CENTERS OF INDUSTRIAL AND TECHNICAL EXCELLENCE.

SEC. 361. CENTERS OF INDUSTRIAL AND TECHNICAL EXCELLENCE. (a) Designation and Purpose.—(1) Chapter 146 of title 10, United States Code, is amended by adding at the end the following new section: “§ 2474. Centers of Industrial and Technical Excellence: designation; public-private partnerships “(a) Designation.—(1) The Secretary of Defense shall designate each depot-level activity of the military departments and the Defense Agencies (other than facilities approved for closure or major realignment under the Defense Base Closure and Realignment Act of 1990 (part A of title XXIX of Public Law 101–510; 10 U.S.C. 2687 note)) as a Center of Industrial and Technical Excellence in the recognized core competencies of the activity. “(2) The Secretary shall establish a policy to encourage the Secretary of each military department and the head of each Defense Agency to reengineer industrial processes and adopt best-business practices at their depot-level activities in connection with their core competency requirements, so as to serve as recognized leaders 111 STAT. 1701in their core competencies throughout the Department of Defense and in the national technology and industrial base (as defined in section 2500(1) of this title). “(3) The Secretary of a military department may conduct a pilot program, consistent with applicable requirements of law, to test any practices referred to in paragraph (2) that the Secretary determines could improve the efficiency and effectiveness of depot-level operations, improve the support provided by depot-level activities for the armed forces user of the services of such activities, and enhance readiness by reducing the time that it takes to repair equipment. “(b) Public-Private Partnerships.—The Secretary of Defense shall enable Centers of Industrial and Technical Excellence to enter into public-private cooperative arrangements for the performance of depot-level maintenance and repair at such Centers and shall encourage the use of such arrangements to maximize the utilization of the capacity at such Centers. A public-private cooperative arrangement under this subsection shall be known as a ‘public-private partnership’. “(c) Crediting of Amounts for Performance.—Amounts received by a Center for work performed under a public-private partnership shall be credited to the appropriation or fund, including a working-capital fund, that incurs the cost of performing the work. “(d) Additional Work.—The policy required under subsection (a) shall include measures to enable a private sector entity that enters into a partnership arrangement under subsection (b) or leases excess equipment and facilities at a Center of Industrial and Technical Excellence pursuant to section 2471 of this title to perform additional work at the Center, subject to the limitations outlined in subsection (b) of such section, outside of the types of work normally assigned to the Center.”. (2) The table of sections at the beginning of such chapter is amended by adding at the end the following new item: “2474. Centers of Industrial and Technical Excellence: designation; public-private partnerships.”. (b) Lease of Excess Depot-Level Equipment and Facilities.—(1) Section 2471(c) of such title is amended to read as follows: “(c) Conformance With Authority Under Section 2667.—The provisions of subsection (d) of section 2667 of this title shall apply to this section in the same manner as such provisions are applicable under that section.”. (2) Section 2667(d)(2) of such title is amended by inserting “or working capital fund” before “from which”. (c) Reporting Requirement.—Not later than March 1, 1999, the Secretary of Defense shall submit to Congress a report on the policies established by the Secretary pursuant to section 2474 of title 10, United States Code, to implement the requirements of such section. The report shall include— (1) the details of any public-private partnerships entered into as of that date under subsection (b) of such section; (2) the details of any leases entered into as of that date under section 2471 of such title with authorized entities for dual-use (military and nonmilitary) purposes; and (3) the effect that the partnerships and leases had on capacity utilization, depot rate structures, and readiness.111 STAT. 1702