---
kind: "section"
citation: "10 U.S.C. § 8696"
title: "10"
title_heading: "Armed Forces"
number: "8696"
heading: "Navy shipbuilding workforce development special incentive"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/10/8696"
units:
  - "Subtitle C — Navy and Marine Corps"
  - "Part IV — General Administration"
  - "Chapter 863 — Naval Vessels"
---

# §8696. Navy shipbuilding workforce development special incentive

- (a) **Requirement.—**
  - (1) **In general.—** The [Secretary](/usc/10/8720.md?p=4) of the [Navy](/usc/10/8001.md?p=a-1) shall include in any solicitation for a covered contract a special incentive for workforce development that funds one or more workforce development activities described in [subsection (c)](#c).
  - (2) **Amount of special incentive.—** The amount of a special incentive required under [subsection (a)(1)](#a-1) shall be equal to not less than one quarter of one percent and not more than one percent of the estimated cost of the covered contract.
  - (3) **Waiver.—**
    - (A) **In general.—** The [Secretary](/usc/10/8720.md?p=4) of the [Navy](/usc/10/8001.md?p=a-1) may waive one or more of the requirements of this section if the [Secretary](/usc/10/8720.md?p=4) determines—
      - (i) unreasonable cost or delay would be incurred by complying with such requirements;
      - (ii) existing workforce development initiatives are sufficient to meet workforce needs;
      - (iii) there are minimal workforce development issues to be addressed; or
      - (iv) it is not in the national security interests of the [United States](/usc/10/101.md?p=a-1) to comply with such requirements.
    - (B) **Notice to congress.—** Not less than 30 days prior to issuing a waiver under [subparagraph (A)](#a-3-A), the [Secretary](/usc/10/8720.md?p=4) of the [Navy](/usc/10/8001.md?p=a-1) shall submit to the [congressional defense committees](/usc/10/101.md?p=a-16) written notice of the intent of the [Secretary](/usc/10/8720.md?p=4) to issue such a waiver. Such notice shall specify the basis for such waiver and include a detailed explanation of the reasons for issuing the waiver.
- (b) **Matching Contribution Requirement.—**
  - (1) **In general.—** Funds for a special incentive for workforce development required under [subsection (a)(1)](#a-1) may be expended only—
    - (A) on or after the date on which the [service acquisition executive](/usc/10/101.md?p=a-10) of the [Navy](/usc/10/8001.md?p=a-1) receives a written commitment from one or more entities described in [paragraph (2)](#b-2) of separate and distinct cumulative monetary contributions to be made on or after the date of such commitment for workforce development; and
    - (B) in an amount that is equal to the aggregate amount of all monetary contributions from entities that made commitments under [subparagraph (A)](#b-1-A) not to exceed the amount of funding made available for the special incentive under [subsection (a)(2)](#a-2).
  - (2) **Entities described.—** The entities described in this paragraph are the following:
    - (A) The prime contractor that was awarded a covered contract.
    - (B) A qualified subcontractor.
    - (C) A State government or other State entity.
    - (D) A county government or other county entity.
    - (E) A local government or other local entity.
    - (F) An industry association, organization, or consortium that directly supports workforce development.
  - (3) **Special rule.—** In a case in which the aggregate amount of all monetary contributions from entities that made commitments under [paragraph (1)(A)](#b-1-A) is less than the minimum amount specified for the special incentive under [subsection (a)(2)](#a-2), funds for the special incentive may be expended in an amount equal to such lesser amount.
- (c) **Authorized Activities.—**
  - (1) **In general.—** Funds for a special incentive for workforce development required under [subsection (a)(1)](#a-1) may be obligated or expended only to provide for the activities described in [paragraph (2)](#c-2) in support of the production and production support workforce of the prime contractor concerned or a qualified subcontractor concerned.
  - (2) **Activities described.—** The activities described in this paragraph are the following:
    - (A) The creation of short- and long-term workforce housing, transportation, and other support services to facilitate attraction, relocation, and retention of workers.
    - (B) The expansion of local talent pipeline programs for both new and existing workers.
    - (C) Investments in long-term outreach in middle school and high school programs, specifically career and technical education programs, to promote and develop manufacturing skills.
    - (D) The development or modification of facilities for the primary purpose of workforce development.
    - (E) Payment of direct costs attributable to workforce development.
    - (F) Attraction and retention bonus programs.
    - (G) On-the-job training to develop key manufacturing skills.
- (d) **Approval Requirement.—** The [service acquisition executive](/usc/10/101.md?p=a-10) of the [Navy](/usc/10/8001.md?p=a-1) shall—
  - (1) provide the final approval of the use of funds for a special incentive for workforce development required under [subsection (a)(1)](#a-1); and
  - (2) not later than 30 days after the date on which such approval is provided, certify to the [congressional defense committees](/usc/10/101.md?p=a-16) compliance with the requirements of subsections [(b)](#b) and [(c)](#c), including—
    - (A) a detailed explanation of such compliance; and
    - (B) the associated benefits to—
      - (i) the Federal Government; and
      - (ii) the shipbuilding industrial base of the [Navy](/usc/10/8001.md?p=a-1).
- (e) **Definitions.—** In this section:
  - (1) The term “covered contract” means a prime contract for the construction of a naval vessel funded using amounts appropriated or otherwise made available for Shipbuilding and Conversion, [Navy](/usc/10/8001.md?p=a-1).
  - (2) The term “qualified subcontractor” means a subcontractor that will deliver the vessel or vessels awarded under a covered contract to the [Navy](/usc/10/8001.md?p=a-1).

## Source credit

(Added Pub. L. 117–263, div. A, title I, § 122(a), Dec. 23, 2022, 136 Stat. 2441.)

## Notes

### Editorial Notes

### Codification

Another section 8696 was renumbered section 8697 of this title.

### Statutory Notes and Related Subsidiaries

### Effective Date

Pub. L. 117–263, div. A, title I, § 122(c), Dec. 23, 2022, 136 Stat. 2443, provided that: “Section 8696 of title 10, United States Code, as added by subsection (a), shall apply with respect to— a solicitation for a covered contract (as defined in subsection (e) of that section) made on or after June 1, 2023; and a solicitation or award of a covered contract, if otherwise determined appropriate by the Secretary of the Navy.”