(6) Ninety-five percent of the cost savings real-
ized through the use of contractor-operated civil en-
gineering supply stores is due to savings in the cost
of actually procuring supplies.
(7) In the past 30 years, private contractors
have never lost a cost comparison conducted pursu-
ant to the criteria set forth in Office of Management
and Budget Circular A–76 for the provision of civil
engineering supplies to the Government.
(c) 
CONDITIONS
ON
MULTI-FUNCTION
CON-
TRACTS.—A civil engineering supplies function that is per-
formed, as of the date of the enactment of this Act, by
a contractor-operated civil engineering supply store may
not be combined with another supply function or any serv-
ice function, including any base operating support func-
tion, for purposes of competition or contracting, until—
(1) the Secretary of Defense submits to Con-
gress a report—
(A) notifying Congress of the proposed
combined competition or contract; and
(B) explaining why a combined competition
or contract is the best method by which to
achieve cost savings and efficiencies to the Gov-
ernment; and
(2) the Comptroller General reviews the report
and submits to Congress a briefing regarding wheth-
er the cost savings and efficiencies identified in the
report are achievable.
(d) RELATIONSHIP TO OTHER LAWS.—If a civil engi-
neering supplies function covered by subsection (c) is pro-
posed for combination with a supply or service function
that is subject to the study and reporting requirements
of section 2461 of title 10, United States Code, the Sec-
retary of Defense may include the report required under
subsection (c) as part of the report under such section.
SEC. 339. REPORT ON SAVINGS AND EFFECT OF PERSON-
NEL REDUCTIONS IN ARMY MATERIEL COM-
MAND.
(a) REPORT REQUIRED.—Not later than March 31,
1999, the Comptroller General shall submit to the con-
gressional defense committees a report concerning—
(1) the effect that the proposed personnel re-
ductions in the Army Materiel Command will have
on workload and readiness if implemented; and
(2) the likelihood that the cost savings pro-
jected to occur from such reductions will actually be
achieved.
(b) DELAY IN IMPLEMENTATION OF REDUCTIONS
PENDING REPORT.—During the period specified in sub-
section (c), the Secretary of Defense and the Secretary
of the Army may not commence personnel reductions
based on the guidelines contained in the May 1997 report
of the Quadrennial Defense Review (including the Na-
tional Defense Panel) prepared pursuant to subtitle B of
title IX of the National Defense Authorization Act for Fis-
cal Year 1997 (Public Law 104-201; 10 U.S.C. 111 note)
at any Army Material Command facility that provides
depot-level maintenance and repair or at any Army Arse-
nal.
(c) DURATION OF DELAY.—Subsection (b) applies
only during the period beginning on the date of the enact-
ment of this Act and ending on the earlier of the following:
(1) March 31, 1999.
(2) The date on which the report required by
subsection (a) is submitted.
SEC. 340. BEST COMMERCIAL INVENTORY PRACTICES FOR
MANAGEMENT 
OF 
SECONDARY 
SUPPLY
ITEMS.
(a) DEVELOPMENT
AND SUBMISSION
OF SCHED-
ULE.—Not later than 180 days after the date of the enact-
ment of this Act, the Secretary of each military depart-
ment shall develop and submit to Congress a schedule for
implementing within the military department, for second-
ary supply items managed by that military department,
inventory practices identified by the Secretary as being the
best commercial inventory practices for the acquisition
and distribution of such supply items consistent with mili-
tary requirements. The schedule shall provide for the im-
plementation of such practices to be completed not later
than five years after the date of the enactment of this Act.
(b) DEFINITION.—For purposes of this section, the
term ‘‘best commercial inventory practice’’ includes cel-
lular repair processes, use of third-party logistics provid-
ers, and any other practice that the Secretary of the mili-
tary department determines will enable the military de-
partment to reduce inventory levels and holding costs
while improving the responsiveness of the supply system
to user needs.
(c) GAO REPORTS ON MILITARY DEPARTMENT AND
DEFENSE LOGISTICS AGENCY SCHEDULES.—(1) Not
later than 240 days after the date of the enactment of
this Act, the Comptroller General shall submit to Congress
a report evaluating the extent to which the Secretary of
each military department has complied with the require-
ments of this section.
(2) Not later than 18 months after the date on which
the Director of the Defense Logistics Agency submits to
Congress a schedule for implementing best commercial in-
ventory practices under section 395 of the National De-
fense Authorization Act for Fiscal Year 1998 (Public Law
105–85; 111 Stat. 1718; 10 U.S.C. 2458 note), the Comp-
troller General shall submit to Congress an evaluation of
the extent to which best commercial inventory practices
are being implemented in the Defense Logistics Agency
in accordance with that schedule.
Subtitle E—Commissaries and Non-
appropriated Fund Instrumen-
talities
SEC. 341. CONTINUATION OF MANAGEMENT AND FUNDING
OF 
DEFENSE 
COMMISSARY 
AGENCY
THROUGH THE OFFICE OF THE SECRETARY
OF DEFENSE.
