Journal of the House of Representatives of the United States

(3) Duplicate payments.

(4) Unauthorized charges.

(5) Other discrepancies between the amount paid to the vendor and the amount actually due the vendor under the purchase agreement.

(d) BONUS PAYMENT.-To the extent provided for in a contract under the demonstration program, the Secretary may pay the contractor a bonus in addition to any other amount paid for performance of the contract. The amount of such bonus may not exceed the amount that is equal to 25 percent of all amounts recovered by the United States on the basis of information obtained as a result of the audit performed under the contract. Any such bonus shall be paid out of amounts made available pursuant to subsection (e).

(e) AVAILABILITY OF FUNDS.-Of the amount authorized to be appropriated pursuant to section 301(5), not more than $5,000,000 shall be available for the demonstration program. SEC. 355. PILOT PROGRAM ON PRIVATE OPERATION OF DEFENSE DEPENDENTS' SCHOOLS.

(a) PILOT PROGRAM. The Secretary of Defense may conduct a pilot program to evaluate the feasibility of using private contractors to operate schools of the defense dependents' education system established under section 1402(a) of the Defense Dependents' Education Act of 1978 (20 U.S.C. 921(a)).

(b) SELECTION OF SCHOOL FOR PROGRAM.—If the Secretary conducts the pilot program, the Secretary shall select one school of the defense dependents' education system for participation in the program and provide for the operation of the school by a private contractor for not less than one complete school year.

(c) REPORT.-Not later than 30 days after the end of the first school year in which the pilot program is conducted, the Secretary shall submit to Congress a report on the results of the program. The report shall include the recommendation of the Secretary with respect to the extent to which other schools of the defense dependents' education system should be operated by private contractors.

SEC. 356. PROGRAM FOR IMPROVED TRAVEL PROCESS FOR THE DEPARTMENT OF DEFENSE.

(a) IN GENERAL.—(1) The Secretary of Defense shall conduct a program to evaluate options to improve the Department of Defense travel process. To carry out the program, the Secretary shall compare the results of the tests conducted under subsection (b) to determine which travel process tested under such subsection is the better option to effectively manage travel of Department personnel.

(2) The program shall be conducted at not less than three and not more than six military installations, except that an installation may be the subject of only one test conducted under the program.

(3) The Secretary shall act through the Under Secretary of Defense (Comptroller) in the performance of the Secretary's responsibilities under this section.

(b) CONDUCT OF TESTS.-(1) The Secretary shall conduct a test at an installation referred to in subsection (a)(2) under which the Secretary

(A) implements the changes proposed to be made with respect to the Department of Defense travel process by the task force on travel management that was established by the Secretary in July 1994;

(B) manages and uniformly applies that travel process (including the implemented changes) throughout the Department; and

(C) provides opportunities for private-sector sources to provide travel reservation services and credit card services to facilitate that travel process.

(2) The Secretary shall conduct a test at an installation referred to in subsection (a)(2) under which the Secretary

(A) enters into one or more contracts with a private-sector source pursuant to which the private-sector source manages the Department of Defense travel process (except for functions referred to in subparagraph (B)), provides for responsive, reasonably priced services as part of the travel process, and uniformly applies the travel process throughout the Department; and

(B) provides for the performance by employees of the Department of only those travel functions, such as travel authorization, that the Secretary considers to be necessary to be performed by such employees.

(3) Each test required by this subsection shall begin not later than 60 days after the date of the enactment of this Act and end two years after the date on which it began. Each such test shall also be conducted in accordance with the guidelines for travel management issued for the Department by the Under Secretary of Defense (Comptroller).

(c) EVALUATION CRITERIA.-The Secretary shall establish criteria to evaluate the travel processes tested under subsection (b). The criteria shall, at a minimum, include the extent to which a travel process provides for the following:

(1) The coordination, at the time of a travel reservation, of travel policy and cost estimates with the mission which necessitates the travel.

(2) The use of fully integrated travel solutions envisioned by the travel reengineering report of the Department of Defense dated January 1995.

(3) The coordination of credit card data and travel reservation data with cost estimate data.

(4) The elimination of the need for multiple travel approvals through the coordination of such data with proposed travel plans.

(5) A responsive and flexible management information system that enables the Under Secretary of Defense (Comptroller) to monitor travel expenses throughout the year, accurately plan travel budgets for future years, and assess, in the case of travel of an employee on temporary duty, the relationship between the cost of the travel and the value of the travel to the accomplishment of the mission which necessitates the travel.

(d) PLAN FOR PROGRAM.-Before conducting the program, the Secretary shall develop a plan for the program that addresses the following:

(1) The purposes of the program, including the achievement of an objective of reducing by at least 50 percent the total cost incurred by the Department annually to manage the Department of Defense travel process.

(2) The methodology and anticipated cost of the program, including the cost of an arrangement pursuant to which a private-sector source would receive an agreed-upon payment plus an additional negotiated amount that does not exceed 50 percent of the total amount saved in excess of the objective specified in paragraph (1).

