| 1 | 1 | | I |
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| 2 | 2 | | 118THCONGRESS |
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| 3 | 3 | | 1 |
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| 4 | 4 | | STSESSION H. R. 3147 |
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| 5 | 5 | | To establish a defense industrial base advanced capabilities pilot program. |
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| 6 | 6 | | IN THE HOUSE OF REPRESENTATIVES |
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| 7 | 7 | | MAY9, 2023 |
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| 8 | 8 | | Ms. H |
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| 9 | 9 | | OULAHAN(for herself, Mr. FALLON, and Mr. WITTMAN) introduced the |
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| 10 | 10 | | following bill; which was referred to the Committee on Armed Services |
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| 11 | 11 | | A BILL |
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| 12 | 12 | | To establish a defense industrial base advanced capabilities |
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| 13 | 13 | | pilot program. |
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| 14 | 14 | | Be it enacted by the Senate and House of Representa-1 |
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| 15 | 15 | | tives of the United States of America in Congress assembled, 2 |
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| 16 | 16 | | SECTION 1. DEFENSE INDUSTRIAL BASE ADVANCED CAPA-3 |
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| 17 | 17 | | BILITIES PILOT PROGRAM. 4 |
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| 18 | 18 | | (a) E |
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| 19 | 19 | | STABLISHMENT.— 5 |
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| 20 | 20 | | (1) I |
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| 21 | 21 | | N GENERAL.—The Under Secretary of De-6 |
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| 22 | 22 | | fense for Acquisition and Sustainment shall carry 7 |
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| 23 | 23 | | out a public-private partnership pilot program to ac-8 |
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| 24 | 24 | | celerate the scaling, production, and acquisition of 9 |
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| 25 | 25 | | advanced capabilities for national security by cre-10 |
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| 26 | 26 | | ating incentives for investment in domestic small 11 |
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| 28 | 28 | | kjohnson on DSK79L0C42PROD with BILLS 2 |
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| 29 | 29 | | •HR 3147 IH |
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| 30 | 30 | | businesses or nontraditional businesses to create a 1 |
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| 31 | 31 | | robust and resilient defense industrial base. 2 |
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| 32 | 32 | | (2) G |
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| 33 | 33 | | OALS.—The goals of the public-private 3 |
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| 34 | 34 | | partnership pilot program are as follows: 4 |
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| 35 | 35 | | (A) To bolster the defense industrial base 5 |
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| 36 | 36 | | through acquisition and deployment of ad-6 |
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| 37 | 37 | | vanced capabilities necessary to field Depart-7 |
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| 38 | 38 | | ment of Defense modernization programs and 8 |
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| 39 | 39 | | priorities. 9 |
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| 40 | 40 | | (B) To strengthen domestic defense supply 10 |
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| 41 | 41 | | chain resilience and capacity by investing in in-11 |
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| 42 | 42 | | novative defense companies. 12 |
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| 43 | 43 | | (C) To leverage private equity capital to 13 |
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| 44 | 44 | | accelerate domestic defense scaling, production, 14 |
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| 45 | 45 | | and manufacturing. 15 |
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| 46 | 46 | | (b) P |
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| 47 | 47 | | UBLIC-PRIVATEPARTNERSHIPS.— 16 |
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| 48 | 48 | | (1) I |
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| 49 | 49 | | N GENERAL.—In carrying out subsection 17 |
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| 50 | 50 | | (a), the Under Secretary shall enter into public-pri-18 |
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| 51 | 51 | | vate partnerships, consistent with the phased imple-19 |
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| 52 | 52 | | mentation provided for in subsection (e), with for- 20 |
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| 53 | 53 | | profit persons using the criteria set forth in para-21 |
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| 54 | 54 | | graph (2). 22 |
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| 55 | 55 | | (2) C |
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| 56 | 56 | | RITERIA.—The criteria referred to in 23 |
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| 57 | 57 | | paragraph (1) shall include the following: 24 |
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| 58 | 58 | | (A) The person shall be independent. 25 |
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| 62 | 62 | | (B) The person shall be free from foreign 1 |
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| 63 | 63 | | oversight, control, influence, or beneficial own-2 |
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| 64 | 64 | | ership. 3 |
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| 65 | 65 | | (C) The person shall have commercial pri-4 |
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| 66 | 66 | | vate equity fund experience in the defense and 5 |
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| 67 | 67 | | commercial sectors. 6 |
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| 68 | 68 | | (D) The person shall be eligible for access 7 |
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| 69 | 69 | | to classified information (as defined in the pro-8 |