Section 192 of title 10, United States Code, is
amended by adding at the end the following new sub-
section:
‘‘(d) SPECIAL RULE
FOR DEFENSE COMMISSARY
AGENCY.—Notwithstanding the results of the periodic re-
view required under subsection (c) with regard to the De-
fense Commissary Agency, the Secretary of Defense may
not transfer to the Secretary of a military department the
responsibility to manage and fund the provision of services
and supplies provided by the Defense Commissary Agency
unless the transfer of the management and funding re-
sponsibility is specifically authorized by a law enacted
after the date of the enactment of the National Defense
Authorization Act for Fiscal Year 1999.’’.
SEC. 342. EXPANSION OF CURRENT ELIGIBILITY OF RE-
SERVES FOR COMMISSARY BENEFITS.
(a) DAYS
OF ELIGIBILITY
FOR READY RESERVE
MEMBERS WITH 50 CREDITABLE POINTS.—Section 1063
of title 10, United States Code, is amended—
(1) by striking out subsection (b); and
(2) in subsection (a)—
(A) by striking out ‘‘(1)’’;
(B) by striking out ‘‘12 days of eligibility’’
and inserting in lieu thereof ‘‘24 days of eligi-
bility’’; and
(C) by striking out ‘‘(2) Paragraph (1)’’
and inserting in lieu thereof ‘‘(b) EFFECT OF
COMPENSATION
OR
TYPE
OF
DUTY.—Sub-
section (a)’’.
(b) DAYS OF ELIGIBILITY FOR RESERVE RETIREES
UNDER AGE 60.—Section 1064 of such title is amended
by striking out ‘‘for 12 days each calendar year’’ and in-
serting in lieu thereof ‘‘for 24 days each calendar year’’.
(c) ELIGIBILITY OF MEMBERS OF NATIONAL GUARD
SERVING IN FEDERALLY DECLARED DISASTER.—Chapter
54 of such title is amended by inserting after section 1063
the following new section:
‘‘§ 1063a. Use of commissary stores and MWR retail
facilities: members of National Guard
serving in federally declared disaster
‘‘(a) ELIGIBILITY OF MEMBERS.—A member of the
National Guard who, although not in Federal service, is
called or ordered to duty in response to a federally de-
clared disaster shall be permitted to use commissary stores
and MWR retail facilities during the period of such duty
on the same basis as members of the armed forces on ac-
tive duty.
‘‘(b) ELIGIBILITY OF DEPENDENTS.—A dependent of
a member of the National Guard who is permitted under
subsection (a) to use commissary stores and MWR retail
facilities shall be permitted to use such stores and facili-
ties, during the same period as the member, on the same
basis as dependents of members of the armed forces on
active duty.
‘‘(c) DEFINITIONS.—In this section:
‘‘(1) FEDERALLY
DECLARED
DISASTER.—The
term ‘federally declared disaster’ means a disaster or
other situation for which a Presidential declaration
of major disaster is issued under section 401 of the
Robert T. Stafford Disaster Relief and Emergency
Assistance Act (42 U.S.C. 5170).
‘‘(2) MWR RETAIL
FACILITIES.—The term
‘MWR retail facilities’ means exchange stores and
other revenue-generating facilities operated by non-
appropriated fund activities of the Department of
Defense for the morale, welfare, and recreation of
members of the armed forces.’’.
(d) SECTION HEADINGS.—(1) The heading of section
1063 of such title is amended to read as follows:
‘‘§ 1063. Use of commissary stores: members of Ready
Reserve 
with 
at 
least 
creditable
points’’.
(2) The heading of section 1064 of such title is
amended to read as follows:
‘‘§ 1064. Use of commissary stores: persons qualified
for retired pay under chapter 1223 but
under age 60’’.
(e) CLERICAL AMENDMENT.—The table of sections
at the beginning of chapter 54 of such title is amended
by striking out the items relating to sections 1063 and
1064 and inserting in lieu thereof the following items:
‘‘1063. Use of commissary stores: members of Ready Reserve with at least 50
creditable points.
‘‘1063a. Use of commissary stores and MWR retail facilities: members of Na-
tional Guard serving in federally declared disaster.
‘‘1064. Use of commissary stores: persons qualified for retired pay under chap-
ter 1223 but under age 60.’’.
SEC. 343. REPEAL OF REQUIREMENT FOR AIR FORCE TO
SELL TOBACCO PRODUCTS TO ENLISTED
PERSONNEL.
(a) REPEAL.—Section 9623 of title 10, United States
Code, is repealed.
(b) CLERICAL AMENDMENT.—The table of sections
at the beginning of chapter 939 of such title is amended
by striking out the item relating to section 9623.
SEC. 344. RESTRICTIONS ON PATRON ACCESS TO, AND PUR-
CHASES IN, OVERSEAS COMMISSARIES AND
EXCHANGE STORES.
