10 USC 2218 – National Defense Sealift Fund
(a)
Terms Used In 10 USC 2218
- Appropriation: The provision of funds, through an annual appropriations act or a permanent law, for federal agencies to make payments out of the Treasury for specified purposes. The formal federal spending process consists of two sequential steps: authorization
- Contract: A legal written agreement that becomes binding when signed.
- Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
- Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- officer: includes any person authorized by law to perform the duties of the office. See 1 USC 1
- Personal property: All property that is not real property.
- Public law: A public bill or joint resolution that has passed both chambers and been enacted into law. Public laws have general applicability nationwide.
- vessel: includes every description of watercraft or other artificial contrivance used, or capable of being used, as a means of transportation on water. See 1 USC 3
(b)
(c)
(A) Construction (including design of vessels), purchase, alteration, and conversion of Department of Defense sealift vessels.
(B) Operation, maintenance, and lease or charter of Department of Defense vessels for national defense purposes.
(C) Installation and maintenance of defense features for national defense purposes on privately owned and operated vessels that are constructed in the United States and documented under the laws of the United States.
(D) Expenses for maintaining the National Defense Reserve Fleet under section 11 of the Merchant Ship Sales Act of 1946 (50 U.S.C. 4405),1 and for the costs of acquisition of vessels for, and alteration and conversion of vessels in (or to be placed in), the fleet, but only for vessels built in United States shipyards.
(2) Funds in the National Defense Sealift Fund may be obligated or expended only in amounts authorized by law.
(3) Funds obligated and expended for a purpose set forth in subparagraph (B) of paragraph (1) may be derived only from funds deposited in the National Defense Sealift Fund pursuant to subsection (d)(1).
(d)
(1) All funds appropriated to the Department of Defense for—
(A) construction (including design of vessels), purchase, alteration, and conversion of national defense sealift vessels;
(B) operations, maintenance, and lease or charter of national defense sealift vessels; and
(C) installation and maintenance of defense features for national defense purposes on privately owned and operated vessels.
(2) All receipts from the disposition of national defense sealift vessels, excluding receipts from the sale, exchange, or scrapping of National Defense Reserve Fleet vessels under sections 57101-57104 and chapter 573 of title 46.
(3) All receipts from the charter of vessels under section 1424(c) of the National Defense Authorization Act for Fiscal Year 1991 (10 U.S.C. 8661 note).
(4) Any other funds made available to the Department of Defense to carry out any of the purposes described in subsection (c).
(e)
(2) Any contribution of property accepted under paragraph (1) may be retained and used by the Department of Defense or disposed of in accordance with procedures prescribed by the Secretary of Defense.
(3) The Secretary of Defense shall deposit in the Fund money and receipts from the disposition of any property accepted under paragraph (1).
(f)
(2) Construction, alteration, or conversion of vessels with funds in the National Defense Sealift Fund pursuant to subsection (c)(1) shall be conducted in United States ship yards and shall be subject to section 1424(b) of Public Law 101-510 (104 Stat. 1683).
(3)(A) Notwithstanding the limitations under subsection (c)(1)(E) and paragraph (1), the Secretary of Defense may, as part of a program to recapitalize the Ready Reserve Force component of the national defense reserve fleet and the Military Sealift Command surge fleet, purchase any used vessel, regardless of where such vessel was constructed if such vessel—
(i) participated in the Maritime Security Fleet; and
(ii) is available for purchase at a reasonable cost, as determined by the Secretary.
(B) If the Secretary determines that no used vessel meeting the requirements under clauses (i) and (ii) of subparagraph (A) is available, the Secretary may purchase a used vessel comparable to a vessel described in clause (i) of subparagraph (A), regardless of the source of the vessel or where the vessel was constructed, if such vessel is available for purchase at a reasonable cost, as determined by the Secretary.
(C) The Secretary may not use the authority under this paragraph to purchase more than nine foreign constructed vessels.
(D) The Secretary shall ensure that the initial conversion, or modernization of any vessel purchased under the authority of subparagraph (A) occurs in a shipyard located in the United States.
(E) The Secretary may not use the authority under this paragraph to procure more than four foreign constructed vessels unless the Secretary submits to Congress, by not later than the second week of February of the fiscal year during which the Secretary plans to use such authority, a certification that—
(i) the Secretary has initiated an acquisition strategy for the construction in United States shipyards of not less than ten new vessels that are sealift vessels, auxiliary vessels, or a combination of such vessels; and
(ii) of such new vessels, the lead ship is anticipated to be delivered by not later than 2028.
