10 USC 3136 – Defense Modernization Account
(a)
(b)
(1) Amounts appropriated to the Defense Modernization Account for the costs of projects described in subsection (d)(1), and amounts reimbursed to the Defense Modernization Account under subsection (c)(1)(B)(ii) out of savings derived from such projects.
(2) Amounts transferred to the Defense Modernization Account under subsection (c).
(c)
(B) This subsection applies to the following funds that have been appropriated for fiscal years after fiscal year 2016 and are available to the Secretary concerned:
(i) Unexpired funds in appropriations accounts that are available for new obligations and that, as a result of economies, efficiencies, and other savings achieved in carrying out an acquisition program, are excess to the requirements of that program.
(ii) Unexpired funds in appropriations accounts that are available for procurement or operation and maintenance of a system, if and to the extent that savings are achieved for such accounts through reductions in life cycle costs of such system that result from one or more projects undertaken with respect to such systems with funds made available from the Defense Modernization Account under subsection (b)(1).
(C) Any transfer under subparagraph (A) shall be made under regulations prescribed by the Secretary of Defense.
(2) Funds referred to in paragraph (1) may not be transferred to the Defense Modernization Account if the balance of funds in the account, after transfer of funds to the account, would exceed $1,000,000,000.
(3) Amounts deposited in the Defense Modernization Account shall remain available for transfer and obligation until the end of the third fiscal year that follows the fiscal year in which the amounts are deposited in the account.
(d)
(1) For paying the costs of any project that, in accordance with criteria prescribed by the Secretary concerned, is undertaken by the Secretary of a military department or the head of a Defense Agency or other element of the Department of Defense to reduce the life cycle cost of a new or existing system.
(2) For increasing, subject to subsection (e), the quantity of items and services procured under an acquisition program in order to achieve a more efficient production or delivery rate.
(3) For research, development, test, and evaluation, for procurement, and for sustainment activities necessary for paying costs of unforeseen contingencies that are approved by the milestone decision authority concerned, that could prevent an ongoing acquisition program from meeting critical schedule or performance requirements.
(4) For paying costs of changes to program requirements or system configuration that are approved by the configuration steering board for a major defense acquisition program.
(e)
(A) result in procurement of a total quantity of items or services in excess of—
(i) a specific limitation provided by law on the quantity of the items or services that may be procured; or
(ii) the requirement for the items or services as approved by the Joint Requirements Oversight Council and reported to Congress by the Secretary of Defense; or
(B) result in an obligation or expenditure of funds in excess of a specific limitation provided by law on the amount that may be obligated or expended, respectively, for that acquisition program.
(2) Funds in the Defense Modernization Account may not be used for a purpose or program for which Congress has not authorized appropriations, unless the procedures for initiating a new start program are complied with.
(3) Funds may not be transferred from the Defense Modernization Account in any year for the purpose of—
(A) making an expenditure for which there is no corresponding obligation; or
(B) making an expenditure that would satisfy an unliquidated or unrecorded obligation arising in a prior fiscal year.
(f)
(2) Funds in the Defense Modernization Account may not be transferred under paragraph (1) until 30 days after the date on which the Secretary concerned notifies the congressional defense committees in writing of the amount and purpose of the proposed transfer.
(3) The total amount of transfers from the Defense Modernization Account during any fiscal year under this subsection may not exceed $500,000,000.
(g)
(h)
(2) The regulations prescribed under paragraph (1) shall, at a minimum, provide for—
(A) the establishment and management of subaccounts for each of the military departments and Defense Agencies concerned for the use of funds in the Defense Modernization Account, consistent with each military department’s or Defense Agency’s deposits in the Account;
(B) the submission of proposals by the Secretaries concerned or heads of Defense Agencies or other elements of the Department of Defense to the Comptroller for the use of Defense Modernization Account funds for purposes set forth in subsection (d);
(C) the use of a competitive process for the evaluation of such proposals and the selection of programs, projects, and activities to be funded out of the Defense Modernization Account and subaccounts from among those proposed for such funding; and
(D) the calculation of—
(i) the savings to be derived from projects described in subsection (d)(1) that are to be funded out of the Defense Modernization Account; and
(ii) the amounts to be reimbursed to the Defense Modernization Account out of such savings pursuant to subsection (c)(1)(B)(ii).
(i)
(1) The term “major defense acquisition program” has the meaning given the term in section 4201 of this title.
(2) The term “unexpired funds” means funds appropriated for a definite period that remain available for obligation.