Pub. L. 87-651, tit. II, sec. 207

Sec. 207. (a) Chapter 131 of title 10, United States Code, is amended by adding after section 2202: “§ 2203. Budget estimates “To account for, and report, the cost of performance of readily identifiable functional programs and activities, with segregation of operating and capital programs, budget estimates of the Department of Defense shall be prepared, presented, and justified, where practicable, and authorized programs shall be administered, in such form and manner its the Secretary of Defense, subject to the authority and direction of the President, may prescribe. As far as practicable, budget estimates and authorized programs of the military departments shall be uniform and in readily comparable form. “§ 2204. Obligation of appropriations “To prevent overdrafts and deficiencies in the fiscal year for which appropriations are made, appropriations made to the Department of Defense or to a military department, and reimbursements thereto, are available for obligation and expenditure only under scheduled rates of obligation, or changes thereto, that have been approved by the Secretary of Defense. This section does not prohibit the Department of Defense from incurring a deficiency that it has been authorized by law to incur. “§ 2205. Availability of reimbursements “Reimbursements made to appropriations of the Department of Defense or a department or agency thereof under section 686 of title 31, or other amounts paid by or on behalf of a department or agency of the Department of Defense to another department or agency of the Department of Defense, or by or on behalf of personnel of any department or organization, for services rendered or supplies furnished, may be credited to authorized accounts. Funds so credited are available for obligation for the same period as the funds in the account so credited. Such an account shall be accounted for as one fund on the books of the Department of the Treasury. “§ 2206. Disbursement of funds of military department to cover obligation of another agency of Department of Defense “As far as authorized by the Secretary of Defense, a disbursing officer of a military department may, out of available advances, make disbursements to cover obligations in connection’with any function, power, or duty of another department or agency of the Department of Defense and charge those disbursements on vouchers, to the appropriate appropriation of that department or agency. Disbursements so made shall be adjusted in settling the accounts of the disbursing officer. “§ 2207. Expenditure of appropriations: limitation “Money appropriated to the Department of Defense may not be spent under a contract other than a contract for personal services unless that contract provides that— “(1) the United States may, by written notice to the contractor, terminate the right of the contractor to proceed under the contract if the Secretary concerned or his designee finds, after notice and hearing, that the contractor, or his agent or other representative, offered or gave any gratuity, such as entertainment or a gift, to an officer, official, or employee of the United States to obtain a contract or favorable treatment in the awarding, amending, or 76 Stat. 521making of determinations concerning the performance, of a contract; and “(2) if a contract is terminated under clause (1), the United States has the same remedies against the contractor that it would have had if the contractor had breached the contract and, in addition to other damages, is entitled to exemplary damages in an amount at least three, but not more than 10, as determined by the Secretary or his designee, times the cost incurred by the contractor in giving gratuities to the officer, official, or employee concerned. The existence of facts upon which the Secretary makes findings under clause (1) may be reviewed by any competent court. “§ 2208. Working-capital funds “(a) To control and account more effectively for the cost of programs and work performed in the Department of Defense, the Secretary of Defense may require the establishment of working-capital funds in the Department of Defense to— “(1) finance inventories of such supplies as he may designate; and “(2) provide working capital for such industrial-type activities, and such commercial-type activities that provide common services within or among departments and agencies of the Department of Defense, as he may designate. “(b) Upon the request of the Secretary of Defense, the Secretary of the Treasury shall establish working-capital funds established under this section on the books of the Department of the Treasury. “(c) Working-capital funds shall be charged, when appropriate, with the cost of— “(1) supplies that are procured or otherwise acquired, manufactured, repaired, issued, or used; and “(2) services or work performed; including applicable administrative expenses, and be reimbursed from available appropriations or otherwise credited for those costs, including applicable administrative expenses and costs of using equipment. “(d) The Secretary of Defense may provide capital for working-capital funds by capitalizing inventories. If this method does not, in the determination of the Secretary of Defense, provide adequate amounts of working capital, such amounts as may be necessary may be appropriated for that