SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Army Arsenal Revitalization Act of 
2016''.

SEC. 2. DEFINITIONS.

    In this Act:
            (1) Congressional defense committees.--The term 
        ``congressional defense committees'' has the meaning given that 
        term in section 101(a)(16) of title 10, United States Code.
            (2) Legacy items.--The term ``legacy items'' means 
        manufactured items that are no longer produced by the private 
        sector but continue to be used for Department of Defense 
        weapons systems, excluding information technology and 
        information systems (as those terms are defined in section 
        11101 of title 40, United States Code).
            (3) Organic industrial base.--The term ``organic industrial 
        base'' means United States military facilities that advance a 
        vital national security interest by producing necessary 
        materials, munitions, and hardware, including arsenals and 
        depots.

SEC. 3. USE OF ARSENALS TO MANUFACTURE CERTAIN ITEMS.

    (a) Production of Legacy Items.--
            (1) Report.--Not later than 180 days after the date of the 
        enactment of this Act, the Director of the Defense Logistics 
        Agency shall submit to the congressional defense committees a 
        report listing all legacy items used by the Department of 
        Defense with a contract value equal to or greater than 
        $5,000,000.
            (2) Production requirement.--The Secretary of Defense shall 
        use Army arsenals for the production of all legacy items 
        identified in the report submitted under paragraph (1).
    (b) Use of Sole Source Contracts for Certain Items.--
            (1) Report.--Not later than one year after the date of the 
        enactment of this Act, the Secretary of Defense shall submit to 
        the congressional defense committees a report listing all sole 
        source contracts for the procurement of manufactured items the 
        lack of which would constitute a critical national security 
        issue for the Department of Defense.
            (2) Competition requirement.--The Secretary of Defense 
        shall establish Army arsenals as a second source for production 
        of any manufactured item included in the report submitted under 
        paragraph (1).
    (c) Report on Equipment Purchased Under Domestic Sole Source 
Contracts.--
            (1) Report.--Not later than March 30, 2017, the Secretary 
        of Defense shall submit to the congressional defense committees 
        a report containing a list of each contract awarded by the 
        Department of Defense during fiscal years 2011 through 2015 
        using procedures other than competitive procedures for the 
        procurement of equipment, weapons, weapons systems, components, 
        subcomponents, or end-items with a contract value equal to or 
        greater than $3,000,000.
            (2) Elements.--The report under paragraph (1) shall 
        include, for each contract listed, the following information:
                    (A) An identification of the items purchased under 
                the contract.
                    (B) The rationale for using an exception or waiver 
                to award the contracts using procedures other than 
                competitive procedures.
                    (C) A list of potential alternative manufacturing 
                sources from the public and private sector that could 
                be developed to establish competition for those items.

SEC. 4. USE OF ORGANIC INDUSTRIAL BASE TO ADDRESS DIMINISHING 
              MANUFACTURING SOURCES AND MATERIAL SHORTAGES.

    (a) Report.--Not later than one year after the date of the 
enactment of this Act, the Secretary of Defense shall submit to the 
congressional defense committees a report detailing plans to update and 
improve its guidance and practices on Diminishing Manufacturing Sources 
and Material Shortages (DMSMS), including through the use of the 
organic industrial base as a resource in the implementation of a DMSMS 
management plan.
    (b) Guidance Regarding Use of Organic Industrial Base.--The 
Secretary of the Army shall maintain the arsenals with sufficient 
workloads to ensure affordability and technical competence in all 
critical capability areas by establishing, not later than March 30, 
2017, clear, step-by-step, prescriptive guidance on the process for 
conducting make-or-buy analyses, including the use of the organic 
industrial base.
    (c) Identification of Army Arsenal Critical Capabilities and 
Minimum Workloads.--
            (1) Report.--Not later than 180 days after the date of the 
        enactment of this Act, the Secretary of Defense shall submit to 
        the congressional defense committees a report that--
                    (A) includes a standardized, consistent method to 
                use for identifying the critical capabilities and 
                minimum workloads of the Army arsenals;
                    (B) provides analysis on the critical capabilities 
                and minimum workloads for each of the manufacturing 
                arsenals; and
                    (C) identifies fundamental elements, such as steps, 
                milestones, timeframes, and resources for implementing 
                the United States Army Organic Industrial Base 
                Strategic Plan 2012-2022.
            (2) Guidance.--Not later than one year after the date of 
        the enactment of this Act, the Secretary of Defense shall issue 
        guidance to implement the process for identifying the critical 
        capabilities of the Army's manufacturing arsenals and the 
        method for determining the minimum workload needed to sustain 
        these capabilities.

SEC. 5. AUTHORITY TO ADJUST LABOR RATES TO REFLECT WORK PRODUCTION.

    (a) Pilot Program.--Not later than 90 days after the date of the 
enactment of this Act, the Secretary of Defense shall establish a 
three-year pilot program for the purpose of permitting Army arsenals to 
adjust their labor rates periodically throughout the year based upon 
changes in workload and other factors.
    (b) Annual Report.--Not later than one year after the date of the 
enactment of this Act, and annually thereafter, the Secretary of 
Defense shall submit to the congressional defense committees a report 
that assesses--
            (1) each Army arsenal's changes in labor rates throughout 
        the previous year;
            (2) the ability of each arsenal to meet the costs of their 
        working capital funds; and
            (3) the effect on arsenal workloads of labor rate changes.
Army Arsenal Revitalization Act of 2016 This bill requires the Defense Logistics Agency to report to Congress regarding Department of Defense (DOD) legacy items with a contract value equal to $5 million or more.  DOD shall use Army arsenals for the production of these legacy items. DOD shall: (1) report to Congress listing all sole source contracts for the procurement of manufactured items the lack of which would constitute a critical national security issue, and (2) establish Army arsenals as a second source for production of any such manufactured item. DOD shall report to Congress regarding:    DOD contracts awarded during FY2011-FY2015 using noncompetitive procedures for the procurement of equipment, weapons, weapons systems, and components with a contract value of $3 million or more;   plans to update practices on Diminishing Manufacturing Sources and Material Shortages (DMSMS), including through the use of the organic industrial base as a resource in the implementation of a DMSMS management plan; and   critical capabilities and minimum workloads of the Army arsenals, and fundamental elements for implementing the United States Army Organic Industrial Base Strategic Plan 2012-2022.   DOD shall establish a three-year pilot program to permit Army arsenals to adjust their labor rates periodically throughout the year based upon changes in workload and other factors.
Army Arsenal Revitalization Act of 2016