(3) A specific citation to any provision or law, rule, or regulation that, if not waived, would prohibit the conduct of the program or any part of the program.

(4) The evaluation criteria established pursuant to subsection (c).

(5) A provision for implementing throughout the Department the travel process determined to be the better option to effectively manage travel of Department personnel on the basis of a final assessment of the results of the program.

(e) REPORT.-After the first full year of the conduct of the tests required by subsection (b), the Secretary shall submit to the Committee on Armed Services of the Senate and the Committee on National Security of the

House of Representatives a report on the implementation of the program. The report shall include an analysis of the evaluation criteria established pursuant to subsection (c).

SEC. 357. INCREASED RELIANCE ON PRIVATESECTOR SOURCES FOR COMMERCIAL PRODUCTS AND SERVICES.

(a) IN GENERAL.-The Secretary of Defense shall endeavor to carry out through a private-sector source any activity to provide a commercial product or service for the Department of Defense if

(1) the product or service can be provided adequately through such a source; and

(2) an adequate competitive environment exists to provide for economical performance of the activity by such a source.

(b) APPLICABILITY.—(1) Subsection (a) shall not apply to any commercial product or service with respect to which the Secretary determines that production, manufacture, or provision of that product or service by the Government is necessary for reasons of national security.

(2) A determination under paragraph (1) shall be made in accordance with regulations prescribed under subsection (c).

(c) REGULATIONS.-The Secretary shall prescribe regulations to carry out this section. Such regulations shall be prescribed in consultation with the Director of the Office of Management and Budget.

(d) REPORT.-(1) The Secretary shall identify activities of the Department (other than activities specified by the Secretary pursuant to subsection (b)) that are carried out by employees of the Department to provide commercial-type products or services for the Department.

(2) Not later than April 15, 1996, the Secretary shall transmit to the congressional defense committees a report on opportunities for increased use of private-sector sources to provide commercial products and services for the Department.

(3) The report required by paragraph (2) shall include the following:

(A) A list of activities identified under paragraph (1) indicating, for each activity, whether the Secretary proposes to convert the performance of that activity to performance by private-sector sources and, if not, the reasons why.

(B) An assessment of the advantages and disadvantages of using private-sector sources, rather than employees of the Department, to provide commercial products and services for the Department that are not essential to the warfighting mission of the Armed Forces.

(C) A specification of all legislative and regulatory impediments to converting the performance of activities identified under paragraph (1) to performance by private-sector sources.

(D) The views of the Secretary on the desirability of terminating the applicability of OMB Circular A-76 to the Department.

(4) The Secretary shall carry out paragraph (1) in consultation with the Director of the Office of Management and Budget and

Comptroller General of the United States. In carrying out that paragraph, the Secretary shall consult with, and seek the views of, representatives of the private sector, including organizations representing small businesses.

Subtitle F-Miscellaneous Reviews, Studies, and Reports

SEC. 361. QUARTERLY READINESS REPORTS. (a) IN GENERAL.-(1) Chapter 22 of title 10, United States Code, is amended by adding at the end the following new section:

"§ 452. Quarterly readiness reports

"(a) REQUIREMENT.-Not later than 30 days after the end of each calendar-year quarter,

the Secretary of Defense shall submit to the Committee on Armed Services of the Senate and the Committee on National Security of the House of Representatives a report on military readiness. The report for any quarter shall be based on assessments that are provided during that quarter

"(1) to any council, committee, or other body of the Department of Defense (A) that has responsibility for readiness oversight, and (B) the membership of which includes at least one civilian officer in the Office of the Secretary of Defense at the level of Assistant Secretary of Defense or higher;

"(2) by senior civilian and military officers of the military departments and the commanders of the unified and specified commands; and

"(3) as part of any regularly established process of periodic readiness reviews for the Department of Defense as a whole.

"(b) MATTERS TO BE INCLUDED.-Each such report shall—

"(1) specifically describe identified readiness problems or deficiencies and planned remedial actions; and

"(2) include the key indicators and other relevant data related to the identified problem or deficiency.

"(c) CLASSIFICATION OF REPORTS.-Reports under this section shall be submitted in unclassified form and may, as the Secretary determines necessary, also be submitted in classified form.".

(2) The table of sections at the beginning of such chapter is amended by adding at the end the following new item:

"452. Quarterly readiness reports.".

(b) EFFECTIVE DATE.-Section 452 of title 10, United States Code, as added by subsection (a), shall take effect with the calendar-year quarter during which this Act is enacted.

SEC. 362. RESTATEMENT OF REQUIREMENT FOR

SEMIANNUAL REPORTS ΤΟ CON-
GRESS ON TRANSFERS FROM HIGH-
PRIORITY READINESS APPROPRIA-
TIONS.

