§2524. Defense dual-use assistance extension program

(a) Establishment of Program.-The Secretary of Defense, in consultation and coordination with the Secretary of Energy and the Secretary of Commerce, shall establish a program to further the national security objectives set forth in section 2501(a) of this title and the defense reinvestment, diversification, and conversion program objectives set forth in section 2501(b) of this title by providing support to entities referred to in subsection (b) for programs described in that subsection.

(b) Programs Supported.-The Secretary may provide support under this section for programs sponsored by the Federal Government, regional entities, States, local governments, and private entities and nonprofit organizations that assist businesses economically dependent on Department of Defense expenditures to acquire dual-use capabilities through the provision under those programs of the following forms of assistance:

(1) Assistance in converting from government-oriented management, production, training, and marketing practices to commercial practices.

(2) Assistance in acquiring and using public and private sector resources, literature, and other information concerning-

(A) research, development, and production processes and practices;

(B) identification of technologies and products having the potential for defense and nondefense commercial applications;

(C) marketing practices and opportunities;

(D) identification of potential suppliers, partners, and subcontractors;

(E) identification of opportunities for government support, including support through grants, contracts, partnerships, and consortia;

(F) enhancement of workforce skills and capabilities, including-

(i) development and introduction of high-performance work systems, workforce literacy programs, and programs for worker education and training;

(ii) other programs that build upon the skills and capabilities of the workforce; and

(G) trade and export assistance.

(3) Loan guarantees to small business concerns and medium-sized business concerns that are economically dependent on defense expenditures, under the terms and conditions specified under other applicable law.

(c) Assistance Authorized.-(1) The Secretary may make grants, enter into contracts, or enter into cooperative agreements and other transactions pursuant to section 2371 of this title.

(2) Subject to subsection (d), the Secretary may provide a program referred to in subsection (b) with technical and other assistance.

(3) The Secretary is authorized to carry out a program to provide assistance to small businesses that are economically dependent on defense expenditures to obtain access to a national network of scientists and engineers, and to information resources (including access through on-line data bases to local, national, and international technical and business literature encompassing a wide range of technologies), that can help minimize technical risk and thereby facilitate the development and commercialization of new products.

(d) Financial Commitment of Non-Federal Government Participants.-(1) The Secretary shall ensure that the amount of funds provided by the Secretary to a program under this section does not exceed 50 percent of the total cost of the program.

(2) The Secretary may prescribe regulations to provide for consideration of in-kind contributions by non-Federal Government participants in a program under this section for the purpose of calculating the share of the costs that has been or is being undertaken by such participants. In such regulations, the Secretary may authorize a participant that is a small business concern to use funds received under the Small Business Innovation Research Program or the Small Business Technology Transfer Program to help pay the costs of the program. Any such funds so used may be considered in calculating the amount of the financial commitment undertaken by the non-Federal Government participants unless the Secretary determines that the small business concern has not made a significant equity percentage contribution in the program from non-Federal sources.

(3) The Secretary shall consider a program proposal submitted by a small business concern without regard to the ability of the small business concern to immediately meet its share of the anticipated program costs. Upon the selection of a proposal submitted by a small business concern, the small business concern shall have a period of not less than 120 days in which to arrange to meet its financial commitment requirements under the program from sources other than a person of a foreign country. If the Secretary determines upon the expiration of that period that the small business concern will be unable to meet its share of the anticipated program costs, the Secretary shall revoke the selection of the program proposal submitted by the small business concern.

(e) Special Requirements Regarding Loan Guarantees.-(1) The Secretary shall carry out the loan guarantee program authorized under subsection (b)(3) during any fiscal year for which funds are specifically made available to cover the costs of loan guarantees to be issued pursuant to such subsection.

(2) In addition to the selection criteria specified in subsection (f), the selection criteria in the case of the loan guarantee program under subsection (b)(3) shall also include the following:

(A) The extent to which the loans to be guaranteed would support the retention of defense workers whose employment would otherwise be permanently or temporarily terminated as a result of reductions in expenditures by the United States for defense, the termination or cancellation of a defense contract, the failure to proceed with an approved major weapon system, the merger or consolidation of the operations of a defense contractor, or the closure or realignment of a military installation.

(B) The extent to which the loans to be guaranteed would stimulate job creation and new economic activities in communities most adversely affected by reductions in expenditures by the United States for defense, the termination or cancellation of a defense contract, the failure to proceed with an approved major weapon system, the merger or consolidation of the operations of a defense contractor, or the closure or realignment of a military installation.

(C) The extent to which the loans to be guaranteed would be used to acquire (or permit the use of other funds to acquire) capital equipment to modernize or expand the facilities of the borrower to enable the borrower to remain in the national technology and industrial base available to the Department of Defense.

(3) To be eligible for a loan guarantee under subsection (b)(3), a borrower must be able to demonstrate to the satisfaction of the Secretary that at least 25 percent of the value of the borrower's sales during the preceding fiscal year were derived from-

(A) contracts with the Department of Defense or the defense-related activities of the Department of Energy; or

(B) subcontracts in support of defense-related prime contracts.

(4) The maximum amount of loan principal that the Secretary may guarantee under the loan guarantee program during a fiscal year may not exceed-

(A) $1,250,000, with respect to a small business concern; and

(B) $10,000,000 with respect to a medium-sized business concern.

