§ 2201. Apportionment of funds: authority for exemption; excepted expenses

• (a) If the President determines such action to be necessary in the interest of national defense, the President may exempt from the provisions of section 1512 of title 31 appropriations, funds, and contract authorizations available for military functions of the Department of Defense.
• (b) Upon a determination by the President that such action is necessary, the Secretary of Defense may provide for the cost of an airborne alert as an excepted expense under section 6301(a) and (b)(1)–(3) of title 41.
• (c) Upon a determination by the President that it is necessary to increase (subject to limits imposed by law) the number of members of the armed forces on active duty beyond the number for which funds are provided in appropriation Acts for the Department of Defense, the Secretary of Defense may provide for the cost of such additional members as an excepted expense under section 6301(a) and (b)(1)–(3) of title 41.
• (d) The Secretary of Defense shall immediately notify Congress of the use of any authority under this section.

§ 2202. Regulations on procurement, production, warehousing, and supply distribution functions

The Secretary of Defense shall prescribe regulations governing the performance within the Department of Defense of the procurement, production, warehousing, and supply distribution functions, and related functions, of the Department of Defense.

§ 2203. Budget estimates

To account for, and report, the cost of performance of readily identifiable functional programs and activities, with segregation of operating and capital programs, budget estimates of the Department of Defense shall be prepared, presented, and justified, where practicable, and authorized programs shall be administered, in such form and manner as the Secretary of Defense, subject to the authority and direction of the President, may prescribe. As far as practicable, budget estimates and authorized programs of the military departments shall be uniform and in readily comparable form. The budget for the Department of Defense submitted to Congress for each fiscal year shall include data projecting the effect of the appropriations requested for materiel readiness requirements. The Secretary of Defense shall provide that the budget justification documents for such budget include information on the number of employees of contractors estimated to be working on contracts of the Department of Defense during the fiscal year for which the budget is submitted. Such information shall be set forth in terms of employee-years or such other measure as will be uniform and readily comparable with civilian personnel of the Department of Defense.

§ 2204. Obligation of appropriations

To prevent overdrafts and deficiencies in the fiscal year for which appropriations are made, appropriations made to the Department of Defense or to a military department, and reimbursements thereto, are available for obligation and expenditure only under scheduled rates of obligation, or changes thereto, that have been approved by the Secretary of Defense. This section does not prohibit the Department of Defense from incurring a deficiency that it has been authorized by law to incur.

§ 2205. Reimbursements

• (a) Reimbursements made to appropriations of the Department of Defense or a department or agency thereof under sections 1535 and 1536 of title 31, or other amounts paid by or on behalf of a department or agency of the Department of Defense to another department or agency of the Department of Defense, or by or on behalf of personnel of any department or organization, for services rendered or supplies furnished, may be credited to authorized accounts. Funds so credited are available for obligation for the same period as the funds in the account so credited. Such an account shall be accounted for as one fund on the books of the Department of the Treasury.
• (b) The Secretary of Defense and the Secretaries of the military departments may charge a fixed rate for reimbursement of the costs of providing planning, supervision, administrative, or overhead services incident to any construction, maintenance, or repair project to real property or for providing facility services, irrespective of the appropriation financing the project or facility services.

§ 2206. Disbursement of funds of military department to cover obligation of another agency of Department of Defense

As far as authorized by the Secretary of Defense, a disbursing official of a military department may, out of available advances, make disbursements to cover obligations in connection with any function, power, or duty of another department or agency of the Department of Defense and charge those disbursements on vouchers, to the appropriate appropriation of that department or agency. Disbursements so made shall be adjusted in settling the accounts of the disbursing official.

§ 2207. Expenditure of appropriations: limitation

• (a) Money appropriated to the Department of Defense may not be spent under a contract other than a contract for personal services unless that contract provides that—
  • (1) the United States may, by written notice to the contractor, terminate the right of the contractor to proceed under the contract if the Secretary concerned or his designee finds, after notice and hearing, that the contractor, or his agent or other representative, offered or gave any gratuity, such as entertainment or a gift, to an officer, official, or employee of the United States to obtain a contract or favorable treatment in the awarding, amending, or making of determinations concerning the performance, of a contract; and
  • (2) if a contract is terminated under clause (1), the United States has the same remedies against the contractor that it would have had if the contractor had breached the contract and, in addition to other damages, is entitled to exemplary damages in an amount at least three, but not more than 10, as determined by the Secretary or his designee, times the cost incurred by the contractor in giving gratuities to the officer, official, or employee concerned.
• (b) This section does not apply to a contract that is for an amount not greater than the simplified acquisition threshold (as defined in section 134 of title 41 ).

