub. L. 106-398, Sec. 1 ((div. A), title III,

Sec. 341(g)(1)), Oct. 30, 2000, 114 Stat. 1654, 1654A-64)

-MISC1-

Section, added Pub. L. 103-337, div. A, title III, Sec. 336(a),

Oct. 5, 1994, 108 Stat. 2717; amended Pub. L. 104-106, div. A,

title XV, Sec. 1503(a)(26), Feb. 10, 1996, 110 Stat. 512; Pub. L.

105-85, div. A, title III, Sec. 361(b)(1), Nov. 18, 1997, 111

Stat. 1701, related to lease of excess depot-level equipment and

facilities by persons outside the Department of Defense.

-CITE-

10 USC Sec. 2472 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle A - General Military Law

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 146 - CONTRACTING FOR PERFORMANCE OF CIVILIAN COMMERCIAL OR

INDUSTRIAL TYPE FUNCTIONS

-HEAD-

Sec. 2472. Management of depot employees

-STATUTE-

(a) Prohibition on Management by End Strength. - The civilian

employees of the Department of Defense, including the civilian

employees of the military departments and the Defense Agencies, who

perform, or are involved in the performance of, depot-level

maintenance and repair workloads may not be managed on the basis of

any constraint or limitation in terms of man years, end strength,

full-time equivalent positions, or maximum number of employees.

Such employees shall be managed solely on the basis of the

available workload and the funds made available for such

depot-level maintenance and repair.

(b) Annual Report. - Not later than December 1 of each fiscal

year, the Secretary of Defense shall submit to the Committee on

Armed Services of the Senate and the Committee on Armed Services of

the House of Representatives a report on the number of employees

employed and expected to be employed by the Department of Defense

during that fiscal year to perform depot-level maintenance and

repair of materiel. The report shall indicate whether that number

is sufficient to perform the depot-level maintenance and repair

functions for which funds are expected to be provided for that

fiscal year for performance by Department of Defense employees.

-SOURCE-

(Added and amended Pub. L. 104-106, div. A, title III, Sec.

312(a), (b), Feb. 10, 1996, 110 Stat. 250; Pub. L. 105-85, div. A,

title III, Sec. 360, Nov. 18, 1997, 111 Stat. 1700; Pub. L. 106-65,

div. A, title X, Sec. 1067(1), Oct. 5, 1999, 113 Stat. 774.)

-COD-

CODIFICATION

The text of section 2466(b) of this title, which was transferred

to this section and redesignated subsec. (a) by Pub. L. 104-106,

Sec. 312(b), was based on Pub. L. 102-190, div. A, title III, Sec.

314(a)(1), Dec. 5, 1991, 105 Stat. 1336; Pub. L. 103-337, div. A,

title III, Sec. 332(b), Oct. 5, 1994, 108 Stat. 2715.

-MISC3-

AMENDMENTS

1999 - Subsec. (b). Pub. L. 106-65 substituted ''and the

Committee on Armed Services'' for ''and the Committee on National

Security''.

1997 - Subsec. (a). Pub. L. 105-85 inserted first sentence and

struck out former first sentence which read as follows: ''The

civilian employees of the Department of Defense involved in the

depot-level maintenance and repair of materiel may not be managed

on the basis of any end-strength constraint or limitation on the

number of such employees who may be employed on the last day of a

fiscal year.''

1996 - Subsec. (a). Pub. L. 104-106, Sec. 312(b), renumbered

section 2466(b) of this title as subsec. (a) of this section.

SUBMISSION OF INITIAL REPORT

Section 312(c) of Pub. L. 104-106 provided that: ''The report

under subsection (b) of section 2472 of title 10, United States

Code, as added by subsection (a), for fiscal year 1996 shall be

submitted not later than March 15, 1996 (notwithstanding the date

specified in such subsection).''

-CITE-

10 USC Sec. 2473 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle A - General Military Law

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 146 - CONTRACTING FOR PERFORMANCE OF CIVILIAN COMMERCIAL OR

INDUSTRIAL TYPE FUNCTIONS

-HEAD-

Sec. 2473. Procurements from the small arms production industrial

base

-STATUTE-

(a) Requirement To Limit Procurements To Certain Sources. - In

order to preserve the small arms production industrial base, the

Secretary of Defense shall require that any procurement of property

or services described in subsection (b) for the Department of

Defense be made only from a firm in the small arms production

industrial base, unless the Secretary determines, with regard to a

particular procurement, that such requirement is not necessary to

preserve the small arms production industrial base.