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| 70 | 70 | | cedures established pursuant to section 801(a) 9 |
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| 71 | 71 | | of the National Security Act of 1947 (50 10 |
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| 72 | 72 | | U.S.C. 3161(a))). 11 |
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| 73 | 73 | | (3) O |
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| 74 | 74 | | PERATING AGREEMENT .—The Under Sec-12 |
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| 75 | 75 | | retary and a person or persons with whom the 13 |
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| 76 | 76 | | Under Secretary enters a partnership under para-14 |
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| 77 | 77 | | graph (1) shall enter into an operating agreement 15 |
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| 78 | 78 | | that sets forth the roles, responsibilities, authorities, 16 |
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| 79 | 79 | | reporting requirements, and governance framework 17 |
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| 80 | 80 | | for the partnership and its operations. 18 |
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| 81 | 81 | | (c) I |
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| 82 | 82 | | NVESTMENT OFEQUITY.— 19 |
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| 83 | 83 | | (1) I |
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| 84 | 84 | | N GENERAL.—Pursuant to public-private 20 |
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| 85 | 85 | | partnerships entered into under subsection (b), a 21 |
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| 86 | 86 | | person or persons with whom the Under Secretary 22 |
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| 87 | 87 | | has entered into a partnership shall invest equity in 23 |
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| 88 | 88 | | domestic small businesses or nontraditional busi-24 |
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| 89 | 89 | | nesses consistent with subsection (a), with invest-25 |
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| 90 | 90 | | VerDate Sep 11 2014 00:56 May 20, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H3147.IH H3147 |
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| 91 | 91 | | kjohnson on DSK79L0C42PROD with BILLS 4 |
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| 92 | 92 | | •HR 3147 IH |
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| 93 | 93 | | ments selected based on technical merit, economic 1 |
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| 94 | 94 | | value, and the Department’s modernization prior-2 |
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| 95 | 95 | | ities. 3 |
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| 96 | 96 | | (2) A |
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| 97 | 97 | | UTHORITIES.—A person or persons de-4 |
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| 98 | 98 | | scribed in paragraph (1) shall have sole authority to 5 |
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| 99 | 99 | | operate, manage, and invest. 6 |
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| 100 | 100 | | (d) L |
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| 101 | 101 | | OANGUARANTEE.— 7 |
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| 102 | 102 | | (1) I |
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| 103 | 103 | | N GENERAL.—The Under Secretary shall 8 |
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| 104 | 104 | | provide an up to 80 percent loan guarantee, pursu-9 |
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| 105 | 105 | | ant to the public-private partnerships entered into 10 |
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| 106 | 106 | | under subsection (b), with investment of equity that 11 |
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| 107 | 107 | | qualifies under subsection (c) and consistent with 12 |
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| 108 | 108 | | the goals set forth under subsection (a)(2). 13 |
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| 109 | 109 | | (2) P |
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| 110 | 110 | | ILOT PROGRAM AUTHORITY .—The tem-14 |
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| 111 | 111 | | porary loan guarantee authority described under 15 |
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| 112 | 112 | | paragraph (1) is exclusively for the public-private 16 |
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| 113 | 113 | | partnerships authorized under this section and may 17 |
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| 114 | 114 | | not be utilized for other programs or purposes. 18 |
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| 115 | 115 | | (3) S |
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| 116 | 116 | | UBJECT TO OPERATING AGREEMENT .— 19 |
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| 117 | 117 | | The loan guarantee under paragraph (1) shall be 20 |
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| 118 | 118 | | subject to the operating agreement entered into 21 |
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| 119 | 119 | | under subsection (b)(3). 22 |
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| 120 | 120 | | (4) U |
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| 121 | 121 | | SE OF FUNDS.—Obligations incurred by 23 |
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| 122 | 122 | | the Under Secretary under this paragraph shall be 24 |
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| 123 | 123 | | subject to the availability of funds provided in ad-25 |
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| 126 | 126 | | •HR 3147 IH |
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| 127 | 127 | | vance specifically for the purpose of such loan guar-1 |
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| 128 | 128 | | antees. 2 |
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| 129 | 129 | | (e) P |
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| 130 | 130 | | HASEDIMPLEMENTATION SCHEDULE AND RE-3 |
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| 131 | 131 | | QUIREDREPORTS ANDBRIEFINGS.—The program estab-4 |
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| 132 | 132 | | lished under subsection (a) shall be carried out in two 5 |
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| 133 | 133 | | phases as follows: 6 |
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| 134 | 134 | | (1) P |
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| 135 | 135 | | HASE 1.— 7 |
