-CITE-

10 USC CHAPTER 434 - ARMAMENTS INDUSTRIAL BASE 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle B - Army

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 434 - ARMAMENTS INDUSTRIAL BASE

.

-HEAD-

CHAPTER 434 - ARMAMENTS INDUSTRIAL BASE

-MISC1-

Sec.

4551. Definitions.

4552. Policy.

4553. Armament Retooling and Manufacturing Support Initiative.

4554. Property management contracts and leases.

4555. ARMS Initiative loan guarantee program.

-SECREF-

CHAPTER REFERRED TO IN OTHER SECTIONS

This chapter is referred to in section 2522 of this title.

-CITE-

10 USC Sec. 4551 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle B - Army

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 434 - ARMAMENTS INDUSTRIAL BASE

-HEAD-

Sec. 4551. Definitions

-STATUTE-

In this chapter:

(1) The term ''ARMS Initiative'' means the Armament Retooling

and Manufacturing Support Initiative authorized by this chapter.

(2) The term ''eligible facility'' means a Government-owned,

contractor-operated ammunition manufacturing facility of the

Department of the Army that is in an active, inactive, layaway,

or caretaker status.

(3) The term ''property manager'' includes any person or entity

managing an eligible facility made available under the ARMS

Initiative through a property management contract.

(4) The term ''property management contract'' includes facility

use contracts, site management contracts, leases, and other

agreements entered into under the authority of this chapter.

(5) The term ''Secretary'' means the Secretary of the Army.

-SOURCE-

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

344(a)(1)), Oct. 30, 2000, 114 Stat. 1654, 1654A-67.)

-MISC1-

ARSENAL SUPPORT PROGRAM INITIATIVE

Pub. L. 106-398, Sec. 1 ((div. A), title III, Sec. 343), Oct. 30,

2000, 114 Stat. 1654, 1654A-65, as amended by Pub. L. 107-314,

div. A, title III, Sec. 362, Dec. 2, 2002, 116 Stat. 2519,

provided that:

''(a) Demonstration Program Required. - To help maintain the

viability of the Army manufacturing arsenals and the unique

capabilities of these arsenals to support the national security

interests of the United States, the Secretary of the Army shall

carry out a demonstration program under this section during fiscal

years 2001 through 2004 at each manufacturing arsenal of the

Department of the Army.

''(b) Purposes of Demonstration Program. - The purposes of the

demonstration program are as follows:

''(1) To provide for the utilization of the existing skilled

workforce at the Army manufacturing arsenals by commercial firms.

''(2) To provide for the reemployment and retraining of skilled

workers who, as a result of declining workload and reduced Army

spending on arsenal production requirements at these Army

arsenals, are idled or underemployed.

''(3) To encourage commercial firms, to the maximum extent

practicable, to use these Army arsenals for commercial purposes.

''(4) To increase the opportunities for small businesses

(including socially and economically disadvantaged small business

concerns and new small businesses) to use these Army arsenals for

those purposes.

''(5) To maintain in the United States a work force having the

skills in manufacturing processes that are necessary to meet

industrial emergency planned requirements for national security

purposes.

''(6) To demonstrate innovative business practices, to support

Department of Defense acquisition reform, and to serve as both a

model and a laboratory for future defense conversion initiatives

of the Department of Defense.

''(7) To the maximum extent practicable, to allow the operation

of these Army arsenals to be rapidly responsive to the forces of

free market competition.

''(8) To reduce or eliminate the cost of Government ownership

of these Army arsenals, including the costs of operations and

maintenance, the costs of environmental remediation, and other

costs.

''(9) To reduce the cost of products of the Department of

Defense produced at these Army arsenals.

''(10) To leverage private investment at these Army arsenals

through long-term facility use contracts, property management

contracts, leases, or other agreements that support and advance

the demonstration program for the following activities:

''(A) Recapitalization of plant and equipment.

''(B) Environmental remediation.

''(C) Promotion of commercial business ventures.

''(D) Other activities approved by the Secretary of the Army.

''(11) To foster cooperation between the Department of the

Army, property managers, commercial interests, and State and

local agencies in the implementation of sustainable development

strategies and investment in these Army arsenals.