(b) Covered Property and Services. - Subject to subsection (d),

subsection (a) applies to the following:

(1) Critical repair parts for small arms, consisting only of

barrels, receivers, and bolts.

(2) Modifications of such parts to improve small arms used by

the armed forces.

(c) Small Arms Production Industrial Base. - In this section, the

term ''small arms production industrial base'' means the firms

comprising the small arms production industrial base, as described

in the plan entitled ''Preservation of Critical Elements of the

Small Arms Industrial Base'', dated January 8, 1994, that was

prepared by an independent assessment panel of the Army Science

Board.

(d) Applicability. - This section applies only to procurements of

covered property and services involving the following small arms:

(1) M16 series rifle.

(2) MK19 grenade machine gun.

(3) M4 series carbine.

(4) M240 series machine gun.

(5) M249 squad automatic weapon.

(e) Submission of Certified Cost or Pricing Data. - If a

procurement under subsection (a) is a procurement of a commercial

item, the Secretary may, notwithstanding section 2306a(b)(1)(B) of

this title, require the submission of certified cost or pricing

data under section 2306a(a) of this title.

-SOURCE-

(Added Pub. L. 104-201, div. A, title VIII, Sec. 832(a), Sept. 23,

1996, 110 Stat. 2616; amended Pub. L. 105-261, div. A, title VIII,

Sec. 809(a)-(d), Oct. 17, 1998, 112 Stat. 2085, 2086; Pub. L.

106-65, div. A, title VIII, Sec. 815(b), Oct. 5, 1999, 113 Stat.

712.)

-MISC1-

AMENDMENTS

1999 - Subsec. (b)(1). Pub. L. 106-65, Sec. 815(b)(1),

substituted ''Critical repair'' for ''Repair'', struck out

''including repair parts'' after ''small arms,'', and inserted

''only'' after ''consisting''.

Subsec. (b)(2). Pub. L. 106-65, Sec. 815(b)(2), inserted ''such''

after ''Modifications of''.

1998 - Subsec. (a). Pub. L. 105-261, Sec. 809(a), substituted

''Requirement'' for ''Authority'' in heading and ''In order to

preserve the small arms production industrial base, the Secretary

of Defense shall'' for ''To the extent that the Secretary of

Defense determines necessary to preserve the small arms production

industrial base, the Secretary may'' in text, and inserted before

period at end '', unless the Secretary determines, with regard to a

particular procurement, that such requirement is not necessary to

preserve the small arms production industrial base''.

Subsec. (b). Pub. L. 105-261, Sec. 809(b), (c)(1), substituted

''Subject to subsection (d), subsection'' for ''Subsection'' in

introductory provisions and inserted '', including repair parts

consisting of barrels, receivers, and bolts'' before period in par.

(1).

Subsec. (d). Pub. L. 105-261, Sec. 809(c)(2), added subsec. (d).

Subsec. (e). Pub. L. 105-261, Sec. 809(d), added subsec. (e).

EXTENSION OF REQUIREMENTS OF SECTION 2473 TO SMALL ARMS

Pub. L. 106-65, div. A, title VIII, Sec. 815(a), Oct. 5, 1999,

113 Stat. 712, provided that: ''In fulfilling the requirement under

subsection (e) of section 809 of the Strom Thurmond National

Defense Authorization Act for Fiscal Year 1999 (Public Law 105-261;

112 Stat. 2086; 10 U.S.C. 2473 note), if the Secretary of the Army

determines that it is necessary to protect the small arms

production industrial base, the Secretary shall exercise the

authority under subsection (f) of such section (set out as a note

below) with regard to M-2 and M-60 machine guns.''

Pub. L. 105-261, div. A, title VIII, Sec. 809(e), (f), Oct. 17,

1998, 112 Stat. 2086, provided that:

''(e) Study. - Not later than 60 days after the date of the

enactment of this Act (Oct. 17, 1998), the Secretary of the Army

shall conduct a study, to be carried out by the Army Science Board,

to examine whether the requirements of section 2473 of title 10,

United States Code, should be extended to small arms (as specified

in subsection (d) of such section) and the parts manufactured under

a contract with the Department of Defense to produce such small

arms.

''(f) Authority to Extend Requirements of Section 2473. - Based

upon recommendations of the Army Science Board resulting from the

study conducted under subsection (e), the Secretary of the Army may

apply the requirements of section 2473 of title 10, United States

Code, to the small arms and parts referred to in subsection (e).''

