
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 2, 2001]
[Document affected by Public Law 107-107 Section 342]
[Document affected by Public Law 107-107 Section 343(b)]
[CITE: 10USC2474]

 
                         TITLE 10--ARMED FORCES
 
                    Subtitle A--General Military Law
 
                PART IV--SERVICE, SUPPLY, AND PROCUREMENT
 
   CHAPTER 146--CONTRACTING FOR PERFORMANCE OF CIVILIAN COMMERCIAL OR 
                        INDUSTRIAL TYPE FUNCTIONS
 
Sec. 2474. Centers of Industrial and Technical Excellence: 
        designation; public-private partnerships
        
    (a) Designation.--(1) The Secretary concerned, or the Secretary of 
Defense in the case of a Defense Agency, shall designate each depot-
level activity of the military departments and the Defense Agencies 
(other than facilities approved for closure or major realignment under 
the Defense Base Closure and Realignment Act of 1990 (part A of title 
XXIX of Public Law 101-510; 10 U.S.C. 2687 note)) as a Center of 
Industrial and Technical Excellence in the recognized core competencies 
of the designee.
    (2) The Secretary of Defense shall establish a policy to encourage 
the Secretary of each military department and the head of each Defense 
Agency to reengineer industrial processes and adopt best-business 
practices at their Centers of Industrial and Technical Excellence in 
connection with their core competency requirements, so as to serve as 
recognized leaders in their core competencies throughout the Department 
of Defense and in the national technology and industrial base (as 
defined in section 2500(1) of this title).
    (3) The Secretary of a military department may conduct a pilot 
program, consistent with applicable requirements of law, to test any 
practices referred to in paragraph (2) that the Secretary determines 
could improve the efficiency and effectiveness of operations at Centers 
of Industrial and Technical Excellence, improve the support provided by 
the Centers for the armed forces user of the services of the Centers, 
and enhance readiness by reducing the time that it takes to repair 
equipment.
    (b) Public-Private Partnerships.--(1) To achieve one or more 
objectives set forth in paragraph (2), the Secretary designating a 
Center of Industrial and Technical Excellence under subsection (a) may 
authorize and encourage the head of the Center to enter into public-
private cooperative arrangements (in this section referred to as a 
``public-private partnership'') to provide for any of the following:
        (A) For employees of the Center, private industry, or other 
    entities outside the Department of Defense to perform (under 
    contract, subcontract, or otherwise) work related to the core 
    competencies of the Center, including any depot-level maintenance 
    and repair work that involves one or more core competencies of the 
    Center.
        (B) For private industry or other entities outside the 
    Department of Defense to use, for any period of time determined to 
    be consistent with the needs of the Department of Defense, any 
    facilities or equipment of the Center that are not fully utilized 
    for a military department's own production or maintenance 
    requirements.

    (2) The objectives for exercising the authority provided in 
paragraph (1) are as follows:
        (A) To maximize the utilization of the capacity of a Center of 
    Industrial and Technical Excellence.
        (B) To reduce or eliminate the cost of ownership of a Center by 
    the Department of Defense in such areas of responsibility as 
    operations and maintenance and environmental remediation.
        (C) To reduce the cost of products of the Department of Defense 
    produced or maintained at a Center.
        (D) To leverage private sector investment in--
            (i) such efforts as plant and equipment recapitalization for 
        a Center; and
            (ii) the promotion of the undertaking of commercial business 
        ventures at a Center.

        (E) To foster cooperation between the armed forces and private 
    industry.

    (3) If the Secretary concerned, or the Secretary of Defense in the 
case of a Defense Agency, authorizes the use of public-private 
partnerships under this subsection, the Secretary shall submit to 
Congress a report evaluating the need for loan guarantee authority, 
similar to the ARMS Initiative loan guarantee program under section 4555 
of this title, to facilitate the establishment of public-private 
partnerships and the achievement of the objectives set forth in 
paragraph (2).
    (c) Private Sector Use of Excess Capacity.--Any facilities or 
equipment of a Center of Industrial and Technical Excellence made 
available to private industry may be used to perform maintenance or to 
produce goods in order to make more efficient and economical use of 
Government-owned industrial plants and encourage the creation and 
preservation of jobs to ensure the availability of a workforce with the 
necessary manufacturing and maintenance skills to meet the needs of the 
armed forces.
    (d) Crediting of Amounts for Performance.--Amounts received by a 
Center for work performed under a public-private partnership shall be 
credited to the appropriation or fund, including a working-capital fund, 
that incurs the cost of performing the work. Consideration in the form 
of rental payments or (notwithstanding section 3302(b) of title 31) in 
other forms may be accepted for a use of property accountable under a 
contract performed pursuant to this section. Notwithstanding section 
2667(d) of this title, revenues generated pursuant to this section shall 
be available for facility operations, maintenance, and environmental 
restoration at the Center where the leased property is located.
    (e) Availability of Excess Equipment to Private-Sector Partners.--
Equipment or facilities of a Center of Industrial and Technical 
Excellence may be made available for use by a private-sector entity 
under this section only if--
        (1) the use of the equipment or facilities will not have a 
    significant adverse effect on the readiness of the armed forces, as 
    determined by the Secretary concerned or, in the case of a Center in 
    a Defense Agency, by the Secretary of Defense; and
        (2) the private-sector entity agrees--
            (A) to reimburse the Department of Defense for the direct 
        and indirect costs (including any rental costs) that are 
        attributable to the entity's use of the equipment or facilities, 
        as determined by that Secretary; and
            (B) to hold harmless and indemnify the United States from--
                (i) any claim for damages or injury to any person or 
            property arising out of the use of the equipment or 
            facilities, except in a case of willful conduct or gross 
            negligence; and
                (ii) any liability or claim for damages or injury to any 
            person or property arising out of a decision by the 
            Secretary concerned or the Secretary of Defense to suspend 
            or terminate that use of equipment or facilities during a 
            war or national emergency.