''(c) Contract Authority. - (1) In the case of each Army

manufacturing arsenal, the Secretary of the Army may enter into

contracts with commercial firms to authorize the contractors,

consistent with section 4543 of title 10, United States Code -

''(A) to use the arsenal, or a portion of the arsenal, and the

skilled workforce at the arsenal to manufacture weapons, weapon

components, or related products consistent with the purposes of

the program; and

''(B) to enter into subcontracts for the commercial use of the

arsenal consistent with such purposes.

''(2) A contract under paragraph (1) shall require the contractor

to contribute toward the operation and maintenance of the Army

manufacturing arsenal covered by the contract.

''(3) In the event an Army manufacturing arsenal is converted to

contractor operation, the Secretary may enter into a contract with

the contractor to authorize the contractor, consistent with section

4543 of title 10, United States Code -

''(A) to use the facility during the period of the program in a

manner consistent with the purposes of the program; and

''(B) to enter into subcontracts for the commercial use of the

facility consistent with such purposes.

''(d) Loan Guarantees. - (1) Subject to paragraph (2), the

Secretary of the Army may guarantee the repayment of any loan made

to a commercial firm to fund, in whole or in part, the

establishment of a commercial activity at an Army manufacturing

arsenal under this section.

''(2) Loan guarantees under this subsection may not be committed

except to the extent that appropriations of budget authority to

cover their costs are made in advance, as required by section 504

of the Federal Credit Reform Act of 1990 (2 U.S.C. 661c).

''(3) The Secretary of the Army may enter into agreements with

the Administrator of the Small Business Administration or the

Administrator of the Farmers Home Administration, the Administrator

of the Rural Development Administration, or the head of other

appropriate agencies of the Department of Agriculture, under which

such Administrators may, under this subsection -

''(A) process applications for loan guarantees;

''(B) guarantee repayment of loans; and

''(C) provide any other services to the Secretary of the Army

to administer this subsection.

''(4) An Administrator referred to in paragraph (3) may guarantee

loans under this section to commercial firms of any size,

notwithstanding any limitations on the size of applicants imposed

on other loan guarantee programs that the Administrator

administers. To the extent practicable, each Administrator shall

use the same procedures for processing loan guarantee applications

under this subsection as the Administrator uses for processing loan

guarantee applications under other loan guarantee programs that the

Administrator administers.

''(e) Loan Limits. - The maximum amount of loan principal

guaranteed during a fiscal year under subsection (d) may not exceed

-

''(1) $20,000,000, with respect to any single borrower; and

''(2) $320,000,000 with respect to all borrowers.

''(f) Transfer of Funds. - The Secretary of the Army may transfer

to an Administrator providing services under subsection (d), and

the Administrator may accept, such funds as may be necessary to

administer loan guarantees under such subsection.

''(g) Reporting Requirements. - (1) Not later than July 1 of each

year in which a guarantee issued under subsection (d) is in effect,

the Secretary of the Army shall submit to Congress a report

specifying the amounts of loans guaranteed under such subsection

during the preceding calendar year. No report is required after

fiscal year 2004.

''(2) Not later than July 1, 2003, the Secretary of the Army

shall submit to the congressional defense committees (Committees on

Armed Services and Appropriations of the Senate and the House of

Representatives) a report on the results of the demonstration

program since its implementation, including the Secretary's views

regarding the benefits of the program for Army manufacturing

arsenals and the Department of the Army and the success of the

program in achieving the purposes specified in subsection (b). The

report shall contain a comprehensive review of contracting at the

Army manufacturing arsenals covered by the program and such

recommendations as the Secretary considers appropriate regarding

changes to the program.''

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10 USC Sec. 4552 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle B - Army

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 434 - ARMAMENTS INDUSTRIAL BASE

-HEAD-

Sec. 4552. Policy

-STATUTE-

It is the policy of the United States -

(1) to encourage, to the maximum extent practicable, commercial

firms to use Government-owned, contractor-operated ammunition

manufacturing facilities of the Department of the Army;

(2) to use such facilities for supporting programs, projects,

policies, and initiatives that promote competition in the private

sector of the United States economy and that advance United

States interests in the global marketplace;

(3) to increase the manufacture of products inside the United

States;

(4) to support policies and programs that provide manufacturers

with incentives to assist the United States in making more

efficient and economical use of eligible facilities for

commercial purposes;

(5) to provide, as appropriate, small businesses (including

socially and economically disadvantaged small business concerns

and new small businesses) with incentives that encourage those

businesses to undertake manufacturing and other industrial

processing activities that contribute to the prosperity of the

United States;

(6) to encourage the creation of jobs through increased

investment in the private sector of the United States economy;

(7) to foster a more efficient, cost-effective, and adaptable

armaments industry in the United States;

(8) to achieve, with respect to armaments manufacturing

capacity, an optimum level of readiness of the national

technology and industrial base within the United States that is

consistent with the projected threats to the national security of

the United States and the projected emergency requirements of the

armed forces; and

(9) to encourage facility use contracting where feasible.

