10 U.S.C.
United States Code, 2006 Edition
Title 10 - ARMED FORCES
Subtitle A - General Military Law
PART IV - SERVICE, SUPPLY, AND PROCUREMENT
From the U.S. Government Printing Office, www.gpo.gov

PART IV—SERVICE, SUPPLY, AND PROCUREMENT

Chap.
Sec.
131.
Planning and Coordination
2201
133.
Facilities for Reserve Components
2231
134.
Miscellaneous Administrative Provisions
2241
135.
Space Programs
2271
136.
Provisions Relating to Specific Programs
2281
137.
Procurement Generally
2301
138.
Cooperative Agreements with NATO Allies and Other Countries
2341
139.
Research and Development
2351
140.
Procurement of Commercial Items
2375
141.
Miscellaneous Procurement Provisions
2381
142.
Procurement Technical Assistance Cooperative Agreement Program
2411
143.
Production by Military Agencies
2421
144.
Major Defense Acquisition Programs
2430
144A.
Major Automated Information System Programs
2445a
145.
Cataloging and Standardization
2451
146.
Contracting for Performance of Civilian Commercial or Industrial Type Functions
2460
147.
Commissaries and Exchanges and Other Morale, Welfare, and Recreation Activities
2481
148.
National Defense Technology and Industrial Base, Defense Reinvestment, and Defense Conversion
2500
[149.
Repealed.]
[150.
Repealed.]
152.
Issue of Supplies, Services, and Facilities
2541
153.
Exchange of Material and Disposal of Obsolete, Surplus, or Unclaimed Property
2571
155.
Acceptance of Gifts and Services
2601
157.
Transportation
2631
159.
Real Property; Related Personal Property; and Lease of Non-Excess Property
2661
160.
Environmental Restoration
2700
161.
Property Records and Report of Theft or Loss of Certain Property
2721
163.
Military Claims
2731
165.
Accountability and Responsibility
2771
[167.
Repealed.]
169.
Military Construction and Military Family Housing
2801
[171.
Repealed.]
172.
Strategic Environmental Research and Development Program
2901
173.
Energy Security
2911

        

Amendments

2006—Pub. L. 109–364, div. A, title VIII, §816(a)(2), div. B, title XXVIII, §2851(c)(1), Oct. 17, 2006, 120 Stat. 2326, 2495, added items for chapters 144A and 173.

2003—Pub. L. 108–136, div. A, title X, §1045(a)(1), Nov. 24, 2003, 117 Stat. 1612, substituted “2700” for “2701” in item for chapter 160.

2001—Pub. L. 107–107, div. A, title IX, §911(b), Dec. 28, 2001, 115 Stat. 1196, added item for chapter 135.

1997—Pub. L. 105–85, div. A, title III, §§355(c)(2), 371(a)(2), (c)(5), title X, §§1073(a)(2), 1074(d)(2), Nov. 18, 1997, 111 Stat. 1694, 1705, 1900, 1910, added item for chapter 136 and substituted “2460” for “2461” in item for chapter 146, “Commissaries and Exchanges and Other Morale, Welfare, and Recreation Activities” for “Utilities and Services” in item for chapter 147, “2500” for “2491” in item for chapter 148, and “2541” for “2540” in item for chapter 152.

1996—Pub. L. 104–201, div. A, title XI, §1123(a)(3), Sept. 23, 1996, 110 Stat. 2688, struck out item for chapter 167 “Defense Mapping Agency”.

Pub. L. 104–106, div. A, title X, §1061(b)(2), Feb. 10, 1996, 110 Stat. 442, struck out item for chapter 171 “Security and Control of Supplies”.

1994—Pub. L. 103–355, title VIII, §8101(b), Oct. 13, 1994, 108 Stat. 3389, added item for chapter 140.

1993—Pub. L. 103–160, div. A, title VIII, §828(b)(1), Nov. 30, 1993, 107 Stat. 1713, struck out item for chapter 135 “Encouragement of Aviation”.

1992—Pub. L. 102–484, div. D, title XLII, §4271(b)(1), Oct. 23, 1992, 106 Stat. 2695, added item for chapter 148 and struck out former items for chapters 148 “Defense Industrial Base”, 149 “Manufacturing Technology”, and 150 “Development of Dual-Use Critical Technologies”.