(F) Not later than 30 days before the purchase of any vessel using the authority under this paragraph, the Secretary, in consultation with the Maritime Administrator, shall submit to the congressional defense committees a report that contains each of the following with respect to such purchase:
(i) The proposed date of the purchase.
(ii) The price at which the vessel would be purchased.
(iii) The anticipated cost of modernization of the vessel.
(iv) The proposed military utility of the vessel.
(v) The proposed date on which the vessel will be available for use by the Ready Reserve.
(vi) The contracting office responsible for the completion of the purchase.
(vii) Certification that—
(I) there was no vessel available for purchase at a reasonable price that was constructed in the United States; and
(II) the used vessel purchased supports the recapitalization of the Ready Reserve Force component of the National Defense Reserve Fleet or the Military Sealift Command surge fleet.
(viii) A detailed account of the criteria used to make the determination under subparagraph (B).
(G) The Secretary may not finalize or execute the final purchase of any vessel using the authority under this paragraph until 30 days after the date on which a report under subparagraph (F) is submitted with respect to such purchase.
(g)
(h)
(1) the amount requested for programs, projects, and activities for construction (including design of vessels), purchase, alteration, and conversion of national defense sealift vessels;
(2) the amount requested for programs, projects, and activities for operation, maintenance, and lease or charter of national defense sealift vessels;
(3) the amount requested for programs, projects, and activities for installation and maintenance of defense features for national defense purposes on privately owned and operated vessels that are constructed in the United States and documented under the laws of the United States; and
(4) the amount requested for programs, projects, and activities for research and development relating to national defense sealift.
(i)
(j)
(2) The head of an agency may make advance payments to the contractor under a contract under paragraph (1) in a lump sum, in annual payments, or in a combination thereof for costs associated with the installation and maintenance of the defense features on a vessel covered by the contract, as follows:
(A) The costs to build, procure, and install a defense feature in the vessel.
(B) The costs to periodically maintain and test any defense feature on the vessel.
(C) Any increased costs of operation or any loss of revenue attributable to the installation or maintenance of any defense feature on the vessel.
(D) Any additional costs associated with the terms and conditions of the contract.
(E) Payments of such sums as the Government would otherwise expend, if the vessel were placed in the Ready Reserve Fleet, for maintaining the vessel in the status designated as “ROS-4 status” in the Ready Reserve Fleet for 25 years.
(3) For any contract under paragraph (1) under which the United States makes advance payments under paragraph (2) for the costs associated with installation or maintenance of any defense feature on a commercial vessel, the contractor shall provide to the United States such security interests in the vessel, by way of a preferred mortgage under section 31322 of title 46 or otherwise, as the head of the agency may prescribe in order to adequately protect the United States against loss for the total amount of those costs.
(4) Each contract entered into under this subsection shall—
(A) set forth terms and conditions under which, so long as a vessel covered by the contract is owned or controlled by the contractor, the contractor is to operate the vessel for the Department of Defense notwithstanding any other contract or commitment of that contractor; and
(B) provide that the contractor operating the vessel for the Department of Defense shall be paid for that operation at fair and reasonable rates.
(5) The head of an agency may not delegate authority under this subsection to any officer or employee in a position below the level of head of a procuring activity.
(6) The head of an agency may not enter into a contract under paragraph (1) that would provide for payments to the contractor as authorized in paragraph (2)(E) until notice of the proposed contract is submitted to the congressional defense committees and a period of 90 days has elapsed.
(k)
(1) The term “Fund” means the National Defense Sealift Fund established by subsection (a).
(2) The term “Department of Defense sealift vessel” means any ship owned, operated, controlled, or chartered by the Department of Defense that is any of the following:
(A) A fast sealift ship, including any vessel in the Fast Sealift Program established under section 1424 of Public Law 101-510 (104 Stat. 1683).
(B) Any other auxiliary vessel that was procured or chartered with specific authorization in law for the vessel, or class of vessels, to be funded in the National Defense Sealift Fund.
(3) The term “national defense sealift vessel” means—
(A) a Department of Defense sealift vessel; and
(B) a national defense reserve fleet vessel, including a vessel in the Ready Reserve Force maintained under section 11 of the Merchant Ship Sales Act of 1946 (50 U.S.C. 4405).1
(4) The term “head of an agency” has the meaning given that term in section 3004 of this title.
(5) The term “Maritime Security Fleet” means the fleet established under section 53102(a) of title 46.