SUBJECT:  DoD Procedures for Implementing Public-Private Ventures (PPVs) for Morale, Welfare and Recreation (MWR), and Armed Services Exchange Category C Revenue-Generating Activities

References: (a)  DoD Instruction 1015.13, "Department of Defense Procedures for Implementing Public-Private Ventures (PPVs) for Morale, Welfare and Recreation (MWR) Category C Revenue-Generating Activities," June 17, 1998 (hereby canceled)

1.  REISSUANCE AND PURPOSE

2.  APPLICABILITY

This Instruction applies to:

2.1.  The Office of the Secretary of Defense, the Military Departments, the Chairman of the Joint Chiefs of Staff, the Combatant Commands, the Office of the Inspector General of the Department of Defense, the Defense Agencies, and the DoD Field Activities, and all other organizational entities in the Department of Defense (hereafter referred to collectively as "the DoD Components").

2.2.  The Commissioned Corps of the Public Health Service and the National Oceanic and Atmospheric Administration under the agreements with the Departments of Health and Human Services and Commerce.

3.  DEFINITIONS

3.1.  Addition..  The modification of an existing facility that results in an overall increase in square footage or gross volume without changing the original functional purpose of the facility.

3.2.  Ancillary Supporting Facility..  Required infrastructure that supplements a Category C facility, but does not generate revenue by itself.  Examples include golf course maintenance facilities, irrigation systems, golf cart paths, recreational vehicle park bathhouses, and exchange store parking lots.

3.3.  Military Exchange Merchandise Retail Store..  A retail facility (main store) with separate departments for various lines of apparel, such as a men's department, a women's department, a children's department, and a linens department.  The store is primarily engaged in retailing a wide range of new products with no single merchandise line predominating.  Products may include apparel, furniture, appliances and home furnishings; and selected additional items, such as paint, hardware, toiletries, cosmetics, electronic equipment, jewelry, toys, and sporting goods.

3.4.  Overseas..  Areas other than the 50 United States and the District of Columbia.

3.5.  Public-Private Venture (PPV) Agreement..  An agreement between a DoD NAFI and a non-Federal entity whereby the non-Federal entity provides goods, services, or facilities to authorized MWR and exchange patrons.  The non-Federal entity may, through the PPV, provide a portion or all of the financing, design, construction, equipment, staffing and operation of a program for goods, services, or facilities.

4.  POLICY

4.5.  PPV agreements that adversely affect or displace NAF employees shall provide for those employees to have the first right of refusal for contractor employment openings for which they are qualified, if their employment would not violate post-Government employment conflict of interest standards.

5.  PROCEDURES

5.2.  If a PPV alternative is suitable, the NAFI shall perform an economic analysis to determine whether a NAF capital expenditure or a PPV provides the best financial value.  Capital budgeting techniques, such as net present value analysis and internal rate of return, shall be used to ensure that the NAF capital expenditure and the PPV alternative(s) are reasonably compared.

5.5.  PPV fees, commissions, or other payments required by the NAFI PPV agreement (other than real property rental payments) shall be deposited into NAF accounts.

5.6.  The written approval of the Principal Deputy Under Secretary of Defense for Personnel and Readiness is required before a NAFI executes a PPV agreement that involves:

5.7.  This Instruction creates no rights or remedies and may not be relied upon by any person, organization, or other entity to allege a denial of any rights or remedies in any administrative, judicial or other forum.

6.  RESPONSIBILITIES

6.1.  The Principal Deputy Under Secretary of Defense for Personnel and Readiness, under the Under Secretary of Defense for Personnel and Readiness, shall serve as the principal DoD focal point for all NAF PPV matters.

6.2.  The Secretaries of the Military Departments shall implement policies and procedures consistent with this Instruction in their respective organizations.

7.  EFFECTIVE DATE

This Instruction is effective immediately.

Enclosures - 1

E1.  ENCLOSURE 1

REFERENCES, continued

(j)  Section 2667 of title 10, United States Code