§2208 . Working-capital funds
(a) To control and account more effectively for the cost of programs and work performed in the Department of Defense, the Secretary of Defense may require the establishment of working-capital funds in the Department of Defense to-
(1) finance inventories of such supplies as he may designate; and
(2) provide working capital for such industrial-type activities, and such commercial-type activities that provide common services within or among departments and agencies of the Department of Defense, as he may designate.
(b) Upon the request of the Secretary of Defense, the Secretary of the Treasury shall establish working-capital funds established under this section on the books of the Department of the Treasury.
(c) Working-capital funds shall be charged, when appropriate, with the cost of-
(1) supplies that are procured or otherwise acquired, manufactured, repaired, issued, or used; and
(2) services or work performed;
including applicable administrative expenses, and be reimbursed from available appropriations or otherwise credited for those costs, including applicable administrative expenses and costs of using equipment.
(d) The Secretary of Defense may provide capital for working-capital funds by capitalizing inventories. In addition, such amounts may be appropriated for the purpose of providing capital for working-capital funds as have been specifically authorized by law.
(e) Subject to the authority and direction of the Secretary of Defense, the Secretary of each military department shall allocate responsibility for its functions, powers, and duties to accomplish the most economical and efficient organization and operation of the activities, and the most economical and efficient use of the inventories, for which working-capital funds are authorized by this section.
(f) The requisitioning agency may not incur a cost for supplies drawn from inventories, or services or work performed by industrial-type or commercial-type activities for which working-capital funds may be established under this section, that is more than the amount of appropriations or other funds available for those purposes.
(g) The appraised value of supplies returned to working-capital funds by a department, activity, or agency may be charged to that fund. The proceeds thereof shall be credited to current applicable appropriations and are available for expenditure for the same purposes that those appropriations are so available. Credits may not be made to appropriations under this subsection as the result of capitalization of inventories under subsection (d).
(h) The Secretary of Defense shall prescribe regulations governing the operation of activities and use of inventories authorized by this section. The regulations may, if the needs of the Department of Defense require it and it is otherwise authorized by law, authorize supplies to be sold to, or services to be rendered or work performed for, persons outside the Department of Defense. However, supplies available in inventories financed by working capital funds established under this section may be sold to contractors for use in performing contracts with the Department of Defense. Working-capital funds shall be reimbursed for supplies so sold, services so rendered, or work so performed by charges to applicable appropriations or payments received in cash.
(i) For provisions relating to sales outside the Department of Defense of manufactured articles and services by a working-capital funded Army industrial facility (including a Department of the Army arsenal) that manufactures large caliber cannons, gun mounts, recoil mechanisms, ammunition, munitions, or components thereof, see section 4543 of this title.
(j) The Secretary of a military department may authorize a working capital funded industrial facility of that department to manufacture or remanufacture articles and sell these articles, as well as manufacturing or remanufacturing services provided by such facilities, to persons outside the Department of Defense if-
(1) the person purchasing the article or service is fulfilling a Department of Defense contract; and
(2) the Department of Defense solicitation for such contract is open to competition between Department of Defense activities and private firms.
(k) The Secretary of Defense shall provide that of the total amount of payments received in a fiscal year by funds established under this section for industrial-type activities, not less than 3 percent during fiscal year 1985, not less than 4 percent during fiscal year 1986, and not less than 5 percent during fiscal year 1987 shall be used for the acquisition of capital equipment for such activities.
(Added
| Revised section | Source (U.S. Code) | Source (Statutes at Large) |
|---|---|---|
| 2208(a) 2208(b) 2208(c) 2208(d) |
5:172d(a). 5:172d(b). 5:172d(c) (less 2d sentence). 5:172d(d). |
July 26, 1947, ch. 343, §405; added Aug. 10, 1949, ch. 412, §11 (8th through 15th pars.), |
| 2208(e) | 5:172d(e) | |
| 2208(f) | 5:172d(f). | |
| 2208(g) | 5:172d(h). | |
| 2208(h) | 5:172d(g). | |
| 2208(i) | 5:172d(c) (2d sentence). |
In subsection (a)(1), (c)(1), (f), (g), and (h), the words "stores, . . . materials, and equipment" are omitted as covered by the word "supplies", as defined in section 101(26) of title 10.
In subsection (c), the word "used" is substituted for the word "consumed". The words "and costs of using equipment" are inserted to reflect an opinion of the Assistant General Counsel (Fiscal Matters), Department of Defense, February 2, 1960.