§ 2208. Working-capital funds

• (a) To control and account more effectively for the cost of programs and work performed in the Department of Defense, the Secretary of Defense may require the establishment of working-capital funds in the Department of Defense to—
  • (1) finance inventories of such supplies as he may designate; and
  • (2) provide working capital for such industrial-type activities, and such commercial-type activities that provide common services within or among departments and agencies of the Department of Defense, as he may designate.
• (b) Upon the request of the Secretary of Defense, the Secretary of the Treasury shall establish working-capital funds established under this section on the books of the Department of the Treasury.
• (c) Working-capital funds shall be charged, when appropriate, with the cost of—
  • (1) supplies that are procured or otherwise acquired, manufactured, repaired, issued, or used, including the cost of the procurement and qualification of technology-enhanced maintenance capabilities that improve either reliability, maintainability, sustainability, or supportability and have, at a minimum, been demonstrated to be functional in an actual system application or operational environment; and
  • (2) services or work performed;
• (d) The Secretary of Defense may provide capital for working-capital funds by capitalizing inventories. In addition, such amounts may be appropriated for the purpose of providing capital for working-capital funds as have been specifically authorized by law.
• (e) Subject to the authority and direction of the Secretary of Defense, the Secretary of each military department shall allocate responsibility for its functions, powers, and duties to accomplish the most economical and efficient organization and operation of the activities, and the most economical and efficient use of the inventories, for which working-capital funds are authorized by this section. The accomplishment of the most economical and efficient organization and operation of working capital fund activities for the purposes of this subsection shall include actions toward the following:
  • (1) Undertaking efforts to optimize the rate structure for all requisitioning entities.
  • (2) Encouraging a working capital fund activity to perform reimbursable work for other entities to sustain the efficient use of the workforce.
  • (3) Determining the appropriate leadership level for approving work from outside entities to maximize efficiency.
• (f) The requisitioning agency may not incur a cost for supplies drawn from inventories, or services or work performed by industrial-type or commercial-type activities for which working-capital funds may be established under this section, that is more than the amount of appropriations or other funds available for those purposes.
• (g) The appraised value of supplies returned to working-capital funds by a department, activity, or agency may be charged to that fund. The proceeds thereof shall be credited to current applicable appropriations and are available for expenditure for the same purposes that those appropriations are so available. Credits may not be made to appropriations under this subsection as the result of capitalization of inventories under subsection (d).
• (h) The Secretary of Defense shall prescribe regulations governing the operation of activities and use of inventories authorized by this section. The regulations may, if the needs of the Department of Defense require it and it is otherwise authorized by law, authorize supplies to be sold to, or services to be rendered or work performed for, persons outside the Department of Defense. However, supplies available in inventories financed by working capital funds established under this section may be sold to contractors for use in performing contracts with the Department of Defense. Working-capital funds shall be reimbursed for supplies so sold, services so rendered, or work so performed by charges to applicable appropriations or payments received in cash.
• (i) For provisions relating to sales outside the Department of Defense of manufactured articles and services by a working-capital funded Army industrial facility (including a Department of the Army arsenal) that manufactures large caliber cannons, gun mounts, recoil mechanisms, ammunition, munitions, or components thereof, see section 7543 of this title .
• (j)
  • (1) The Secretary of a military department may authorize a working capital funded industrial facility of that department to manufacture or remanufacture articles and sell these articles, as well as manufacturing, remanufacturing, and engineering services provided by such facilities, to persons outside the Department of Defense if—
    • (A) the person purchasing the article or service is fulfilling a Department of Defense contract or a subcontract under a Department of Defense contract, and the solicitation for the contract or subcontract is open to competition between Department of Defense activities and private firms; or
    • (B) the Secretary would advance the objectives set forth in section 2474(b)(2) of this title by authorizing the facility to do so.
  • (2) The Secretary of Defense may waive the conditions in paragraph (1) in the case of a particular sale if the Secretary determines that the waiver is necessary for reasons of national security and notifies Congress regarding the reasons for the waiver.
• (k)
  • (1) Subject to paragraph (2), a contract for the procurement of a capital asset financed by a working-capital fund may be awarded in advance of the availability of funds in the working-capital fund for the procurement.
  • (2) Paragraph (1) applies to any of the following capital assets that have a development or acquisition cost of not less than $500,000 for procurements by a major range and test facility installation or a science and technology reinvention laboratory and not less than $250,000 for procurements at all other facilities:
    • (A) An unspecified minor military construction project under section 2805(c) of this title .
    • (B) Automatic data processing equipment or software.
    • (C) Any other equipment.
    • (D) Any other capital improvement.
• (l)
  • (1) An advance billing of a customer of a working-capital fund may be made if the Secretary of the military department concerned submits to Congress written notification of the advance billing within 30 days after the end of the month in which the advanced billing was made. The notification shall include the following:
    • (A) The reasons for the advance billing.
    • (B) An analysis of the effects of the advance billing on military readiness.
    • (C) An analysis of the effects of the advance billing on the customer.
  • (2) The Secretary of Defense may waive the notification requirements of paragraph (1)—
    • (A) during a period of war or national emergency; or
    • (B) to the extent that the Secretary determines necessary to support a contingency operation.
  • (3) The total amount of the advance billings rendered or imposed for all working-capital funds of the Department of Defense in a fiscal year may not exceed $1,000,000,000.
  • (4) In this subsection:
    • (A) The term “advance billing”, with respect to a working-capital fund, means a billing of a customer by the fund, or a requirement for a customer to reimburse or otherwise credit the fund, for the cost of goods or services provided (or for other expenses incurred) on behalf of the customer that is rendered or imposed before the customer receives the goods or before the services have been performed.
    • (B) The term “customer” means a requisitioning component or agency.
• (m) Amounts charged for depreciation of capital assets shall be credited to a separate capital asset subaccount established within a working-capital fund.
• (n) The Secretary of Defense, with respect to the working-capital funds of each Defense Agency, and the Secretary of each military department, with respect to the working-capital funds of the military department, shall provide for separate accounting, reporting, and auditing of funds and activities managed through the working-capital funds.
• (o)
  • (1) Charges for goods and services provided for an activity through a working-capital fund shall include the following:
    • (A) Amounts necessary to recover the full costs of the goods and services provided for that activity.
    • (B) Amounts for depreciation of capital assets, set in accordance with generally accepted accounting principles.
  • (2) Charges for goods and services provided through a working-capital fund may not include the following:
    • (A) Amounts necessary to recover the costs of a military construction project (as defined in section 2801(b) of this title ), other than a minor construction project financed by the fund pursuant to section 2805(c) of this title .
    • (B) Amounts necessary to cover costs incurred in connection with the closure or realignment of a military installation.
    • (C) Amounts necessary to recover the costs of functions designated by the Secretary of Defense as mission critical, such as ammunition handling safety, and amounts for ancillary tasks not directly related to the mission of the function or activity managed through the fund.
• (p) The Secretary of Defense, with respect to each working-capital fund of a Defense Agency, and the Secretary of a military department, with respect to each working-capital fund of the military department, shall establish billing procedures to ensure that the balance in that working-capital fund does not exceed the amount necessary to provide for the working-capital requirements of that fund, as determined by the Secretary.
• (q) The Secretary of Defense, with respect to each working-capital fund of a Defense Agency, and the Secretary of each military department, with respect to each working-capital fund of the military department, shall annually submit to Congress, at the same time that the President submits the budget under section 1105 of title 31 , the following:
  • (1) A detailed report that contains a statement of all receipts and disbursements of the fund (including such a statement for each subaccount of the fund) for the fiscal year ending in the year preceding the year in which the budget is submitted.
  • (2) A detailed proposed budget for the operation of the fund for the fiscal year for which the budget is submitted.
  • (3) A comparison of the amounts actually expended for the operation of the fund for the fiscal year referred to in paragraph (1) with the amount proposed for the operation of the fund for that fiscal year in the President’s budget.
  • (4) A report on the capital asset subaccount of the fund that contains the following information:
    • (A) The opening balance of the subaccount as of the beginning of the fiscal year in which the report is submitted.
    • (B) The estimated amounts to be credited to the subaccount in the fiscal year in which the report is submitted.
    • (C) The estimated amounts of outlays to be paid out of the subaccount in the fiscal year in which the report is submitted.
    • (D) The estimated balance of the subaccount at the end of the fiscal year in which the report is submitted.
    • (E) A statement of how much of the estimated balance at the end of the fiscal year in which the report is submitted will be needed to pay outlays in the immediately following fiscal year that are in excess of the amount to be credited to the subaccount in the immediately following fiscal year.
• (r)
  • (1) Notwithstanding any authority provided in this section to transfer funds, the transfer of funds from a working-capital fund, including a transfer to another working-capital fund, shall not be made under such authority unless the Secretary of Defense submits, in advance, a notification of the proposed transfer to the congressional defense committees in accordance with customary procedures.
  • (2) The amount of a transfer covered by a notification under paragraph (1) that is made in a fiscal year does not count toward any limitation on the total amount of transfers that may be made for that fiscal year under authority provided to the Secretary of Defense in a law authorizing appropriations for a fiscal year for military activities of the Department of Defense or a law making appropriations for the Department of Defense.
• (s)
  • (1) Except as provided in paragraph (2), the Secretary of Defense or the Secretary of a military department is not authorized—
    • (A) to suspend the employment of indirectly funded Government employees of the Department of Defense who are paid for out of working-capital funds by ceasing or suspending the distribution of such funds; or
    • (B) to cease or suspend the distribution of funds from a working-capital fund for a current project undertaken to carry out the functions or activities of the Department.
  • (2) Paragraph (1) shall not apply with respect to a working-capital fund if—
    • (A) the working-capital fund is insolvent; or
    • (B) there are insufficient funds in the working-capital fund to pay labor costs for the current project concerned.
  • (3) The Secretary of Defense or the Secretary of a military department may waive the limitation in paragraph (1) if such Secretary determines that the waiver is in the national security interests of the United States.
  • (4) This subsection shall not be construed to provide for the exclusion of any particular category of employees of the Department of Defense from furlough due to absence of or inadequate funding.
• (t)
  • (1) From amounts available for Working Capital Fund, Defense, the Secretary shall reserve up to $1,000,000,000, to remain available without fiscal year limitation, for petroleum market price fluctuations. Such amounts may only be disbursed if the Secretary determines such a disbursement is necessary to absorb volatile market changes in fuel prices without affecting the standard price charged for fuel.
  • (2) A budget request for the anticipated costs of fuel may not take into account the availability of funds reserved under paragraph (1).
• (u)
  • (1) The Secretary of a military department may use a working capital fund of the department under this section to fund an unspecified minor military construction project under section 2805 of this title for the revitalization and recapitalization of a defense industrial base facility owned by the United States and under the jurisdiction of the Secretary.
  • (2)
    • (A) Except as provided in subparagraph (B), section 2805 of this title shall apply with respect to a project funded using a working capital fund under the authority of this subsection in the same manner as such section applies to any unspecified minor military construction project under section 2805 of this title .
    • (B) For purposes of applying subparagraph (A), the dollar limitation specified in subsection (a)(2) of section 2805 of this title , subject to adjustment as provided in subsection (f) of such section, shall apply rather than the dollar limitation specified in subsection (c) of such section.
  • (3) In this subsection, the term “defense industrial base facility” means any Department of Defense depot, arsenal, shipyard, or plant located within the United States.
  • (4) The authority to use a working capital fund to fund a project under the authority of this subsection expires on September 30, 2023 .

§ 2209. Management funds

• (a) To conduct economically and efficiently the operations of the Department of Defense that are financed by at least two appropriations but whose costs cannot be immediately distributed and charged to those appropriations, there is the Army Management Fund, the Navy Management Fund, and the Air Force Management Fund, each within its respective department and under the direction of the Secretary of that department. Each such fund shall consist of a corpus of $1,000,000 and such amounts as may be appropriated thereto from time to time. An account for an operation that is to be financed by such a fund may be established only with the approval of the Secretary of Defense.
• (b) Under such regulations as the Secretary of Defense may prescribe, expenditures may be made from a management fund for material (other than for stock), personal services, and services under contract. However, obligation may not be incurred against that fund if it is not chargeable to funds available under an appropriation of the department concerned or funds of another department or agency of the Department of Defense. The fund shall be promptly reimbursed from those funds for expenditures made from it.
• (c) Notwithstanding any other provision of law, advances, by check or warrant, or reimbursements, may be made from available appropriations to a management fund on the basis of the estimated cost of a project. As adequate data becomes available, the estimated cost shall be revised and necessary adjustments made. Final adjustment shall be made with the appropriate funds for the fiscal year in which the advances or reimbursements are made. Except as otherwise provided by law, amounts advanced to management funds are available for obligation only during the fiscal year in which they are advanced.

§ 2210. Proceeds of sales of supplies: credit to appropriations

• (a)
  • (1) A working-capital fund established pursuant to section 2208 of this title may retain so much of the proceeds of disposals of property referred to in paragraph (2) as is necessary to recover the expenses incurred by the fund in disposing of such property. Proceeds from the sale or disposal of such property in excess of amounts necessary to recover the expenses may be credited to current applicable appropriations of the Department of Defense.
  • (2) Paragraph (1) applies to disposals of supplies, material, equipment, and other personal property that were not financed by stock funds established under section 2208 of this title .
• (b) Obligations may, without regard to fiscal year limitations, be incurred against anticipated reimbursements to stock funds in such amounts and for such period as the Secretary of Defense, with the approval of the President, may determine to be necessary to maintain stock levels consistently with planned operations for the next fiscal year.

§ 2211. Reimbursement for equipment, material, or services furnished members of the United Nations

Amounts paid by members of the United Nations for equipment or materials furnished, or services performed, in joint military operations shall be credited to appropriate appropriations of the Department of Defense in the manner authorized by section 632(d) of the Foreign Assistance Act of 1961 ( 22 U.S.C. 2392(d) ).

