[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2993 Introduced in House (IH)]


104th CONGRESS
  2d Session
                                H. R. 2993

     To establish the Forrestal Institute, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           February 29, 1996

  Mr. Hobson introduced the following bill; which was referred to the 
                     Committee on National Security

_______________________________________________________________________

                                 A BILL


 
     To establish the Forrestal Institute, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

                      TITLE I--FORRESTAL INSTITUTE

SECTION 101. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This title may be cited as the ``Forrestal 
Institute Act of 1997''.
    (b) Table of Contents.--The table of contents of this title is as 
follows:

                      TITLE I--FORRESTAL INSTITUTE

Sec. 101. Short title; table of contents.
Sec. 102. Definitions.
Sec. 103. Purpose of title.
Sec. 104. Establishment of institute.
Sec. 105. Institute powers.
Sec. 106. Process of organization.
Sec. 107. Board of directors.
Sec. 108. Institute governance.
Sec. 109. Institute capitalization and debt.
Sec. 110. Institute advisory panel.
Sec. 111. Authority of military departments to enter into institute 
                            contracts.
Sec. 112. Institute project list.
Sec. 113. Annual reports.

SEC. 102. DEFINITIONS.

    For purposes of this title:
            (1) The term ``Advisory Panel'' means the Institute 
        Advisory Panel established by section 110.
            (2) The term ``defense energy facility'' means--
                    (A) energy production, consuming, or distribution 
                facility owned or operated by, or leased to or from, a 
                military department; and
                    (B) any related infrastructure owned or operated by 
                a military department, or leased to or from a military 
                department, located at the same site as a facility 
                under subparagraph (A).
            (3) The term ``Board of Directors'' means the Board of 
        Directors of the Forrestal Institute.
            (4) The term ``Comptroller General'' means the Comptroller 
        General of the United States.
            (5) The term ``Institute'' means the Forrestal Institute, 
        as authorized to be established by section 104.
            (6) The term ``Director'' means a member of the Board of 
        Directors.
            (7) The term ``environmental study'' means a study intended 
        to satisfy the requirements of the National Environmental 
        Policy Act of 1969 (42 U.S.C. 4321 et seq.) with respect to a 
        defense energy facility.
            (8) The term ``facility audit'' means a survey of a defense 
        energy facility that provides sufficiently detailed information 
        to allow a military department to make an informed decision 
        whether to proceed with one or more Institute projects at such 
        defense energy facility.
            (9) The term ``Institute contract'' means an agreement for 
        all or part of the Institute project--
                    (A) directly between the Institute and a military 
                department,
                    (B) between or among a military department and one 
                or more private parties that has been negotiated by the 
                Institute, or
                    (C) among a military department, one or more 
                private parties and the Institute.
            (10) The term ``Institute project'' means any construction, 
        operation, refurbishing, rebuilding, upgrading, or retrofitting 
        of a defense energy facility or any environmental study or 
        facility audit performed by a private party for a defense 
        energy facility.
            (11) The term ``military department'' means the Department 
        of the Army, the Department of the Navy, and the Department of 
        the Air Force.
            (12) The term ``private party'' means any entity or 
        organization other than the Department of Defense, a military 
        department, or the Institute.

SEC. 103. PURPOSE OF TITLE.

    The Congress hereby declares that it is the purpose of this title 
to establish a not-for-profit private institute--
            (1) to help save Federal tax dollars by improving the 
        energy efficiency, economic performance, and environmental 
        acceptability of defense facilities;
            (2) to help the Department of Defense and the military 
        departments identify, assess, and satisfy their energy and 
        related defense energy facility needs by acquiring Institute 
        projects from private parties;
            (3) to acquire facility audits from private parties for 
        defense facilities to determine the most economic and 
        environmentally beneficial means of meeting such needs;
            (4) to facilitate Institute contracts between private 
        parties and the military departments and to enter into 
        Institute contracts with the military departments and private 
        parties;
            (5) to function as a central objective source of energy-
        related technical, financial, and contracting expertise and 
        advice for the Department of Defense and the military 
        departments;
            (6) to promote commercially acceptable buying practices in 
        the performance of Institute projects; and
            (7) to foster synergistic cooperation among defense energy 
        facilities and neighboring energy producers and consumers, 
        including local utilities.