(a) AUTHORITY TO IMPOSE RESTRICTIONS; LIMITA-
TIONS ON AUTHORITY.—Chapter 147 of title 10, United
States Code, is amended by adding at the end the follow-
ing new section:
‘‘§ 2491. Overseas commissary and exchange stores:
access and purchase restrictions
‘‘(a) GENERAL AUTHORITY.—The Secretary of De-
fense may establish restrictions on the ability of eligible
patrons of commissary and exchange stores located out-
side of the United States to purchase certain merchandise
items (or the quantity of certain merchandise items) oth-
erwise included within an authorized merchandise category
if the Secretary determines that such restrictions are nec-
essary to prevent the resale of such merchandise in viola-
tion of host nation laws or treaty obligations of the United
States. In establishing a quantity or other restriction, the
Secretary shall ensure that the restriction is consistent
with the purpose of the overseas commissary and exchange
system to provide reasonable access for eligible patrons to
purchase merchandise items made in the United States.
‘‘(b) CONTROLLED ITEM LISTS.—For each location
outside the United States that is served by the commissary
system or the exchange system, the Secretary of Defense
may maintain a list of controlled merchandise items, ex-
cept that, after the date of the enactment of the National
Defense Authorization Act for Fiscal Year 1999, the Sec-
retary may not change the list to add a merchandise item
unless, before making the change, the Secretary submits
to Congress a notice of the proposed addition and the rea-
sons for the addition of the item.
‘‘(c) SPECIAL RULES FOR KOREA.—(1) The Sec-
retary of Defense may not prohibit a dependent who re-
sides in Korea, is at least 21 years of age, and is otherwise
eligible to use the commissary and exchange system, from
purchasing alcoholic beverages through the commissary
and exchange system. Quantity restrictions on the pur-
chase of alcoholic beverages may be imposed, and any such
restriction may be enforced through the use of an issued
ration control device, but a dependent may not be required
to sign for any purchase. A quantity restriction on malt
beverages may not restrict purchases to fewer than eight
cases, of 24-units per case, per month. Daily or weekly
restrictions on malt beverage purchases may not be im-
posed. The purchase of malt beverages may be recorded
on a ration control device, but eligible patrons may not
be required to sign for any purchase.
‘‘(2) A dependent residing in Korea who is at least
18 years of age and otherwise eligible to use the com-
missary and exchange system may purchase tobacco prod-
ucts on the same basis as other eligible patrons of the
commissary and exchange system.
‘‘(3) Eligible patrons of the commissary and exchange
system who are traveling through a military air terminal
in Korea shall be authorized to the purchase sundry items,
including tobacco products, on a temporary basis during
the normal operating hours of commissary and exchange
stores operated in connection with the terminal.
‘‘(4) In applying restrictions to dependents of mem-
bers of the armed forces, the Secretary of Defense may
not differentiate between a dependent whose movement to
Korea was authorized at the expense of the United States
under section 406 of title 37 and other dependents resid-
ing in Korea.
‘‘(d) REPORTING REQUIREMENTS.—The Secretary of
Defense shall submit to Congress an annual report de-
scribing the host nation laws and the treaty obligations
of the United States, and the conditions within host na-
tions, that necessitate the use of quantity or other restric-
tions on purchases in commissary and exchange stores lo-
cated outside the United States.’’.
(b) CLERICAL AMENDMENT.—The table of sections
at the beginning of such chapter is amended by adding
at the end the following new item:
‘‘2491. Overseas commissary and exchange stores: access and purchase restric-
tions.’’.
SEC. 345. EXTENSION OF DEMONSTRATION PROJECT FOR
UNIFORM FUNDING OF MORALE, WELFARE,
AND RECREATION ACTIVITIES.
Section 335 of the National Defense Authorization
Act for Fiscal Year 1996 (Public Law 104–106; 10 U.S.C.
2241 note) is amended—
(1) in subsection (c), by striking out ‘‘not later
than September 30, 1998’’ and inserting in lieu
thereof ‘‘on September 30, 1999’’; and
(2) in subsection (e)(2), by striking out ‘‘a final
report on the results’’ and inserting in lieu thereof
‘‘an additional report on the progress’’.
SEC. 346. PROHIBITION ON CONSOLIDATION OR OTHER OR-
GANIZATIONAL CHANGES OF DEPARTMENT
OF DEFENSE RETAIL SYSTEMS.
(a) DEFENSE RETAIL SYSTEMS DEFINED.—For pur-
poses of this section, the term ‘‘defense retail systems’’
means the defense commissary system and exchange
stores and other revenue-generating facilities operated by
nonappropriated fund activities of the Department of De-
fense for the morale, welfare, and recreation of members
of the Armed Forces.
(b) PROHIBITION.—The operation and administra-
tion of the defense retail systems may not be consolidated
or otherwise changed, and a study or review may not be
commenced regarding the need for or merits of such a con-
solidation or change, unless the consolidation, change,
study, or review is specifically authorized by a law enacted
after the date of the enactment of this Act.
(c) EFFECT ON EXISTING STUDY.—Nothing in this
section shall be construed to prohibit the study of defense
retail systems, known as the ‘‘Joint Exchange Due Dili-
gence Study’’, which is underway on the date of the enact-
ment of this Act pursuant to a contract awarded by the
Department of the Navy on April 21, 1998, except that
any recommendation contained in the completed study re-
garding the operation or administration of the defense re-
tail systems may not be implemented unless implementa-
tion of the recommendation is specifically authorized by
a law enacted after the date of the enactment of this Act.