§ 2212. Obligations for contract services: reporting in budget object classes

• (a) The Secretary of Defense shall ensure that, in reporting to the Office of Management and Budget (pursuant to OMB Circular A–11 (relating to preparation and submission of budget estimates)) obligations of the Department of Defense for any period of time for contract services, no more than 15 percent of the total amount of obligations so reported is reported in the miscellaneous services object class.
• (b) In carrying out section 1105(g) of title 31 for the Department of Defense (and in determining what services are to be reported to the Office of Management and Budget in the advisory and assistance services object class), the Secretary of Defense shall apply to the terms used for the definition of “advisory and assistance services” in paragraph (2)(A) of that section the following meanings (subject to the authorized exemptions):
  • (1) The term “management and professional support services” (used in clause (i) of section 1105(g)(2)(A) of title 31 ) means services that provide engineering or technical support, assistance, advice, or training for the efficient and effective management and operation of organizations, activities, or systems. Those services—
    • (A) are closely related to the basic responsibilities and mission of the using organization; and
    • (B) include efforts that support or contribute to improved organization or program management, logistics management, project monitoring and reporting, data collection, budgeting, accounting, auditing, and administrative or technical support for conferences and training programs.
  • (2) The term “studies, analyses, and evaluations” (used in clause (ii) of section 1105(g)(2)(A) of title 31 ) means services that provide organized, analytic assessments to understand or evaluate complex issues to improve policy development, decisionmaking, management, or administration and that result in documents containing data or leading to conclusions or recommendations. Those services may include databases, models, methodologies, and related software created in support of a study, analysis, or evaluation.
  • (3) The term “engineering and technical services” (used in clause (iii) of section 1105(g)(2)(A) of title 31 ) means services that take the form of advice, assistance, training, or hands-on training necessary to maintain and operate fielded weapon systems, equipment, and components (including software when applicable) at design or required levels of effectiveness.
• (c) Before the submission to the Office of Management and Budget of the proposed Department of Defense budget for inclusion in the President’s budget for a fiscal year pursuant to section 1105 of title 31 , the Secretary of Defense, acting through the Under Secretary of Defense (Comptroller), shall conduct a review of Department of Defense services expected to be performed as contract services during the fiscal year for which that budget is to be submitted in order to ensure that those services that are advisory and assistance services (as defined in accordance with subsection (b)) are in fact properly classified, in accordance with that subsection, in the advisory and assistance services object class.
• (d) The Secretary shall submit to Congress each year, not later than 30 days after the date on which the budget for the next fiscal year is submitted pursuant to section 1105 of title 31 , a report containing the information derived from the review under subsection (c).
• (e)
  • (1) The Comptroller General shall conduct a review of the report of the Secretary of Defense under subsection (d) each year and shall—
    • (A) assess the methodology used by the Secretary in obtaining the information submitted to Congress in that report; and
    • (B) assess the information submitted to Congress in that report.
  • (2) Not later than 120 days after the date on which the Secretary submits to Congress the report required under subsection (d) for any year, the Comptroller General shall submit to Congress the Comptroller General’s report containing the results of the review for that year under paragraph (1).
• (f) In this section:
  • (1) The term “contract services” means all services that are reported to the Office of Management and Budget pursuant to OMB Circular A–11 (relating to preparation and submission of budget estimates) in budget object classes that are designated in the Object Class 25 series.
  • (2) The term “advisory and assistance services object class” means those contract services constituting the budget object class that is denominated “Advisory and Assistance Service” and designated (as of October 17, 1998 ) as Object Class 25.1 (or any similar object class established after October 17, 1998 , for the reporting of obligations for advisory and assistance contract services).
  • (3) The term “miscellaneous services object class” means those contract services constituting the budget object class that is denominated “Other Services (services not otherwise specified in the 25 series)” and designated (as of October 17, 1998 ) as Object Class 25.2 (or any similar object class established after October 17, 1998 , for the reporting of obligations for miscellaneous or unspecified contract services).
  • (4) The term “authorized exemptions” means those exemptions authorized (as of October 17, 1998 ) under Department of Defense Directive 4205.2, captioned “Acquiring and Managing Contracted Advisory and Assistance Services (CAAS)” and issued by the Under Secretary of Defense for Acquisition and Technology on February 10, 1992 , such exemptions being set forth in Enclosure 3 to that directive (captioned “CAAS Exemptions”).

§ 2213. Limitation on acquisition of excess supplies

• (a) The Secretary of Defense may not incur any obligation against a stock fund of the Department of Defense for the acquisition of any item of supply if that acquisition is likely to result in an on-hand inventory (excluding war reserves) of that item of supply in excess of two years of operating stocks.
• (b) The head of a procuring activity may authorize the acquisition of an item of supply in excess of the limitation contained in subsection (a) if that activity head determines in writing—
  • (1) that the acquisition is necessary to achieve an economical order quantity and will not result in an on-hand inventory (excluding war reserves) in excess of three years of operating stocks and that the need for the item is unlikely to decline during the period for which the acquisition is made; or
  • (2) that the acquisition is necessary for purposes of maintaining the industrial base or for other reasons of national security.

§ 2214. Transfer of funds: procedure and limitations

• (a) Whenever authority is provided in an appropriation Act to transfer amounts in working capital funds or to transfer amounts provided in appropriation Acts for military functions of the Department of Defense (other than military construction) between such funds or appropriations (or any subdivision thereof), amounts transferred under such authority shall be merged with and be available for the same purposes and for the same time period as the fund or appropriations to which transferred.
• (b) Such authority to transfer amounts—
  • (1) may not be used except to provide funds for a higher priority item, based on unforeseen military requirements, than the items for which the funds were originally appropriated; and
  • (2) may not be used if the item to which the funds would be transferred is an item for which Congress has denied funds.
• (c) The Secretary of Defense shall promptly notify the Congress of each transfer made under such authority to transfer amounts.
• (d) Neither the Secretary of Defense nor the Secretary of a military department may prepare or present to the Congress, or to any committee of either House of the Congress, a request with respect to a reprogramming of funds—
  • (1) unless the funds to be transferred are to be used for a higher priority item, based on unforeseen military requirements, than the item for which the funds were originally appropriated; or
  • (2) if the request would be for authority to reprogram amounts to an item for which the Congress has denied funds.

§ 2215. Transfer of funds to other departments and agencies: limitation

Funds available for military functions of the Department of Defense may not be made available to any other department or agency of the Federal Government pursuant to a provision of law enacted after November 29, 1989 , unless, not less than 30 days before such funds are made available to such other department or agency, the Secretary of Defense submits to the congressional defense committees a certification that making those funds available to such other department or agency is in the national security interest of the United States.

§ 2216. Defense Modernization Account

• (a) There is established in the Treasury an account to be known as the “Defense Modernization Account”.
• (b) The Defense Modernization Account shall consist of the following:
  • (1) Amounts appropriated to the Defense Modernization Account for the costs of projects described in subsection (d)(1), and amounts reimbursed to the Defense Modernization Account under subsection (c)(1)(B)(ii) out of savings derived from such projects.
  • (2) Amounts transferred to the Defense Modernization Account under subsection (c).
• (c)
  • (1)
    • (A) Upon a determination by the Secretary of a military department, or the Secretary of Defense with respect to Defense-wide appropriations accounts, of the availability and source of funds described in subparagraph (B), the Secretary concerned may transfer to the Defense Modernization Account during any fiscal year any amount of funds available to the Secretary described in that subparagraph. Such funds may be transferred to that account only after the Secretary concerned notifies the congressional defense committees in writing of the amount and source of the proposed transfer.
    • (B) This subsection applies to the following funds that have been appropriated for fiscal years after fiscal year 2016 and are available to the Secretary concerned:
      • (i) Unexpired funds in appropriations accounts that are available for new obligations and that, as a result of economies, efficiencies, and other savings achieved in carrying out an acquisition program, are excess to the requirements of that program.
      • (ii) Unexpired funds in appropriations accounts that are available for procurement or operation and maintenance of a system, if and to the extent that savings are achieved for such accounts through reductions in life cycle costs of such system that result from one or more projects undertaken with respect to such systems with funds made available from the Defense Modernization Account under subsection (b)(1).
    • (C) Any transfer under subparagraph (A) shall be made under regulations prescribed by the Secretary of Defense.
  • (2) Funds referred to in paragraph (1) may not be transferred to the Defense Modernization Account if the balance of funds in the account, after transfer of funds to the account, would exceed $1,000,000,000.
  • (3) Amounts deposited in the Defense Modernization Account shall remain available for transfer and obligation until the end of the third fiscal year that follows the fiscal year in which the amounts are deposited in the account.
• (d) Funds in the Defense Modernization Account may be used for the following purposes:
  • (1) For paying the costs of any project that, in accordance with criteria prescribed by the Secretary concerned, is undertaken by the Secretary of a military department or the head of a Defense Agency or other element of the Department of Defense to reduce the life cycle cost of a new or existing system.
  • (2) For increasing, subject to subsection (e), the quantity of items and services procured under an acquisition program in order to achieve a more efficient production or delivery rate.
  • (3) For research, development, test, and evaluation, for procurement, and for sustainment activities necessary for paying costs of unforeseen contingencies that are approved by the milestone decision authority concerned, that could prevent an ongoing acquisition program from meeting critical schedule or performance requirements.
  • (4) For paying costs of changes to program requirements or system configuration that are approved by the configuration steering board for a major defense acquisition program.
• (e)
  • (1) Funds in the Defense Modernization Account may not be used to increase the quantity of an item or services procured under a particular acquisition program to the extent that doing so would—
    • (A) result in procurement of a total quantity of items or services in excess of—
      • (i) a specific limitation provided by law on the quantity of the items or services that may be procured; or
      • (ii) the requirement for the items or services as approved by the Joint Requirements Oversight Council and reported to Congress by the Secretary of Defense; or
    • (B) result in an obligation or expenditure of funds in excess of a specific limitation provided by law on the amount that may be obligated or expended, respectively, for that acquisition program.
  • (2) Funds in the Defense Modernization Account may not be used for a purpose or program for which Congress has not authorized appropriations, unless the procedures for initiating a new start program are complied with.
  • (3) Funds may not be transferred from the Defense Modernization Account in any year for the purpose of—
    • (A) making an expenditure for which there is no corresponding obligation; or
    • (B) making an expenditure that would satisfy an unliquidated or unrecorded obligation arising in a prior fiscal year.
• (f)
  • (1) The Secretary of a military department, or the Secretary of Defense with respect to Defense-wide appropriations accounts, may transfer funds in the Defense Modernization Account to appropriations available for purposes set forth in subsection (d).
  • (2) Funds in the Defense Modernization Account may not be transferred under paragraph (1) until 30 days after the date on which the Secretary concerned notifies the congressional defense committees in writing of the amount and purpose of the proposed transfer.
  • (3) The total amount of transfers from the Defense Modernization Account during any fiscal year under this subsection may not exceed $500,000,000.
• (g) In addition to transfers under subsection (f), funds in the Defense Modernization Account may be made available for purposes set forth in subsection (d), but only to the extent authorized in an Act other than an appropriations Act. Funds deposited in the Defense Modernization Account shall remain available for obligation until the end of the third fiscal year that follows the fiscal year in which the amounts are deposited in the account.
• (h)
  • (1) The Secretary of Defense shall carry out this section through the Under Secretary of Defense (Comptroller), who shall be authorized to implement this section through the issuance of any necessary regulations, policies, and procedures after consultation with the General Counsel and Inspector General of the Department of Defense.
  • (2) The regulations prescribed under paragraph (1) shall, at a minimum, provide for—
    • (A) the establishment and management of subaccounts for each of the military departments and Defense Agencies concerned for the use of funds in the Defense Modernization Account, consistent with each military department’s or Defense Agency’s deposits in the Account;
    • (B) the submission of proposals by the Secretaries concerned or heads of Defense Agencies or other elements of the Department of Defense to the Comptroller for the use of Defense Modernization Account funds for purposes set forth in subsection (d);
    • (C) the use of a competitive process for the evaluation of such proposals and the selection of programs, projects, and activities to be funded out of the Defense Modernization Account and subaccounts from among those proposed for such funding; and
    • (D) the calculation of—
      • (i) the savings to be derived from projects described in subsection (d)(1) that are to be funded out of the Defense Modernization Account; and
      • (ii) the amounts to be reimbursed to the Defense Modernization Account out of such savings pursuant to subsection (c)(1)(B)(ii).
• (i) In this section:
  • (1) The term “major defense acquisition program” has the meaning given the term in section 2430(a) of this title .
  • (2) The term “unexpired funds” means funds appropriated for a definite period that remain available for obligation.
• (j)
  • (1) The authority under subsection (c) to transfer funds into the Defense Modernization Account terminates at the close of September 30, 2022 .
  • (2) Three years after the termination date specified in paragraph (1), the Defense Modernization Account shall be closed and any remaining balance in the account shall be canceled and thereafter shall not be available for any purpose.

