PUBLIC LAW 106-65—OCT. 5, 1999 113 STAT. 743 SEC. 1015. NATIONAL DEFENSE FEATURES PROGRAM. (a) AUTHORITY FOR NATIONAL DEFENSE FEATURES PROGRAM.— Section 2218 of title 10, United States Code, is amended— (1) by redesignating subsection (k) as subsection (1); and (2) by inserting after subsection (j) the following new subsection (k): "(k) CONTRACTS FOR INCORPORATION OF DEFENSE FEATURES IN COMMERCIAL VESSELS.— (1) The head of an agency may enter into a contract with a company submitting an offer for that company to install and maintain defense features for national defense purposes in one or more commercial vessels owned or controlled by that company in accordance with the purpose for which funds in the National Defense Sealift Fund are available under subsection (c)(1)(C). The head of the agency may enter into such a contract only after the head of the agency makes a determination of the economic soundness of the offer. "(2) The head of an agency may make advance payments to the contractor under a contract under paragraph (1) in a lump sum, in annual payments, or in a combination thereof for costs associated with the installation and maintenance of the defense features on a vessel covered by the contract, as follows: "(A) The costs to build, procure, and install a defense feature in the vessel. "(B) The costs to periodically maintain and test any defense feature on the vessel. "(C) Any increased costs of operation or any loss of revenue attributable to the installation or maintenance of any defense feature on the vessel. "(D) Any additional costs associated with the terms and conditions of the contract. "(3) For any contract under paragraph (1) under which the United States meikes advance payments under paragraph (2) for the costs associated with installation or maintenance of any defense feature on a commercial vessel, the contractor shall provide to the United States such security interests in the vessel, by way of a preferred mortgage under section 31322 of title 46 or otherwise, as the head of the agency may prescribe in order to adequately protect the United States against loss for the total amount of those costs. "(4) Each contract entered into under this subsection shall— "(A) set forth terms and conditions under which, so long as a vessel covered by the contract is owned or controlled by the contractor, the contractor is to operate the vessel for the Department of Defense notwithstanding any other contract or commitment of that contractor; and "(B) provide that the contractor operating the vessel for the Department of Defense shall be paid for that operation at fair and reasonable rates. "(5) The head of an agency may not delegate authority under this subsection to any officer or employee in a position below the level of head of a procuring activity.". (b) DEFINITION.— Subsection (1) of such section, as redesignated by subsection (a)(1), is amended by adding at the end the following new paragraph: "(5) The term 'head of an agency* has the mesining given that term in section 2302(1) of this title.".
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