Section 361 of the National Defense Authorization Act for Fiscal Year 1995 (Public Law 103-337; 108 Stat. 2732) is amended to read as follows: "SEC. 361. SEMIANNUAL REPORTS TO CONGRESS TRANSFERS FROM HIGH-PRIORITY READINESS APPROPRIATIONS.

"(a) ANNUAL REPORTS.-During 1996 and 1997, the Secretary of Defense shall submit to the congressional defense committees a report on transfers during the preceding fiscal year from funds available for each budget activity specified in subsection (d) (hereinafter in this section referred to as 'covered budget activities'). The report each year shall be submitted not later than the date in that year on which the President submits the budget for the next fiscal year to Congress pursuant to section 1105 of title 31, United States Code.

"(b) MIDYEAR REPORTS.-On May 1 of each year specified in subsection (a), the Secretary of Defense shall submit to the congressional defense committees a report providing the same information, with respect to the first six months of the fiscal year in which the report is submitted, that is provided in reports under subsection (a) with respect to the preceding fiscal year.

"(c) MATTERS TO BE INCLUDED.-In each report under this section, the Secretary shall include for each covered budget activity the following:

"(1) A statement, for the period covered by the report, of—

"(A) the total amount of transfers into funds available for that activity;

"(B) the total amount of transfers from funds available for that activity; and

"(C) the net amount of transfers into, or out of, funds available for that activity.

"(2) A detailed explanation of the transfers into, and out of, funds available for that activity during the period covered by the report.

"(d) COVERED BUDGET ACTIVITIES.-The budget activities to which this section applies are the following:

"(1) The budget activity groups (known as 'subactivities') within the Operating Forces budget activity of the annual Operation and Maintenance, Army, appropriation that are designated as follows:

"(A) Combat Units. "(B) Tactical Support.

"(C) Force-Related Training/Special Activities.

"(D) Depot Maintenance. "(E) JCS Exercises.

"(2) The budget activity groups (known as 'subactivities') within the Operating Forces budget activity of the annual Operation and Maintenance, Navy, appropriation that are designated as follows:

"(A) Mission and Other Flight Operations. "(B) Mission and Other Ship Operations. "(C) Fleet Air Training.

"(D) Ship Operational Support and Training.

“(E) Aircraft Depot Maintenance. "(F) Ship Depot Maintenance.

"(3) The budget activity groups (known as 'subactivities'), or other activity, within the Operating Forces budget activity of the annual Operation and Maintenance, Air Force, appropriation that are designated or otherwise identified as follows:

"(A) Primary Combat Forces.
"(B) Primary Combat Weapons.
"(C) Global and Early Warning.
"(D) Air Operations Training.
"(E) Depot Maintenance.
"(F) JCS Exercises.".

SEC. 363. REPORT REGARDING REDUCTION OF
COSTS ASSOCIATED WITH CON-
TRACT MANAGEMENT OVERSIGHT.
(a) REPORT REQUIRED.-Not later than
April 1, 1996, the Comptroller General of the
United States shall submit to Congress a re-
port identifying methods to reduce the cost
to the Department of Defense of manage-
ment oversight of contracts in connection
with major defense acquisition programs.

(b) MAJOR DEFENSE ACQUISITION PROGRAMS DEFINED. For purposes of this section, the term “major defense acquisition program” has the meaning given that term in section 2430(a) of title 10, United States Code. SEC. 364. REVIEWS OF MANAGEMENT OF INVENTORY CONTROL POINTS AND MATERIEL MANAGEMENT STANDARD SYSTEM.

(a) REVIEW OF CONSOLIDATION OF INVENTORY CONTROL POINTS. (1) The Secretary of Defense shall conduct a review of the management by the Defense Logistics Agency of all inventory control points of the Department of Defense. In conducting the review, the Secretary shall examine the management and acquisition practices of the Defense Logistics Agency for inventory of repairable spare parts.

(2) Not later than March 31, 1996, the Secretary shall submit to the Comptroller General of the United States and the congressional defense committees a report on the results the review conducted under paragraph (1).

(b) REVIEW OF MATERIEL MANAGEMENT STANDARD SYSTEM.-(1) The Comptroller General of the United States shall conduct a review of the automated data processing system of the Department of Defense known as the Materiel Management Standard System.

(2) Not later than May 1, 1996, the Comptroller General shall submit to the congressional defense committees a report on the results of the review conducted under paragraph (1).

3SEC. 365. REPORT ON PRIVATE PERFORMANCE OF CERTAIN FUNCTIONS PER

FORMED BY MILITARY AIRCRAFT. (a) REPORT REQUIRED.-Not later than May 1, 1996, the Secretary of Defense shall submit to Congress a report on the feasibility of providing for the performance by private-sector sources of functions necessary to be performed to fulfill the requirements of the Department of Defense for air transportation of personnel and cargo.

(b) CONTENT OF REPORT.-The report shall include the following:

(1) A cost-benefit analysis with respect to the performance by private-sector sources of functions described in subsection (a), including an explanation of the assumptions used in the cost-benefit analysis.