§ 2216a. Rapidly meeting urgent needs: Joint Urgent Operational Needs Fund

• (a) There is established in the Treasury an account to be known as the “Joint Urgent Operational Needs Fund” (in this section referred to as the “Fund”).
• (b) The Fund shall consist of the following:
  • (1) Amounts appropriated to the Fund.
  • (2) Amounts transferred to the Fund.
  • (3) Any other amounts made available to the Fund by law.
• (c)
  • (1) Amounts in the Fund shall be available to the Secretary of Defense for capabilities that are determined by the Secretary, pursuant to the review process required by section 804(b) of the Ike Skelton National Defense Authorization Act for Fiscal Year 2011 ( 10 U.S.C. 2302 note), to be suitable for rapid fielding in response to urgent operational needs.
  • (2) The Secretary shall establish a merit-based process for identifying equipment, supplies, services, training, and facilities suitable for funding through the Fund.
  • (3) Nothing in this section shall be interpreted to require or enable any official of the Department of Defense to provide funding under this section pursuant to a congressional earmark, as defined in clause 9 of Rule XXI of the Rules of the House of Representatives, or a congressionally directed spending item, as defined in paragraph 5 of Rule XLIV of the Standing Rules of the Senate.
• (d)
  • (1) Amounts in the Fund may be transferred by the Secretary of Defense from the Fund to any of the following accounts of the Department of Defense to accomplish the purpose stated in subsection (c):
    • (A) Operation and maintenance accounts.
    • (B) Procurement accounts.
    • (C) Research, development, test, and evaluation accounts.
  • (2) Upon determination by the Secretary that all or part of the amounts transferred from the Fund under paragraph (1) are not necessary for the purpose for which transferred, such amounts may be transferred back to the Fund.
  • (3) The transfer of an amount to an account under the authority in paragraph (1) shall be deemed to increase the amount authorized for such account by an amount equal to the amount so transferred.
  • (4) The transfer authority provided by paragraphs (1) and (2) is in addition to any other transfer authority available to the Department of Defense by law.
• (e) The authority to make expenditures or transfers from the Fund shall expire on September 30, 2018 .

§ 2217. Comparable budgeting for common procurement weapon systems

• (a) In preparing the defense budget for any fiscal year, the Secretary of Defense shall—
  • (1) specifically identify each common procurement weapon system included in the budget;
  • (2) take all feasible steps to minimize variations in procurement unit costs for any such system as shown in the budget requests of the different armed forces requesting procurement funds for the system; and
  • (3) identify and justify in the budget all such variations in procurement unit costs for common procurement weapon systems.
• (b) The Secretary shall carry out this section through the Under Secretary of Defense (Comptroller).
• (c) In this section:
  • (1) The term “defense budget” means the budget of the Department of Defense included in the President’s budget submitted to Congress under section 1105 of title 31 for a fiscal year.
  • (2) The term “common procurement weapon system” means a weapon system for which two or more of the Army, Navy, Air Force, and Marine Corps request procurement funds in a defense budget.

§ 2218. National Defense Sealift Fund

• (a) There is established in the Treasury of the United States a fund to be known as the “National Defense Sealift Fund”.
• (b) The Secretary of Defense shall administer the Fund consistent with the provisions of this section.
• (c)
  • (1) Funds in the National Defense Sealift Fund shall be available for obligation and expenditure only for the following purposes:
    • (A) Construction (including design of vessels), purchase, alteration, and conversion of Department of Defense sealift vessels.
    • (B) Operation, maintenance, and lease or charter of Department of Defense vessels for national defense purposes.
    • (C) Installation and maintenance of defense features for national defense purposes on privately owned and operated vessels that are constructed in the United States and documented under the laws of the United States.
    • (D) Expenses for maintaining the National Defense Reserve Fleet under section 11 of the Merchant Ship Sales Act of 1946 ( 50 U.S.C. 4405 ), 1 1 See References in Text note below. and for the costs of acquisition of vessels for, and alteration and conversion of vessels in (or to be placed in), the fleet, but only for vessels built in United States shipyards.
  • (2) Funds in the National Defense Sealift Fund may be obligated or expended only in amounts authorized by law.
  • (3) Funds obligated and expended for a purpose set forth in subparagraph (B) of paragraph (1) may be derived only from funds deposited in the National Defense Sealift Fund pursuant to subsection (d)(1).
• (d) There shall be deposited in the Fund the following:
  • (1) All funds appropriated to the Department of Defense for—
    • (A) construction (including design of vessels), purchase, alteration, and conversion of national defense sealift vessels;
    • (B) operations, maintenance, and lease or charter of national defense sealift vessels; and
    • (C) installation and maintenance of defense features for national defense purposes on privately owned and operated vessels.
  • (2) All receipts from the disposition of national defense sealift vessels, excluding receipts from the sale, exchange, or scrapping of National Defense Reserve Fleet vessels under sections 57101–57104 and chapter 573 of title 46.
  • (3) All receipts from the charter of vessels under section 1424(c) of the National Defense Authorization Act for Fiscal Year 1991 ( 10 U.S.C. 8661 note).
  • (4) Any other funds made available to the Department of Defense to carry out any of the purposes described in subsection (c).
• (e)
  • (1) The Secretary of Defense may accept from any person, foreign government, or international organization any contribution of money, personal property (excluding vessels), or assistance in kind for support of the sealift functions of the Department of Defense.
  • (2) Any contribution of property accepted under paragraph (1) may be retained and used by the Department of Defense or disposed of in accordance with procedures prescribed by the Secretary of Defense.
  • (3) The Secretary of Defense shall deposit in the Fund money and receipts from the disposition of any property accepted under paragraph (1).
• (f)
  • (1) A vessel built in a foreign ship yard may not be purchased with funds in the National Defense Sealift Fund pursuant to subsection (c)(1), unless specifically authorized by law.
  • (2) Construction, alteration, or conversion of vessels with funds in the National Defense Sealift Fund pursuant to subsection (c)(1) shall be conducted in United States ship yards and shall be subject to section 1424(b) of Public Law 101–510 ( 104 Stat. 1683 ).
  • (3)
    • (A) Notwithstanding the limitations under subsection (c)(1)(E) and paragraph (1), the Secretary of Defense may, as part of a program to recapitalize the Ready Reserve Force component of the national defense reserve fleet and the Military Sealift Command surge fleet, purchase any used vessel, regardless of where such vessel was constructed if such vessel—
      • (i) participated in the Maritime Security Fleet; and
      • (ii) is available for purchase at a reasonable cost, as determined by the Secretary.
    • (B) If the Secretary determines that no used vessel meeting the requirements under clauses (i) and (ii) of subparagraph (A) is available, the Secretary may purchase a used vessel comparable to a vessel described in clause (i) of subparagraph (A), regardless of the source of the vessel or where the vessel was constructed, if such vessel is available for purchase at a reasonable cost, as determined by the Secretary.
    • (C) The Secretary may not use the authority under this paragraph to purchase more than seven foreign constructed vessels.
    • (D) The Secretary shall ensure that the initial conversion, or modernization of any vessel purchased under the authority of subparagraph (A) occurs in a shipyard located in the United States.
    • (E) The Secretary may not use the authority under this paragraph to procure more than two foreign constructed vessels unless the Secretary submits to Congress, by not later than the second week of February of the fiscal year during which the Secretary plans to use such authority, a certification that—
      • (i) the Secretary has initiated an acquisition strategy for the construction in United States shipyards of not less than ten new vessels that are sealift vessels, auxiliary vessels, or a combination of such vessels; and
      • (ii) of such new vessels, the lead ship is anticipated to be delivered by not later than 2026.
    • (F) Not later than 30 days before the purchase of any vessel using the authority under this paragraph, the Secretary, in consultation with the Maritime Administrator, shall submit to the congressional defense committees a report that contains each of the following with respect to such purchase:
      • (i) The proposed date of the purchase.
      • (ii) The price at which the vessel would be purchased.
      • (iii) The anticipated cost of modernization of the vessel.
      • (iv) The proposed military utility of the vessel.
      • (v) The proposed date on which the vessel will be available for use by the Ready Reserve.
      • (vi) The contracting office responsible for the completion of the purchase.
      • (vii) Certification that—
        • (I) there was no vessel available for purchase at a reasonable price that was constructed in the United States; and
        • (II) the used vessel purchased supports the recapitalization of the Ready Reserve Force component of the National Defense Reserve Fleet or the Military Sealift Command surge fleet.
      • (viii) A detailed account of the criteria used to make the determination under subparagraph (B).
    • (G) The Secretary may not finalize or execute the final purchase of any vessel using the authority under this paragraph until 30 days after the date on which a report under subparagraph (E) is submitted with respect to such purchase.
• (g) No part of an appropriation that is deposited in the National Defense Sealift Fund pursuant to subsection (d)(1) shall remain available for obligation more than five years after the end of fiscal year for which appropriated except to the extent specifically provided by law.
• (h) Budget requests submitted to Congress for the National Defense Sealift Fund shall separately identify—
  • (1) the amount requested for programs, projects, and activities for construction (including design of vessels), purchase, alteration, and conversion of national defense sealift vessels;
  • (2) the amount requested for programs, projects, and activities for operation, maintenance, and lease or charter of national defense sealift vessels;
  • (3) the amount requested for programs, projects, and activities for installation and maintenance of defense features for national defense purposes on privately owned and operated vessels that are constructed in the United States and documented under the laws of the United States; and
  • (4) the amount requested for programs, projects, and activities for research and development relating to national defense sealift.
• (i) Nothing in this section (other than subsection (c)(1)(E)) shall be construed to affect or modify title to, management of, or funding responsibilities for, any vessel of the National Defense Reserve Fleet, or assigned to the Ready Reserve Force component of the National Defense Reserve Fleet, as established by section 57100 of title 46 .
• (j)
  • (1) The head of an agency may enter into a contract with a company submitting an offer for that company to install and maintain defense features for national defense purposes in one or more commercial vessels owned or controlled by that company in accordance with the purpose for which funds in the National Defense Sealift Fund are available under subsection (c)(1)(C). The head of the agency may enter into such a contract only after the head of the agency makes a determination of the economic soundness of the offer. As consideration for a contract with the head of an agency under this subsection, the company entering into the contract shall agree with the Secretary of Defense to make any vessel covered by the contract available to the Secretary, fully crewed and ready for sea, at any time at any port determined by the Secretary, and for whatever duration the Secretary determines necessary.
  • (2) The head of an agency may make advance payments to the contractor under a contract under paragraph (1) in a lump sum, in annual payments, or in a combination thereof for costs associated with the installation and maintenance of the defense features on a vessel covered by the contract, as follows:
    • (A) The costs to build, procure, and install a defense feature in the vessel.
    • (B) The costs to periodically maintain and test any defense feature on the vessel.
    • (C) Any increased costs of operation or any loss of revenue attributable to the installation or maintenance of any defense feature on the vessel.
    • (D) Any additional costs associated with the terms and conditions of the contract.
    • (E) Payments of such sums as the Government would otherwise expend, if the vessel were placed in the Ready Reserve Fleet, for maintaining the vessel in the status designated as “ROS–4 status” in the Ready Reserve Fleet for 25 years.
  • (3) For any contract under paragraph (1) under which the United States makes advance payments under paragraph (2) for the costs associated with installation or maintenance of any defense feature on a commercial vessel, the contractor shall provide to the United States such security interests in the vessel, by way of a preferred mortgage under section 31322 of title 46 or otherwise, as the head of the agency may prescribe in order to adequately protect the United States against loss for the total amount of those costs.
  • (4) Each contract entered into under this subsection shall—
    • (A) set forth terms and conditions under which, so long as a vessel covered by the contract is owned or controlled by the contractor, the contractor is to operate the vessel for the Department of Defense notwithstanding any other contract or commitment of that contractor; and
    • (B) provide that the contractor operating the vessel for the Department of Defense shall be paid for that operation at fair and reasonable rates.
  • (5) The head of an agency may not delegate authority under this subsection to any officer or employee in a position below the level of head of a procuring activity.
  • (6) The head of an agency may not enter into a contract under paragraph (1) that would provide for payments to the contractor as authorized in paragraph (2)(E) until notice of the proposed contract is submitted to the congressional defense committees and a period of 90 days has elapsed.
• (k) In this section:
  • (1) The term “Fund” means the National Defense Sealift Fund established by subsection (a).
  • (2) The term “Department of Defense sealift vessel” means any ship owned, operated, controlled, or chartered by the Department of Defense that is any of the following:
    • (A) A fast sealift ship, including any vessel in the Fast Sealift Program established under section 1424 of Public Law 101–510 ( 104 Stat. 1683 ).
    • (B) Any other auxiliary vessel that was procured or chartered with specific authorization in law for the vessel, or class of vessels, to be funded in the National Defense Sealift Fund.
  • (3) The term “national defense sealift vessel” means—
    • (A) a Department of Defense sealift vessel; and
    • (B) a national defense reserve fleet vessel, including a vessel in the Ready Reserve Force maintained under section 11 of the Merchant Ship Sales Act of 1946 ( 50 U.S.C. 4405 ). 1
  • (4) The term “head of an agency” has the meaning given that term in section 2302(1) of this title .
  • (5) The term “Maritime Security Fleet” means the fleet established under section 53102(a) of title 46 .