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| 136 | 136 | | (A) I |
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| 137 | 137 | | N GENERAL.—Phase 1 shall consist of 8 |
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| 138 | 138 | | an initial pilot program with one public-private 9 |
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| 139 | 139 | | partnership, consistent with subsection (b), to 10 |
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| 140 | 140 | | assess the feasibility and advisability of expand-11 |
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| 141 | 141 | | ing the scope of the program. The Under Sec-12 |
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| 142 | 142 | | retary shall begin implementation of phase 1 13 |
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| 143 | 143 | | not later than 180 days after the date of the 14 |
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| 144 | 144 | | enactment of this Act. 15 |
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| 145 | 145 | | (B) I |
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| 146 | 146 | | MPLEMENTATION SCHEDULE AND 16 |
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| 147 | 147 | | FRAMEWORK.—Not later than 90 days after the 17 |
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| 148 | 148 | | date of the enactment of this Act, the Secretary 18 |
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| 149 | 149 | | shall submit an implementation plan to the con-19 |
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| 150 | 150 | | gressional defense committees on the design of 20 |
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| 151 | 151 | | phase 1. The plan shall include— 21 |
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| 152 | 152 | | (i) an overview of, and the activities 22 |
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| 153 | 153 | | undertaken, to execute the public-private 23 |
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| 154 | 154 | | partnership; 24 |
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| 158 | 158 | | (ii) a description of the advanced ca-1 |
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| 159 | 159 | | pabilities and defense industrial base areas 2 |
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| 160 | 160 | | under consideration for investment; and 3 |
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| 161 | 161 | | (iii) implementation milestones and 4 |
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| 162 | 162 | | metrics. 5 |
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| 163 | 163 | | (C) R |
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| 164 | 164 | | EPORT AND BRIEFING REQUIRED .— 6 |
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| 165 | 165 | | Not later than 27 months after the date of the 7 |
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| 166 | 166 | | enactment of this Act, the Secretary shall pro-8 |
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| 167 | 167 | | vide to the congressional defense committees a 9 |
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| 168 | 168 | | report and briefing on the implementation of 10 |
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| 169 | 169 | | this section and the feasibility and advisability 11 |
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| 170 | 170 | | of expanding the scope of the pilot program. 12 |
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| 171 | 171 | | The report and briefing shall include, at min-13 |
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| 172 | 172 | | imum— 14 |
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| 173 | 173 | | (i) an overview of program perform-15 |
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| 174 | 174 | | ance, and implementation and execution 16 |
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| 175 | 175 | | milestones and outcomes; 17 |
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| 176 | 176 | | (ii) an overview of progress in— 18 |
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| 177 | 177 | | (I) achieving new products in 19 |
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| 178 | 178 | | production aligned with Department 20 |
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| 179 | 179 | | of Defense needs; 21 |
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| 180 | 180 | | (II) scaling businesses aligned to 22 |
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| 181 | 181 | | targeted industrial base and capability 23 |
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| 182 | 182 | | areas; 24 |
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| 186 | 186 | | (III) generating defense indus-1 |
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| 187 | 187 | | trial base job growth; 2 |
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| 188 | 188 | | (IV) increasing supply chain re-3 |
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| 189 | 189 | | silience and capacity; and 4 |
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| 190 | 190 | | (V) enhancing competition on ad-5 |
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| 191 | 191 | | vanced capability programs; and 6 |
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| 192 | 192 | | (iii) an accounting of activities under-7 |
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| 193 | 193 | | taken and outline of the opportunities and 8 |
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| 194 | 194 | | benefits of expanding the scope of the pilot 9 |
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| 195 | 195 | | program. 10 |
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| 196 | 196 | | (2) P |
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| 197 | 197 | | HASE 2.— 11 |
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| 198 | 198 | | (A) I |
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| 199 | 199 | | N GENERAL.—Not later than 30 12 |
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| 200 | 200 | | months after the date of the enactment of this 13 |
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| 201 | 201 | | Act, the Secretary may expand the scope of the 14 |
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| 202 | 202 | | phase 1 pilot program with the ability to in-15 |
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| 203 | 203 | | crease to not more than three public-private 16 |
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| 204 | 204 | | partnerships, consistent with subsection (b). 17 |
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| 205 | 205 | | (B) R |