-CITE-

10 USC Sec. 2474 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle A - General Military Law

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 146 - CONTRACTING FOR PERFORMANCE OF CIVILIAN COMMERCIAL OR

INDUSTRIAL TYPE FUNCTIONS

-HEAD-

Sec. 2474. Centers of Industrial and Technical Excellence:

designation; public-private partnerships

-STATUTE-

(a) Designation. - (1) The Secretary concerned, or the Secretary

of Defense in the case of a Defense Agency, shall designate each

depot-level activity of the military departments and the Defense

Agencies (other than facilities approved for closure or major

realignment under the Defense Base Closure and Realignment Act of

1990 (part A of title XXIX of Public Law 101-510; 10 U.S.C. 2687

note)) as a Center of Industrial and Technical Excellence in the

recognized core competencies of the designee.

(2) The Secretary of Defense shall establish a policy to

encourage the Secretary of each military department and the head of

each Defense Agency to reengineer industrial processes and adopt

best-business practices at their Centers of Industrial and

Technical Excellence in connection with their core competency

requirements, so as to serve as recognized leaders in their core

competencies throughout the Department of Defense and in the

national technology and industrial base (as defined in section

2500(1) of this title).

(3) The Secretary of a military department may conduct a pilot

program, consistent with applicable requirements of law, to test

any practices referred to in paragraph (2) that the Secretary

determines could improve the efficiency and effectiveness of

operations at Centers of Industrial and Technical Excellence,

improve the support provided by the Centers for the armed forces

user of the services of the Centers, and enhance readiness by

reducing the time that it takes to repair equipment.

(b) Public-Private Partnerships. - (1) To achieve one or more

objectives set forth in paragraph (2), the Secretary designating a

Center of Industrial and Technical Excellence under subsection (a)

may authorize and encourage the head of the Center to enter into

public-private cooperative arrangements (in this section referred

to as a ''public-private partnership'') to provide for any of the

following:

(A) For employees of the Center, private industry, or other

entities outside the Department of Defense to perform (under

contract, subcontract, or otherwise) work related to the core

competencies of the Center, including any depot-level maintenance

and repair work that involves one or more core competencies of

the Center.

(B) For private industry or other entities outside the

Department of Defense to use, for any period of time determined

to be consistent with the needs of the Department of Defense, any

facilities or equipment of the Center that are not fully utilized

for a military department's own production or maintenance

requirements.

(2) The objectives for exercising the authority provided in

paragraph (1) are as follows:

(A) To maximize the utilization of the capacity of a Center of

Industrial and Technical Excellence.

(B) To reduce or eliminate the cost of ownership of a Center by

the Department of Defense in such areas of responsibility as

operations and maintenance and environmental remediation.

(C) To reduce the cost of products of the Department of Defense

produced or maintained at a Center.

(D) To leverage private sector investment in -

(i) such efforts as plant and equipment recapitalization for

a Center; and

(ii) the promotion of the undertaking of commercial business

ventures at a Center.

(E) To foster cooperation between the armed forces and private

industry.

(3) If the Secretary concerned, or the Secretary of Defense in

the case of a Defense Agency, authorizes the use of public-private

partnerships under this subsection, the Secretary shall submit to

Congress a report evaluating the need for loan guarantee authority,

similar to the ARMS Initiative loan guarantee program under section

4555 of this title, to facilitate the establishment of

public-private partnerships and the achievement of the objectives

set forth in paragraph (2).

(c) Private Sector Use of Excess Capacity. - Any facilities or

equipment of a Center of Industrial and Technical Excellence made

available to private industry may be used to perform maintenance or

to produce goods in order to make more efficient and economical use

of Government-owned industrial plants and encourage the creation

and preservation of jobs to ensure the availability of a workforce

with the necessary manufacturing and maintenance skills to meet the

needs of the armed forces.

(d) Crediting of Amounts for Performance. - Amounts received by a

Center for work performed under a public-private partnership shall

be credited to the appropriation or fund, including a

working-capital fund, that incurs the cost of performing the work.

Consideration in the form of rental payments or (notwithstanding

section 3302(b) of title 31) in other forms may be accepted for a

use of property accountable under a contract performed pursuant to

this section. Notwithstanding section 2667(d) of this title,

revenues generated pursuant to this section shall be available for

facility operations, maintenance, and environmental restoration at

the Center where the leased property is located.

(e) Availability of Excess Equipment to Private-Sector Partners.