§ 2218a. National Sea-Based Deterrence Fund

• (a) There is established in the Treasury of the United States a fund to be known as the “National Sea-Based Deterrence Fund”.
• (b) The Secretary of Defense shall administer the Fund consistent with the provisions of this section.
• (c)
  • (1) Funds in the Fund shall be available for obligation and expenditure only for construction (including design of vessels), purchase, alteration, and conversion of national sea-based deterrence vessels.
  • (2) Funds in the Fund may not be used for a purpose or program unless the purpose or program is authorized by law.
• (d) There shall be deposited in the Fund all funds appropriated to the Department of Defense for construction (including design of vessels), purchase, alteration, and conversion of national sea-based deterrence vessels.
• (e) No part of an appropriation that is deposited in the Fund pursuant to subsection (d) shall remain available for obligation more than five years after the end of fiscal year for which appropriated except to the extent specifically provided by law.
• (f)
  • (1) The Secretary of the Navy may use funds deposited in the Fund to enter into contracts known as “economic order quantity contracts” with private shipyards and other commercial or government entities to achieve economic efficiencies based on production economies for major components or subsystems. The authority under this subsection extends to the procurement of parts, components, and systems (including weapon systems) common with and required for other nuclear powered vessels under joint economic order quantity contracts.
  • (2) A contract entered into under paragraph (1) shall provide that any obligation of the United States to make a payment under the contract is subject to the availability of appropriations for that purpose, and that total liability to the Government for termination of any contract entered into shall be limited to the total amount of funding obligated at time of termination.
• (g)
  • (1) The Secretary of the Navy may use funds deposited into the Fund to enter into contracts for advance construction of national sea-based deterrence vessels to support achieving cost savings through workload management, manufacturing efficiencies, or workforce stability, or to phase fabrication activities within shipyard and manage sub-tier manufacturer capacity.
  • (2) A contract entered into under paragraph (1) shall provide that any obligation of the United States to make a payment under the contract is subject to the availability of appropriations for that purpose, and that total liability to the Government for termination of any contract entered into shall be limited to the total amount of funding obligated at time of termination.
• (h)
  • (1) The Secretary of the Navy may use funds deposited into the Fund to enter into incrementally funded contracts for advance procurement of high value, long lead time items for nuclear powered vessels to better support construction schedules and achieve cost savings through schedule reductions and properly phased installment payments.
  • (2) A contract entered into under paragraph (1) shall provide that any obligation of the United States to make a payment under the contract is subject to the availability of appropriations for that purpose, and that total liability to the Government for termination of any contract entered into shall be limited to the total amount of funding obligated at time of termination.
• (i)
  • (1) To implement the continuous production of critical components, the Secretary of the Navy may use funds deposited in the Fund, in conjunction with funds appropriated for the procurement of other nuclear-powered vessels, to enter into one or more multiyear contracts (including economic ordering quantity contracts), for the procurement of critical contractor-furnished and Government-furnished components for critical components of national sea-based deterrence vessels. The authority under this subsection extends to the procurement of equivalent critical components common with and required for other nuclear-powered vessels.
  • (2) In each annual budget request submitted to Congress, the Secretary shall clearly identify funds requested for critical components and the individual ships and programs for which such funds are requested.
  • (3) Any contract entered into pursuant to paragraph (1) shall provide that any obligation of the United States to make a payment under the contract is subject to the availability of appropriations for that purpose and that the total liability to the Government for the termination of the contract shall be limited to the total amount of funding obligated for the contract as of the date of the termination.
• (j) Budget requests submitted to Congress for the Fund shall separately identify the amount requested for programs, projects, and activities for construction (including design of vessels), purchase, alteration, and conversion of national sea-based deterrence vessels.
• (k) In this section:
  • (1) The term “Fund” means the National Sea-Based Deterrence Fund established by subsection (a).
  • (2) The term “national sea-based deterrence vessel” means any submersible vessel constructed or purchased after fiscal year 2016 that is owned, operated, or controlled by the Department of Defense and that carries operational intercontinental ballistic missiles.
  • (3) The term “critical component” means any of the following:
    • (A) A common missile compartment component.
    • (B) A spherical air flask.
    • (C) An air induction diesel exhaust valve.
    • (D) An auxiliary seawater valve.
    • (E) A hovering valve.
    • (F) A missile compensation valve.
    • (G) A main seawater valve.
    • (H) A launch tube.
    • (I) A trash disposal unit.
    • (J) A logistics escape trunk.
    • (K) A torpedo tube.
    • (L) A weapons shipping cradle weldment.
    • (M) A control surface.
    • (N) A launcher component.
    • (O) A propulsor.

§ 2220. Performance based management: acquisition programs

• (a) The Secretary of Defense shall approve or define the cost, performance, and schedule goals for major defense acquisition programs of the Department of Defense and for each phase of the acquisition cycle of such programs.
• (b) The Under Secretary of Defense (Comptroller) shall evaluate the cost goals proposed for each major defense acquisition program of the Department.
• (c) The authority under this section shall terminate on September 30, 2018 .