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| 206 | 206 | | EPORT AND BRIEFING REQUIRED .— 18 |
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| 207 | 207 | | Not later than five years after the date of the 19 |
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| 208 | 208 | | enactment of this Act, the Secretary shall pro-20 |
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| 209 | 209 | | vide to the congressional defense committees a 21 |
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| 210 | 210 | | report and briefing on the outcomes of the pilot 22 |
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| 211 | 211 | | program under subsection (a), including the ele-23 |
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| 212 | 212 | | ments described in paragraph (1)(C), and the 24 |
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| 216 | 216 | | feasibility and advisability of making the pro-1 |
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| 217 | 217 | | gram permanent. 2 |
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| 218 | 218 | | (f) T |
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| 219 | 219 | | ERMINATION.—The authority to enter into an 3 |
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| 220 | 220 | | agreement to carry out the pilot program under subsection 4 |
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| 221 | 221 | | (a) shall terminate on the date that is five years after the 5 |
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| 222 | 222 | | date of the enactment of this Act. 6 |
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| 223 | 223 | | (g) D |
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| 224 | 224 | | EFINITIONS.—In this section: 7 |
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| 225 | 225 | | (1) C |
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| 226 | 226 | | ONGRESSIONAL DEFENSE COMMITTEES .— 8 |
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| 227 | 227 | | The term ‘‘congressional defense committees’’ has 9 |
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| 228 | 228 | | the meaning given the term in section 101(a)(16) of 10 |
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| 229 | 229 | | title 10, United States Code. 11 |
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| 230 | 230 | | (2) D |
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| 231 | 231 | | OMESTIC BUSINESS.—The term ‘‘domestic 12 |
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| 232 | 232 | | business’’ has the meaning given the term ‘‘U.S. 13 |
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| 233 | 233 | | business’’ in section 800.252 of title 31, Code of 14 |
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| 234 | 234 | | Federal Regulations, or successor regulation. 15 |
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| 235 | 235 | | (3) D |
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| 236 | 236 | | OMESTIC SMALL BUSINESSES OR NON -16 |
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| 237 | 237 | | TRADITIONAL BUSINESSES .—The term ‘‘domestic 17 |
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| 238 | 238 | | small businesses or nontraditional businesses’’ 18 |
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| 239 | 239 | | means— 19 |
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| 240 | 240 | | (A) a small business that is a domestic 20 |
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| 241 | 241 | | business; or 21 |
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| 242 | 242 | | (B) a nontraditional business that is a do-22 |
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| 243 | 243 | | mestic business. 23 |
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| 244 | 244 | | (4) F |
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| 245 | 245 | | REE FROM FOREIGN OVERSIGHT , CON-24 |
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| 246 | 246 | | TROL, INFLUENCE, OR BENEFICIAL OWNERSHIP .— 25 |
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| 249 | 249 | | •HR 3147 IH |
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| 250 | 250 | | The term ‘‘free from foreign oversight, control, influ-1 |
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| 251 | 251 | | ence, or beneficial ownership’’, with respect to a per-2 |
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| 252 | 252 | | son, means a person who has not raised and man-3 |
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| 253 | 253 | | aged capital from a person or entity that is not 4 |
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| 254 | 254 | | trusted and who is otherwise free from foreign over-5 |
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| 255 | 255 | | sight, control, influence, or beneficial ownership. 6 |
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| 256 | 256 | | (5) I |
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| 257 | 257 | | NDEPENDENT.—The term ‘‘independent’’, 7 |
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| 258 | 258 | | with respect to a person, means a person who lacks 8 |
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| 259 | 259 | | a conflict of interest accomplished by not having en-9 |
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| 260 | 260 | | tity or manager affiliation or ownership with an ex-10 |
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| 261 | 261 | | isting fund. 11 |
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| 262 | 262 | | (6) N |
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| 263 | 263 | | ONTRADITIONAL BUSINESS .—The term 12 |
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| 264 | 264 | | ‘‘nontraditional business’’ has the meaning given the 13 |
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| 265 | 265 | | term ‘‘nontraditional defense contractor’’ in section 14 |
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| 266 | 266 | | 3014 of title 10, United States Code. 15 |
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| 267 | 267 | | (7) S |
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| 268 | 268 | | MALL BUSINESS.—The term ‘‘small busi-16 |
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| 269 | 269 | | ness’’ has the meaning given the term ‘‘small busi-17 |
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| 270 | 270 | | ness concern’’ in section 3 of the Small Business Act 18 |
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| 271 | 271 | | (15 U.S.C. 632). 19 |
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| 272 | 272 | | Æ |
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