- Equipment or facilities of a Center of Industrial and Technical

Excellence may be made available for use by a private-sector entity

under this section only if -

(1) the use of the equipment or facilities will not have a

significant adverse effect on the readiness of the armed forces,

as determined by the Secretary concerned or, in the case of a

Center in a Defense Agency, by the Secretary of Defense; and

(2) the private-sector entity agrees -

(A) to reimburse the Department of Defense for the direct and

indirect costs (including any rental costs) that are

attributable to the entity's use of the equipment or

facilities, as determined by that Secretary; and

(B) to hold harmless and indemnify the United States from -

(i) any claim for damages or injury to any person or

property arising out of the use of the equipment or

facilities, except under the circumstances described in

section 2563(c)(3) of this title; and

(ii) any liability or claim for damages or injury to any

person or property arising out of a decision by the Secretary

concerned or the Secretary of Defense to suspend or terminate

that use of equipment or facilities during a war or national

emergency.

(f) Exclusion of Certain Expenditures From Percentage Limitation.

- (1) Amounts expended for the performance of a depot-level

maintenance and repair workload by non-Federal Government personnel

at a Center of Industrial and Technical Excellence under any

contract entered into during fiscal years 2003 through 2006 shall

not be counted for purposes of applying the percentage limitation

in section 2466(a) of this title if the personnel are provided by

private industry or other entities outside the Department of

Defense pursuant to a public-private partnership.

(2) All funds covered by paragraph (1) shall be included as a

separate item in the reports required under paragraphs (1), (2),

and (3) of section 2466(e) of this title.

(g) Construction of Provision. - Nothing in this section may be

construed to authorize a change, otherwise prohibited by law, from

the performance of work at a Center of Industrial and Technical

Excellence by Department of Defense personnel to performance by a

contractor.

-SOURCE-

(Added Pub. L. 105-85, div. A, title III, Sec. 361(a)(1), Nov. 18,

1997, 111 Stat. 1700; amended Pub. L. 106-398, Sec. 1 ((div. A),

title III, Sec. 341(a)-(e)), Oct. 30, 2000, 114 Stat. 1654,

1654A-61 to 1654A-63; Pub. L. 107-107, div. A, title III, Sec.

342, 343(b), Dec. 28, 2001, 115 Stat. 1060, 1061; Pub. L. 107-314,

div. A, title III, Sec. 334, Dec. 2, 2002, 116 Stat. 2514.)

-MISC1-

AMENDMENTS

2002 - Subsec. (f)(1). Pub. L. 107-314, Sec. 334(1), substituted

''Amounts expended for the performance of a depot-level maintenance

and repair workload by non-Federal Government personnel at a Center

of Industrial and Technical Excellence under any contract entered

into during fiscal years 2003 through 2006'' for ''Amounts expended

out of funds described in paragraph (2) for the performance of a

depot-level maintenance and repair workload by non-Federal

Government personnel at a Center of Industrial and Technical

Excellence''.

Subsec. (f)(2), (3). Pub. L. 107-314, Sec. 334(2), (3),

redesignated par. (3) as (2) and struck out former par. (2) which

read as follows: ''The funds referred to in paragraph (1) are funds

available to the military departments and Defense Agencies for

depot-level maintenance and repair workloads for fiscal years 2002

through 2005.''

2001 - Subsec. (e)(2)(B)(i). Pub. L. 107-107, Sec. 343(b),

substituted ''under the circumstances described in section

2563(c)(3) of this title'' for ''in a case of willful conduct or

gross negligence''.

Subsecs. (f), (g). Pub. L. 107-107, Sec. 342, added subsec. (f)

and redesignated former subsec. (f) as (g).

2000 - Subsec. (a)(1). Pub. L. 106-398, Sec. 1 ((div. A), title

III, Sec. 341(a)(1)), substituted ''The Secretary concerned, or the

Secretary of Defense in the case of a Defense Agency,'' for ''The

Secretary of Defense'' and ''of the designee'' for ''of the

activity''.

Subsec. (a)(2). Pub. L. 106-398, Sec. 1 ((div. A), title III,

Sec. 341(a)(2)), inserted ''of Defense'' after ''The Secretary''

and substituted ''Centers of Industrial and Technical Excellence''

for ''depot-level activities''.

Subsec. (a)(3). Pub. L. 106-398, Sec. 1 ((div. A), title III,

Sec. 341(a)(3)), substituted ''operations at Centers of Industrial

and Technical Excellence'' for ''depot-level operations'', ''by the

Centers'' for ''by depot-level activities'', and ''of the Centers''

for ''of such activities''.

Subsec. (b). Pub. L. 106-398, Sec. 1 ((div. A), title III, Sec.

341(b)), amended heading and text of subsec. (b) generally. Prior

to amendment, text read as follows: ''The Secretary of Defense

shall enable Centers of Industrial and Technical Excellence to

enter into public-private cooperative arrangements for the

performance of depot-level maintenance and repair at such Centers

and shall encourage the use of such arrangements to maximize the

utilization of the capacity at such Centers. A public-private

cooperative arrangement under this subsection shall be known as a

'public-private partnership'.''

