suant to a base closure law and subject to a covenant that 
was required to be provided by paragraphs (3) and (4) 
of section 120(h) of CERCLA (42 U.S.C. 9620(h)), the 
sole source of funds for services procured under subsection 
2701(d)(1) of this title shall be the applicable Department 
of Defense base closure account.’’. 
SEC. 315. STUDY ON USE OF BIODIESEL AND ETHANOL 
FUEL. 
(a) IN GENERAL.—The Secretary of Defense shall 
conduct a study on the use of biodiesel and ethanol fuel 
by the Armed Forces and the Defense Agencies and any 
measures that can be taken to increase such use. 
(b) ELEMENTS.—The study shall include—
(1) a review and assessment of potential re-
quirements for increased use of biodiesel and ethanol 
fuel within the Department of Defense and research 
and development efforts required to meet those in-
creased requirements; 
(2) based on the review in subparagraph (1), a 
forecast of the requirements of the Armed Forces 
and the Defense Agencies for biodiesel and ethanol 
fuels for each of fiscal years 2007 through 2012; 
(3) an assessment of the current and future 
commercial availability of biodiesel and ethanol fuel, 
including facilities for the production, storage, trans-
portation, distribution, and commercial sale of such 
fuel; 
(4) a review of the actions of the Department 
of Defense to coordinate with State, local, and pri-
vate entities to support the expansion and use of al-
ternative fuel refueling stations that are accessible to 
the public; and 
(5) an assessment of the fueling infrastructure 
on military installations in the United States, includ-
ing storage and distribution facilities, that could be 
adapted or converted for the delivery of biodiesel and 
ethanol fuel. 
(c) REPORT.—Not later than February 1, 2006, the 
Secretary shall submit to the congressional defense com-
mittees a report on the study conducted under subsection 
(a). 
(d) DEFINITIONS.—In this section: 
(1) The term ‘‘ethanol fuel’’ means fuel that is 
85 percent ethyl alcohol. 
(2) The term ‘‘biodiesel’’ means a diesel fuel 
substitute produced from nonpetroleum renewable 
resources that meets the registration requirements 
for fuels and fuel additives established by the Envi-
ronmental Protection Agency under section 7545 of 
title 42, United States Code.
Subtitle C—Workplace and Depot 
Issues 
SEC. 321. PROCEEDS FROM COOPERATIVE ACTIVITIES 
WITH NON-ARMY ENTITIES. 
Section 4544 of title 10, United States Code, is 
amended—
(1) by redesignating subsections (h) through (j) 
as subsections (i) through (k), respectively; and 
(2) by inserting after subsection (g) the fol-
lowing new subsection: 
‘‘(h) PROCEEDS CREDITED TO WORKING CAPITAL 
FUND.—Proceeds received from the sale of an article or 
service pursuant to a contract or other cooperative ar-
rangement under this section shall be credited to the work-
ing capital fund that incurs the cost of manufacturing the 
article or performing the service.’’. 
SEC. 322. PUBLIC-PRIVATE COMPETITION. 
Section 2461(b) of title 10, United States Code, is 
amended by adding at the end the following new para-
graph: 
‘‘(5)(A) A function of the Department of De-
fense performed by 10 or more civilian employees 
may not be converted, in whole or in part, to per-
formance by a contractor unless the conversion is
based on the results of a public-private competition 
process that—
‘‘(i) formally compares the cost of civilian 
employee performance of the function with the 
costs of performance by a contractor; 
‘‘(ii) creates an agency tender, including a 
most efficient organization plan, in accordance 
with Office of Management and Budget Cir-
cular A–76, as implemented on May 29, 2003; 
‘‘(iii) determines whether the submitted of-
fers meet the needs of the Department of De-
fense with respect to factors other than cost, in-
cluding quality and reliability; and 
‘‘(iv) requires continued performance of 
the function by civilian employees if the dif-
ference in the cost of performance of the func-
tion by a contractor compared to the civilian 
employees would, over all performance periods 
required by the solicitation, be less than—
‘‘(I) 10 percent of the personnel-re-
lated costs for performance of that activity 
or function in the agency tender; or 
‘‘(II) $10,000,000. 
‘‘(B) An activity that is performed by the De-
partment of Defense and is reengineered, reorga-