1991—Pub. L. 102–190, div. A, title VIII, §821(f), title X, §1061(a)(27)(A), Dec. 5, 1991, 105 Stat. 1432, 1474, substituted “Manufacturing” for “Maufacturing” in item for chapter 149, substituted “Development of Dual-Use Critical Technologies” for “Issue to Armed Forces” in item for chapter 150, struck out item for chapter 151 “Issue of Serviceable Material Other Than to Armed Forces”, and added item for chapter 152.

1990—Pub. L. 101–510, div. A, title VIII, §823(b)(1), title XVIII, §1801(a)(2), Nov. 5, 1990, 104 Stat. 1602, 1757, added item for chapter 149, redesignated former item for chapter 149 as item for chapter 150, and added item for chapter 172.

1989—Pub. L. 101–189, div. A, title IX, §931(e)(2), Nov. 29, 1989, 103 Stat. 1535, substituted “Cooperative Agreements” for “Acquisition and Cross-Servicing Agreements” in item for chapter 138.

1988—Pub. L. 100–456, div. A, title III, §§342(a)(2), 344(b)(2), title VIII, §821(b)(2), Sept. 29, 1988, 102 Stat. 1961, 1962, 2016, substituted “Defense Industrial Base” for “Buy American Requirements” in item for chapter 148, substituted “Property Records and Report of Theft or Loss of Certain Property” for “Property Records” in item for chapter 161, and added item for chapter 171.

Pub. L. 100–370, §§1(e)(2), 2(a)(2), 3(a)(2), July 19, 1988, 102 Stat. 845, 854, 855, added items for chapters 134, 146, and 148.

1987—Pub. L. 100–26, §7(c)(1), Apr. 21, 1987, 101 Stat. 280, substituted “Acquisition and Cross-Servicing Agreements with NATO Allies and Other Countries” for “North Atlantic Treaty Organization Acquisition and Cross-Servicing Agreements” in item for chapter 138, substituted “Major Defense Acquisition Programs” for “Oversight of Cost Growth in Major Programs” and “2430” for “2431” in item for chapter 144, and substituted “2721” for “2701” in item for chapter 161.

1986—Pub. L. 99–661, div. A, title XIII, §1343(a)(22), Nov. 14, 1986, 100 Stat. 3994, substituted “2341” for “2321” in item for chapter 138.

Pub. L. 99–499, title II, §211(a)(2), Oct. 17, 1986, 100 Stat. 1725, added item for chapter 160.

Pub. L. 99–433, title VI, §605(b), Oct. 1, 1986, 100 Stat. 1075a, added item for chapter 144.

1984—Pub. L. 98–525, title XII, §1241(a)(2), Oct. 19, 1984, 98 Stat. 2606, added item for chapter 142.

1982—Pub. L. 97–295, §1(50)(E), Oct. 12, 1982, 96 Stat. 1300, added item for chapter 167.

Pub. L. 97–214, §2(b), July 12, 1982, 96 Stat. 169, added item for chapter 169.

1980—Pub. L. 96–323, §2(b), Aug. 4, 1980, 94 Stat. 1019, added item for chapter 138.

CHAPTER 131—PLANNING AND COORDINATION

Sec.
2201.
Apportionment of funds: authority for exemption; excepted expenses.
2202.
Regulations on procurement, production, warehousing, and supply distribution functions.
2203.
Budget estimates.
2204.
Obligation of appropriations.
2205.
Reimbursements.
2206.
Disbursement of funds of military department to cover obligation of another agency of Department of Defense.
2207.
Expenditure of appropriations: limitation.
2208.
Working-capital funds.
2209.
Management funds.
2210.
Proceeds of sales of supplies: credit to appropriations.
2211.
Reimbursement for equipment, material, or services furnished members of the United Nations.
2212.
Obligations for contract services: reporting in budget object classes.
2213.
Limitation on acquisition of excess supplies.
2214.
Transfer of funds: procedure and limitations.
2215.
Transfer of funds to other departments and agencies: limitation.
2216.
Defense Modernization Account.
[2216a.
Repealed.]
2217.
Comparable budgeting for common procurement weapon systems.
2218.
National Defense Sealift Fund.
[2219.
Renumbered.]
2220.
Performance based management: acquisition programs.
[2221.
Repealed.]
2222.
Defense business systems: architecture, accountability, and modernization.
2223.
Information technology: additional responsibilities of Chief Information Officers.
2224.
Defense Information Assurance Program.
2224a.
Information security: continued applicability of expiring Governmentwide requirements to the Department of Defense.
2225.
Information technology purchases: tracking and management.
2226.
Contracted property and services: prompt payment of vouchers.
2227.
Electronic submission and processing of claims for contract payments.
2228.
Military equipment and infrastructure: prevention and mitigation of corrosion.
2229.
Strategic policy on prepositioning of materiel and equipment.

