
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 10USC7315]

 
                         TITLE 10--ARMED FORCES
 
                    Subtitle C--Navy and Marine Corps
 
                     PART IV--GENERAL ADMINISTRATION
 
                       CHAPTER 633--NAVAL VESSELS
 
Sec. 7315. Preservation of Navy shipbuilding capability

    (a) Shipbuilding Capability Preservation Agreements.--The Secretary 
of the Navy may enter into an agreement, to be known as a ``shipbuilding 
capability preservation agreement'', with a shipbuilder under which the 
cost reimbursement rules described in subsection (b) shall be applied to 
the shipbuilder under a Navy contract for the construction of a ship. 
Such an agreement may be entered into in any case in which the Secretary 
determines that the application of such cost reimbursement rules would 
facilitate the achievement of the policy objectives set forth in section 
2501(b) of this title.
    (b) Cost Reimbursement Rules.--The cost reimbursement rules 
applicable under an agreement entered into under subsection (a) are as 
follows:
        (1) The Secretary of the Navy shall, in determining the 
    reimbursement due a shipbuilder for its indirect costs of performing 
    a contract for the construction of a ship for the Navy, allow the 
    shipbuilder to allocate indirect costs to its private sector work 
    only to the extent of the shipbuilder's allocable indirect private 
    sector costs, subject to paragraph (3).
        (2) For purposes of paragraph (1), the allocable indirect 
    private sector costs of a shipbuilder are those costs of the 
    shipbuilder that are equal to the sum of the following:
            (A) The incremental indirect costs attributable to such 
        work.
            (B) The amount by which the revenue attributable to such 
        private sector work exceeds the sum of--
                (i) the direct costs attributable to such private sector 
            work; and
                (ii) the incremental indirect costs attributable to such 
            private sector work.

        (3) The total amount of allocable indirect private sector costs 
    for a contract covered by the agreement may not exceed the amount of 
    indirect costs that a shipbuilder would have allocated to its 
    private sector work during the period covered by the agreement in 
    accordance with the shipbuilder's established accounting practices.

    (c) Authority To Modify Cost Reimbursement Rules.--The cost 
reimbursement rules set forth in subsection (b) may be modified by the 
Secretary of the Navy for a particular agreement if the Secretary 
determines that modifications are appropriate to the particular 
situation to facilitate achievement of the policy set forth in section 
2501(b) of this title.
    (d) Applicability.--(1) An agreement entered into with a shipbuilder 
under subsection (a) shall apply to each of the following Navy contracts 
with the shipbuilder:
        (A) A contract that is in effect on the date on which the 
    agreement is entered into.
        (B) A contract that is awarded during the term of the agreement.

    (2) In a shipbuilding capability preservation agreement applicable 
to a shipbuilder, the Secretary may agree to apply the cost 
reimbursement rules set forth in subsection (b) to allocations of 
indirect costs to private sector work performed by the shipbuilder only 
with respect to costs that the shipbuilder incurred on or after November 
18, 1997, under a contract between the shipbuilder and a private sector 
customer of the shipbuilder that became effective on or after January 
26, 1996.

(Added Pub. L. 105-85, div. A, title X, Sec. 1027(a)(1), Nov. 18, 1997, 
111 Stat. 1878; amended Pub. L. 106-65, div. A, title X, 
Sec. 1066(a)(29), Oct. 5, 1999, 113 Stat. 772.)


                               Amendments

    1999--Subsec. (d)(2). Pub. L. 106-65 substituted ``November 18, 
1997,'' for ``the date of the enactment of the National Defense 
Authorization Act for Fiscal Year 1998''.


     Procedures for Applications and for Consideration of Agreements

    Section 1027(b) of Pub. L. 105-85 provided that: ``Not later than 30 
days after the date of the enactment of this Act [Nov. 18, 1997], the 
Secretary of the Navy shall establish application procedures and 
procedures for expeditious consideration of shipbuilding capability 
preservation agreements as authorized by section 7315 of title 10, 
United States Code, as added by subsection (a).''
