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  2. Depot Maintenance Statute - Title 10 USC 2469

Depot Maintenance Statute - Title 10 USC 2469

DAU GLOSSARY DEFINITION

Alternate Definition

Title 10 USC 2469 is a statute that prohibits the Secretary of Defense (SECDEF) from reassigning organically-performed depot maintenance workloads without some form of competition that is open to DoD depot-level maintenance activities. The statute is sometimes referred to as the "$3 Million Law" or the "$3 Million Rule."

Alternate Definition Source

Title 10 USC 2469Contracts to perform workloads previously performed by depot-level activities of the Department of Defense: requirement of competition

General Information

Key aspects of the statute are:

  • The SECDEF may not change the performance of depot-level workload currently being performed by a DoD depot maintenance activity to another source, unless the change is made using:
    • Merit-based selection procedures for competitions among all DoD depot-level activities (i.e., public-public competition)
    • Competitive procedures for competitions among private and public sector entities (i.e., public-private competition)
  • In either case, the thrust of the statute is to mandate that a depot maintenance workload may not be transferred out of an organic depot to another source without some type of competitive process that is open to organic depots.
  • This requirement applies to any depot maintenance workload with a value of not less than $3 Million. (This has been interpreted to mean an annual value of $3M, including labor & materials.)
  • A waiver may be granted for workloads reassigned to a contract source performed at a Center of Industrial and Technical Excellence pursuant to a Public-Private Partnership (PPP) (also known as Public-Private Partnering) entered into under the provisions of 10 USC 2474Centers of Industrial and Technical Excellence: designation; public-private partnerships.
  • The provisions Office of Management and Budget (OMB) Circular A-76 do not apply to depot workloads reassigned in accordance with this statute.
  • Although not explicitly stated, the statute, in effect, applies to both core and non-core workload.
  • Although not explicitly stated, the distinction between "competitive procedures" for organic-to-contract transfers and "merit-based" procedures for organic-to-organic transfers would seem to imply that public-public competitions may be conducted on a less formal--though not necessarily less rigorous--basis than public-private competitions. In fact, the common practice has been to conduct public-private competitions in accordance with the Defense Federal Acquisition Regulation Supplement (DFARS), while public-public competitions have been governed by Service-level regulations.