        

Amendments

2006—Pub. L. 109–364, div. A, title III, §351(b), Oct. 17, 2006, 120 Stat. 2160, added item 2229.

2004—Pub. L. 108–375, div. A, title III, §332(a)(2), title VI, §651(f)(2), Oct. 28, 2004, 118 Stat. 1854, 1972, struck out item 2219 “Retention of morale, welfare, and recreation funds by military installations: limitation” and added item 2222.

2002—Pub. L. 107–314, div. A, title X, §§1004(h)(1), 1052(b)(2), 1067(a)(2), Dec. 2, 2002, 116 Stat. 2631, 2649, 2658, struck out item 2222 “Annual financial management improvement plan” and added items 2224a and 2228.

2001—Pub. L. 107–107, div. A, title X, §1009(b)(3)(B), Dec. 28, 2001, 115 Stat. 1209, substituted “Annual” for “Biennial” in item 2222.

2000—Pub. L. 106–398, §1 [[div. A], title VIII, §812(a)(2), title X, §§1006(a)(2), 1008(a)(2)], Oct. 30, 2000, 114 Stat. 1654, 1654A–214, 1654A–247, 1654A–250, added items 2225, 2226, and 2227.

1999—Pub. L. 106–65, div. A, title X, §1043(b), Oct. 5, 1999, 113 Stat. 761, added item 2224.

1998—Pub. L. 105–261, div. A, title III, §331(a)(2), title IX, §§906(f)(1), 911(a)(2), title X, §1008(b), Oct. 17, 1998, 112 Stat. 1968, 2096, 2099, 2117, added item 2212, struck out items 2216a “Defense Business Operations Fund” and 2221 “Fisher House trust funds”, and added item 2223.

1997—Pub. L. 105–85, div. A, title X, §1008(a)(2), Nov. 18, 1997, 111 Stat. 1871, added item 2222.

1996—Pub. L. 104–201, div. A, title X, §1074(a)(10), Sept. 23, 1996, 110 Stat. 2659, redesignated item 2216 “Defense Business Operations Fund” as 2216a.

Pub. L. 104–106, div. A, title III, §371(a)(2), title IX, §§912(a)(2), 914(a)(2), Feb. 10, 1996, 110 Stat. 279, 410, 412, added two items 2216 and item 2221.

1994—Pub. L. 103–355, title II, §2454(c)(3)(A), title III, §3061(b), title V, §5001(a)(2), Oct. 13, 1994, 108 Stat. 3326, 3336, 3350, substituted “Regulations on procurement, production, warehousing, and supply distribution functions” for “Obligation of funds: limitation” in item 2202, struck out item 2212 “Contracted advisory and assistance services: accounting procedures”, and added item 2220.

Pub. L. 103–337, div. A, title III, §373(b), div. B, title XXVIII, §2804(b)(2), Oct. 5, 1994, 108 Stat. 2736, 3053, substituted “Reimbursements” for “Availability of reimbursements” in item 2205 and added item 2219.

1993—Pub. L. 103–160, div. A, title XI, §1106(a)(2), Nov. 30, 1993, 107 Stat. 1750, added item 2215.

1992—Pub. L. 102–484, div. A, title X, §1024(a)(2), Oct. 23, 1992, 106 Stat. 2488, added item 2218.

1991—Pub. L. 102–190, div. A, title III, §317(b), Dec. 5, 1991, 105 Stat. 1338, added item 2213.

1990—Pub. L. 101–510, div. A, title XIII, §1331(2), title XIV, §§1482(c)(2), 1484(i)(6), Nov. 5, 1990, 104 Stat. 1673, 1710, 1718, struck out item 2213 “Cooperative military airlift agreements”, added item 2214, and struck out items 2215 “Reports on unobligated balances” and 2216 “Annual report on budgeting for inflation”.

1988—Pub. L. 100–370, §1(d)(4), July 19, 1988, 102 Stat. 843, added items 2201, 2212, and 2217.

1986—Pub. L. 99–661, div. A, title XIII, §1307(a)(2), Nov. 14, 1986, 100 Stat. 3981, added items 2215 and 2216.