In subsection (d), the first sentence (less 1st 18 words) of 5 U.S.C. 172d(d) is omitted as executed.
In subsection (h), the following substitutions are made: "prescribe" for "issue"; and "persons" for "purchasers or users". The word "shall" is substituted for the words "is authorized to" in the first sentence and for the word "may" in the last sentence to reflect the opinion of the Assistant General Counsel (Fiscal Matters), October 2, 1959, that the source law requires the action in question.
| Revised section | Source (U.S. Code) | Source (Statutes at Large) |
|---|---|---|
| 2208(h) (3d sentence) | 10:2208 (note). | Dec. 21, 1979,
|
The word "hereafter" is omitted as executed.
Amendments
1993-Subsec. (i).
1992-Subsec. (j).
1991-Subsecs. (j), (k).
1990-Subsec. (i)(1).
"(1) Regulations under subsection (h) may authorize an article manufactured by a working-capital funded Department of the Army arsenal that manufactures large caliber cannons, gun mounts, or recoil mechanisms to be sold to a person outside the Department of Defense if-
"(A) the article is sold to a United States manufacturer, assembler, or developer (i) for use in developing new products, or (ii) for incorporation into items to be sold to, or to be used in a contract with, an agency of the United States or a friendly foreign government;
"(B) the purchaser is determined by the Department of Defense to be qualified to carry out the proposed work involving the article to be purchased;
"(C) the article is not readily available from a commercial source in the United States; and
"(D) the sale is to be made on a basis that does not interfere with performance of work by the arsenal for the Department of Defense or for a contractor of the Department of Defense.
"(2) Services related to an article sold under this subsection may also be sold to the purchaser if the services are to be performed in the United States for the purchaser."
Subsec. (k).
1987-Subsec. (i)(3).
1984-Subsecs. (i) to (k).
1983-Subsec. (d).
1982-Subsec. (h).
Effective Date of 1983 Amendment
Section 1204(b) of
Oversight of Defense Business Operations Fund
"(b)
"(c)
"(d)
"(e)
"(1) A detailed report that contains a statement of all receipts and disbursements of the Fund (including such a statement for each subaccount of the Fund) for the year for which the report is submitted.
"(2) A detailed proposed budget for the operation of the Fund for the fiscal year for which the budget is submitted.
"(3) A comparison of the amounts actually expended for the operation of the Fund for the previous fiscal year with the amount proposed for the operation of the Fund for that fiscal year in the budget.
"(f)
"(2) The Comptroller General shall monitor and evaluate the progress of the Department of Defense in developing and implementing the improvement plan referred to in paragraph (1).
"(3) Not later than March 1, 1995, the Comptroller General shall submit to the congressional defense committees a report containing the following:
"(A) An evaluation of the progress report submitted to the congressional defense committees by the Secretary of Defense pursuant to paragraph (1).
"(B) The findings and conclusions of the Comptroller General resulting from the monitoring and evaluation conducted under paragraph (2).
"(C) Any recommendations for legislation or administrative action concerning the Fund that the Comptroller General considers appropriate.
"(g)
Charges for Goods and Services Provided Through Defense Business Operations Fund
Section 333(a), (b) of
"(a)
"(1) shall include amounts necessary to recover the full costs of-
"(A) the development, implementation, operation, and maintenance of systems supporting the wholesale supply and maintenance activities of the Department of Defense; and
"(B) the use of military personnel in the provision of the goods and services, as computed by calculating, to the maximum extent practicable, such costs if employees of the Department of Defense were used in the provision of the goods and services; and
"(2) shall not include amounts necessary to recover the costs of a military construction project (as such term is defined in section 2801(b) of title 10, United States Code), other than a minor construction project financed by the Defense Business Operations Fund pursuant to section 2805(c)(1) of such title.
"(b)
Capital Asset Subaccount
Section 342 of
"(a)
"(b)
"(c)
"(1) the opening balance of the subaccount as of the beginning of the fiscal year in which the report is submitted;
"(2) the estimated amounts to be credited to the subaccount in the fiscal year in which the report is submitted;
"(3) the estimated amounts of outlays to be paid out of the subaccount in the fiscal year in which the report is submitted;
"(4) the estimated balance of the subaccount at the end of the fiscal year in which the report is submitted; and
"(5) a statement of how much of the estimated balance at the end of the fiscal year in which the report is submitted will be needed to pay outlays in the immediately following fiscal year that are in excess of the amount to be credited to the subaccount in the immediately following fiscal year.