-SOURCE-

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

344(a)(1)), Oct. 30, 2000, 114 Stat. 1654, 1654A-67.)

-CITE-

10 USC Sec. 4553 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle B - Army

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 434 - ARMAMENTS INDUSTRIAL BASE

-HEAD-

Sec. 4553. Armament Retooling and Manufacturing Support Initiative

-STATUTE-

(a) Authority for Initiative. - The Secretary may carry out a

program to be known as the ''Armament Retooling and Manufacturing

Support Initiative''.

(b) Purposes. - The purposes of the ARMS Initiative are as

follows:

(1) To encourage commercial firms, to the maximum extent

practicable, to use eligible facilities for commercial purposes.

(2) To increase the opportunities for small businesses

(including socially and economically disadvantaged small business

concerns and new small businesses) to use eligible facilities for

those purposes.

(3) To maintain in the United States a work force having the

skills in manufacturing processes that are necessary to meet

industrial emergency planned requirements for national security

purposes.

(4) To demonstrate innovative business practices, to support

Department of Defense acquisition reform, and to serve as both a

model and a laboratory for future defense conversion initiatives

of the Department of Defense.

(5) To the maximum extent practicable, to allow the operation

of eligible facilities to be rapidly responsive to the forces of

free market competition.

(6) To reduce or eliminate the cost of Government ownership of

eligible facilities, including the costs of operations and

maintenance, the costs of environmental remediation, and other

costs.

(7) To reduce the cost of products of the Department of Defense

produced at eligible facilities.

(8) To leverage private investment at eligible facilities

through long-term facility use contracts, property management

contracts, leases, or other agreements that support and advance

the policies and purposes of this chapter, for the following

activities:

(A) Recapitalization of plant and equipment.

(B) Environmental remediation.

(C) Promotion of commercial business ventures.

(D) Other activities approved by the Secretary.

(9) To foster cooperation between the Department of the Army,

property managers, commercial interests, and State and local

agencies in the implementation of sustainable development

strategies and investment in eligible facilities made available

for purposes of the ARMS Initiative.

(10) To reduce or eliminate the cost of asset disposal that

would be incurred if property at an eligible facility was

declared excess to the needs of the Department of the Army.

(c) Availability of Facilities. - The Secretary may make any

eligible facility available for the purposes of the ARMS

Initiative.

(d) Consideration for Leases. - Section 321 of the Act of June

30, 1932 (40 U.S.C. 303b) (FOOTNOTE 1) , shall not apply to uses of

property or facilities in accordance with the ARMS Initiative.

(FOOTNOTE 1) See References in Text note below.

(e) Program Support. - (1) Funds appropriated for purposes of the

ARMS Initiative may be used for administrative support and

management.

(2) A full annual accounting of such expenses for each fiscal

year shall be provided 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 not later than March 30 of the following fiscal

year.

-SOURCE-

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

344(a)(1)), Oct. 30, 2000, 114 Stat. 1654, 1654A-68.)

-REFTEXT-

REFERENCES IN TEXT

Section 321 of the Act of June 30, 1932 (40 U.S.C. 303b),

referred to in subsec. (d), is section 321 of act June 30, 1932,

ch. 314, 47 Stat. 412, which was classified to section 303b of

former Title 40, Public Buildings, Property, and Works, and was

repealed and reenacted as section 1302 of Title 40, Public

Buildings, Property, and Works, by Pub. L. 107-217, Sec. 1, 6(b),

Aug. 21, 2002, 116 Stat. 1062, 1304.