(2) An assessment of the issues raised by providing for such performance by means of a contract entered into with a private-sector

source.

(3) An assessment of the issues raised by providing for such performance by means of converting functions described in subsection (a) to private ownership and operation, in whole or in part.

(4) A discussion of the requirements for the performance of such functions in order to fulfill the requirements referred to in subsection (a) during wartime.

(5) The effect on military personnel and facilities of using private-sector sources to fulfill the requirements referred to in such subsection.

(6) The performance by private-sector sources of any other military aircraft functions (such as non-combat inflight fueling of aircraft) the Secretary considers appropriate.

SEC. 366. STRATEGY AND REPORT ON AUTOMATED INFORMATION SYSTEMS OF DEPARTMENT OF DEFENSE.

(a) DEVELOPMENT OF STRATEGY.-The Secretary of Defense shall develop a strategy for the development or modernization of automated information systems for the Department of Defense.

(b) MATTERS TO CONSIDER.-In developing the strategy required under subsection (a), the Secretary shall consider the following:

(1) The use of performance measures and management controls.

(2) Findings of the Functional Management Review conducted by the Secretary.

(3) Program management actions planned by the Secretary.

(4) Actions and milestones necessary for completion of functional and economic analyses for

(A) the Automated System for Transportation data;

(B) continuous acquisition and life cycle support;

(D) flexible computer integrated manufacturing;

(E) the Navy Tactical Command Support System; and

(F) the Defense Information System Network.

(5) Progress made by the Secretary in resolving problems with respect to the Defense Information System Network and the Joint Computer-Aided Acquisition and Logistics Support System.

(6) Tasks identified in the review conducted by the Secretary of the Standard Installation/Division Personnel System-3.

(7) Such other matters as the Secretary considers appropriate.

(c) REPORT ON STRATEGY.-(1) Not later than April 15, 1996, the Secretary shall submit to Congress a report on the development of the strategy required under subsection (a). (2) In the case of the Air Force Wargaming Center, the Air Force Command Exercise System, the Cheyenne Mountain Upgrade, the Transportation Coordinator Automated

Command and Control Information Systems, and the Wing Command and Control Systems, the report required by paragraph (1) shall provide functional economic analyses and address waivers exercised for compelling military importance under section 381(d) of the National Defense Authorization Act for Fiscal Year 1995 (Public Law 103-337; 108 Stat. 2739).

(3) The report required by paragraph (1) shall also include the following:

(A) A certification by the Secretary of the termination of the Personnel Electronic Record Management System or a justification for the continued need for such system. (B) Findings of the Functional Management Review conducted by the Secretary and program management actions planned by the Secretary for

(i) the Base Level System Modernization and the Sustaining Base Information System; and

(ii) the Standard Installation/Division Personnel System-3.

(i) identification of the systems and applications by functional or business area, specifying target dates for operation of the systems and applications;

(ii) identification of the legacy systems and applications that will be terminated;

(iii) the cost of and schedules for implementing the migration systems and applications; and

(iv) termination schedules.

(D) A certification by the Secretary that each information system that is subject to review by the Major Automated Information System Review Committee of the Department is cost-effective and supports the corporate information management goals of the Department, including the results of the review conducted for each such system by the Committee.

Subtitle G-Other Matters

SEC. 371. CODIFICATION OF DEFENSE BUSINESS OPERATIONS FUND.

(a) MANAGEMENT OF WORKING-CAPITAL FUNDS. (1) Chapter 131 of title 10, United States Code, is amended by inserting after section 2215 the following new section:

"§ 2216. Defense Business Operations Fund

"(a) MANAGEMENT OF WORKING-CAPITAL FUNDS AND CERTAIN ACTIVITIES.-The Secretary of Defense may manage the performance of the working-capital funds and industrial, commercial, and support type activities described in subsection (b) through the fund known as the Defense Business Operations Fund, which is established on the books of the Treasury. Except for the funds. and activities specified in subsection (b), no other functions, activities, funds, or accounts of the Department of Defense may be managed or converted to management through the Fund.

"(b) FUNDS AND ACTIVITIES INCLUDED.—The funds and activities referred to in subsection (a) are the following:

"(1) Working-capital funds established

under section 2208 of this title and in existence on December 5, 1991.

"(2) Those activities that, on December 5, 1991, were funded through the use of a working-capital fund established under that section.

"(3) The Defense Finance and Accounting Service.

"(4) The Defense Commissary Agency. "(5) The Defense Reutilization and Marketing Service.

"(6) The Joint Logistics Systems Center. "(c) SEPARATE ACCOUNTING, REPORTING, AND AUDITING OF FUNDS AND ACTIVITIES.—(1) The Secretary of Defense shall provide in ac

cordance with this subsection for separate accounting, reporting, and auditing of funds. and activities managed through the Fund. "(2) The Secretary shall maintain the separate identity of each fund and activity managed through the Fund that (before the establishment of the Fund) was managed as a separate Fund or activity.

