ANNUAL REPORT ON ACTIVITIES RELATING TO DEFENSE INDUSTRIAL BASE

SEC. 825. ANNUAL REPORT ON ACTIVITIES RELATING TO DEFENSE INDUSTRIAL BASE (a) Defense Industrial Base Annual Report.— Chapter 148 of title 10, United States Code, is amended by inserting after section 2508 the following new section: “§2509. Defense industrial base annual report “(a) Annual Report Requirement.— The Secretary of Defense (acting through the Under Secretary of Defense for Acquisition), in consultation with the Secretary of Commerce (acting through the Under Secretary of Commerce for Export Administration), shall submit to the Committees on Armed Services of the Senate and House of Representatives an annual report on— “(1) the actions taken pursuant to this chapter for the improvement of the defense industrial base of the United States; and “(2) the effects of defense budgets and plans on the ability of the United States defense industrial base to meet the national security needs of the United States. “(b) Financial Ability Analysis.— The report required by this section shall include an analysis of the condition of the defense industrial base of the United States, particularly with respect to the financial ability of United States businesses— “(1) to conduct research and development activities relating to critical defense technologies, including the critical technologies identified in the annual defense critical technologies plan submitted pursuant to section 2508 of this title in the year in which the annual report is submitted; “(2) to apply those technologies to the production of goods and the furnishing of services; “(3) to maintain a viable production base in critical areas of defense production and technology at the procurement levels for which funds are available to the Department of Defense and at planned Department of Defense procurement levels; “(4) to expand the defense production base to respond to rapid increases in the demand for defense production and critical defense technologies; “(5) to maintain a viable defense production base in each critical area of defense production and technology in which terminations of major Department of Defense procurement programs or reductions in planned Department of Defense procurement— 104 STAT. 1605 “(A) have taken place in the year before the year in which the report is submitted; or “(B) are provided for— “(i) in the budget submitted pursuant to section 1105(a) of title 31 in the year in which the annual report is submitted; and “(ii) in the five-year defense program submitted with such budget pursuant to section 114a of this title; and “(6) to engage in any other activities determined by the Secretary to be critical to the national security. “(c) Analysis Considerations.— In the preparation of the analysis required in subsection (b), the following factors shall be considered: “(1) Trends in the profitability, levels of capital investment, spending on research and development, and debt burden of businesses involved in research on, development of, and application of critical defense technologies. “(2) The consequences of mergers, acquisitions, and takeovers of such businesses. “(3) The consequences of terminations of major programs and reductions in levels of military procurements in the fiscal year in which the report is submitted and planned military procurement. “(4) The effects of levels of concurrency in acquisition program strategies, levels of facilitation required by the Secretary of defense contractors, competition requirements, and efforts of the Department of Defense to expand the use of commercial technology and equipment. “(5) The effects of dependence on foreign or foreign-owned suppliers. “(6) The results of Department of Defense spending for critical defense technologies for the fiscal year in which the report is submitted. “(7) The likely future level of Department of Defense spending for such technologies during the four fiscal years following the fiscal year in which the report is submitted and the likely results of that level of spending. “(d) Annual Report Date.— The report under this section shall be submitted not later than March 15 of each year.”. (b) Table of Sections.— The table of sections at the beginning of such chapter is amended by adding at the end the following new item: “2509. Defense industrial base annual report.”.