(f) Selection Process and Criteria.-Competitive procedures shall be used in the selection of programs to receive assistance under this section. The criteria for the selection of a program to receive assistance under this section shall include the following:

(1) The extent to which the program advances and enhances the national security objectives set forth in section 2501(a) of this title and the reinvestment, diversification, and conversion program objectives set forth in section 2501(b) of this title.

(2) The technical excellence of the program.

(3) The qualifications of the personnel proposed to participate in the program's research activities.

(4) The adequacy of timely private sector investment in activities that is sufficient to achieve the goals and objectives of the programs.

(5) The potential effectiveness of the program in the conversion of businesses (and their work forces) from capabilities that make the companies economically dependent on Department of Defense expenditures to capabilities having defense and nondefense commercial applications.

(6) The ability of the program to assist businesses (and their work forces) that are adversely affected by significant reductions in Department of Defense spending.

(7) The extent of the financial commitment by sources other than the Department of Defense.

(8) The extent to which the program would supplement, rather than duplicate, other available services.

(9) The likelihood that, within five years after the commencement of assistance for a program under this section (or a lesser period established by the Secretary), Department of Defense assistance will not be necessary to sustain the program.

(10) Such other criteria as the Secretary prescribes.

(g) Definition.-In this section, the "medium-sized business concern" means a business concern that is not more than two times the maximum size specified by the Administrator of the Small Business Administration for purposes of determining whether a business concern furnishing a product or service is a small business concern.

(h) Termination of Authority.-After September 30, 1995, funds may be provided by the Department of Defense under this section only for programs referred to in subsection (b) for which funds have been provided by the Department of Defense under this section on or before that date. No funds may be provided by the Department of Defense under this section for a program referred to in subsection (b) after September 30, 1998.

(Added Pub. L. 102–484, div. D, title XLII, §4234(a), Oct. 23, 1992, 106 Stat. 2687 ; amended Pub. L. 103–35, title II, §201(g)(9), May 31, 1993, 107 Stat. 100 ; Pub. L. 103–160, div. A, title XIII, §§1314, 1315(e), Nov. 30, 1993, 107 Stat. 1786 , 1788; Pub. L. 103–337, div. A, title X, §1070(b)(10), title XI, §§1114(b), (c), 1115(d), Oct. 5, 1994, 108 Stat. 2857 , 2867-2869.)

Prior Provisions

A prior section 2524 was renumbered section 2513 of this title.

Amendments

1994-Subsec. (d)(3). Pub. L. 103–337, §1115(d), added par. (3).

Subsec. (e). Pub. L. 103–337, §1114(b), amended heading and text of subsec. (e) generally. Prior to amendment, text read as follows: "Competitive procedures shall be used in the selection of programs to receive assistance under this section."

Subsec. (f). Pub. L. 103–337, §1114(c), substituted "Selection Process and Criteria" for "Selection Criteria" in heading and inserted after heading "Competitive procedures shall be used in the selection of programs to receive assistance under this section."

Subsec. (g). Pub. L. 103–337, §1070(b)(10), made technical correction to directory language of Pub. L. 103–160, §1314(3). See 1993 Amendment note below.

1993-Subsec. (b)(2)(F). Pub. L. 103–35 substituted "workforce" for "work force" in introductory provisions and in cl. (ii).

Subsec. (b)(3). Pub. L. 103–160, §1314(1), substituted "small business concerns and medium-sized business concerns" for "small businesses".

Subsec. (d). Pub. L. 103–160, §1315(e), substituted "Non-Federal Government" for "Non-Department of Defense" in heading and amended text generally. Prior to amendment, text read as follows:

"(1) The Secretary shall ensure that the amount of funds provided by the Department of Defense for a program under this section does not exceed the maximum authorized percentage of the combined amount provided by the Department of Defense and all other sources of funding for the program for any year.

"(2) The maximum authorized percentage of Department of Defense funding referred to in paragraph (1) for each year of Department of Defense assistance for a program under this section is as follows:

"(A) 50 percent in the first year.

"(B) 40 percent in the second year.

"(C) 30 percent in the third and following years."

Subsec. (g). Pub. L. 103–160, §1314(3), as amended by Pub. L. 103–337, §1070(b)(10), added subsec. (g). Former subsec. (g) redesignated (h).

Subsec. (h). Pub. L. 103–160, §1314(2), redesignated subsec. (g) as (h).

Effective Date of 1994 Amendment

Section 1070(b) of Pub. L. 103–337 provided that the amendment made by that section is effective as of Nov. 30, 1993, and as if included in the National Defense Authorization Act for Fiscal Year 1994, Pub. L. 103–160, as enacted.

Application of 1993 Amendments to Existing Technology Reinvestment Projects

Amendment by section 1315(e) of Pub. L. 103–160 not to alter financial commitment requirements in effect on the day before Nov. 30, 1993, for non-Federal Government participants in a project funded under section 2511, 2512, 2513, 2523, or 2524 of this title, using funds appropriated for a fiscal year beginning before Oct. 1, 1993, see section 1315(g) of Pub. L. 103–160, set out as a note under section 2511 of this title.