SEC. 347. AUTHORIZED USE OF APPROPRIATED FUNDS FOR
RELOCATION OF NAVY EXCHANGE SERVICE
COMMAND.
The Navy Exchange Service Command is not re-
quired to reimburse the United States for appropriated
funds allotted to the Navy Exchange Service Command
during fiscal years 1994, 1995, and 1996 to cover costs
incurred by the Navy Exchange Service Command to relo-
cate to Virginia Beach, Virginia, and to lease headquarters
space in Virginia Beach.
SEC. 348. EVALUATION OF MERIT OF SELLING MALT BEV-
ERAGES AND WINE IN COMMISSARY STORES
AS EXCHANGE SYSTEM MERCHANDISE.
(a) PATRON SURVEY.—(1) The Secretary of Defense
shall enter into a contract with a commercial survey firm
to conduct a survey of eligible patrons of the commissary
store system to determine patron interest in having com-
missary stores sell malt beverages and wine as exchange
store merchandise.
(2) The survey shall be conducted at not less than
three military installations in the United States of each
of the Armed Forces (other than the Coast Guard).
(3) The survey shall be completed, and the results
submitted to the Secretary of Defense, not later than No-
vember 30, 1998.
(b) DEMONSTRATION PROJECT.—(1) After consider-
ation of the survey results, the Secretary of Defense may
conduct a demonstration project at seven military installa-
tions in the United States (two Army installations, two
Air Force installations, two Navy installations, and one
Marine Corps installation) to evaluate the merit of selling
malt beverages and wine in commissary stores as exchange
store merchandise. Under the demonstration project, the
Secretary may sell malt beverages and wine in commissary
stores as exchange store merchandise notwithstanding the
general requirement that merchandise sold in, at, or by
commissary stores be commissary store inventory.
(2) The demonstration project may only be conducted
in States where it is legal to sell malt beverages and wine
in grocery stores.
(3) Not later than February 1, 1999, the Secretary
of Defense shall determine whether to conduct the dem-
onstration project. Any such demonstration project shall
be completed not later than September 30, 2000.
(c) REPORT.—(1) If the Secretary of Defense con-
ducts a demonstration project under subsection (b), the
Secretary shall submit to Congress a report describing the
results of the demonstration project. The report shall in-
clude a description of patron views, the impact on com-
missary sales, the impact on exchange sales, and the im-
pact, if any, on dividends for morale, welfare, and recre-
ation activities.
(2) The report shall be submitted not later than
March 1, 2000.
(d) LIMITATION.—Nothing in this section shall be
construed to authorize the sale of malt beverages and wine
in commissary stores as commissary store inventory.
Subtitle F—Other Matters
SEC. 361. ELIGIBILITY REQUIREMENTS FOR ATTENDANCE
AT DEPARTMENT OF DEFENSE DOMESTIC DE-
PENDENT ELEMENTARY AND SECONDARY
SCHOOLS.
(a) DEPENDENTS OF MEMBERS RESIDING IN CER-
TAIN AREAS.—Subsection (a) of section 2164 of title 10,
United States Code, is amended—
(1) by inserting ‘‘(1)’’ before ‘‘If’’;
(2) by designating the second sentence as para-
graph (2); and
(3) by adding at the end of paragraph (2) (as
so designated) the following new sentence: ‘‘If a
member of the armed forces is assigned to a remote
location or is assigned to an unaccompanied tour of
duty, a dependent of the member who resides, on or
off a military installation, in a territory, common-
wealth, or possession of the United States, as au-
thorized by the member’s orders, may be enrolled in
an educational program provided by the Secretary
under this subsection.’’.
(b) WAIVER OF FIVE-YEAR ATTENDANCE LIMITA-
TION.—Subsection (c)(2) of such section is amended by
striking out subparagraph (B) and inserting in lieu there-
of the following new subparagraph:
‘‘(B) At the discretion of the Secretary, a dependent
referred to in subparagraph (A) may be enrolled in the
program for more than five consecutive school years if the
dependent is otherwise qualified for enrollment, space is
available in the program, and the Secretary will be reim-
bursed for the services provided. Any such extension shall
cover only one school year at a time.’’.
SEC. 362. SPECIFIC EMPHASIS OF PROGRAM TO INVES-
TIGATE FRAUD, WASTE, AND ABUSE WITHIN
DEPARTMENT OF DEFENSE.
Section 392 of the National Defense Authorization
Act for Fiscal Year 1998 (Public Law 105–85; 10 U.S.C.
113 note) is amended by inserting before the period the
following: ‘‘and any fraud, waste, and abuse occurring in
connection with overpayments made to vendors by the De-
partment of Defense, including overpayments identified
under section 354 of the National Defense Authorization
Act for Fiscal Year 1996 (Public Law 104–106; 10 U.S.C.
2461 note)’’.
SEC. 363. REVISION OF INSPECTION REQUIREMENTS RE-
LATING TO ARMED FORCES RETIREMENT
HOME.
Section 1518 of the Armed Forces Retirement Home
Act of 1991 (24 U.S.C. 418) is amended to read as fol-
lows:
‘‘SEC. 1518. INSPECTION OF RETIREMENT HOME.
