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TITLE XVII — SMALL BUSINESS PROCUREMENT AND INDUSTRIAL BASE MATTERS

P. L. 115-

House Conference Report. 115-404

(a) Pilot Program Required.—The Secretary of Defense shall carry out a pilot program to assess the feasibility and advisability of increasing the capability of the defense industrial base to support—

(1) production needs to meet military requirements; and

(2) manufacturing and production of emerging defense and commercial technologies.

(b) Authorities.—The Secretary shall carry out the pilot program under the following:

(1) Chapters 137 and 139 and sections 2371, 2371b, and 2373 of title 10, United States Code.

(2) Such other legal authorities as the Secretary considers applicable to carrying out the pilot program.

(c) Activities.—Activities under the pilot program may include the following:

(1) Use of contracts, grants, or other transaction authorities to support manufacturing and production capabilities in small- and medium-sized manufacturers.

(2) Purchases of goods or equipment for testing and certification purposes.

(3) Incentives, including purchase commitments and cost sharing with nongovernmental sources, for the private sector to develop manufacturing and production capabilities in areas of national security interest.

(4) Issuing loans or providing loan guarantees to small- and medium-sized manufacturers to support manufacturing and production capabilities in areas of national security interest.

(5) Giving awards to third party entities to support investments in small- and medium-sized manufacturers working in areas of national security interest, including debt and equity investments that would benefit missions of the Department of Defense.

(6) Such other activities as the Secretary determines necessary.

(d) Termination.—The pilot program shall terminate on the date that is four years after the date of the enactment of this Act.

(e) Briefing Required.—No later than January 31, 2022, the Secretary of Defense shall provide a briefing to the Committees on Armed Services in the Senate and the House of Representatives on the results of the pilot program.

The Senate amendment contained a provision (sec. 862) that would create a pilot program that would authorize the Department of Defense to use existing authorities to support investments that enhance the ability of the defense industrial base to meet military needs. The provision would also authorize the Department to invest in the manufacture of these kinds of technologies and systems, especially through the use of contracts, loan guarantees, direct loans, and purchases of equipment to support the startup of needed production lines. Further, the provision would allow the Department to engage with private sector financing and investment instruments, including instruments that take equity stakes in concerns – so as to support needed advanced manufacturing capabilities.

The House bill contained no similar provision.

The House recedes with an amendment that would clarify the authorities to be considered under the pilot program.