§2505. National technology and industrial base: periodic defense capability assessments

(a) Comprehensive Assessment.-The National Defense Technology and Industrial Base Council shall, on a regular and periodic basis and not less often than annually through fiscal year 1997 and biennially thereafter, prepare a comprehensive assessment of the capability of the national technology and industrial base to attain each of the national security objectives set forth in section 2501(a) of this title.

(b) Technology and Industrial Base Sector Capability Analysis.-Each assessment under subsection (a) shall include the following:

(1) An analysis of the role, capability, and continued economic viability of those technology and industrial base sectors that are critical to attaining each of the objectives set forth in section 2501(a) of this title.

(2) An analysis of the present and projected financial condition of each technology and industrial base sector.

(3) An analysis of the impact of the terminations and significant reductions of major research and development programs and procurement programs of the Department of Defense on the capability of those technology and industrial base sectors that are critical to attaining each of the national security objectives set forth in section 2501(a) of this title during a period of reduction in defense expenditures.

(4) A critical technology analysis that identifies the product and process technologies that are most critical for attaining the national security objectives set forth in section 2501(a) of this title.

(c) Foreign Dependency Considerations.-In the preparation of the periodic assessment, the Council shall include considerations of foreign dependency.

(d) Issuance.-The Secretary of Defense shall prescribe by regulation a schedule for the completion of the periodic assessment that ensures sufficient time for the consideration of the assessment in the preparation of the periodic national technology and industrial base plan required by section 2506 of this title.

(Added Pub. L. 102–484, div. D, title XLII, §4215, Oct. 23, 1992, 106 Stat. 2667 ; amended Pub. L. 103–35, title II, §201(g)(7), May 31, 1993, 107 Stat. 100 .)

Prior Provisions

A prior section 2505 was renumbered section 2532 of this title.

Amendments

1993-Pub. L. 103–35 substituted "capability" for "capabilty" in section catchline.

Implementation of Requirements for Assessment, Planning, and Analysis

For provisions relating to first assessment required by this section, see section 4218 of Pub. L. 102–484, set out as a note under section 2501 of this title.

Implementing Regulations Concerning National Technology and Industrial Base Periodic Assessment

Section 4219 of Pub. L. 102–484, as amended by Pub. L. 103–35, title II, §202(a)(14), May 31, 1993, 107 Stat. 101 , provided that:

"(a) Rule of Construction.-Except as otherwise expressly provided, in this section each reference to a section is a reference to a section of title 10, United States Code.

"(b) Initial Regulations.-The Secretary of Defense shall ensure that the initial regulations prescribed to implement section 2505 provide that the periodic assessment required by such section address the matters set forth in this section.

"(c) Sector Role Analysis.-The initial regulations shall provide that the analysis required by section 2505(b)(1), concerning the role and capability of each technology and industrial base sector in furthering each of the national security objectives of section 2501(a), include the following:

"(1) An analysis of the current and projected capability of each sector to attain each such objective for each of the following periods:

"(A) The fiscal year during which the assessment is submitted to Congress pursuant to section 2506(e).

"(B) The following fiscal year.

"(C) The multiyear period covered by the future-years defense program submitted under section 221 during the fiscal year referred to in subparagraph (A).

"(2) For each period described in paragraph (1), an analysis of the present and projected capabilities of prime contractors, subcontractors, the Defense Industrial Reserve, and departments and agencies of the Federal Government with respect to each of the following:

"(A) Research and development, including research and development regarding the critical technologies identified in the analysis pursuant to section 2505(b)(4).

"(B) Application of critical technologies to the production of goods and the furnishing of services.

"(C) Test and evaluation.

"(D) Low rate production.

"(E) High volume production.

"(F) Repair and maintenance.

"(G) Design and prototyping.

"(H) Workforce skills and capabilities, including improvements that build on the skill and experience of the workforce.

"(d) Financial Capability Analysis.-The initial regulations shall provide that the analysis required by section 2505(b)(2), concerning the present and projected financial capability of each technology and industrial base sector, specifically consider the following matters:

"(1) Trends in the following:

"(A) Profitability.

"(B) Levels of capital investment.

"(C) Expenditures on research and development.

"(D) Levels of debt.

"(2) The effects of actual and potential commercial sales.

"(3) The consequences of mergers, acquisitions, and takeovers.

"(4) The effects of Department of Defense financial policies, including the following:

"(A) Policies relating to progress payments or other financing by the Department of Defense.

"(B) Policies relating to the return on contractor investment.

"(C) Policies relating to the allocation of contract risk between the Department of Defense and a contractor.

"(5) The effects of expenditures in the technology and industrial base sector by departments and agencies of the Federal Government other than the Department of Defense and the Department of Energy (for national security programs).

"(6) The analysis required by section 2505(b)(3).