‘‘(a) PERIODIC INSPECTION.—The Inspector Gen-
erals of the military departments shall conduct, at three-
year intervals, an inspection of the Retirement Home and
the records of the Retirement Home. Each inspection
under this subsection shall be performed by a single In-
spector General on an alternating basis.
‘‘(b) REPORT.—The Inspector General of a military
department who performs an inspection of the Retirement
Home under subsection (a) shall submit to the Retirement
Home Board, the Secretary of Defense, and Congress a
report describing the results of the inspection and contain-
ing such recommendations as the Inspector General con-
siders appropriate.’’.
SEC. 364. ASSISTANCE TO LOCAL EDUCATIONAL AGENCIES
THAT BENEFIT DEPENDENTS OF MEMBERS
OF THE ARMED FORCES AND DEPARTMENT
OF DEFENSE CIVILIAN EMPLOYEES.
(a) CONTINUATION OF DEPARTMENT OF DEFENSE
PROGRAM FOR FISCAL YEAR 1999.—Of the amount au-
thorized to be appropriated pursuant to section 301(5) for
operation and maintenance for Defense-wide activities—
(1) $30,000,000 shall be available only for the
purpose of providing educational agencies assistance
(as defined in subsection (d)(1)) to local educational
agencies; and
(2) $5,000,000 shall be available only for the
purpose of making educational agencies payments
(as defined in subsection (d)(2)) to local educational
agencies.
(b) NOTIFICATION.—Not later than June 30, 1999,
the Secretary of Defense shall—
(1) notify each local educational agency that is
eligible for educational agencies assistance for fiscal
year 1999 of that agency’s eligibility for such assist-
ance and the amount of such assistance for which
that agency is eligible; and
(2) notify each local educational agency that is
eligible for an educational agencies payment for fis-
cal year 1999 of that agency’s eligibility for such
payment and the amount of the payment for which
that agency is eligible.
(c) DISBURSEMENT OF FUNDS.—The Secretary of
Defense shall disburse funds made available under para-
graphs (1) and (2) of subsection (a) not later than 30
days after the date on which notification to the eligible
local educational agencies is provided pursuant to sub-
section (b).
(d) DEFINITIONS.—In this section:
(1) The term ‘‘educational agencies assistance’’
means assistance authorized under section 386(b) of
the National Defense Authorization Act for Fiscal
Year 1993 (Public Law 102–484; 20 U.S.C. 7703
note).
(2) The term ‘‘educational agencies payments’’
means payments authorized under section 386(d) of
the National Defense Authorization Act for Fiscal
Year 1993 (Public Law 102–484; 20 U.S.C. 7703
note).
(3) The term ‘‘local educational agency’’ has
the meaning given that term in section 8013(9) of
the Elementary and Secondary Education Act of
1965 (20 U.S.C. 7713(9)).
SEC. 365. STRATEGIC PLAN FOR EXPANSION OF DISTANCE
LEARNING INITIATIVES.
(a) DEVELOPMENT OF PLAN.—The Secretary of De-
fense shall develop a strategic plan for guiding and ex-
panding distance learning initiatives in the Department of
Defense. The strategic plan shall cover the five-year period
beginning on October 1, 1999.
(b) ELEMENTS OF PLAN.—The strategic plan re-
quired by this section shall contain at a minimum the fol-
lowing elements:
(1) Measurable goals and objectives, including
outcome-related performance indicators, for develop-
ing distance learning initiatives in the Department
that would be consistent with the principles of the
Government Performance and Results Act of 1993
(section 306 of title 5 and sections 1115 through
1119, 9703, and 9704 of title 31).
(2) A description of the manner in which dis-
tance learning initiatives will be developed and man-
aged in the Department.
(3) An estimate of the costs and benefits associ-
ated with developing and maintaining an infrastruc-
ture in the Department to support distance learning
initiatives and a statement of planned expenditures
for investments necessary to build and maintain the
infrastructure.
(4) A description of mechanisms that will be
used to oversee the development and coordination of
distance learning initiatives in the Department.
(c) CONSIDERATION OF CURRENT EFFORT.—In de-
veloping the strategic plan required by this section, the
Secretary of Defense may recognize the collaborative dis-
tance learning effort of the Department of Defense and
other Federal agencies and private industry (known as the
Advanced Distribution Learning initiative), but the strate-
gic plan shall be specific to the goals and objectives of
the Department.
(d) SUBMISSION OF PLAN.—Not later than March 1,
1999, the Secretary of Defense shall submit to Congress
the completed strategic plan required by this section.
SEC. 366. PUBLIC AVAILABILITY OF OPERATING AGREE-
MENTS BETWEEN MILITARY INSTALLATIONS
AND FINANCIAL INSTITUTIONS.
With respect to an agreement between the com-
mander of a military installation in the United States (or
the designee of an installation commander) and a financial
institution that permits, allows, or otherwise authorizes
the provision of financial services by the financial institu-
tion on the military installation, nothing in the terms or
nature of such an agreement shall be construed to exempt
the agreement from the provisions of sections 552 and
552a of title 5, United States Code.
