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Army Arsenal Revitalization Act of 2016 This bill requires the Defense Logistics Agency to report to Congress regarding Department of Defense (DOD) legacy items with a contract value equal to $5 million or more. DOD shall use Army arsenals for the production of these legacy items. DOD shall: (1) report to Congress listing all sole source contracts for the procurement of manufactured items the lack of which would constitute a critical national security issue, and (2) establish Army arsenals as a second source for production of any such manufactured item. DOD shall report to Congress regarding: DOD contracts awarded during FY2011-FY2015 using noncompetitive procedures for the procurement of equipment, weapons, weapons systems, and components with a contract value of $3 million or more; plans to update practices on Diminishing Manufacturing Sources and Material Shortages (DMSMS), including through the use of the organic industrial base as a resource in the implementation of a DMSMS management plan; and critical capabilities and minimum workloads of the Army arsenals, and fundamental elements for implementing the United States Army Organic Industrial Base Strategic Plan 2012-2022. DOD shall establish a three-year pilot program to permit Army arsenals to adjust their labor rates periodically throughout the year based upon changes in workload and other factors.

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