10 U.S.C. § 8684 — Overhaul of naval vessels: competition be-

Page 3339 TITLE 10—ARMED FORCES § 8684 § 8683. Ship overhaul work: availability of appro- priations for unusual cost overruns and for changes in scope of work (a) UNUSUAL COST OVERRUNS.—(1) Appropria- tions available to the Department of Defense for a fiscal year may be used for payment of un- usual cost overruns incident to ship overhaul, maintenance, and repair for a vessel inducted into an industrial-fund activity or contracted for during a prior fiscal year. (2) The Secretary of Defense shall notify Con- gress promptly before an obligation is incurred for any payment under paragraph (1). (b) CHANGES IN SCOPE OF WORK.—An appropria- tion available to the Department of Defense for a fiscal year may be used after the otherwise-ap- plicable expiration of the availability for obliga- tion of that appropriation— (1) for payments to an industrial-fund activ- ity for amounts required because of changes in the scope of work for ship overhaul, mainte- nance, and repair, in the case of work inducted into the industrial-fund activity during the fiscal year; and (2) for payments under a contract for amounts required because of changes in the scope of work, in the case of a contract en- tered into during the fiscal year for ship over- haul, maintenance, and repair. (c) TREATMENT OF AMOUNTS APPROPRIATED AFTER END OF PERIOD OF OBLIGATION.—In the ap- plication of section 1553(c) of title 31 to funds ap- propriated in the Operation and Maintenance, Navy account that are available for ship over- haul, the Secretary of the Navy may treat the limitation specified in paragraph (1) of such sec- tion to be ‘‘$10,000,000’’ rather than ‘‘$4,000,000’’. (Added Pub. L. 100–370, § 1(n)(1), July 19, 1988, 102 Stat. 850, § 7313; renumbered § 8683, Pub. L. 115–232, div. A, title VIII, § 807(d)(2), Aug. 13, 2018, 132 Stat. 1836; amended Pub. L. 116–283, div. A, title III, § 367, Jan. 1, 2021, 134 Stat. 3551.) HISTORICAL AND REVISION NOTES Section is based on Pub. L. 99–190, § 101(b) [title VIII, § 8005(j), (k)], Dec. 19, 1985, 99 Stat. 1185, 1203. In two instances, the source law to be codified by the bill includes provisions that on their face require that the Department of Defense notify Congress of certain actions. These notification requirements were termi- nated by section 602 of the Goldwater-Nichols Depart- ment of Defense Reorganization Act of 1986 (Public Law 99–433), which terminated all recurring reporting re- quirements applicable to the Department of Defense ex- cept for those requirements that were specifically ex- empted in that section. The source law sections are sec- tions 8009(c) and 8005(j) (proviso) of the FY86 defense ap- propriations Act (Public Law 99–190), enacted December 19, 1985, which would be codified as section 2201 of title 10 (by section 1(d) of the bill) and section 7313(a) of title 10 (by section 1(n) of the bill). In codifying the authori- ties provided the Department of Defense by these two provisions of law, the committee believes that it is ap- propriate to reinstate the congressional notification re- quirements that go with those authorities. These sec- tions were recurring annual appropriation provisions for many years and were made permanent only months before the enactment of the 1986 Reorganization Act. It is the committee’s belief that the failure to exempt these provisions from the general reports termination provision was inadvertent and notes that the notifica- tion provisions had in fact previously applied to the De- partment of Defense for many years. The action of the committee restores the status quo as it existed before the Reorganization Act. Editorial Notes PRIOR PROVISIONS A prior section 8683, acts Aug. 10, 1956, ch. 1041, 70A Stat. 535; Sept. 2, 1958, Pub. L. 85–861, § 1(156), 72 Stat. 1513; Aug. 25, 1959, Pub. L. 86–197, § 1(7), 73 Stat. 426, re- lated to service credit for certain service as a nurse, woman medical specialist, or civilian employee of Army Medical Department, prior to repeal by Pub. L. 99–145, title XIII, § 1301(d)(1)(A), Nov. 8, 1985, 99 Stat. 736. AMENDMENTS 2021—Subsec. (c). Pub. L. 116–283 added subsec. (c). 2018—Pub. L. 115–232 renumbered section 7313 of this title as this section. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2018 AMENDMENT Amendment by Pub. L. 115–232 effective Feb. 1, 2019, with provision for the coordination of amendments and special rule for certain redesignations, see section 800 of Pub. L. 115–232, set out as a note preceding section 3001 of this title. § 8684. Overhaul of naval vessels: competition be- tween public and private shipyards The Secretary of the Navy should ensure, in any case in which the Secretary awards a project for repair, alteration, overhaul, or con- version of a naval vessel following competition between public and private shipyards, that each of the following criteria is met: (1) The bid of any public shipyard for the award includes— (A) the full costs to the United States as- sociated with future retirement benefits of civilian employees of that shipyard con- sistent with computation methodology es- tablished by Office of Management and Budget Circular A–76; and (B) in a case in which equal access to the Navy supply system is not allowed to public and private shipyards, a pro rata share of the costs of the Navy supply system. (2) Costs applicable to oversight of the con- tract by the appropriate Navy supervisor of shipbuilding, conversion, and repair are added to the bid of any private shipyard for the pur- pose of comparability analysis. (3) The award is made using the results of the comparability analysis. (Added Pub. L. 100–456, div. A, title XII, § 1225(a)(1), Sept. 29, 1988, 102 Stat. 2054, § 7313; re- numbered § 7314, Pub. L. 101–189, div. A, title XVI, § 1622(a), Nov. 29, 1989, 103 Stat. 1604; renum- bered § 8684, Pub. L. 115–232, div. A, title VIII, § 807(d)(2), Aug. 13, 2018, 132 Stat. 1836.) Editorial Notes PRIOR PROVISIONS A prior section 8684 was renumbered section 9252 of this title. AMENDMENTS 2018—Pub. L. 115–232 renumbered section 7314 of this title as this section. 