"(3) The Secretary shall maintain separate records for each function for which payment is made through the Fund and which (before the establishment of the Fund) was paid directly through appropriations, including the separate identity of the appropriation account used to pay for the performance of the function.

"(d) CHARGES FOR GOODS AND SERVICES PROVIDED THROUGH THE FUND. (1) Charges for goods and services provided through the Fund shall include the following:

"(A) Amounts necessary to recover the full costs of the goods and services, whenever practicable, and the costs of the development, implementation, operation, and maintenance of systems supporting the wholesale supply and maintenance activities of the Department of Defense.

"(B) Amounts for depreciation of capital assets, set in accordance with generally accepted accounting principles.

"(C) Amounts necessary to recover the full cost of the operation of the Defense Finance Accounting Service.

"(2) Charges for goods and services provided through the 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)(1) 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.

"(3)(A) The Secretary of Defense may submit to a customer a bill for the provision of goods and services through the Fund in advance of the provision of those goods and services.

"(B) The Secretary shall submit to Congress a report on advance billings made pursuant to subparagraph (A)—

“(i) when the aggregate amount of all such billings after the date of the enactment of the National Defense Authorization Act for Fiscal Year 1996 reaches $100,000,000; and

"(ii) whenever the aggregate amount of all such billings after the date of a preceding report under this subparagraph reaches $100,000,000.

"(C) Each report under subparagraph (B) shall include, for each such advance billing, the following:

"(i) An explanation of the reason for the advance billing.

"(ii) An analysis of the impact of the advance billing on readiness.

"(iii) An analysis of the impact of the advance billing on the customer so billed. "(e) CAPITAL ASSET SUBACCOUNT.—(1) Amounts charged for depreciation of capital assets pursuant to subsection (d)(1)(B) shall be credited to a separate capital asset subaccount established within the Fund.

"(2) The Secretary of Defense may award contracts for capital assets of the Fund in advance of the availability of funds in the subaccount.

"(f) PROCEDURES FOR ACCUMULATION OF FUNDS. The Secretary of Defense shall establish billing procedures to ensure that the

balance in the Fund does not exceed the amount necessary to provide for the working capital requirements of the Fund, as determined by the Secretary.

"(g) PURCHASE FROM OTHER SOURCES.-The Secretary of Defense or the Secretary of a military department may purchase goods and services that are available for purchase from the Fund from a source other than the Fund if the Secretary determines that such source offers a more competitive rate for the goods and services than the Fund offers.

"(h) ANNUAL REPORTS AND BUDGET.-The Secretary of Defense 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.

“(i) DEFINITIONS.-In this section:

"(1) The term 'capital assets' means the following capital assets that have a development or acquisition cost of not less than $50,000:

"(A) Minor construction projects financed by the Fund pursuant to section 2805(c)(1) of this title.

"(B) Automatic data processing equipment, software.

"(C) Equipment other than equipment described in subparagraph (B).

"(D) Other capital improvements. "(2) The term 'Fund' means the Defense Business Operations Fund.".

(2) The table of sections at the beginning of such chapter is amended by inserting after the item relating to section 2215 the following new item:

"2216. Defense Business Operations Fund.".

(b) CONFORMING REPEALS.-The following provisions of law are hereby repealed:

(1) Subsections (b), (c), (d), and (e) of section 311 of the National Defense Authorization Act for Fiscal Year 1995 (Public Law 103-337; 10 U.S.C. 2208 note).

(2) Subsections (a) and (b) of section 333 of the National Defense Authorization Act for Fiscal Year 1994 (Public Law 103-160; 10 U.S.C. 2208 note).

(3) Section 342 of the National Defense Authorization Act for Fiscal Year 1993 (Public Law 102-484; 10 U.S.C. 2208 note).

(4) Section 316 of the National Defense Authorization Act for Fiscal Years 1992 and 1993 (Public Law 102–190; 10 U.S.C. 2208 note).

(5) Section 8121 of the Department of Defense Appropriations Act, 1992 (Public Law 102-172; 10 U.S.C. 2208 note).

SEC. 372. CLARIFICATION OF SERVICES AND PROPERTY THAT MAY BE EXCHANGED TO BENEFIT THE HISTORICAL COLLECTION OF THE ARMED FORCES.

Section 2572(b)(1) of title 10, United States Code, is amended by striking out "not needed by the armed forces" and all that follows through the end of the paragraph and inserting in lieu thereof the following: “not needed by the armed forces for any of the following items or services if such items or services directly benefit the historical collection of the armed forces:

"(A) Similar items held by any individual, organization, institution, agency, or nation. "(B) Conservation supplies, equipment, facilities, or systems.

"(C) Search, salvage, or transportation services.

"(D) Restoration, conservation, or preservation services.

"(E) Educational programs.".

SEC. 373. FINANCIAL MANAGEMENT TRAINING.