SEC. 367. DEPARTMENT OF DEFENSE READINESS REPORT-
ING SYSTEM.
(a) ESTABLISHMENT OF SYSTEM.—(1) Chapter 2 of
title 10, United States Code, is amended by inserting after
section 116 the following new section:
‘‘§ 117. Readiness reporting system: establishment; re-
porting to congressional committees
‘‘(a) REQUIRED READINESS REPORTING SYSTEM.—
The Secretary of Defense shall establish a comprehensive
readiness reporting system for the Department of Defense.
The readiness reporting system shall measure in an objec-
tive, accurate, and timely manner the capability of the
armed forces to carry out—
‘‘(1) the National Security Strategy prescribed
by the President in the most recent annual national
security strategy report under section 108 of the
National Security Act of 1947 (50 U.S.C. 404a);
‘‘(2) the defense planning guidance provided by
the Secretary of Defense pursuant to section 113(g)
of this title; and
‘‘(3) the National Military Strategy prescribed
by the Chairman of the Joint Chiefs of Staff.
‘‘(b) READINESS REPORTING SYSTEM CHARACTERIS-
TICS.—In establishing the readiness reporting system, the
Secretary shall ensure—
‘‘(1) that the readiness reporting system is ap-
plied uniformly throughout the Department of De-
fense;
‘‘(2) that information in the readiness reporting
system is continually updated, with any change in
the overall readiness status of a unit, of an element
of the training establishment, or an element of de-
fense infrastructure that is required to be reported
as part of the readiness reporting system shall be re-
ported within 24 hours of the event necessitating the
change in readiness status; and
‘‘(3) that sufficient resources are provided to
establish and maintain the system so as to allow re-
porting of changes in readiness status as required by
this section.
‘‘(c) CAPABILITIES.—The readiness reporting system
shall have the capability to do the following:
‘‘(1) Measure the capability of units (both as
elements of their respective armed force and as ele-
ments of joint forces) to conduct their assigned war-
time missions.
100
‘‘(2) Measure the capability of training estab-
lishments to provide trained and ready forces for
wartime missions.
‘‘(3) Measure the capability of defense installa-
tions and facilities and other elements of Depart-
ment of Defense infrastructure, both in the United
States and abroad, to provide appropriate support to
forces in the conduct of their wartime missions.
‘‘(4) Measure critical warfighting deficiencies in
unit capability, training establishments, and defense
infrastructure.
‘‘(5) Measure the level of current risk based
upon the readiness reporting system relative to the
capability of forces to carry out their wartime mis-
sions.
‘‘(6) Measure such other factors relating to
readiness as the Secretary prescribes.
‘‘(d) PERIODIC JOINT READINESS REVIEW.—The
Chairman of the Joint Chiefs of Staff shall periodically,
and not less frequently than monthly, conduct a joint
readiness review. The Chairman shall incorporate into
each such review the current information derived from the
readiness reporting system and shall assess the capability
of the armed forces to execute their wartime missions
based upon their posture at the time of the review. The
101
Chairman shall submit to the Secretary of Defense the re-
sults of each review, including the deficiencies in readiness
identified during that review.
‘‘(e) SUBMISSION
TO
CONGRESSIONAL
COMMIT-
TEES.—The Secretary shall each month submit to the
Committee on Armed Services and the Committee on Ap-
propriations of the Senate and the Committee on National
Security and the Committee on Appropriations of the
House of Representatives a report in writing containing
the complete results of each review under subsection (d)
during the preceding month, including the current infor-
mation derived from the readiness reporting system. Each
such report shall be submitted in unclassified form and
may, as the Secretary determines necessary, also be sub-
mitted in classified form.
‘‘(f) REGULATIONS.—The Secretary shall prescribe
regulations to carry out this section. In those regulations,
the Secretary shall prescribe the units that are subject to
reporting in the readiness reporting system, what type of
equipment is subject to such reporting, and the elements
of the training establishment and of defense infrastructure
that are subject to such reporting.’’.
(2) The table of sections at the beginning of such
chapter is amended by inserting after the item relating
to section 116 the following new item:
102
‘‘117. Readiness reporting system: establishment; reporting to congressional
committees.’’.
(b) IMPLEMENTATION.—The Secretary of Defense
shall establish and implement the readiness reporting sys-
tem required by section 117 of title 10, United States
Code, as added by subsection (a), so as to ensure that
the capabilities required by subsection (c) of that section
are attained not later than July 1, 1999.
(c) IMPLEMENTATION PLAN.—Not later than March
1, 1999, the Secretary of Defense shall submit to Congress
a report setting forth the Secretary’s plan for implementa-
tion of section 117 of title 10, United States Code, as
added by subsection (a).
(d) REPEAL
OF QUARTERLY READINESS REPORT
REQUIREMENT.—Effective July 1, 1999, or the date on
which the first report of the Secretary of Defense is sub-
mitted under section 117(d) of title 10, United States
Code, as added by subsection (a), whichever is later—
(1) section 482 of title 10, United States Code,
is repealed; and
(2) the table of sections at the beginning of
chapter 23 of such title is amended by striking out
the item relating to that section.