1982—Pub. L. 97–252, title XI, §1125(b), Sept. 8, 1982, 96 Stat. 758, added item 2213.

Pub. L. 97–214, §10(a)(1), July 12, 1982, 96 Stat. 174, struck out item 2212 “Transmission of annual military construction authorization request”.

1978—Pub. L. 95–356, title VIII, §802(a)(2), Sept. 8, 1978, 92 Stat. 585, added item 2212.

1962—Pub. L. 87–651, title II, §207(b), Sept. 7, 1962, 76 Stat. 523, added items 2203 to 2211.

1958—Pub. L. 85–599, §3(c), Aug. 6, 1958, 72 Stat. 516, struck out item 2201 “General functions of Secretary of Defense”.

§2201. Apportionment of funds: authority for exemption; excepted expenses

(a) Exemption From Apportionment Requirement.—If the President determines such action to be necessary in the interest of national defense, the President may exempt from the provisions of section 1512 of title 31 appropriations, funds, and contract authorizations available for military functions of the Department of Defense.

(b) Airborne Alerts.—Upon a determination by the President that such action is necessary, the Secretary of Defense may provide for the cost of an airborne alert as an excepted expense under section 3732(a) of the Revised Statutes (41 U.S.C. 11(a)).

(c) Members on Active Duty.—Upon a determination by the President that it is necessary to increase (subject to limits imposed by law) the number of members of the armed forces on active duty beyond the number for which funds are provided in appropriation Acts for the Department of Defense, the Secretary of Defense may provide for the cost of such additional members as an excepted expense under section 3732(a) of the Revised Statutes (41 U.S.C. 11(a)).

(d) Notification to Congress.—The Secretary of Defense shall immediately notify Congress of the use of any authority under this section.

(Added Pub. L. 100–370, §1(d)(1)(A), July 19, 1988, 102 Stat. 841; amended Pub. L. 106–65, div. A, title X, §1032(a)(1), Oct. 5, 1999, 113 Stat. 751.)

Historical and Revision Notes

Section is based on Pub. L. 99–190, §101(b) [title VIII, §8009], Dec. 19, 1985, 99 Stat. 1185, 1204.

In two instances, the source law to be codified by the bill includes provisions that on their face require that the Department of Defense notify Congress of certain actions. These notification requirements were terminated by section 602 of the Goldwater-Nichols Department of Defense Reorganization Act of 1986 (Public Law 99–433), which terminated all recurring reporting requirements applicable to the Department of Defense except for those requirements that were specifically exempted in that section. The source law sections are sections 8009(c) and 8005(j) (proviso) of the FY86 defense appropriations Act (Public Law 99–190), enacted December 19, 1985, which would be codified as section 2201 of title 10 (by section 1(d) of the bill) and section 7313(a) of title 10 (by section 1(n) of the bill). In codifying the authorities provided the Department of Defense by these two provisions of law, the committee believes that it is appropriate to reinstate the congressional notification requirements that go with those authorities. These sections were recurring annual appropriation provisions for many years and were made permanent only months before the enactment of the 1986 Reorganization Act. It is the committee's belief that the failure to exempt these provisions from the general reports termination provision was inadvertent and notes that the notification provisions had in fact previously applied to the Department of Defense for many years. The action of the committee restores the status quo as it existed before the Reorganization Act.

Prior Provisions

A prior section 2201, act Aug. 10, 1956, ch. 1041, 70A Stat. 119, prescribed the general functions of the Secretary of Defense, prior to repeal by Pub. L. 85–599, §3(c), Aug. 6, 1958, 72 Stat. 516. See section 113 of this title.

Amendments

1999—Subsec. (d). Pub. L. 106–65 substituted “Defense” for “Defense—”, struck out par. (1) designation, substituted “this section.” for “this section; and”, and struck out par. (2) which read as follows: “shall submit monthly reports to Congress on the estimated obligations incurred pursuant to subsections (b) and (c).”

§2202. Regulations on procurement, production, warehousing, and supply distribution functions

The Secretary of Defense shall prescribe regulations governing the performance within the Department of Defense of the procurement, production, warehousing, and supply distribution functions, and related functions, of the Department of Defense.

(Aug. 10, 1956, ch. 1041, 70A Stat. 120; Pub. L. 100–180, div. A, title XII, §1202, Dec. 4, 1987, 101 Stat. 1153; Pub. L. 103–355, title III, §3061(a), Oct. 13, 1994, 108 Stat. 3336.)

