REQUIREMENT FOR PREPARATION OF PLAN FOR IMPROVED OPERATION OF WORKING-CAPITAL FUNDS AND EFFECT OF FAILURE TO PRODUCE AN APPROVED PLAN.

SEC. 363. REQUIREMENT FOR PREPARATION OF PLAN FOR IMPROVED OPERATION OF WORKING-CAPITAL FUNDS AND EFFECT OF FAILURE TO PRODUCE AN APPROVED PLAN. (a) Plan for Improved Operation of Working-Capital Funds.— Not later than September 30, 1997, the Secretary of Defense shall submit to Congress a plan to improve the management and performance of the industrial, commercial, and support type activities of the military departments or the Defense Agencies that are currently managed through the Defense Business Operations Fund. (b) Elements of Plan.— The plan required by subsection (a) shall address the following issues: (1) The ability of each military department or Defense Agency to set working capital requirements and set charges at its own industrial and supply activities. (2) The desirability of separate business accounts for the management of both industrial and supply activities for each military department or Defense Agency. (3) Liability for operation losses at industrial and supply activities. (4) Reimbursement to the Department of Defense by each military department or Defense Agency of its fair share of the costs of legitimate common business support services (such as accounting and financial services and central logistics services) provided by the Department of Defense. (5) The role of the Department of Defense in setting charges or imposing surcharges for activities managed by the business accounts of a military department or Defense Agency (except for the common business support cost described in paragraph (4)), and what such charges should properly reflect. (6) The appropriate use of operating profits arising from the operations of the industrial and supply activities of a military department or Defense Agency. (7) The ability of a military department or Defense Agency to purchase industrial and supply services from, and provide such services to, other military departments or Defense Agencies. (8) Standardization of financial management and accounting practices employed by the business accounts of a military department or Defense Agency. (9) Reporting requirements related to actual and projected performance of business management account activities of a military department or Defense Agency. (c) Effect of Failure to Submit or Approve of Plan.— (1) Unless, before October 1, 1999, the Secretary of Defense submits the plan required by subsection (a) and Congress enacts a provision of law described in paragraph (2) that approves of the plan as submitted or in an amended form, then section 2216a of title 10, United States Code, regarding the Defense Business Operations 110 STAT. 2494Fund (as redesignated by section 1074(a)(10) of this Act), shall be repealed effective as of that date. (2) The provision of law referred to in paragraph (1) is a provision of law that— (A) is enacted after the submission of the plan required by subsection (a); (B) specifically refers to the plan and this section; and (C) specifically states that the plan required by subsection (a) is approved as submitted or with such amendments as may be contained in such law. (d) Basis for Charges for Goods And Services; Comptroller General Review.— (1) In the development of the proposed budget for the Defense Business Operations Fund for a fiscal year, the Secretary of Defense shall ensure that accurate and realistic pricing and quantity estimates are used regarding the goods and services to be provided by working-capital funds and industrial, commercial, and support type activities managed through the Fund. (2) The Secretary of Defense shall make available to the Comptroller General information used to establish the charges for goods and services to be provided by working-capital funds and industrial, commercial, and support type activities managed through the Fund. The Comptroller General shall conduct an annual review of the adequacy of the basis for the charges. Not later than 30 days after the date on which the Secretary submits the annual report and proposed budget for the Fund under subsection (h) of section 2216a of title 10, United States Code, as redesignated by section 1074(a)(10) of this Act, the Comptroller General shall submit to Congress a report containing the results of the review.