TREATMENT OF FINANCING COSTS AS ALLOWABLE EXPENSES UNDER CONTRACTS FOR UTILITY SERVICES FROM UTILITY SYSTEMS CONVEYED UNDER PRIVATIZATION INITIATIVE.

SEC. 2806. TREATMENT OF FINANCING COSTS AS ALLOWABLE EXPENSES UNDER CONTRACTS FOR UTILITY SERVICES FROM UTILITY SYSTEMS CONVEYED UNDER PRIVATIZATION INITIATIVE. (a) Evaluation of Federal Acquisition Regulation.—The Secretary of Defense shall conduct an evaluation of the Federal Acquisition Regulation to determine whether or not it is advisable to modify the Federal Acquisition Regulation to provide that a contract for utility services from a utility system conveyed under section 2688(a) of title 10, United States Code, may include terms and conditions that recognize financing costs, such as return on equity and interest on debt, as an allowable expense when incurred by the conveyee of the utility system to acquire, operate, renovate, replace, upgrade, repair, or expand the utility system. The Secretary shall complete the evaluation not later than 90 days after the date of the enactment of this Act. (b) Submission of Recommendation to Federal Acquisition Regulatory Council.—If the Secretary determines under subsection (a) that it is advisable to modify the Federal Acquisition Regulation to provide that a contract described in such subsection may include terms and conditions described in such subsection, the Secretary shall submit the results of the evaluation to the Federal Acquisition Regulatory Council together with a recommendation regarding the amendments to the Federal Acquisition Regulation necessary to effectuate the modification.