§ 2222. Defense business systems: business process reengineering; enterprise architecture; management

• (a) The Secretary of Defense shall ensure that defense business processes are reviewed, and as appropriate revised, through business process reengineering to match best commercial practices, to the maximum extent practicable, so as to minimize customization of commercial business systems.
• (b) The Secretary of Defense shall ensure that each covered defense business system developed, deployed, and operated by the Department of Defense—
  • (1) supports efficient business processes that have been reviewed, and as appropriate revised, through business process reengineering;
  • (2) is integrated into a comprehensive defense business enterprise architecture;
  • (3) is managed in a manner that provides visibility into, and traceability of, expenditures for the system; and
  • (4) uses an acquisition and sustainment strategy that prioritizes the use of commercial software and business practices.
• (c)
  • (1) The Secretary shall issue guidance to provide for the coordination of, and decision making for, the planning, programming, and control of investments in covered defense business systems.
  • (2) The Secretary shall direct the Chief Management Officer of the Department of Defense, the Under Secretary of Defense for Acquisition and Sustainment, the Chief Information Officer, and the Chief Management Officer of each of the military departments to issue and maintain supporting guidance, as appropriate and within their respective areas of responsibility, for the guidance of the Secretary issued under paragraph (1).
• (d) The guidance issued under subsection (c) shall include the following elements:
  • (1) Policy to ensure that the business processes of the Department of Defense are continuously reviewed and revised—
    • (A) to implement the most streamlined and efficient business processes practicable; and
    • (B) to eliminate or reduce the need to tailor commercial off-the-shelf systems to meet or incorporate requirements or interfaces that are unique to the Department of Defense.
  • (2) A process to establish requirements for covered defense business systems.
  • (3) Mechanisms for the planning and control of investments in covered defense business systems, including a process for the collection and review of programming and budgeting information for covered defense business systems.
  • (4) Policy requiring the periodic review of covered defense business systems that have been fully deployed, by portfolio, to ensure that investments in such portfolios are appropriate.
  • (5) Policy to ensure full consideration of sustainability and technological refreshment requirements, and the appropriate use of open architectures.
  • (6) Policy to ensure that best acquisition and systems engineering practices are used in the procurement and deployment of commercial systems, modified commercial systems, and defense-unique systems to meet Department of Defense missions.
  • (7) Policy to ensure a covered defense business system is in compliance with the Department’s auditability requirements.
  • (8) Policy to ensure approvals required for the development of a covered defense business system.
• (e)
  • (1) The Secretary, working through the Chief Management Officer of the Department of Defense, shall develop and maintain a blueprint to guide the development of integrated business processes within the Department of Defense. Such blueprint shall be known as the “defense business enterprise architecture”.
  • (2) The defense business enterprise architecture shall be sufficiently defined to effectively guide implementation of interoperable defense business system solutions and shall be consistent with the policies and procedures established by the Director of the Office of Management and Budget.
  • (3) The defense business enterprise architecture shall—
    • (A) include policies, procedures, business data standards, business performance measures, and business information requirements that apply uniformly throughout the Department of Defense; and
    • (B) enable the Department of Defense to—
      • (i) comply with all applicable law, including Federal accounting, financial management, and reporting requirements;
      • (ii) routinely produce verifiable, timely, accurate, and reliable business and financial information for management purposes;
      • (iii) integrate budget, accounting, and program information and systems; and
      • (iv) identify whether each existing business system is a part of the business systems environment outlined by the defense business enterprise architecture, will become a part of that environment with appropriate modifications, or is not a part of that environment.
  • (4)
    • (A) The defense business enterprise architecture shall be integrated into the information technology enterprise architecture required under subparagraph (B).
    • (B) The Chief Information Officer of the Department of Defense shall develop an information technology enterprise architecture. The architecture shall describe a plan for improving the information technology and computing infrastructure of the Department of Defense, including for each of the major business processes conducted by the Department of Defense.
  • (5) The defense business enterprise shall include enterprise data that may be automatically extracted from the relevant systems to facilitate Department of Defense-wide analysis and management of its business operations.
  • (6)
    • (A) The Chief Management Officer of the Department of Defense shall have primary decision-making authority with respect to the development of common enterprise data. In consultation with the Defense Business Council, the Chief Management Officer shall—
      • (i) develop an associated data governance process; and
      • (ii) oversee the preparation, extraction, and provision of data across the defense business enterprise.
    • (B) The Chief Management Officer and the Under Secretary of Defense (Comptroller) shall—
      • (i) in consultation with the Defense Business Council, document and maintain any common enterprise data for their respective areas of authority;
      • (ii) participate in any related data governance process;
      • (iii) extract data from defense business systems as needed to support priority activities and analyses;
      • (iv) when appropriate, ensure the source data is the same as that used to produce the financial statements subject to annual audit;
      • (v) in consultation with the Defense Business Council, provide access, except as otherwise provided by law or regulation, to such data to the Office of the Secretary of Defense, the Joint Staff, the military departments, the combatant commands, the Defense Agencies, the Department of Defense Field Activities, and all other offices, agencies, activities, and commands of the Department of Defense; and
      • (vi) ensure consistency of the common enterprise data maintained by their respective organizations.
    • (C) The Director of Cost Assessment and Program Evaluation shall have access to data for the purpose of executing missions as designated by the Secretary of Defense.
    • (D) The Secretary of Defense, the Chairman of the Joint Chiefs of Staff, the Secretaries of the military departments, commanders of combatant commands, the heads of the Defense Agencies, the heads of the Department of Defense Field Activities, and the heads of all other offices, agencies, activities, and commands of the Department of Defense shall provide access to the relevant system of such department, combatant command, Defense Agency, Defense Field Activity, or office, agency, activity, and command organization, as applicable, and data extracted from such system, for purposes of automatically populating data sets coded with common enterprise data.
• (f)
  • (1) The Secretary shall establish a Defense Business Council to provide advice to the Secretary on developing the defense business enterprise architecture, reengineering the Department’s business processes, developing and deploying defense business systems, and developing requirements for defense business systems. The Council shall be chaired by the Chief Management Officer and the Chief Information Officer of the Department of Defense.
  • (2) The membership of the Council shall include the following:
    • (A) The Chief Management Officers of the military departments, or their designees.
    • (B) The following officials of the Department of Defense, or their designees:
      • (i) The Under Secretary of Defense for Acquisition and Sustainment with respect to acquisition, logistics, and installations management processes.
      • (ii) The Under Secretary of Defense (Comptroller) with respect to financial management and planning and budgeting processes.
      • (iii) The Under Secretary of Defense for Personnel and Readiness with respect to human resources management processes.
• (g)
  • (1) The Secretary shall ensure that a covered defense business system program cannot proceed into development (or, if no development is required, into production or fielding) unless the appropriate approval official (as specified in paragraph (2)) determines that—
    • (A) the system has been, or is being, reengineered to be as streamlined and efficient as practicable, and the implementation of the system will maximize the elimination of unique software requirements and unique interfaces;
    • (B) the system and business system portfolio are or will be in compliance with the defense business enterprise architecture developed pursuant to subsection (e) or will be in compliance as a result of modifications planned;
    • (C) the system has valid, achievable requirements and a viable plan for implementing those requirements (including, as appropriate, market research, business process reengineering, and prototyping activities);
    • (D) the system has an acquisition strategy designed to eliminate or reduce the need to tailor commercial off-the-shelf systems to meet unique requirements, incorporate unique requirements, or incorporate unique interfaces to the maximum extent practicable; and
    • (E) the system is in compliance with the Department’s auditability requirements.
  • (2) For purposes of paragraph (1), the appropriate approval official with respect to a covered defense business system is the following:
    • (A) Except as may be provided in subparagraph (C), in the case of a priority defense business system, the Chief Management Officer of the Department of Defense.
    • (B) Except as may be provided in subparagraph (C), for any defense business system other than a priority defense business system—
      • (i) in the case of a system of a military department, the Chief Management Officer of that military department; and
      • (ii) in the case of a system of a Defense Agency or Department of Defense Field Activity, or a system that will support the business process of more than one military department or Defense Agency or Department of Defense Field Activity, the Chief Management Officer of the Department of Defense.
    • (C) In the case of any defense business system, such official other than the applicable official under subparagraph (A) or (B) as the Secretary designates for such purpose.
  • (3) For any fiscal year in which funds are expended for development or sustainment pursuant to a covered defense business system program, the appropriate approval official shall review the system and certify, certify with conditions, or decline to certify, as the case may be, that it continues to satisfy the requirements of paragraph (1). If the approval official determines that certification cannot be granted, the approval official shall notify the milestone decision authority for the program and provide a recommendation for corrective action.
  • (4) The obligation of Department of Defense funds for a covered defense business system program that has not been certified in accordance with paragraph (3) is a violation of section 1341(a)(1)(A) of title 31 .
• (h) The milestone decision authority for a covered defense business system program shall be responsible for the acquisition of such system and shall ensure that acquisition process approvals are not considered for such system until the relevant certifications and approvals have been made under this section.
• (i) In this section:
  • (1)
    • (A) The term “defense business system” means an information system that is operated by, for, or on behalf of the Department of Defense, including any of the following:
      • (i) A financial system.
      • (ii) A financial data feeder system.
      • (iii) A contracting system.
      • (iv) A logistics system.
      • (v) A planning and budgeting system.
      • (vi) An installations management system.
      • (vii) A human resources management system.
      • (viii) A training and readiness system.
    • (B) The term does not include—
      • (i) a national security system; or
      • (ii) an information system used exclusively by and within the defense commissary system or the exchange system or other instrumentality of the Department of Defense conducted for the morale, welfare, and recreation of members of the armed forces using nonappropriated funds.
  • (2) The term “covered defense business system” means a defense business system that is expected to have a total amount of budget authority, over the period of the current future-years defense program submitted to Congress under section 221 of this title , in excess of $50,000,000.
  • (3) The term “business system portfolio” means all business systems performing functions closely related to the functions performed or to be performed by a covered defense business system.
  • (4) The term “covered defense business system program” means a defense acquisition program to develop and field a covered defense business system or an increment of a covered defense business system.
  • (5) The term “priority defense business system” means a defense business system that is—
    • (A) expected to have a total amount of budget authority over the period of the current future-years defense program submitted to Congress under section 221 of this title in excess of $250,000,000; or
    • (B) designated by the Chief Management Officer of the Department of Defense as a priority defense business system, based on specific program analyses of factors including complexity, scope, and technical risk, and after notification to Congress of such designation.
  • (6) The term “enterprise architecture” has the meaning given that term in section 3601(4) of title 44 .
  • (7) The term “information system” has the meaning given that term in section 11101 of title 40 , United States Code.
  • (8) The term “national security system” has the meaning given that term in section 3552(b)(6)(A) of title 44 .
  • (9) The term “business process mapping” means a procedure in which the steps in a business process are clarified and documented in both written form and in a flow chart.
  • (10) The term “common enterprise data” means business operations or management-related data, generally from defense business systems, in a usable format that is automatically accessible by authorized personnel and organizations.
  • (11) The term “data governance process” means a system to manage the timely Department of Defense-wide sharing of data described under subsection (e)(6)(A).