SEC. 104. ESTABLISHMENT OF INSTITUTE.

    (a) Establishment.--There is hereby authorized to be established by 
the Secretary of Defense, in accordance with section 106, a District of 
Columbia not-for-profit entity to be known as the ``Forrestal 
Institute''.
    (b) Treatment.--The Institute shall not be an agency, 
instrumentality or establishment of the United States Government or a 
``Government corporation'' or ``Government controlled corporation'' 
within the meaning of chapter 91 of title 31, United States Code. The 
Institute shall be subject to the provisions of this title and, to the 
extent not inconsistent with this title, to the District of Columbia 
Nonprofit Corporation Act (D.C. Code, sec. 29-501 et seq.). Except as 
provided in this title, or applicable laws of the United States, the 
Institute shall have all the powers of a District of Columbia not-for-
profit corporation.
    (c) Office.--The Institute shall maintain an office for the service 
of process and papers in the District of Columbia, and shall be deemed, 
for purposes of venue in civil actions, to be a resident thereof. The 
Institute may establish offices in such other place or places as its 
Board of Directors may deem necessary or appropriate for the conduct of 
its business.

SEC. 105. INSTITUTE POWERS.

    (a) Performance of Institute Contracts.--The Institute may enter 
into an Institute contract to provide any military department an 
Institute project, through the use of private parties, except that in 
performing any such contract, the Institute shall procure all 
subcontracts, supplies, and services involving expenditures of over 
$100,000 through the use of competitive procedures approved by its 
Board of Directors.
    (b) Negotiation.--In lieu of performing an Institute contract 
directly, the Institute may negotiate Institute contracts between or 
among the military departments and one or more private parties and may 
solicit and evaluate proposals and bids for such contracts.
    (c) Related General Powers.--In furtherance of the powers specified 
under subsections (a) and (b), the Institute--
            (1) may lease, sublease, purchase, accept gifts or 
        donations of, or otherwise acquire any real, personal, or mixed 
        property, or any interest therein, may own, hold, improve, use, 
        or otherwise deal in or with such property, and may sell, 
        convey, mortgage, pledge, lease, sublease, exchange, or 
        otherwise dispose of such property;
            (2) may perform management support services in connection 
        with Institute projects;
            (3) may charge to and collect fees for any advisory or 
        management support services performed thereby, and for any 
        financial assistance provided thereby with respect to Institute 
        projects;
            (4) may, subject to subsection (d) below, make loans, enter 
        into guaranty agreements, and otherwise provide financial 
        assistance to a military department or private parties in 
        connection with the leasing, ownership, or financing of an 
        Institute project;
            (5) may provide or arrange for environmental 
        indemnification of private parties for environmental hazards 
        existing at any defense energy facility at the time the 
        Institute undertakes any Institute project with respect to such 
        facility;
            (6) may sue and be sued in its corporate capacity in any 
        court of competent jurisdiction;
            (7) may issue notes, bonds, and otherwise incur debt in 
        accordance with section 109; and
            (8) may structure compensation for Institute contracts as a 
        percentage of the savings to the government to provide 
        additional incentives for the Institute to maximize such 
        savings.
    (d) Limitations.--Notwithstanding this section or any other 
provision of this title, the Institute shall not have any power, 
directly or indirectly, to invest in an Institute project or otherwise 
acquire or retain an ownership interest in an Institute project or its 
associated stream of revenues. The Institute shall have no power to 
perform the facility audit, design, construction, rebuilding, 
upgrading, retrofitting, or long-term operation of an Institute 
project, except through the use of private parties.

SEC. 106. PROCESS OF ORGANIZATION.