(a) LIMITATION. The Secretary of Defense may enter into a capital lease for the establishment of a Department of Defense financial management training center no earlier than the date that is 30 days after the date on which the Secretary of Defense submits to the Committee on Armed Services of the Senate and the Committee on National Security of the House of Representatives, in accordance with subsection (b), a certification of the need for such a center and a report on financial management training for Department of Defense personnel.

(b) CERTIFICATION AND REPORT.-(1) The certification and report referred to in subsection (a) are the following:

(A) Certification by the Secretary of the need for such a center.

(B) A report, submitted with the certification, on financial management training for Department of Defense personnel.

(2) Any report under paragraph (1) shall contain the following:

(A) The Secretary's analysis of the requirements for providing financial management training for employees of the Department of Defense.

(B) The alternatives considered by the Secretary for meeting those requirements.

(D) A financial analysis of the estimated short-term and long-term costs of carrying out the plan.

(3) If, upon completing the analysis referred to in paragraph (2)(A) and after considering alternatives as described in paragraph (2)(B), the Secretary determines to meet the requirements for providing financial management training for employees of the Department of Defense through establishment of a financial management training center, the Secretary

(A) shall make the determination of the location of the center using a merit-based selection process; and

(B) shall include in the report under paragraph (1) a description of that merit-based selection process.

SEC. 374. PERMANENT AUTHORITY FOR USE OF PROCEEDS FROM THE SALE OF CERTAIN LOST, ABANDONED, OR UNCLAIMED PROPERTY.

(a) PERMANENT AUTHORITY.-Section 2575 of title 10 is amended

(1) by striking out subsection (b) and inserting in lieu thereof the following:

"(b)(1) In the case of lost, abandoned, or unclaimed personal property found on a mili

tary installation, the proceeds from the sale of the property under this section shall be credited to the operation and maintenance account of that installation and used

"(A) to reimburse the installation for any costs incurred by the installation to collect, transport, store, protect, or sell the property; and

"(B) to the extent that the amount of the proceeds exceeds the amount necessary for reimbursing all such costs, to support morale, welfare, and recreation activities under the jurisdiction of the armed forces that are conducted for the comfort, pleasure, contentment, or physical or mental improvement of members of the armed forces at such installation.

"(2) The net proceeds from the sale of other property under this section shall be covered into the Treasury as miscellaneous receipts."; and

(2) by adding at the end the following: "(d)(1) The owner (or heirs, next of kin, or legal representative of the owner) of personal property the proceeds of which are credited to a military installation under subsection (b)(1) may file a claim with the Secretary of Defense for the amount equal to the proceeds (less costs referred to in subparagraph (A) of such subsection). Amounts to pay the claim shall be drawn from the morale, welfare, and recreation account for the installation that received the proceeds.

"(2) The owner (or heirs, next of kin, or legal representative of the owner) may file a claim with the Comptroller General of the United States for proceeds covered into the Treasury under subsection (b)(2).

"(3) Unless a claim is filed under this subsection within 5 years after the date of the disposal of the property to which the claim relates, the claim may not be considered by a court, the Secretary of Defense (in the case of a claim filed under paragraph (1)), or the Comptroller General of the United States (in the case of a claim filed under paragraph (2)).".

(b) REPEAL OF AUTHORITY FOR DEMONSTRATION PROGRAM. Section 343 of the National Defense Authorization Act for Fiscal Years 1992 and 1993 (Public Law 102-190; 105 Stat. 1343) is repealed.

SEC. 375. SALE OF MILITARY CLOTHING AND SUBSISTENCE AND OTHER SUPPLIES OF THE NAVY AND MARINE CORPS.

(a) IN GENERAL.—(1) Chapter 651 of title 10, United States Code, is amended by adding at the end the following new section:

"§ 7606. Subsistence and other supplies: members of armed forces; veterans; executive or military departments and employees; prices "(a)(1) The Secretary of the Navy shall procure and sell, for cash or credit

"(A) articles designated by the Secretary to members of the Navy and Marine Corps; and

"(B) items of individual clothing and equipment to members of the Navy and Marine Corps, under such restrictions as the Secretary may prescribe.

"(2) An account of sales on credit shall be kept and the amount due reported to the Secretary. Except for articles and items acquired through the use of working capital funds under section 2208 of this title, sales of articles shall be at cost, and sales of individual clothing and equipment shall be at average current prices, including overhead, as determined by the Secretary.

"(b) The Secretary shall sell subsistence supplies to members of other armed forces at the prices at which like property is sold to members of the Navy and Marine Corps. "(c) The Secretary may sell serviceable supplies, other than subsistence supplies, to members of other armed forces for the buyers' use in the service. The prices at which the supplies are sold shall be the same prices

at which like property is sold to members of the Navy and Marine Corps.

"(d) A person who has been discharged honorably or under honorable conditions from the Army, Navy, Air Force or Marine Corps and who is receiving care and medical treatment from the Public Health Service or the Department of Veterans Affairs may buy subsistence supplies and other supplies, except articles of uniform, at the prices at which like property is sold to members of the Navy and Marine Corps.

