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TITLE VIII--ACQUISITION POLICY, ACQUISITION MANAGEMENT, AND RELATED MATTERS

Subtitle E—Defense Industrial Base Matters

P. L. 112-81

House Conference Report 112-329

(a) Requirement- Not later than 180 days after the date of the enactment of this Act, the Administrator of the Defense Logistics Agency Strategic Materials shall submit to the Secretary of Defense an assessment of the feasibility and advisability of establishing an inventory of rare earth materials necessary to ensure the long-term availability of such rare earth materials. The assessment shall--

(1) identify and describe the steps necessary to create an inventory of rare earth materials, including oxides, metals, alloys, and magnets, to support national defense requirements and ensure reliable sources of such materials for defense purposes;

(2) provide a detailed cost-benefit analysis of creating such an inventory in accordance with Office of Management and Budget Circular A-94;

(3) provide an analysis of the potential market effects, including effects on the pricing and commercial availability of such rare earth materials, associated with creating such an inventory;

(4) identify and describe the mechanisms available to the Administrator to make such an inventory accessible, including by purchase, to entities requiring such rare earth materials to support national defense requirements, including producers of end items containing rare earth materials;

(5) provide a detailed explanation of the ability of the Administrator to authorize the sale of excess materials to support a Rare Earth Material Stockpile Inventory Program;

(6) analyze any potential requirements to amend or revise the Defense Logistics Agency Strategic Materials Annual Material Plan for Fiscal Year 2012 and subsequent years to reflect an inventory of rare earth materials to support national defense requirements;

(7) identify and describe the steps necessary to develop or maintain a competitive, multi-source supply-chain to avoid reliance on a single source of supply;

(8) identify and describe supply sources considered by the Administrator to be reliable, including an analysis of the capabilities of such sources to produce such materials in forms required for military applications in the next five years, as well as the security of upstream supply for these sources of material; and

(9) include such other considerations and recommendations as necessary to support the establishment of such inventory.

(b) Findings and Recommendations-

(1) IN GENERAL- Not later than 90 days after the date on which the assessment is submitted under subsection (a), the Secretary of Defense shall submit to the congressional defense committees--

(A) the findings and recommendations from the assessment required under subsection (a);

(B) a description of any actions the Secretary intends to take regarding the plans, strategies, policies, regulations, or resourcing of the Department of Defense as a result of the findings and recommendations from such assessment; and

(C) any recommendations for legislative or regulatory changes needed to ensure the long-term availability of such rare earth materials.

(c) Definitions- In this section:

(1) The term `rare earth' means any of the following chemical elements in any of their physical forms or chemical combinations and alloys:

(A) Scandium.

(B) Yttrium.

(C) Lanthanum.

(D) Cerium.

(E) Praseodymium.

(F) Neodymium.

(G) Promethium.

(H) Samarium.

(I) Europium.

(J) Gadolinium.

(K) Terbium.

(L) Dysprosium.

(M) Holmium.

(N) Erbium.

(O) Thulium.

(P) Ytterbium.

(Q) Lutetium.

(2) The term `capability' means the required facilities, manpower, technological knowledge, and intellectual property necessary for the efficient and effective production of rare earth materials.

The House bill contained a provision (sec. 835) that would require the Department of Defense to develop a plan for the establishment of a rare earth material inventory.

The Senate amendment contained no similar provision.

The Senate recedes with an amendment that would require the Department to assess the feasibility and advisability of establishing a rare earth material inventory.

House Report 112-078

SECTION 835--RARE EARTH MATERIAL INVENTORY PLAN

This section would require the Administrator, Defense Logistics Agency Strategic Materials to develop a plan to establish an inventory of rare earth materials needed to ensure the long-term availability of such materials. Among other matters, the Administrator would be required to identify and describe the steps necessary to create an inventory of rare earth materials to support national defense requirements and ensure reliable sources, provide a detailed cost-benefit analysis of creating such an inventory, provide an analysis of the potential market effects associated with creating such an inventory, and identify and describe the steps necessary to develop and maintain a competitive multi-source supply chain for rare earth materials. This section would require the Administrator to submit the plan to the Secretary of Defense within 180 days following the date of enactment of this Act, and require the Secretary to determine whether to execute the plan. The Secretary would be required to submit that determination, along with the plan, to the congressional defense committees within 90 days of receiving the plan from the Administrator.