to provide for the consolidation and improvement of authorities for army working-capital funded facilities to engage in public-private partnerships.

1. Adds SEC. 364. CONSOLIDATION AND IMPROVEMENT OF AUTHORITIES FOR ARMY WORKING-CAPITAL FUNDED FACILITIES TO ENGAGE IN PUBLIC-PRIVATE PARTNERSHIPS on page 58, line 24

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   Inserted: SEC. 364. CONSOLIDATION AND IMPROVEMENT OF AUTHORITIES FOR ARMY WORKING-CAPITAL FUNDED FACILITIES TO ENGAGE IN PUBLIC-PRIVATE PARTNERSHIPS.

   Inserted: (a) Public-Private Partnerships Authorized.--Chapter 433 of title 10, United States Code, is amended by adding at the end the following new section:

   Inserted: "Sec. 4544. Army industrial facilities: public-private partnerships

   Inserted: "(a) Public-Private Partnerships Authorized.--A working-capital funded Army industrial facility may enter into cooperative arrangements with non-Army entities to carry out military or commercial projects with the non-Army entities. A cooperative arrangement under this section shall be known as a 'public-private partnership'.

   Inserted: "(b) Authorized Partnership Activities.--A public-private partnership entered into by an Army industrial facility may provide for any of the following activities:

   Inserted: "(1) The sale of articles manufactured by the facility or services performed by the facility to persons outside the Department of Defense.

   Inserted: "(2) The performance of--

   Inserted: "(A) work by a non-Army entity at the facility; or

   Inserted: "(B) work for a non-Army entity by the facility.

   Inserted: "(3) The sharing of work by the facility and one or more non-Army entities.

   Inserted: "(4) The leasing, or use under a facilities use contract or otherwise, of the facility (including excess capacity) or equipment (including excess equipment) of the facility by a non-Army entity.

   Inserted: "(5) The preparation and submission of joint offers by the facility and one or more non-Army entities for competitive procurements entered into with a department or agency of the United States.

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   Inserted: "(c) Conditions for Public-Private Partnerships.--An activity described in subsection (b) may be carried out as a public-private partnership at an Army industrial facility only under the following conditions:

   Inserted: "(1) In the case of an article to be manufactured or services to be performed by the facility, the articles can be substantially manufactured, or the services can be substantially performed, by the facility without subcontracting for more than incidental performance.

   Inserted: "(2) The activity does not interfere with performance of--

   Inserted: "(A) work by the facility for the Department of Defense; or

   Inserted: "(B) a military mission of the facility.

   Inserted: "(3) The activity meets one of the following objectives:

   Inserted: "(A) Maximize utilization of the capacity of the facility.

   Inserted: "(B) Reduction or elimination of the cost of ownership of the facility.

   Inserted: "(C) Reduction in the cost of manufacturing or maintaining Department of Defense products at the facility.

   Inserted: "(D) Preservation of skills or equipment related to a core competency of the facility.

   Inserted: "(4) The non-Army entity partner or purchaser agrees to hold harmless and indemnify the United States from any liability or claim for damages or injury to any person or property arising out of the activity, including any damages or injury arising out of a decision by the Secretary of the Army or the Secretary of Defense to suspend or terminate an activity, or any portion thereof, during a war or national emergency or to require the facility to perform other work or provide other services on a priority basis, except--

   Inserted: "(A) in any case of willful misconduct or gross negligence; and

   Inserted: "(B) in the case of a claim by a purchaser of articles or services under this section that damages or injury arose from the failure of the Government to comply with quality, schedule, or cost performance requirements in the contract to carry out the activity.

   Inserted: "(d) Methods of Public-Private Partnerships.--To conduct an activity of a public-private partnership under this section, the approval authority described in subsection (f) for an Army industrial facility may, in the exercise of good business judgment--

   Inserted: "(1) enter into a firm, fixed-price contract (or, if agreed to by the purchaser, a cost reimbursement contract) for a sale of articles or services or use of equipment or facilities;

   Inserted: "(2) enter into a multiyear partnership contract for a period not to exceed five years, unless a longer period is specifically authorized by law;

   Inserted: "(3) charge a partner the amounts necessary to recover the full costs of the articles or services provided, including capital improvement costs, and equipment depreciation costs associated with providing the articles, services, equipment, or facilities;

   Inserted: "(4) authorize a partner to use incremental funding to pay for the articles, services, or use of equipment or facilities; and

   Inserted: "(5) accept payment-in-kind.