    (f) Construction of Provision.--Nothing in this section may be 
construed to authorize a change, otherwise prohibited by law, from the 
performance of work at a Center of Industrial and Technical Excellence 
by Department of Defense personnel to performance by a contractor.

(Added Pub. L. 105-85, div. A, title III, Sec. 361(a)(1), Nov. 18, 1997, 
111 Stat. 1700; amended Pub. L. 106-398, Sec. 1 [[div. A], title III, 
Sec. 341(a)-(e)], Oct. 30, 2000, 114 Stat. 1654, 1654A-61 to 1654A-63.)


                               Amendments

    2000--Subsec. (a)(1). Pub. L. 106-398, Sec. 1 [[div. A], title III, 
Sec. 341(a)(1)], substituted ``The Secretary concerned, or the Secretary 
of Defense in the case of a Defense Agency,'' for ``The Secretary of 
Defense'' and ``of the designee'' for ``of the activity''.
    Subsec. (a)(2). Pub. L. 106-398, Sec. 1 [[div. A], title III, 
Sec. 341(a)(2)], inserted ``of Defense'' after ``The Secretary'' and 
substituted ``Centers of Industrial and Technical Excellence'' for 
``depot-level activities''.
    Subsec. (a)(3). Pub. L. 106-398, Sec. 1 [[div. A], title III, 
Sec. 341(a)(3)], substituted ``operations at Centers of Industrial and 
Technical Excellence'' for ``depot-level operations'', ``by the 
Centers'' for ``by depot-level activities'', and ``of the Centers'' for 
``of such activities''.
    Subsec. (b). Pub. L. 106-398, Sec. 1 [[div. A], title III, 
Sec. 341(b)], amended heading and text of subsec. (b) generally. Prior 
to amendment, text read as follows: ``The Secretary of Defense shall 
enable Centers of Industrial and Technical Excellence to enter into 
public-private cooperative arrangements for the performance of depot-
level maintenance and repair at such Centers and shall encourage the use 
of such arrangements to maximize the utilization of the capacity at such 
Centers. A public-private cooperative arrangement under this subsection 
shall be known as a `public-private partnership'.''
    Subsec. (c). Pub. L. 106-398, Sec. 1 [[div. A], title III, 
Sec. 341(c)(3)], added subsec. (c). Former subsec. (c) redesignated (d).
    Subsec. (d). Pub. L. 106-398, Sec. 1 [[div. A], title III, 
Sec. 341(d)], inserted at end ``Consideration in the form of rental 
payments or (notwithstanding section 3302(b) of title 31) in other forms 
may be accepted for a use of property accountable under a contract 
performed pursuant to this section. Notwithstanding section 2667(d) of 
this title, revenues generated pursuant to this section shall be 
available for facility operations, maintenance, and environmental 
restoration at the Center where the leased property is located.''
    Pub. L. 106-398, Sec. 1 [[div. A], title III, Sec. 341(c)(1), (2)], 
redesignated subsec. (c) as (d) and struck out heading and text of 
former subsec. (d). Text read as follows: ``The policy required under 
subsection (a) shall include measures to enable a private sector entity 
that enters into a partnership arrangement under subsection (b) or 
leases excess equipment and facilities at a Center of Industrial and 
Technical Excellence pursuant to section 2471 of this title to perform 
additional work at the Center, subject to the limitations outlined in 
subsection (b) of such section, outside of the types of work normally 
assigned to the Center.''
    Subsecs. (e), (f). Pub. L. 106-398, Sec. 1 [[div. A], title III, 
Sec. 341(e)], added subsecs. (e) and (f).


                          Reporting Requirement

    Section 361(c) of Pub. L. 105-85 provided that: ``Not later than 
March 1, 1999, the Secretary of Defense shall submit to Congress a 
report on the policies established by the Secretary pursuant to section 
2474 of title 10, United States Code, to implement the requirements of 
such section. The report shall include--
        ``(1) the details of any public-private partnerships entered 
    into as of that date under subsection (b) of such section;
        ``(2) the details of any leases entered into as of that date 
    under section 2471 of such title with authorized entities for dual-
    use (military and nonmilitary) purposes; and
        ``(3) the effect that the partnerships and leases had on 
    capacity utilization, depot rate structures, and readiness.''

                  Section Referred to in Other Sections

    This section is referred to in sections 2208, 2461, 2469a of this 
title.