"(e) Under such conditions as the Secretary may prescribe, exterior articles of uniform may be sold to a person who has been discharged honorably or under honorable conditions from the Navy or Marine Corps, at the prices at which like articles are sold to members of the Navy or Marine Corps. This subsection does not modify sections 772 or 773 of this title.

"(f) Under regulations prescribed by the Secretary, payment for subsistence supplies shall be made in cash or by commercial credit.

"(g)(1) The Secretary may provide for the procurement and sale of stores designated by the Secretary to such civilian officers and employees of the United States, and such other persons, as the Secretary considers proper

"(A) at military installations outside the United States; and

"(B) subject to paragraph (2), at military installations inside the United States where the Secretary determines that it is impracticable for those civilian officers, employees, and persons to obtain such stores from commercial enterprises without impairing the efficient operation of military activities.

"(2) Sales to civilian officers and employees inside the United States may be made under paragraph (1) only to civilian officers and employees residing within military installations.

"(h) Appropriations for subsistence of the Navy or Marine Corps may be applied to the purchase of subsistence supplies for sale to members of the Navy and Marine Corps on active duty for the use of such members and their families.".

(2) The table of sections at the beginning of chapter 651 of such title is amended by adding at the end the following: "7606. Subsistence and other supplies: members of armed forces; veterans; executive or military departments and employees; prices.".

(b) CONFORMING AMENDMENTS FOR OTHER ARMED FORCES.—(1) Section 4621 of such title is amended

(A) by striking out "The branch, office, or officer designated by the Secretary of the Army" in subsection (a) and inserting in lieu thereof "The Secretary of the Army";

(B) by striking out "The branch, office, or officer designated by the Secretary" both places it appears in subsections (b) and (c) and inserting in lieu thereof "The Secretary"; and

(2) Section 9621 of such title is amended(A) by striking out "The Air Force shall" in subsection (b) and inserting in lieu thereof "The Secretary shall"; and

(B) by inserting before the period at the end of subsection (f) the following: "or by commercial credit".

SEC. 376. PERSONNEL SERVICES AND LOGISTICAL SUPPORT FOR CERTAIN ACTIVITIES HELD ON MILITARY INSTALLATIONS.

Section 2544 of title 10, United States Code, is amended

(1) by redesignating subsection (g) as subsection (h); and

(2) by inserting after subsection (f) the following new subsection:

"(g) In the case of a Boy Scout Jamboree held on a military installation, the Secretary of Defense may provide personnel services and logistical support at the military installation in addition to the support authorized under subsections (a) and (d).”. SEC. 377. RETENTION OF MONETARY AWARDS.

(a) MONETARY AWARDS.-Chapter 155 of title 10, United States Code, is amended by adding at the end the following new section: "S2610. Competitions for excellence: acceptance of monetary awards

"(a) ACCEPTANCE AUTHORIZED.-The Secretary of Defense may accept a monetary award given to the Department of Defense by a nongovernmental entity as a result of the participation of the Department in a competition carried out to recognize excellence or innovation in providing services or administering programs.

"(b) DISPOSITION OF AWARDS.-A monetary award accepted under subsection (a) shall be credited to one or more nonappropriated fund accounts supporting morale, welfare, and recreation activities for the command, installation, or other activity that is recognized for the award. Amounts so credited may be expended only for such activities.

"(c) INCIDENTAL EXPENSES.-Subject such limitations as may be provided in appropriation Acts, appropriations available to the Department of Defense may be used to pay incidental expenses incurred by the Department to participate in a competition described in subsection (a) of to accept a monetary award under this section.

"(d) REGULATIONS AND REPORTING.-(1) The Secretary shall prescribe regulations to determine the disposition of monetary awards accepted under this section and the payment of incidental expenses under subsection (c).

"(2) At the end of each year, the Secretary shall submit to Congress a report for that year describing the disposition of monetary awards accepted under this section and the payment of incidental expenses under subsection (c).

"(e) TERMINATION. The authority of the Secretary under this section shall expire two years after the date of the enactment of the National Defense Authorization Act for Fiscal Year 1996.".

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

"2610. Competitions for excellence: acceptance of monetary awards.".

SEC. 378. PROVISION OF EQUIPMENT AND FACILITIES TO ASSIST IN EMERGENCY RESPONSE ACTIONS.

Section 372 of title 10, United States Code, is amended

(1) by inserting "(a) IN GENERAL.-" before "The Secretary of Defense"; and

(2) by adding at the end the following new subsection:

"(b) EMERGENCIES INVOLVING CHEMICAL AND BIOLOGICAL AGENTS. (1) In addition to equipment and facilities described in subsection (a), the Secretary may provide an item referred to in paragraph (2) to a Federal, State, or local law enforcement or emergency response agency to prepare for or respond to an emergency involving chemical or biological agents if the Secretary determines that the item is not reasonably available from another source.