   Inserted: "(e) Deposit of Proceeds.--(1) The proceeds of sales of articles and services received in connection with the use of an Army industrial facility under this section shall be credited to the appropriation or working-capital fund that incurs the variable costs of manufacturing the articles or performing the services. Notwithstanding section 3302(b) of title 31, the amount so credited with respect to an Army industrial facility shall be available, without further appropriation, as follows:

   Inserted: "(A) Amounts equal to the amounts of the variable costs so incurred shall be available for the same purposes as the appropriation or working-capital fund to which credited.

   Inserted: "(B) Amounts in excess of the amounts of the variable costs so incurred shall be available for operations, maintenance, and environmental restoration at that Army industrial facility.

   Inserted: "(2) Amounts credited to a working-capital fund under paragraph (1) shall remain available until expended. Amounts credited to an appropriation under paragraph (1) shall remain available for the same period as the appropriation to which credited.

   Inserted: "(f) Approval of Sales.--The authority of an Army industrial facility to conduct a public-private partnership under this section shall be exercised at the level of the commander of the major subordinate command of the Army that has responsibility for the facility. The commander may approve such partnership on a case basis or a class basis.

   Inserted: "(g) Commercial Sales.--Except in the case of work performed for the Department of Defense, for a contract of the Department of Defense, for foreign military sales, or for authorized foreign direct commercial sales (defense articles or defense services sold to a foreign government or international organization under export controls), a sale of articles or services may be made under this section only if the approval authority described in subsection (f) determines that the articles or services are not available from a commercial source located in the United States in the required quantity or quality, or within the time required.

   Inserted: "(h) Exclusion From Depot-Level Maintenance and Repair Percentage Limitation.--Amounts expended for depot-level maintenance and repair workload by non-Federal personnel at an Army industrial facility shall not be counted for purposes of applying the percentage limitation in section 2466(a) of this title if the personnel are provided by a non-Army entity pursuant to a public-private partnership established under this section.

   Inserted: "(i) Relationship to Other Laws.--Nothing in this section shall be construed to affect the application of--

   Inserted: "(1) foreign military sales and the export controls provided for in sections 30 and 38 of the Arms Export Control Act (22 U.S.C. 2770 and 2778) to activities of a public-private partnership under this section; and

   Inserted: "(2) section 2667 of this title to leases of non-excess property in the administration of a public-private partnership under this section.

   Inserted: "(j) Definitions.--In this section:

   Inserted: "(1) The term 'Army industrial facility' includes an ammunition plant, an arsenal, a depot, and a manufacturing plant.

   Inserted: "(2) The term 'non-Army entity' includes the following:

   Inserted: "(A) An executive agency.

   Inserted: "(B) An entity in industry or commercial sales.

   Inserted: "(C) A State or political subdivision of a State.

   Inserted: "(D) An institution of higher education or vocational training institution.

   Inserted: "(3) The term 'incremental funding' means a series of partial payments that--

   Inserted: "(A) are made as the work on manufacture or articles is being performed or services are being performed or equipment or facilities are used, as the case may be; and

   Inserted: "(B) result in full payment being completed as the required work is being completed.

   Inserted: "(4) The term 'full costs', with respect to articles or services provided under this section, means the variable costs and the fixed costs that are directly related to the production of the articles or the provision of the services.

   Inserted: "(5) The term 'variable costs' means the costs that are expected to fluctuate directly with the volume of sales or services provided or the use of equipment or facilities.".

   Inserted: (b) Clerical Amendment.--The table of sections at the beginning of such chapter is amended by adding at the end the following new item:

   Inserted: "4544. Army industrial facilities: public-private partnerships.".

   Original wording

   On page 58, after line 24, insert the following:

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As printed