    (a) Incorporation.--(1) Within 30 days after the date of the 
enactment of this title, the Secretary of Defense shall appoint the 
Chairman of the Board of Directors and four additional persons to serve 
as the incorporators thereof. The incorporators may not be officers or 
employees of the United States.
    (2) Within sixty days after the completion of the appointments, the 
incorporators shall take whatever actions are necessary or appropriate 
to incorporate the Institute, including the signing and filing of 
articles of incorporation. The incorporators for the Institute shall 
also serve as the initial Board of Directors thereof.
    (b) Initial Operations.--(1) Within sixty days after the 
incorporation of the Institute, the Chairman of the Board of Directors 
shall appoint a President of the Institute from private life who shall 
serve at the pleasure of the Board of Directors.
    (2) The President shall have such powers and may exercise such 
authority as is necessary for the proper operation of the Institute, 
including the hiring of employees.
    (3) To assist in the start-up of the Institute, the Secretary of 
Defense may detail, upon receipt of a written request from either 
President thereof and approval of the Military Department concerned if 
requested from a Military Department, appropriate personnel as may be 
required for the Institute's functioning, until such time as officers 
and employees of the Institute are hired. No such detail of personnel 
shall exceed two years in length. The Institute shall reimburse the 
Department of Defense for the salary and benefit costs of such detailed 
personnel.
    (c) Additional Institutes.--The Secretary shall have the authority 
to establish up to five Institutes, if in his judgment additional 
Institutes would encourage increased administrative and technical 
expertise and efficiency through competition between Institutes and/or 
regionalization or specialization of responsibilities.

SEC. 107. BOARD OF DIRECTORS.

    (a) Appointment.--The Institute shall be managed by or under the 
direction of its Board of Directors, which shall consist of five 
individuals who shall be appointed as follows:
            (1) A Chairman of the Board of Directors who shall be 
        appointed by the Secretary of Defense from private life.
    (2) Four individuals who shall be appointed by the Secretary of 
Defense from private life.
    (b) Term.--The term of each Director shall be three years. Any 
Director appointed by the Board of Directors to fill a vacancy may be 
appointed only for the unexpired term of the succeeded Director.
    (c) Compensation.--Directors, including each Chairman, shall serve 
on a part-time basis and shall be paid at a commercially reasonable 
rate established by the Board of Directors, after consultation with the 
Advisory Panel.

SEC. 108. INSTITUTE GOVERNANCE.