"(d)
"(e)
"(1) The term 'capital assets' means the following capital assets that have a development or acquisition cost of not less than $15,000:
"(A) Minor construction projects financed by the Fund pursuant to section 2805(c)(1) of title 10, United States Code.
"(B) Automatic data processing equipment, software, other equipment, and other capital improvements.
"(2) The term 'Fund' means the Defense Business Operations Fund."
Limitations on Use of Defense Business Operations Fund
"(a)
"(b)
"(1) working-capital funds established under section 2208 of title 10, United States Code, and in existence on the date of the enactment of this Act [Dec. 5, 1991];
"(2) those activities that, on the date of the enactment of this Act, are funded through the use of a working-capital fund established under that section; and
"(3) the Defense Finance and Accounting Service, the Defense Industrial Plant Equipment Center, the Defense Commissary Agency, the Defense Technical Information Service, and the Defense Reutilization and Marketing Service.
"(c)
"(1) the separate identity of each fund and activity managed through the Fund that (before the establishment of the Fund) was managed as a separate fund or activity; and
"(2) separate records for each function for which payment is made through the Fund and which (before the establishment of the Fund) was paid directly through appropriations, including the separate identity of the appropriation account used to pay for the performance of the function.
"(d)
"(2)(A) The plan shall also include the following matters:
"(i) The specific tasks to be performed to address the serious shortcomings that exist in the Fund's implementation and operation.
"(ii) Milestones for starting and completing each task.
"(iii) A statement of the resources needed to complete each task.
"(iv) The specific organizations within the Department of Defense that are responsible for accomplishing each task.
"(v) Department of Defense plans to monitor the implementation of all corrective actions.
"(B) The plan shall also address the following specific areas:
"(i) The management and organizational structure of the Fund.
"(ii) The development and implementation of the policies and procedures, including cash management and internal controls, applicable to the Fund.
"(iii) Management reporting, including financial and operational reporting.
"(iv) Accuracy and reliability of cost accounting data.
"(v) Development and use of performance indicators to measure the efficiency and effectiveness of Fund operations.
"(vi) The status of efforts to develop and implement new financial systems for the Fund.
"(e)
"(f)
"(2) Not later than March 1, 1994, the Comptroller General shall submit to the congressional defense committees a report containing the following:
"(A) The findings and conclusions of the Comptroller General resulting from the monitoring and evaluation conducted under paragraph (1).
"(B) An evaluation of the progress report submitted to the congressional defense committees by the Secretary of Defense pursuant to subsection (e).
"(C) Any recommendations for legislation or administrative action concerning the Fund that the Comptroller General considers appropriate."
Defense Business Operations Fund
Section 8121 of
"(a) There is established on the books of the Treasury a fund entitled the 'Defense Business Operations Fund' (hereinafter referred to as the 'Fund') to be operated as a working capital fund under the provisions of section 2208 of title 10, United States Code. Existing organizations which shall operate as part of the Fund shall include, but not be limited to, (1) The Defense Finance and Accounting Service; (2) The Defense Commissary Agency; (3) The Defense Technical Information Center; (4) The Defense Reutilization and Marketing Service; and (5) The Defense Industrial Plant Equipment Service.
"(b) Upon the enactment of this Act [Nov. 26, 1991], there shall be transferred to the Fund all assets and balances of working capital funds heretofore established under the provisions of section 2208 of title 10, United States Code.
"(c) Amounts charged for supplies and services provided by the Fund shall include capital asset charges which shall be calculated so that the total amount of the charges assessed during any fiscal year shall equal the total amount of (1) the costs of equipment purchased during that fiscal year by the Fund for the purpose of providing supplies and services by the Fund and (2) the costs, other than costs of military construction, of capital improvements made for the purpose of providing services by the Fund.
"(d) Capital asset charges collected pursuant to the provisions of subsection (c) shall be credited to a subaccount of the Fund which shall be available only for the payment of: (1) the costs of equipment purchased by the Fund for the purpose of providing supplies and services by the Fund and (2) the costs other than costs of military construction, of capital improvements made for the purposes of providing services by the Fund."
Sale of Inventories for Performance of Contracts With Defense Department
Cross References
Sale of articles acquired with working capital funds, see sections 4621 and 9621 of this title.
Section Referred to in Other Sections
This section is referred to in sections 129, 2210, 2350c, 4543, 4621, 7227, 9621 of this title; title 40 section 484.