"(e) Analysis of Impact of Department of Defense Reductions.-The initial regulations shall provide that, in the periodic assessment, the analysis required by section 2505(b)(3), concerning the impact of terminations and significant reductions of programs referred to in such section on the capability of each technology and industrial base sector to further each of the national security objectives set forth in section 2501(a), specifically consider the impact of the terminations and significant reductions that-

"(1) have taken place in the fiscal year before the fiscal year in which such periodic assessment is submitted to Congress pursuant to section 2506(e); or

"(2) are provided for-

"(A) in the budget submitted to Congress by the President in that fiscal year; and

"(B) in the future-years defense program submitted with such budget.

"(f) Critical Technology Analysis.-The initial regulations shall provide, with respect to the critical technology analysis required by section 2505(b)(4), the following:

"(1) That the number of technologies so identified not exceed 20.

"(2) That the analysis be prepared in consultation with the Critical Technologies Institute.

"(3) That, for each technology, the analysis include the following:

"(A) The reasons for selection of that technology as a technology critical to the Department of Defense.

"(B) The potential dual-use applications of that technology.

"(C) The relationship between the activities of the Department of Defense and other Federal agencies in the development of that technology.

"(D) The potential contributions that the private sector can be expected to make from its own resources in connection with the development of civilian applications for such technology.

"(E) A comparison of the position of the United States to the positions of other nations in the development of that technology, including the potential contributions that other nations can make to meeting the needs of the United States for that technology.

"(g) Economic Viability Analysis.-(1) The initial regulations shall provide that the economic viability analysis required by section 2505(b)(5) include, for each of the periods described in subsection (c)(1) of this section, an analysis of the following matters:

"(A) The extent to which each technology and industrial base sector is-

"(i) dependent on defense expenditures to ensure continued viability;

"(ii) dependent on a mix of defense and nondefense Federal Government expenditures to ensure continued viability;

"(iii) dependent on a mix of Federal Government expenditures and other Federal Government programs to ensure continued viability; and

"(iv) sufficiently integrated with the commercial marketplace to ensure continued viability regardless of the level of Federal Government expenditures in the technology and industrial base sector.

"(B) The extent to which each technology and industrial base sector is capable of-

"(i) ongoing production with a present capability for high volume production;

"(ii) maintenance of a production base that can be converted to high volume production within a reasonable period of time; or

"(iii) reconstitution of a production base that can reinstate high volume production within a reasonable period of time.

"(2) The analysis shall specifically identify any technology and industrial base sectors and any entities within technology and industrial base sectors that should be considered for inclusion in the Defense Industrial Reserve.

"(h) Foreign Dependency Considerations.-The initial regulations shall provide that the foreign dependency considerations taken into account in the preparation of the periodic assessment pursuant to section 2505(c) include, for each technology and industrial base sector, the following factors:

"(1) The availability of essential raw materials, special alloys, composite materials, components, subsystems, production equipment, facilities, special tooling, and production test equipment for-

"(A) the sustained production of systems fully capable of meeting the performance objectives established for those systems;

"(B) the uninterrupted maintenance and repair of such systems; and

"(C) the sustained operation of such systems.

"(2) The identification of items specified in paragraph (1) that are available only from sources outside the national technology and industrial base.

"(3)(A) The availability of alternatives for obtaining such items from within the national technology and industrial base if such items become unavailable from sources outside the national technology and industrial base.

"(B) An analysis of any military vulnerability that could result from the lack of reasonable alternatives.

"(4) The effects on the national technology and industrial base that result from foreign acquisition of firms in the United States.

"(i) Definitions.-In this section:

"(1) The term 'continued viability' means the capability to attain the national security objectives set forth in section 2501(a).

"(2) The term 'defense expenditure' means an expenditure-

"(A) by the Department of Defense; or

"(B) by the Department of Energy for a national security program.

"(3) The term 'Defense Industrial Reserve' is the Defense Industrial Reserve established by section 2535.

"(4) The term 'future-years defense program' means the future-years defense program required by section 221.

"(5) The term 'national technology and industrial base' has the meaning given that term in section 2491.

"(6) The term 'periodic assessment' means the periodic assessment required by section 2505.

"(7) The term 'section 2501 objectives' means the objectives set forth in section 2501.

"(8) The term 'significant reduction', with respect to expenditures for a program for a fiscal year, means that the amount provided for that program for that fiscal year in the budget, Acts authorizing appropriations, appropriations Acts, or the future years defense program for that fiscal year is less than the amount provided for that program for the preceding fiscal year in the budget, Acts authorizing appropriations, appropriations Acts, or the future years defense program, respectively, for that preceding fiscal year by at least-

"(A) the greater of-

"(i) the amount equal to 10 percent of the amount provided for that preceding fiscal year; or

"(ii) $5,000,000; or

"(B) a lesser amount determined significant by the Secretary of Defense or the National Defense Technology and Industrial Base Council.

"(9) The term 'technology and industrial base sector' has the meaning given such term in section 2491."

Section Referred to in Other Sections

This section is referred to in sections 2410g, 2491, 2502, 2503, 2506 of this title.