103
SEC. 368. TRAVEL BY RESERVISTS ON CARRIERS UNDER
CONTRACT WITH GENERAL SERVICES ADMIN-
ISTRATION.
(a) RESERVE USE OF FEDERAL SUPPLY TRANSPOR-
TATION.—Chapter 1217 of title 10, United States Code,
is amended by adding at the end the following new section:
‘‘§ 12603. Travel: use of carriers under contract with
General Services Administration
‘‘A member of a reserve component who requires
transportation in order to perform inactive duty training
may use a carrier under contract with the General Serv-
ices Administration to provide the transportation. The
transportation shall be provided by the carrier in the same
manner as transportation is provided to members of the
armed forces and civilian employees who are traveling at
Government expense, except that the Reserve is respon-
sible for the cost of the travel at the contract rate. The
Secretary concerned may require the Reserve to use a
Government approved travel card to ensure that the trans-
portation is procured for the purpose of performing inac-
tive duty training.’’.
(b) CLERICAL AMENDMENT.—The table of sections
for such chapter is amended by adding at the end the fol-
lowing new item:
‘‘12603. Travel: use of carriers under contract with General Services Adminis-
tration.’’.
104
Subtitle G—Demonstration of Com-
mercial-Type Practices To Im-
prove Quality of Personal Prop-
erty Shipments
SEC. 381. DEMONSTRATION PROGRAM REQUIRED.
(a) IN GENERAL.—The Secretary of Defense shall
conduct a demonstration program, to be known as the
‘‘Commercial-Like Activities for Superior Quality Dem-
onstration Program’’, pursuant to this subtitle to test
commercial-style practices to improve the quality of per-
sonal property shipments within the Department of De-
fense.
(b) DEFINITIONS.—In this subtitle:
(1) The term ‘‘CLASS Demonstration Pro-
gram’’ means the Commercial-Like Activities for Su-
perior Quality Demonstration Program required by
subsection (a).
(2) The term ‘‘affiliated’’ means an entity that
is owned and controlled by another entity or an
independently owned entity whose day-to-day busi-
ness operations are controlled by another entity.
(3) The term ‘‘best value CLASS score’’ means
a weighted score that reflects an eligible provider’s
past performance rating score and the schedules of
charges for services provided.
105
(4) The term ‘‘broker’’ means an entity, de-
scribed in section 13102(2) of title 49, United
States Code, that conducts operations on behalf of
the Military Traffic Management Command and
possesses appropriate authority from the Depart-
ment of Transportation or an appropriate State reg-
ulatory agency to arrange for the transportation of
personal property in interstate, intrastate, or foreign
commerce.
(5) The term ‘‘freight forwarder’’ means an en-
tity that provides the services described in section
13102(8) of title 49, United States Code, in inter-
state, intrastate, or foreign commerce and possesses
the authority to provide such services from the De-
partment of Transportation or an appropriate State
regulatory agency.
(6) The term ‘‘motor carrier’’ means an entity
that uses motor vehicles to transport personal prop-
erty in interstate, intrastate, or foreign commerce
and possesses the authority to provide such services
from the Department of Transportation or an appro-
priate State regulatory agency.
(7) The term ‘‘motor vehicles’’ has the meaning
given such term in section 13102(14) of title 49,
United States Code.
106
(8) The term ‘‘move management services pro-
vider’’ means an entity that provides certain services
in connection with the shipment of the household
goods of a member of the Armed Forces, such as ar-
ranging, coordinating, and monitoring the shipment.
(9) The term ‘‘test plan’’ means the plan pre-
pared under section 384 for the conduct of the
CLASS Demonstration Program.
SEC. 382. GOALS OF DEMONSTRATION PROGRAM.
The goals of the CLASS Demonstration Program are
to—
(1) adopt commercial-style practices to improve
the quality of Department of Defense personal prop-
erty shipments within the United States and to for-
eign locations;
(2) adopt simplified acquisition procedures for
the selection of contractors qualified to provide var-
ious types of personal property shipping services and
for the award of individual orders to such contrac-
tors;
(3) assure ready access of the Department of
Defense to a sufficient number of qualified providers
of personal property shipping to permit timely ship-
ments during periods of high demand for such serv-
ices;
107
(4) assure maximum practicable opportunities
for small business concerns to participate as prime
contractors rather than subcontractors;
(5) empower Installation Transportation Offi-
cers to assure that the personal property shipping
needs of individual members of the Armed Forces
are met in a timely manner by quality contractors
who minimize opportunities for damage; and
(6) provide for the expedited resolution of
claims for damaged or lost property through direct
settlement negotiations between the service provider
and the member of the Armed Forces who sustains
the loss, with commercial-like arbitration available to
the member with the assistance of the military de-
partment concerned.
SEC. 383. PROGRAM PARTICIPANTS.
(a) ELIGIBLE SERVICE PROVIDERS.—(1) Any motor
carrier, freight forwarder, or broker regularly providing
personal property shipping services that is approved by the
Military Traffic Management Command to provide such
services to the Department of Defense is eligible to partici-
pate in the CLASS Demonstration Program. A motor car-
rier providing domestic personal property shipping serv-
ices shall not be precluded from providing such services
108
to international destinations through an affiliated freight
forwarder.