    (a) Bylaws.--The Board of Directors shall adopt and may from time 
to time amend in accordance with the District of Columbia Nonprofit 
Corporation Act (D.C. Code, sec. 29-501 et seq.), such bylaws as are 
necessary for the proper management and operation of the Institute. 
Such bylaws shall not be inconsistent with the provisions of this title 
or the articles of incorporation adopted by the Institute.
    (b) Officers and Employees.--(1) The Board of Directors shall 
appoint a President, who shall be the chief executive officer of the 
Institute, and establish such other officers as the Board of Directors 
may deem appropriate, define their duties, and establish a system of 
compensation for individual officer positions and other categories of 
employees. All officers appointed shall be from private life.
    (2) The Institute shall recruit and employ (on a permanent or 
temporary basis as the Board of Directors deems appropriate) persons 
with appropriate technical, financial, legal, contracting, and 
operational expertise to assist in the identification and acquisition 
of Institute projects and Institute contracts, and shall employ such 
other administrative personnel as the Board of Directors determines 
necessary or appropriate for the proper operation of the Institute.
    (3) Except as specifically provided in this title, Directors, 
officers, and employees of the Institute, shall not be subject to any 
law of the United States relating to post-Federal employment by reason 
of their employment with the Institute.
    (4) No political test or qualification shall be used in selecting, 
appointing, promoting, electing, or taking other personnel actions with 
respect to Directors, officers, agents, and employees of the Institute.
    (c) Fiscal Year.--The fiscal year of the Institute shall begin on 
each October 1 and end on the subsequent September 30.
    (d) Independent Audits.--(1) The financial statements of the 
Institute shall be audited annually in accordance with generally 
accepted auditing standard by a firm of independent certified public 
accountants of recognized national standing selected by the Board of 
Directors. All books, accounts, financial records, reports, files and 
other papers, things, and property belonging to or used by the 
Institute and necessary to facilitate each audit shall be made 
available to the firm conducting such audit.
    (2) The Comptroller General may review any audit of the Institute's 
financial statements conducted under paragraph (1). The Comptroller 
General shall report to Congress and the Institute the results of any 
such review and shall include in such report any recommendations based 
on such review.
    (3) All books, accounts, financial records, reports, files, papers, 
and property belonging to or used by the Institute and its auditing 
firm that the Comptroller General considers necessary to the 
performance of any audit or review under this section shall be made 
available to the Comptroller General.
    (e) Conflicts of Interest.--(1) Except as permitted by paragraph 
(3), no Director of the Institute shall vote on any matter respecting 
any application, contract, claim, or other particular matter pending 
before the Institute, in which, to his or her knowledge, he or she, his 
or her spouse, parent, minor child, partner, or an organization (other 
than the Institute) in which he or she is serving as officer, director, 
trustee, partner, or employee, or any person or organization with whom 
he or she is negotiating or has any arrangement concerning prospective 
employment, has a financial interest.
    (2) Action by a Director contrary to the prohibition contained in 
paragraph (1) shall be grounds for removal of such Director by the 
Board of Directors, but any such action shall not impair or otherwise 
affect the validity of any otherwise lawful action by the Institute in 
which such Director participated.
    (3) The prohibition contained in paragraph (1) shall not apply if 
the Director first advises the Board of Directors of the nature of the 
particular matter in which he or she proposes to participate and makes 
full disclosure of such financial interest, and the Board of Directors 
determines by majority vote that such financial interest is too remote 
or too inconsequential to affect the integrity of such Director's 
services for the Institute in that matter. The Director involved shall 
not participate in such determination.
    (4) No person or entity that is an employee of the Institute shall 
be allowed to enter into an Institute contract for, or to propose for 
or to bid on, an Institute contract for materials to be furnished or 
work to be performed pursuant to or in connection with an Institute 
contract.
    (5) No part of the income or assets of the Institute shall inure to 
the benefit of any director, employee, or other individual except as 
salary or reasonable compensation for services.

SEC. 109. INSTITUTE CAPITALIZATION AND DEBT.

    (a) Federal Contribution.--In order to provide the institute with 
initial capital adequate to exercise its functions and 
responsibilities, there is authorized to be transferred to the 
Institute from the Department of Defense from funds otherwise available 
for energy savings an amount not to exceed $5,000,000 for the fiscal 
year 1997, and $5,000,000 for the fiscal year 1998 (with each of these 
amounts to be available until expended). Repayment of these funds shall 
be made to the Department from compensation from a percentage of 
savings to the government in excess of operational costs, at the 
discretion of the Board of Directors.
    (b) Issuance and Sale of Debt Instruments.--For the purposes of 
maintaining working capital, the Institute may issue, sell, and have 
outstanding such notes, bonds, and other debt instruments having such 
maturities and bearing such rate or rates of interest as may be 
determined by the Board of Directors in an amount not to exceed 
$10,000,000.
    (c) Rules of Construction.--No instrument that is issued, insured, 
or guaranteed by, or otherwise is an obligation of the Institute, nor 
any contractual undertaking by the Institute, shall be construed to be 
an obligation or undertaking of the United States, or an obligation or 
undertaking which is guaranteed by the full faith and credit of the 
United States.

SEC. 110. INSTITUTE ADVISORY PANEL.

    (a) Establishment.--There is hereby established an Institute 
Advisory Panel to advise the Board of Directors of the Institute. The 
Institute Advisory Panel shall review the Institute's operations and 
advise the Institute regarding such other matters as the Board of 
Directors may request of the Institute Advisory Panel from time to 
time.
    (b) Members.--The Institute Advisory Panel shall be comprised of 
the Assistant Secretary of Defense for Economic Security and such 
representatives from the private sector as each Board of Directors may 
select to ensure that the views of the financial community and the 
various segments of the energy industry (including the energy service 
companies, the independent power producers, the utilities, and 
architectural and engineering companies) are available to each Board of 
Directors. The Assistant Secretary of Defense for Economic Security 
shall be the Chairperson of the Institute Advisory Panel.
    (c) Meetings.--The Institute Advisory Panel shall meet with each 
Board of Directors not less than semiannually.

