10 U.S.C. § 8685: Preservation of Navy shipbuilding capability

The Secretary of the Navy may enter into an agreement, to be known as a “shipbuilding capability preservation agreement”, with a shipbuilder under which the cost reimbursement rules described in subsection (b) shall be applied to the shipbuilder under a Navy contract for the construction of a ship. Such an agreement may be entered into in any case in which the Secretary determines that the application of such cost reimbursement rules would facilitate the achievement of the policy objectives set forth in section 4811(b) of this title . The Secretary of the Navy shall, in determining the reimbursement due a shipbuilder for its indirect costs of performing a contract for the construction of a ship for the Navy, allow the shipbuilder to allocate indirect costs to its private sector work only to the extent of the shipbuilder’s allocable indirect private sector costs, subject to paragraph (3). The incremental indirect costs attributable to such work. the direct costs attributable to such private sector work; and the incremental indirect costs attributable to such private sector work. The total amount of allocable indirect private sector costs for a contract covered by the agreement may not exceed the amount of indirect costs that a shipbuilder would have allocated to its private sector work during the period covered by the agreement in accordance with the shipbuilder’s established accounting practices. The cost reimbursement rules set forth in subsection (b) may be modified by the Secretary of the Navy for a particular agreement if the Secretary determines that modifications are appropriate to the particular situation to facilitate achievement of the policy set forth in section 4811(b) of this title . A contract that is in effect on the date on which the agreement is entered into. A contract that is awarded during the term of the agreement. In a shipbuilding capability preservation agreement applicable to a shipbuilder, the Secretary may agree to apply the cost reimbursement rules set forth in subsection (b) to allocations of indirect costs to private sector work performed by the shipbuilder only with respect to costs that the shipbuilder incurred on or after November 18, 1997 , under a contract between the shipbuilder and a private sector customer of the shipbuilder that became effective on or after January 26, 1996 . The Secretary of the Navy may carry out a pilot program to train individuals to become skilled technicians in critical shipbuilding skills such as welding, metrology, quality assurance, machining, and additive manufacturing. In carrying out the pilot program under this section, the Secretary may partner with existing Federal or State projects relating to investment and infrastructure in training and education or workforce development, such as the National Network for Manufacturing Innovation, the Industrial Base Analysis and Sustainment program of the Department of Defense, and the National Maritime Educational Council. The authority to carry out a pilot program under this section shall terminate on September 30, 2025 . Not later than 30 days before beginning to implement the pilot program, the Secretary shall provide a briefing on the plan, cost estimate, and schedule for the pilot program. Not less frequently than annually during the period when the pilot program is carried out, the Secretary shall provide briefings on the progress of the Secretary in carrying out the pilot program.”