"(2) An item referred to in paragraph (1) is any material or expertise of the Department of Defense appropriate for use in preparing for or responding to an emergency involving chemical or biological agents, including the following:

"(A) Training facilities. "(B) Sensors.

"(C) Protective clothing. "(D) Antidotes.".

SEC. 379. REPORT ON DEPARTMENT OF DEFENSE MILITARY AND CIVIL DEFENSE PREPAREDNESS TO RESPOND TO EMERGENCIES RESULTING FROM A CHEMICAL, BIOLOGICAL, RADIOLOGICAL, OR NUCLEAR ATTACK.

(a) REPORT.-(1) Not later than March 1, 1996, the Secretary of Defense and the Secretary of Energy shall submit to Congress a joint report on the military and civil defense plans and programs of the Department of Defense to prepare for and respond to the effects of an emergency in the United States resulting from a chemical, biological, radiological, or nuclear attack on the United States (hereinafter in this section referred to as an "attack-related civil defense emergency").

(2) The report shall be prepared in consultation with the Director of the Federal Emergency Management Agency.

(b) CONTENT OF REPORT.-The report shall include the following:

(1) A discussion of the military and civil defense plans and programs of the Department of Defense for preparing for and responding to an attack-related civil defense emergency arising from an attack of a type for which the Department of Defense has a primary responsibility to respond.

(2) A discussion of the military and civil defense plans and programs of the Department of Defense for preparing for and providing a response to an attack-related civil defense emergency arising from an attack of a type for which the Department of Defense has responsibility to provide a supporting response.

(3) A description of any actions, and any recommended legislation, that the Secretaries consider necessary for improving the preparedness of the Department of Defense to respond effectively to an attack-related civil defense emergency.

TITLE IV-MILITARY PERSONNEL
AUTHORIZATIONS

Subtitle A-Active Forces

SEC. 401. END STRENGTHS FOR ACTIVE FORCES. (a) FISCAL YEAR 1996.-The Armed Forces are authorized strengths for active duty personnel as of September 30, 1996, as follows: (1) The Army, 495,000, of which not more than 81,300 may be commissioned officers. (2) The Navy, 428,340, of which not more than 58,870 may be commissioned officers. (3) The Marine Corps, 174,000, of which not more than 17,978 may be commissioned offi

cers.

(4) The Air Force, 388,200, of which not more than 75,928 may be commissioned officers.

(b) FLOOR ON END STRENGTHS.-(1) Chapter 39 of title 10, United States Code, is amended by adding at the end the following new section:

"8691. Permanent end strength levels to support two major regional contingencies

"(a) The end strengths specified in subsection (b) are the minimum strengths necessary to enable the armed forces to fulfill a national defense strategy calling for the United States to be able to successfully conduct two nearly simultaneous major regional contingencies.

"(b) Unless otherwise provided by law, the number of members of the armed forces (other than the Coast Guard) on active duty at the end of any fiscal year shall be not less than the following:

"(1) For the Army, 495,000.
"(2) For the Navy, 395,000.
"(3) For the Marine Corps, 174,000.
"(4) For the Air Force, 381,000.

"(c) No funds appropriated to the Department of Defense may be used to implement a reduction of the active duty end strength for

any of the armed forces for any fiscal year below the level specified in subsection (b) unless the Secretary of Defense submits to Congress notice of the proposed lower end strength levels and a justification for those levels. No action may then be taken to implement such a reduction for that fiscal year until the end of the six-month period beginning on the date of the receipt of such notice by Congress.

"(d) For a fiscal year for which the active duty end strength authorized by law pursuant to section 115(a)(1)(A) of this title for any of the armed forces is identical to the number applicable to that armed force under subsection (b), the Secretary of Defense may reduce that number by not more than 0.5 percent.

"(e) The number of members of the armed forces on active duty shall be counted for purposes of this section in the same manner as applies under section 115(a)(1) of this title.".

(2) The table of sections at the beginning of such chapter is amended by adding at the end the following new item:

"691. Permanent end strength levels to support two major regional contingencies.".

(c) ACTIVE COMPONENT END STRENGTH FLEXIBILITY.-Section 115(c)(1) of title 10, United States Code, is amended by striking out "0.5 percent" and inserting in lieu thereof "1 percent".

SEC. 402. TEMPORARY VARIATION IN DOPMA AUTHORIZED END STRENGTH LIMITATIONS FOR ACTIVE DUTY AIR FORCE AND NAVY OFFICERS IN CERTAIN GRADES.

(a) AIR FORCE OFFICERS.-In the administration of the limitation under section 523(a)(1) of title 10, United States Code, for fiscal years 1996 and 1997, the numbers applicable to officers of the Air Force serving on active duty in the grades of major, lieutenant colonel, and colonel shall be the numbers set forth for that fiscal year in the following table (rather than the numbers determined in accordance with the table in that section):

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Journal of the House of Representatives of the United States, Teil 1