Subsec. (c). Pub. L. 106-398, Sec. 1 ((div. A), title III, Sec.

341(c)(3)), added subsec. (c). Former subsec. (c) redesignated (d).

Subsec. (d). Pub. L. 106-398, Sec. 1 ((div. A), title III, Sec.

341(d)), inserted at end ''Consideration in the form of rental

payments or (notwithstanding section 3302(b) of title 31) in other

forms may be accepted for a use of property accountable under a

contract performed pursuant to this section. Notwithstanding

section 2667(d) of this title, revenues generated pursuant to this

section shall be available for facility operations, maintenance,

and environmental restoration at the Center where the leased

property is located.''

Pub. L. 106-398, Sec. 1 ((div. A), title III, Sec. 341(c)(1),

(2)), redesignated subsec. (c) as (d) and struck out heading and

text of former subsec. (d). Text read as follows: ''The policy

required under subsection (a) shall include measures to enable a

private sector entity that enters into a partnership arrangement

under subsection (b) or leases excess equipment and facilities at a

Center of Industrial and Technical Excellence pursuant to section

2471 of this title to perform additional work at the Center,

subject to the limitations outlined in subsection (b) of such

section, outside of the types of work normally assigned to the

Center.''

Subsecs. (e), (f). Pub. L. 106-398, Sec. 1 ((div. A), title III,

Sec. 341(e)), added subsecs. (e) and (f).

REPORTING REQUIREMENT

Section 361(c) of Pub. L. 105-85 provided that: ''Not later than

March 1, 1999, the Secretary of Defense shall submit to Congress a

report on the policies established by the Secretary pursuant to

section 2474 of title 10, United States Code, to implement the

requirements of such section. The report shall include -

''(1) the details of any public-private partnerships entered

into as of that date under subsection (b) of such section;

''(2) the details of any leases entered into as of that date

under section 2471 of such title with authorized entities for

dual-use (military and nonmilitary) purposes; and

''(3) the effect that the partnerships and leases had on

capacity utilization, depot rate structures, and readiness.''

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 2208, 2461 of this title.

-CITE-

10 USC Sec. 2475 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle A - General Military Law

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 146 - CONTRACTING FOR PERFORMANCE OF CIVILIAN COMMERCIAL OR

INDUSTRIAL TYPE FUNCTIONS

-HEAD-

Sec. 2475. Consolidation, restructuring, or reengineering of

organizations, functions, or activities: notification

requirements

-STATUTE-

(a) Requirement To Submit Plan Annually. - Concurrently with the

submission of the President's annual budget request under section

1105 of title 31, the Secretary of Defense shall submit to Congress

each Strategic Sourcing Plan of Action for the Department of

Defense (as identified in the Department of Defense Interim

Guidance dated February 29, 2000, or any successor Department of

Defense guidance or directive), for the following year.

(b) Notification of Decision To Execute Plan. - If a decision is

made to consolidate, restructure, or reengineer an organization,

function, or activity of the Department of Defense pursuant to a

Strategic Sourcing Plan of Action described in subsection (a), and

such consolidation, restructuring, or reengineering would result in

a manpower reduction affecting 50 or more personnel of the

Department of Defense (including military and civilian personnel) -

(1) the Secretary of Defense shall submit to the Committees on

Armed Services of the Senate and the House of Representatives a

report describing that decision, including -

(A) a projection of the savings that will be realized as a

result of the consolidation, restructuring, or reengineering,

compared with the cost incurred by the Department of Defense to

perform the function or to operate the organization or activity

prior to such proposed consolidation, restructuring, or

reengineering;

(B) a description of all missions, duties, or military

requirements that will be affected as a result of the decision

to consolidate, restructure, or reengineer the organization,

function, or activity that was analyzed;

(C) the Secretary's certification that the consolidation,

restructuring, or reengineering will not result in any

diminution of military readiness;

(D) a schedule for performing the consolidation,

restructuring, or reengineering; and

(E) the Secretary's certification that the entire analysis

for the consolidation, restructuring, or reengineering is

available for examination; and

(2) the head of the Defense Agency or the Secretary of the

military department concerned may not implement the plan until 30

days after the date that the agency head or Secretary submits

notification to the Committees on Armed Services of the Senate

and House of Representatives of the intent to carry out such

plan.

-SOURCE-

(Added Pub. L. 106-398, Sec. 1 ((div. A), title III, Sec. 353(a)),

Oct. 30, 2000, 114 Stat. 1654, 1654A-72.)

-CITE-