1989—Pub. L. 101–189 renumbered section 7313 of this title as this section. Page 3340 TITLE 10—ARMED FORCES [§ 8684a Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2018 AMENDMENT Amendment by Pub. L. 115–232 effective Feb. 1, 2019, with provision for the coordination of amendments and special rule for certain redesignations, see section 800 of Pub. L. 115–232, set out as a note preceding section 3001 of this title. EFFECTIVE DATE Pub. L. 100–456, div. A, title XII, § 1225(b), Sept. 29, 1988, 102 Stat. 2055, provided that: ‘‘Section 7313 [now 8684] of title 10, United States Code, as added by sub- section (a), applies to any award by the Secretary of the Navy made after the end of the 30-day period begin- ning on the date of the enactment of this Act [Sept. 29, 1988] for repair, alteration, overhaul, or conversion of a naval vessel following competition between public and private shipyards.’’ [§ 8684a. Omitted] CODIFICATION Section, added and amended Pub. L. 116–283, div. A, title XVIII, § 1876(a), Jan. 1, 2021, 134 Stat. 4291, related to rate for progress payments in the repair, mainte- nance, or overhaul of naval vessels, and was to become effective Jan. 1, 2022. Pub. L. 117–81, div. A, title XVII, § 1701(n)(3), Dec. 27, 2021, 135 Stat. 2146, repealed section 1876 of Pub. L. 116–283, effective as if included in title XVIII of Pub. L. 116–283, thereby omitting this section before it took effect. Text of section 2307(g)(1) of this title, which had been transferred to this section, was transferred to section 3808(a) of this title. § 8685. Preservation of Navy shipbuilding capa- bility (a) SHIPBUILDING CAPABILITY PRESERVATION AGREEMENTS.—The Secretary of the Navy may enter into an agreement, to be known as a ‘‘shipbuilding capability preservation agree- ment’’, 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 appli- cation of such cost reimbursement rules would facilitate the achievement of the policy objec- tives set forth in section 4811(b) of this title. (b) COST REIMBURSEMENT RULES.—The cost re- imbursement rules applicable under an agree- ment entered into under subsection (a) are as follows: (1) The Secretary of the Navy shall, in deter- mining 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 allo- cable indirect private sector costs of a ship- builder are those costs of the shipbuilder that are equal to the sum of the following: (A) The incremental indirect costs attrib- utable to such work. (B) The amount by which the revenue at- tributable to such private sector work ex- ceeds the sum of— (i) the direct costs attributable to such private sector work; and (ii) the incremental indirect costs attrib- utable 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 REIMBURSE- MENT RULES.—The cost reimbursement rules set forth in subsection (b) may be modified by the Secretary of the Navy for a particular agree- ment if the Secretary determines that modifica- tions are appropriate to the particular situation to facilitate achievement of the policy set forth in section 4811(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 con- tracts 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 Sec- retary may agree to apply the cost reimburse- ment rules set forth in subsection (b) to alloca- tions 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, § 1027(a)(1), Nov. 18, 1997, 111 Stat. 1878, § 7315; amended Pub. L. 106–65, div. A, title X, § 1066(a)(29), Oct. 5, 1999, 113 Stat. 772; renumbered § 8685, Pub. L. 115–232, div. A, title VIII, § 807(d)(2), Aug. 13, 2018, 132 Stat. 1836; Pub. L. 116–283, div. A, title XVIII, § 1867(e)(3), Jan. 1, 2021, 134 Stat. 4282.) Editorial Notes PRIOR PROVISIONS A prior section 8685, acts Aug. 10, 1956, ch. 1041, 70A Stat. 535; Sept. 2, 1958, Pub. L 85–861, § 1(187), 72 Stat. 1534, set forth restrictions on consideration of a hus- band or child as dependent of a female member of Reg- ular Air Force, Air National Guard of the United States or Air Force Reserve, prior to repeal by Pub. L. 90–235, § 7(a)(3), Jan. 2, 1968, 81 Stat. 763. AMENDMENTS 2021—Subsecs. (a), (c). Pub. L. 116–283 substituted ‘‘section 4811(b)’’ for ‘‘section 2501(b)’’. 2018—Pub. L. 115–232 renumbered section 7315 of this title as this section. 1999—Subsec. (d)(2). Pub. L. 106–65 substituted ‘‘No- vember 18, 1997,’’ for ‘‘the date of the enactment of the National Defense Authorization Act for Fiscal Year 1998’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2021 AMENDMENT Amendment by Pub. L. 116–283 effective Jan. 1, 2022, with additional provisions for delayed implementation and applicability of existing law, see section 1801(d) of Pub. L. 116–283, set out as a note preceding section 3001 of this title.