-CITE-

10 USC Sec. 4554 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle B - Army

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 434 - ARMAMENTS INDUSTRIAL BASE

-HEAD-

Sec. 4554. Property management contracts and leases

-STATUTE-

(a) In General. - In the case of each eligible facility that is

made available for the ARMS Initiative, the Secretary -

(1) shall make full use of facility use contracts, leases, and

other such commercial contractual instruments as may be

appropriate;

(2) shall evaluate, on the basis of efficiency, cost, emergency

mobilization requirements, and the goals and purposes of the ARMS

Initiative, the procurement of services from the property

manager, including maintenance, operation, modification,

infrastructure, environmental restoration and remediation, and

disposal of ammunition manufacturing assets, and other services;

and

(3) may, in carrying out paragraphs (1) and (2) -

(A) enter into contracts, and provide for subcontracts, for

terms up to 25 years, as the Secretary considers appropriate

and consistent with the needs of the Department of the Army and

the goals and purposes of the ARMS Initiative; and

(B) use procedures that are authorized to be used under

section 2304(c)(5) of this title when the contractor or

subcontractor is a source specified in law.

(b) Consideration for Use. - (1) To the extent provided in a

contract entered into under this section for the use of property at

an eligible facility that is accountable under the contract, the

Secretary may accept consideration for such use that is, in whole

or in part, in a form other than -

(A) rental payments; or

(B) revenue generated at the facility.

(2) Forms of consideration acceptable under paragraph (1) for a

use of an eligible facility or any property at an eligible facility

include the following:

(A) The improvement, maintenance, protection, repair, and

restoration of the facility, the property, or any property within

the boundaries of the installation where the facility is located.

(B) Reductions in overhead costs.

(C) Reductions in product cost.

(3) The authority under paragraph (1) may be exercised without

regard to section 3302(b) of title 31 and any other provision of

law.

-SOURCE-

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

344(a)(1)), Oct. 30, 2000, 114 Stat. 1654, 1654A-69.)

-MISC1-

IMPLEMENTATION REPORT

Pub. L. 106-398, Sec. 1 ((div. A), title III, Sec. 344(b)), Oct.

30, 2000, 114 Stat. 1654, 1654A-71, provided that: ''Not later than

July 1, 2001, the Secretary of Defense shall submit to the

congressional defense committees (Committees on Armed Services and

Appropriations of the Senate and the House of Representatives) a

report on the procedures and controls implemented to carry out

section 4554 of title 10, United States Code, as added by

subsection (a).''

-CITE-

10 USC Sec. 4555 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle B - Army

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 434 - ARMAMENTS INDUSTRIAL BASE

-HEAD-

Sec. 4555. ARMS Initiative loan guarantee program

-STATUTE-

(a) Program Authorized. - Subject to subsection (b), the

Secretary may carry out a loan guarantee program to encourage

commercial firms to use eligible facilities under this chapter.

Under any such program, the Secretary may guarantee the repayment

of any loan made to a commercial firm to fund, in whole or in part,

the establishment of a commercial activity to use an eligible

facility under this chapter.

(b) Advanced Budget Authority. - Loan guarantees under this

section may not be committed except to the extent that

appropriations of budget authority to cover their costs are made in

advance, as required by section 504 of the Federal Credit Reform

Act of 1990 (2 U.S.C. 661c).

(c) Program Administration. - (1) The Secretary may enter into an

agreement with any of the officials named in paragraph (2) under

which that official may, for the purposes of this section -

(A) process applications for loan guarantees;

(B) guarantee repayment of loans; and

(C) provide any other services to the Secretary to administer

the loan guarantee program.

(2) The officials referred to in paragraph (1) are as follows:

(A) The Administrator of the Small Business Administration.

(B) The head of any appropriate agency in the Department of

Agriculture, including -

(i) the Administrator of the Farmers Home Administration; and

(ii) the Administrator of the Rural Development

Administration.

(3) Each official authorized to do so under an agreement entered

into under paragraph (1) may guarantee loans under this section to

commercial firms of any size, notwithstanding any limitations on

the size of applicants imposed on other loan guarantee programs

that the official administers.

(4) To the extent practicable, each official processing loan

guarantee applications under this section pursuant to an agreement

entered into under paragraph (1) shall use the same processing

procedures as the official uses for processing loan guarantee

applications under other loan guarantee programs that the official

administers.

(d) Loan Limits. - The maximum amount of loan principal

guaranteed during a fiscal year under this section may not exceed -

(1) $20,000,000, with respect to any single borrower; and

(2) $320,000,000 with respect to all borrowers.

(e) Transfer of Funds. - The Secretary may transfer to an

official providing services under subsection (c), and that official

may accept, such funds as may be necessary to administer the loan

guarantee program under this section.

-SOURCE-

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

344(a)(1)), Oct. 30, 2000, 114 Stat. 1654, 1654A-70.)

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 2474 of this title.

-CITE-