SEC. 111. AUTHORITY OF MILITARY DEPARTMENTS TO ENTER INTO INSTITUTE 
              CONTRACTS.

    (a) General Authority.--Any military department may select the 
Institute to perform one or more Institute contracts for the 
performance of the Institute project based upon an evaluation of 
technical proposals submitted by the Institute; provided all goods and 
services contracted for pursuant to any such Institute contract shall 
be supplied by subcontractors selected in accordance with section 105. 
Institute contracts may be for one or more Institute projects, and any 
military department may enter into a single Institute contract with the 
Institute authorizing multiple Institute projects to be performed on 
behalf of such military department. No Institute contract may exceed a 
period of 30 years.
    (b) Exception From Contract Requirements.--Except as provided in 
subsection (c) and in order to foster the growth of standard industry 
practices in Federal procurement, no Federal law, rule, or regulation 
dealing with the solicitation, award, execution, delivery or 
performance of public or Federal contracts (including chapter 137 title 
10, United States Code) shall apply to any Institute contract or any 
subcontract awarded thereunder.
    (c) Continued Application of Certain Requirements.--The following 
provisions shall apply to every Institute contract and any subcontracts 
awarded under the Institute contract:
            (1) The Act of March 3, 1931 (40 U.S.C. 276a et seq.), 
        commonly known as the Davis-Bacon Act.
            (2) The dispute resolution procedures of the Contract 
        Disputes Act of 1978 (41 U.S.C. 601 et seq.).
    (d) Sale of Excess Electric Power.--The sale of electric power 
produced in excess of the amount needed by a military department as a 
result of an Institute contract shall be subject to applicable Federal 
and State law governing the sale and transmission of electric power and 
the provision of electric utility services, including State utility 
commission rulings and electric utility franchises or service 
territories established pursuant to State law or regulation.
    (e) Termination Clause.--Institute contracts may contain a clause 
authorizing the termination of an Institute contract for the 
convenience of the Government. Such clause may permit anticipatory 
profits and consequential damages to the extent of termination.
    (f) Lease of Real Property Authorized.--The Secretary of a military 
department may lease, at fair market value, real and related personal 
property under the jurisdiction and control of the Secretary in 
connection with an Institute project undertaken pursuant to an 
Institute contract for a period not in excess of fifty years. The 
interest of a lessee of property leased under this section may be taxed 
by State or local governments.
    (g) Rule of Construction.--No officer, director, or employee of the 
Institute shall be construed to be a ``procurement official'' as such 
term is used in the Office of Federal Procurement Policy Act.
    (h) Consultation With Local Public Utility.--Any public utility 
supplying electric energy or natural gas to a military installation 
shall be notified by the Institute of any proposed Institute contract 
or Institute project at such installation and the military department 
and the Institute issuing any such proposal for such Institute contract 
or Institute project shall consult with such utility relative to its 
ability to serve the installation's needs and the effect of the 
proposal on such utility. Nothing herein shall preclude such public 
utility from bidding upon and receiving the award of such Institute 
contract.

SEC. 112. INSTITUTE PROJECT LIST.

    Within one hundred and eighty days after the date of the 
incorporation of the Institute, the Secretaries of the Military 
Departments will develop and submit to the Institute a list of defense 
energy facilities potentially suitable to the test of Institute 
contracts pursuant to the authority of this title. The Secretary of a 
Military Department may contract with the Institute to aid in the 
preparation of this list.

SEC. 113. ANNUAL REPORTS.

    The Institute shall prepare and submit to the Secretary of Defense 
within ninety days after the close of each fiscal year an annual report 
of its activities. Such report shall contain--
            (1) a general description of the Institute's operations;
            (2) a summary of the Institute's operating and financial 
        performance; and
            (3) a copy of the financial statements of the Institute for 
        the related fiscal year together with the audit report on such 
        statements prepared pursuant to section 108(d).
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