purpose. “(e) Subject to the authority and direction of the Secretary of Defense, the Secretary of each military department shall allocate responsibility for its functions, powers, and duties to accomplish the most economical and efficient organization and operation of the activities, and the most economical and efficient use oi the inventories, for which working-capital funds are authorized by this section. “(f) The requisitioning agency may not incur a cost for supplies drawn from inventories, or services or work performed by industrial-type or commercial-type activities for which working-capital funds may be established under this section, that is more than the amount of appropriations or other funds available for those purposes. “(g) The appraised value of supplies returned to working-capital funds by a department, activity, or agency may be charged to that fund. The proceeds thereof shall be credited to current applicable appropriations and are available for expenditure for the same purposes that those appropriations are so available. Credits may not be made to appropriations under this subsection as the result of capitalization of inventories under subsection (d). “(h) The Secretary of Defense shall prescribe regulations governing the operation of activities and use of inventories authorized by 76 Stat. 522this section. The regulations may, if the needs of the Department of Defense require it and it is otherwise authorized by law, authorize supplies to be sold to, or services to be rendered or work performed for, persons outside the Department of Defense. Working-capital funds shall be reimbursed for supplies so sold, services so rendered, or work so performed by charges to applicable appropriations or payments received in cash. “(i) Reports annually shall be made to the President and to Congress on the condition and operation of working-capital funds established under this section. “§ 2209. Management funds “(a) To conduct economically and efficiently the operations of the Department of Defense that are financed by at least two appropriations but whose costs cannot be immediately distributed and charged to those appropriations, there is the Army Management Fund, the Navy Management Fund, and the Air Force Management Fund, each within its respective department and under the direction of the Secretary of that department. Each such fund shall consist of a corpus of $1,000,000 and such amounts as may be appropriated thereto from time to time. An account for an operation that is to be financed by such a fund may be established only with the approval of the Secretary of Defense. “(b) Under such regulations as the Secretary of Defense may prescribe, expenditures may be made from a management fund for material (other than for stock), personal services, and services under contract. However, obligation may not be incurred against that fund if it is not chargeable to funds available under an appropriation of the department concerned or funds of another department or agency of the Department of Defense. The fund shall be promptly reimbursed from those funds for expenditures made from it. “(c) Notwithstanding any other provision of law, advances, by check or warrant, or reimbursements, may be made from available appropriations to a management fund on the basis of the estimated cost of a project. As adequate data becomes available, the estimated cost shall be revised and necessary adjustments made. Final adjustment shall be made with the appropriate funds for the fiscal year in which the advances or reimbursements are made. Except as otherwise provided by law, amounts advanced to management funds are available for obligation only during the fiscal year in which they are advanced. “§ 2210. Proceeds of sales of supplies: credit to appropriations “(a) Current applicable appropriations of the Department of Defense may be created with proceeds of the disposals of supplies that are not financed by stock funds established under section 2208 of this title. “(b) Obligations may, without regard to fiscal year limitations, be incurred against anticipated reimbursements to stock funds in such amounts and for such period as the Secretary of Defense, with the approval of the Director of the Bureau of the Budget, may determine to be necessary to maintain stock levels consistently with planned operations for the next fiscal year. “§ 2211. Reimbursement for equipment, material, or services furnished members of the United Nations “Amounts paid by members of the United Nations for equipment or materials furnished, or services performed, in joint military operations shall be credited to appropriate appropriations of the Department of Defense in the manner authorized by section 2392(d) of title 22.” 76 Stat. 523 (b) Chapter 131 of title 10, United States Code, is further amended by adding at the end of the analysis: “2203. Budget estimates. “2204. Obligation of appropriations. “2205. Availability of reimbursements. “2206. Disbursement of funds of military department to cover obligation of another agency of Department of Defense. “2207. Expenditure of appropriations: limitation. “2208. Working-capital funds. “2209. Management funds. “2210. Proceeds of sales of supplies: credit to appropriations. “2211. Reimbursement for equipment, material, or services furnished members of the United Nations.”