CRITICAL MATERIEL READINESS SHORTFALLS.

SEC. 872. CRITICAL MATERIEL READINESS SHORTFALLS. (a) Designation of Critical Materiel Readiness Shortfalls.—(1) Designation.—The Secretary of Defense may designate any requirement of the Armed Forces for equipment or supplies as a critical materiel readiness shortfall if there is a shortfall in the required equipment or supplies that materially reduces readiness of the Armed Forces and that—(A) cannot be adequately addressed by identifying acceptable substitute capabilities or cross leveling of equipment that does not unacceptably reduce the readiness of other Armed Forces; and(B) that is likely to persist for more than two years based on currently projected budgets and schedules for deliveries of equipment and supplies.(2) Consideration of board findings and recommendations.—In making any such designation, the Secretary shall take into consideration the findings and recommendations of the Defense Materiel Readiness Board.(b) Measures to Address Critical Materiel Readiness Shortfalls.—The Secretary of Defense shall ensure that critical materiel readiness shortfalls designated pursuant to subsection (a)(1) are transmitted to the relevant officials of the Department of Defense responsible for requirements, budgets, and acquisition, and that such officials prioritize and address such shortfalls in the shortest time frame practicable.(c) Transfer Authority.—(1) In general.—The amounts of authorizations that the Secretary may transfer under the authority of section 1001 of this Act is hereby increased by $2,000,000,000.(2) Limitations.—The additional transfer authority provided by this section—(A) may be made only from authorizations to the Department of Defense for fiscal year 2008;(B) may be exercised solely for the purpose of addressing critical materiel readiness shortfalls as designated by the Secretary of Defense under subsection (a); and(C) is subject to the same terms, conditions, and procedures as other transfer authority under section 1001 of this Act.(d) Strategic Readiness Fund.—(1) Establishment.—There is established on the books of the Treasury a fund to be known as the Department of Defense Strategic Readiness Fund (in this subsection referred to as the “Fund”), which shall be administered by the Secretary of the Treasury.(2) Purposes.—The Fund shall be used to address critical materiel readiness shortfalls as designated by the Secretary of Defense under subsection (a).(3) Assets of fund.—There shall be deposited into the Fund any amount appropriated to the Fund, which shall constitute the assets of the Fund.122 STAT. 262(4) Limitation.—The procurement unit cost (as defined in section 2432(a) of title 10, United States Code) of any item purchased using assets of the Fund, whether such assets are in the Fund or after such assets have been transferred from the Fund using the authority provided in subsection (c), shall not exceed $30,000,000.(e) Multiyear Contract Notification.—(1) Notification.—If the Secretary of a military department makes the determination described in paragraph (2) with respect to the use of a multiyear contract, the Secretary shall notify the congressional defense committees within 30 days of the determination and provide a detailed description of the proposed multiyear contract.(2) Determination.—The determination referred to in paragraph (1) is a determination by the Secretary of a military department that the use of a multiyear contract to procure an item to address a critical materiel readiness shortfall—(A) will significantly accelerate efforts to address a critical materiel readiness shortfall;(B) will provide savings compared to the total anticipated costs of carrying out the contract through annual contracts; and(C) will serve the interest of national security.(f) Definition.—In this section, the term “critical materiel readiness shortfall” means a critical materiel readiness shortfall designated by the Secretary of Defense under this section.