§ 2223. Information technology: additional responsibilities of Chief Information Officers

• (a) In addition to the responsibilities provided for in chapter 35 of title 44 and in section 11315 of title 40 , the Chief Information Officer of the Department of Defense shall—
  • (1) review and provide recommendations to the Secretary of Defense on Department of Defense budget requests for information technology and national security systems;
  • (2) ensure the interoperability of information technology and national security systems throughout the Department of Defense;
  • (3) ensure that information technology and national security systems standards that will apply throughout the Department of Defense are prescribed;
  • (4) provide for the elimination of duplicate information technology and national security systems within and between the military departments and Defense Agencies; and
  • (5) maintain a consolidated inventory of Department of Defense mission critical and mission essential information systems, identify interfaces between those systems and other information systems, and develop and maintain contingency plans for responding to a disruption in the operation of any of those information systems.
• (b) In addition to the responsibilities provided for in chapter 35 of title 44 and in section 11315 of title 40 , the Chief Information Officer of a military department, with respect to the military department concerned, shall—
  • (1) review budget requests for all information technology and national security systems;
  • (2) ensure that information technology and national security systems are in compliance with standards of the Government and the Department of Defense;
  • (3) ensure that information technology and national security systems are interoperable with other relevant information technology and national security systems of the Government and the Department of Defense; and
  • (4) coordinate with the Joint Staff with respect to information technology and national security systems.
• (c) In this section:
  • (1) The term “Chief Information Officer” means the senior official designated by the Secretary of Defense or a Secretary of a military department pursuant to section 3506 of title 44 .
  • (2) The term “information technology” has the meaning given that term by section 11101 of title 40 .
  • (3) The term “national security system” has the meaning given that term by section 3552(b)(6) of title 44 .

§ 2223a. Information technology acquisition planning and oversight requirements

• (a) The Secretary of Defense shall establish a program to improve the planning and oversight processes for the acquisition of major automated information systems by the Department of Defense.
• (b) The program established under subsection (a) shall include—
  • (1) a documented process for information technology acquisition planning, requirements development and management, project management and oversight, earned value management, and risk management;
  • (2) the development of appropriate metrics that can be implemented and monitored on a real-time basis for performance measurement of—
    • (A) processes and development status of investments in major automated information system programs;
    • (B) continuous process improvement of such programs; and
    • (C) achievement of program and investment outcomes;
  • (3) a process to ensure that key program personnel have an appropriate level of experience, training, and education in the planning, acquisition, execution, management, and oversight of information technology systems;
  • (4) a process to ensure sufficient resources and infrastructure capacity for test and evaluation of information technology systems;
  • (5) a process to ensure that military departments and Defense Agencies adhere to established processes and requirements relating to the planning, acquisition, execution, management, and oversight of information technology programs and developments; and
  • (6) a process under which an appropriate Department of Defense official may intervene or terminate the funding of an information technology investment if the investment is at risk of not achieving major project milestones.

§ 2224. Defense Information Assurance Program

• (a) The Secretary of Defense shall carry out a program, to be known as the “Defense Information Assurance Program”, to protect and defend Department of Defense information, information systems, and information networks that are critical to the Department and the armed forces during day-to-day operations and operations in times of crisis.
• (b) The objectives of the program shall be to provide continuously for the availability, integrity, authentication, confidentiality, nonrepudiation, and rapid restitution of information and information systems that are essential elements of the Defense Information Infrastructure.
• (c) In carrying out the program, the Secretary shall develop a program strategy that encompasses those actions necessary to assure the readiness, reliability, continuity, and integrity of Defense information systems, networks, and infrastructure, including through compliance with subchapter II of chapter 35 of title 44, including through compliance with subchapter III of chapter 35 of title 44. The program strategy shall include the following:
  • (1) A vulnerability and threat assessment of elements of the defense and supporting nondefense information infrastructures that are essential to the operations of the Department and the armed forces.
  • (2) Development of essential information assurances technologies and programs.
  • (3) Organization of the Department, the armed forces, and supporting activities to defend against information warfare.
  • (4) Joint activities of the Department with other departments and agencies of the Government, State and local agencies, and elements of the national information infrastructure.
  • (5) The conduct of exercises, war games, simulations, experiments, and other activities designed to prepare the Department to respond to information warfare threats.
  • (6) Development of proposed legislation that the Secretary considers necessary for implementing the program or for otherwise responding to the information warfare threat.
• (d) In carrying out the program, the Secretary shall coordinate, as appropriate, with the head of any relevant Federal agency and with representatives of those national critical information infrastructure systems that are essential to the operations of the Department and the armed forces on information assurance measures necessary to the protection of these systems.
• [(e) Repealed. Pub. L. 108–136, div. A, title X, § 1031(a)(12) , Nov. 24, 2003 , 117 Stat. 1597 .]
• (f) The Secretary shall develop an information assurance test bed within the Department of Defense to provide—
  • (1) an integrated organization structure to plan and facilitate the conduct of simulations, war games, exercises, experiments, and other activities to prepare and inform the Department regarding information warfare threats; and
  • (2) organization and planning means for the conduct by the Department of the integrated or joint exercises and experiments with elements of the national information systems infrastructure and other non-Department of Defense organizations that are responsible for the oversight and management of critical information systems and infrastructures on which the Department, the armed forces, and supporting activities depend for the conduct of daily operations and operations during crisis.

§ 2224a. Information security: continued applicability of expiring Governmentwide requirements to the Department of Defense

• (a) The provisions of subchapter II 1 1 See References in Text note below. of chapter 35 of title 44 shall continue to apply through September 30, 2004 , with respect to the Department of Defense, notwithstanding the expiration of authority under section 3536 1 of such title.
• (b) In administering the provisions of subchapter II 1 of chapter 35 of title 44 with respect to the Department of Defense after the expiration of authority under section 3536 1 of such title, the Secretary of Defense shall perform the duties set forth in that subchapter for the Director of the Office of Management and Budget.

§ 2226. Contracted property and services: prompt payment of vouchers

• (a) Of the contract vouchers that are received by the Defense Finance and Accounting Service by means of the mechanization of contract administration services system, the number of such vouchers that remain unpaid for more than 30 days as of the last day of each month may not exceed 5 percent of the total number of the contract vouchers so received that remain unpaid on that day.
• (b) In this section, the term “contract voucher” means a voucher or invoice for the payment to a contractor for services or deliverable items provided by the contractor under a contract funded by the Department of Defense.

§ 2227. Electronic submission and processing of claims for contract payments

• (a) The Secretary of Defense shall require that any claim for payment under a Department of Defense contract shall be submitted to the Department of Defense in electronic form.
• (b) A contracting officer, contract administrator, certifying official, or other officer or employee of the Department of Defense who receives a claim for payment in electronic form in accordance with subsection (a) and is required to transmit the claim to any other officer or employee of the Department of Defense for processing under procedures of the department shall transmit the claim and any additional documentation necessary to support the determination and payment of the claim to such other officer or employee electronically.
• (c) If the Secretary of Defense determines that the requirement for using electronic means for submitting claims under subsection (a), or for transmitting claims and supporting documentation under subsection (b), is unduly burdensome in any category of cases, the Secretary may exempt the cases in that category from the application of the requirement.
• (d) In implementing subsections (a) and (b), the Secretary of Defense shall provide for the following:
  • (1) Policies, requirements, and procedures for using electronic means for the submission of claims for payment to the Department of Defense and for the transmission, between Department of Defense officials, of claims for payment received in electronic form, together with supporting documentation (such as receiving reports, contracts and contract modifications, and required certifications).
  • (2) The format in which information can be accepted by the corporate database of the Defense Finance and Accounting Service.
  • (3) The requirements to be included in contracts regarding the electronic submission of claims for payment by contractors.
• (e) In this section, the term “claim for payment” means an invoice or any other demand or request for payment.