(2) If a motor carrier is affiliated with another motor
carrier or freight forwarder that also seeks qualification
to participate in the CLASS Demonstration Program, the
affiliate must demonstrate that it also conducts independ-
ent regular motor carrier operations using motor vehicles
or independent freight forwarding services described in
subparagraph (A), (B), or (C) of section 13102(8) of title
49, United States Code. If a freight forwarder is affiliated
with another freight forwarder or motor carrier that also
seeks qualification to participate in the program, the affili-
ate must demonstrate that it also conducts regular inde-
pendent operations.
(b) MOVE MANAGEMENT SERVICES PROVIDERS.—
The test plan may provide for the participation of a broker
providing move management services. A move manage-
ment service provider shall be compensated for providing
such services solely by the Department of Defense. The
test plan shall prohibit a move management services pro-
vider from obtaining a commission (or similar type of pay-
ment however denominated) from a motor carrier or
freight forwarder providing the personal property shipping
services.
109
(c) DEMONSTRATION PROGRAM PARTICIPANTS.—Eli-
gible service providers shall be offered participation in the
CLASS Demonstration Program on the basis of their best
value CLASS score. Each eligible service provider’s best
value CLASS score shall be computed in a manner that
assigns 70 percent of the weighted average to the provid-
er’s past performance rating and 30 percent to the provid-
er’s offered prices.
SEC. 384. TEST PLAN.
(a) IN GENERAL.—The CLASS Demonstration Pro-
gram shall be conducted pursuant to a test plan.
(b) COMPONENTS OF THE TEST PLAN.—In addition
to such other matters as the Secretary of Defense consid-
ers appropriate, the test plan shall include the following
components:
(1) RATING PAST PERFORMANCE.—A past per-
formance rating score shall be developed for each eli-
gible service provider based on—
(A) evaluations from service members who
have received personal property shipping serv-
ices during a specified six-month rating period
prior to the commencement of the CLASS
Demonstration Program; or
(B) a rating of comparable personal prop-
erty shipping services provided to non-Depart-
110
ment of Defense customers during the same
rating period, if an eligible provider did not
make a sufficient number of military personal
property shipments during the rating period to
be assigned a rating pursuant to subparagraph
(A).
(2) PARTICIPATION BY QUALITY SERVICE PRO-
VIDERS.—A minimum best value CLASS score shall
be established for participation in the CLASS Dem-
onstration Program. In establishing the minimum
score for participation, consideration shall be given
to assuring access to sufficient numbers of service
providers to meet the needs of members of the
Armed Forces during periods of high demand for
such personal property shipping services.
(3) SIMPLIFIED
ACQUISITION
PROCEDURES.—
The CLASS Demonstration Program shall make use
of simplified acquisition procedures similar to those
provided in section 2304(g)(1)(A) of title 10, United
States Code.
(4) PRICING.—The test plan shall specify pric-
ing policies to be met by the CLASS Demonstration
Program participants. The pricing policies shall re-
flect the following:
111
(A) Domestic pricing shall be based on the
contemporary Household Goods Carriers Com-
mercial Tariff 400–M, or subsequent reissues
thereof, applicable to commercial domestic ship-
ments with discounts and adjustments for
States outside the continental United States.
(B) So-called single factor rates for inter-
national shipments.
(C) Full value protection for a shipment
based on the actual cash value of the contents
of the shipment with liability limited on a per
pound basis as well as a total-value basis.
(5) ALLOCATION OF ORDERS.—Orders to pro-
vide personal property shipping services shall be allo-
cated by the appropriate Installation Transportation
Officer taking into consideration—
(A) the service provider’s best value
CLASS score;
(B) maximum practicable utilization of
small business service providers;
(C) exceptional performance of a CLASS
Demonstration Program participant; and
(D) other criteria necessary to advance the
goals of the CLASS Demonstration Program,
except that carrier selection by a member of the
119
(7) The Coast Guard Reserve, 8,000.
(b) ADJUSTMENTS.—The end strengths prescribed by
subsection (a) for the Selected Reserve of any reserve com-
ponent shall be proportionately reduced by—
(1) the total authorized strength of units orga-
nized to serve as units of the Selected Reserve of
such component which are on active duty (other
than for training) at the end of the fiscal year; and
(2) the total number of individual members not
in units organized to serve as units of the Selected
Reserve of such component who are on active duty
(other than for training or for unsatisfactory partici-
pation in training) without their consent at the end
of the fiscal year.
Whenever such units or such individual members are re-
leased from active duty during any fiscal year, the end
strength prescribed for such fiscal year for the Selected
Reserve of such reserve component shall be proportion-
ately increased by the total authorized strengths of such
units and by the total number of such individual members.
SEC. 412. END STRENGTHS FOR RESERVES ON ACTIVE
DUTY IN SUPPORT OF THE RESERVES.
Within the end strengths prescribed in section
411(a), the reserve components of the Armed Forces are
authorized, as of September 30, 1999, the following num-