§ 2228. Office of Corrosion Policy and Oversight

• (a)
  • (1) There is an Office of Corrosion Policy and Oversight within the Office of the Under Secretary of Defense for Acquisition and Sustainment.
  • (2) The Office shall be headed by a Director of Corrosion Policy and Oversight, who shall be assigned to such position by the Under Secretary from among civilian employees of the Department of Defense with the qualifications described in paragraph (3). The Director is responsible in the Department of Defense to the Secretary of Defense (after the Under Secretary of Defense for Acquisition and Sustainment) for the prevention and mitigation of corrosion of the military equipment and infrastructure of the Department of Defense.
  • (3) In order to qualify to be assigned to the position of Director, an individual shall—
    • (A) have management expertise in, and professional experience with, corrosion project and policy implementation, including an understanding of the effects of corrosion policies on infrastructure; research, development, test, and evaluation; and maintenance; and
    • (B) have an understanding of Department of Defense budget formulation and execution, policy formulation, and planning and program requirements.
  • (4) The Secretary of Defense shall designate the position of Director as a critical acquisition position under section 1731 of this title .
• (b)
  • (1) The Director of Corrosion Policy and Oversight (in this section referred to as the “Director”) shall oversee and coordinate efforts throughout the Department of Defense to prevent and mitigate corrosion of the military equipment and infrastructure of the Department. The duties under this paragraph shall include the duties specified in paragraphs (2) through (5).
  • (2) The Director shall develop and recommend any policy guidance on the prevention and mitigation of corrosion to be issued by the Secretary of Defense.
  • (3) The Director shall review the programs and funding levels proposed by the Secretary of each military department during the annual internal Department of Defense budget review process as those programs and funding proposals relate to programs and funding for the prevention and mitigation of corrosion and shall submit to the Secretary of Defense recommendations regarding those programs and proposed funding levels.
  • (4) The Director shall provide oversight and coordination of the efforts within the Department of Defense to prevent or mitigate corrosion during—
    • (A) the design, acquisition, and maintenance of military equipment; and
    • (B) the design, construction, and maintenance of infrastructure.
  • (5) The Director shall monitor acquisition practices within the Department of Defense—
    • (A) to ensure that the use of corrosion prevention technologies and the application of corrosion prevention treatments are fully considered during research and development in the acquisition process; and
    • (B) to ensure that, to the extent determined appropriate for each acquisition program, such technologies and treatments are incorporated into that program, particularly during the engineering and design phases of the acquisition process.
• (c) The Director is authorized to—
  • (1) develop, update, and coordinate corrosion training with the Defense Acquisition University;
  • (2) participate in the process within the Department of Defense for the development of relevant directives and instructions; and
  • (3) interact directly with the corrosion prevention industry, trade associations, other government corrosion prevention agencies, academic research and educational institutions, and scientific organizations engaged in corrosion prevention, including the National Academy of Sciences.
• (d)
  • (1) The Secretary of Defense shall develop and implement a long-term strategy to reduce corrosion and the effects of corrosion on the military equipment and infrastructure of the Department of Defense.
  • (2) The strategy under paragraph (1) shall include the following:
    • (A) Expansion of the emphasis on corrosion prevention and mitigation within the Department of Defense to include coverage of infrastructure.
    • (B) Application uniformly throughout the Department of Defense of requirements and criteria for the testing and certification of new corrosion-prevention technologies for equipment and infrastructure with similar characteristics, similar missions, or similar operating environments.
    • (C) Implementation of programs, including supporting databases, to ensure that a focused and coordinated approach is taken throughout the Department of Defense to collect, review, validate, and distribute information on proven methods and products that are relevant to the prevention of corrosion of military equipment and infrastructure.
    • (D) Establishment of a coordinated research and development program for the prevention and mitigation of corrosion for new and existing military equipment and infrastructure that includes a plan to transition new corrosion prevention technologies into operational systems, including through the establishment of memoranda of agreement, joint funding agreements, public-private partnerships, university research and education centers, and other cooperative research agreements.
  • (3) The strategy shall include, for the matters specified in paragraph (2), the following:
    • (A) Policy guidance.
    • (B) Performance measures and milestones.
    • (C) An assessment of the necessary personnel and funding necessary to accomplish the long-term strategy.
• (e)
  • (1) For each budget for a fiscal year, beginning with the budget for fiscal year 2009 and ending with the budget for fiscal year 2022, the Secretary of Defense shall submit, with the defense budget materials, a report on the following:
    • (A) Funding requirements for the long-term strategy developed under subsection (d).
    • (B) The estimated composite return on investment achieved by implementing the strategy, and documented in the assessments by the Department of Defense of completed corrosion projects and activities.
    • (C) For the fiscal year covered by the report and the preceding fiscal year, the funds requested in the budget compared to the funding requirements.
    • (D) If the full amount of funding requirements is not requested in the budget, the reasons for not including the full amount and a description of the impact on readiness, logistics, and safety of not fully funding required corrosion prevention and mitigation activities.
    • (E) For the fiscal year preceding the fiscal year covered by the report, the amount of funds requested in the budget for each project or activity described in subsection (d) compared to the funding requirements for the project or activity.
    • (F) For the fiscal year preceding the fiscal year covered by the report, a description of the specific amount of funds used for military corrosion projects, the Technical Corrosion Collaboration program, and other corrosion-related activities.
  • (2)
    • (A) Each report under this section shall include, in an annex to the report, a summary of the most recent report required by subparagraph (B).
    • (B) Not later than December 31 of each year, through December 31, 2020 , the corrosion control and prevention executive of a military department shall submit to the Director of Corrosion Policy and Oversight a report containing recommendations pertaining to the corrosion control and prevention program of the military department. Such report shall include recommendations for the funding levels necessary for the executive to carry out the duties of the executive under this section. The report required under this subparagraph shall—
      • (i) provide a summary of key accomplishments, goals, and objectives of the corrosion control and prevention program of the military department; and
      • (ii) include the performance measures used to ensure that the corrosion control and prevention program achieved the goals and objectives described in clause (i).
• (f) In this section:
  • (1) The term “corrosion” means the deterioration of a material or its properties due to a reaction of that material with its chemical environment.
  • (2) The term “military equipment” includes all weapon systems, weapon platforms, vehicles, and munitions of the Department of Defense, and the components of such items.
  • (3) The term “infrastructure” includes all buildings, structures, airfields, port facilities, surface and subterranean utility systems, heating and cooling systems, fuel tanks, pavements, and bridges.
  • (4) The term “budget”, with respect to a fiscal year, means the budget for that fiscal year that is submitted to Congress by the President under section 1105(a) of title 31 .
  • (5) The term “defense budget materials”, with respect to a fiscal year, means the materials submitted to Congress by the Secretary of Defense in support of the budget for that fiscal year.

§ 2229. Strategic policy on prepositioning of materiel and equipment

• (a)
  • (1) The Secretary of Defense shall maintain a strategic policy on the programs of the Department of Defense for prepositioned materiel and equipment. Such policy shall take into account national security threats, strategic mobility, service requirements, support for crisis response elements, and the requirements of the combatant commands, and shall address how the Department’s prepositioning programs, both ground and afloat, align with national defense strategies and departmental priorities.
  • (2) The strategic policy required under paragraph (1) shall include the following elements:
    • (A) Overarching strategic guidance concerning planning and resource priorities that link the Department of Defense’s current and future needs for prepositioned stocks, such as desired responsiveness, to evolving national defense objectives.
    • (B) A description of the Department’s vision for prepositioning programs and the desired end state.
    • (C) Specific interim goals demonstrating how the vision and end state will be achieved.
    • (D) A description of the strategic environment, requirements for, and challenges associated with, prepositioning.
    • (E) Metrics for how the Department will evaluate the extent to which prepositioned assets are achieving defense objectives.
    • (F) A framework for joint departmental oversight that reviews and synchronizes the military services’ prepositioning strategies to minimize potentially duplicative efforts and maximize efficiencies in prepositioned materiel and equipment across the Department of Defense.
  • (3) The Secretary of Defense shall establish joint oversight of the military services’ prepositioning efforts to maximize efficiencies across the Department of Defense.
• (b) The Secretary of a military department may not divert materiel or equipment from prepositioned stocks except—
  • (1) in accordance with a change made by the Secretary of Defense to the policy maintained under subsection (a); or
  • (2) for the purpose of directly supporting a contingency operation or providing humanitarian assistance under chapter 20 of this title.
• (c) The Secretary of Defense may not implement or change the policy required under subsection (a) until the Secretary submits to the congressional defense committees a report describing the policy or change to the policy.
• (d)
  • (1) Not later than the date of the submission of the President’s budget request for a fiscal year under section 1105 of title 31 , the Secretary of Defense shall submit to the congressional defense committees a certification in writing that the prepositioned stocks of each of the military departments meet all operations plans, in both fill and readiness, that are in effect as of the date of the submission of the certification.
  • (2) If, for any year, the Secretary cannot certify that any of the prepositioned stocks meet such operations plans, the Secretary shall include with the certification for that year a list of the operations plans affected, a description of any measures that have been taken to mitigate any risk associated with prepositioned stock shortfalls, and an anticipated timeframe for the replenishment of the stocks.
  • (3) A certification under this subsection shall be in an unclassified form but may have a classified annex.

§ 2229a. Annual report on prepositioned materiel and equipment

• (a) Not later than the date of the submission of the President’s budget request for a fiscal year under section 1105 of title 31 , the Secretary of Defense shall submit to the congressional defense committees a report on the status of the materiel in the prepositioned stocks as of the end of the fiscal year preceding the fiscal year during which the report is submitted. Each report shall be unclassified and may contain a classified annex. Each report shall include the following information:
  • (1) The level of fill for major end items of equipment and spare parts in each prepositioned set as of the end of the fiscal year covered by the report.
  • (2) The material condition of equipment in the prepositioned stocks as of the end of such fiscal year, grouped by category or major end item.
  • (3) A list of major end items of equipment drawn from the prepositioned stocks during such fiscal year and a description of how that equipment was used and whether it was returned to the stocks after being used.
  • (4) A timeline for completely reconstituting any shortfall in the prepositioned stocks.
  • (5) An estimate of the amount of funds required to completely reconstitute any shortfall in the prepositioned stocks and a description of the Secretary’s plan for carrying out such complete reconstitution.
  • (6) A list of any operations plan affected by any shortfall in the prepositioned stocks and a description of any action taken to mitigate any risk that such a shortfall may create.
  • (7) A list of any non-standard items slated for inclusion in the prepositioned stocks and a plan for funding the inclusion and sustainment of such items.
  • (8) A list of any equipment used in support of contingency operations slated for retrograde and subsequent inclusion in the prepositioned stocks.
  • (9) An efficiency strategy for limited shelf-life medical stock replacement.
  • (10) The status of efforts to develop a joint strategy, integrate service requirements, and eliminate redundancies.
  • (11) The operational planning assumptions used in the formulation of prepositioned stock levels and composition.
  • (12) A list of any strategic plans affected by changes to the levels, composition, or locations of the prepositioned stocks and a description of any action taken to mitigate any risk that such changes may create.
• (b)
  • (1) The Comptroller General shall review each report submitted under subsection (a) and, as the Comptroller General determines appropriate, submit to the congressional defense committees any additional information that the Comptroller General determines will further inform such committees on issues relating to the status of the materiel in the prepositioned stocks.
  • (2) The Secretary of Defense shall ensure the full cooperation of the Department of Defense with the Comptroller General for purposes of the conduct of the review required by this subsection, both before and after each report is submitted under subsection (a). The Secretary shall conduct periodic briefings for the Comptroller General on the information covered by each report required under subsection (a) and provide to the Comptroller General access to the data and preliminary results to be used by the Secretary in preparing each such report before the Secretary submits the report to enable the Comptroller General to conduct each review required under paragraph (1) in a timely manner.
  • (3) The requirement to conduct a review under this subsection shall terminate on September 30, 2015 .

§ 2229b. Comptroller General assessment of acquisition programs and initiatives

• (a) The Comptroller General of the United States shall submit to the congressional defense committees an annual assessment of selected acquisition programs and initiatives of the Department of Defense by March 30th of each year from 2020 through 2023.
• (b) The assessment required under subsection (a) shall include—
  • (1) a macro analysis of how well acquisition programs and initiatives are performing and reasons for that performance;
  • (2) a summary of organizational and legislative changes and emerging assessment methodologies since the last assessment, and a discussion of the implications for execution and oversight of programs and initiatives; and
  • (3) specific analyses of individual acquisition programs and initiatives.
• (c) The assessment required under subsection (a) shall consider the following programs and initiatives:
  • (1) Selected weapon systems, as determined appropriate by the Comptroller General.
  • (2) Selected information technology systems and initiatives, including defense business systems, networks, and software-intensive systems, as determined appropriate by the Comptroller General.
  • (3) Selected prototyping and rapid fielding activities and initiatives, as determined appropriate by the Comptroller General.