Historical and Revision Notes
Revised sectionSource (U.S. Code)Source (Statutes at Large)
2202 41:162. July 10, 1952, ch. 630, §638, 66 Stat. 537.

The words “an officer or agency * * * may * * * only” are substituted for the words “no officer or agency * * * shall * * * except”. The word “of”, before the words “the Department”, is substituted for the words “in or under”. The words “under regulations prescribed” are substituted for the words “in accordance with regulations issued”. The words “after the effective date of this section” and 41:162(b) are omitted as executed. The words “or equipment” are omitted as covered by the definition of “supplies” in section 101(26) of this title.

Amendments

1994—Pub. L. 103–355 amended heading and text generally. Prior to amendment, text read as follows:

“(a) Notwithstanding any other provision of law, an officer or agency of the Department of Defense may obligate funds for procuring, producing, warehousing, or distributing supplies, or for related functions of supply management, only under regulations prescribed by the Secretary of Defense. The purpose of this section is to achieve the efficient, economical, and practical operation of an integrated supply system to meet the needs of the military departments without duplicate or overlapping operations or functions.

“(b) Except as otherwise provided by law, the availability for obligation of funds appropriated for any program, project, or activity of the Department of Defense expires at the end of the three-year period beginning on the date that such funds initially become available for obligation unless before the end of such period the Secretary of Defense enters into a contract for such program, project, or activity.”

1987—Pub. L. 100–180 designated existing provisions as subsec. (a) and added subsec. (b).

Effective Date of 1994 Amendment

For effective date and applicability of amendment by Pub. L. 103–355, see section 10001 of Pub. L. 103–355, set out as a note under section 251 of Title 41, Public Contracts.

§2203. Budget estimates

To account for, and report, the cost of performance of readily identifiable functional programs and activities, with segregation of operating and capital programs, budget estimates of the Department of Defense shall be prepared, presented, and justified, where practicable, and authorized programs shall be administered, in such form and manner as the Secretary of Defense, subject to the authority and direction of the President, may prescribe. As far as practicable, budget estimates and authorized programs of the military departments shall be uniform and in readily comparable form. The budget for the Department of Defense submitted to Congress for each fiscal year shall include data projecting the effect of the appropriations requested for materiel readiness requirements. The Secretary of Defense shall provide that the budget justification documents for such budget include information on the number of employees of contractors estimated to be working on contracts of the Department of Defense during the fiscal year for which the budget is submitted. Such information shall be set forth in terms of employee-years or such other measure as will be uniform and readily comparable with civilian personnel of the Department of Defense.

(Added Pub. L. 87–651, title II, §207(a), Sept. 7, 1962, 76 Stat. 520; amended Pub. L. 97–295, §1(21), Oct. 12, 1982, 96 Stat. 1290; Pub. L. 99–661, div. A, title III, §311, Nov. 14, 1986, 100 Stat. 3851.)

Historical and Revision Notes
1956 Act
Revised sectionSource (U.S. Code)Source (Statutes at Large)
2203 5:172b. July 26, 1947, ch. 343, §403; added Aug. 10, 1949, ch. 412, §11 (5th and 6th pars.), 63 Stat. 586.

The word “prescribe” is substituted for the word “determine”. 5 U.S.C. 172b(b) is omitted as executed.

1982 Act
Revised sectionSource (U.S. Code)Source (Statutes at Large)
2203 (last sentence) 10:2203 (note). July 30, 1977, Pub. L. 95–79, §812 (last sentence), 91 Stat. 336.

The words “for fiscal year 1979” are omitted as executed. The words “for each fiscal year” are substituted for “subsequent fiscal years” for consistency.

Amendments

1986—Pub. L. 99–661 inserted provisions that budget justification documents include information on number of employees estimated to be working during the fiscal year, such information to be set forth in terms of employee-years or other measure as is uniform and comparable with civilian personnel of the Department of Defense.

1982—Pub. L. 97–295 inserted provision requiring that the budget for the Department of Defense submitted annually to Congress include data projecting the effect of the appropriations requested for materiel readiness requirements.

Presidential Recommendations Respecting Modifications in Cruise Missile Program

Pub. L. 95–184, title II, §203, Nov. 15, 1977, 91 Stat. 1382, provided that in authorizing funds under that Act [Pub. L. 95–184], Congress was asserting its readiness to consider, in accordance with the processes set forth in the Congressional Budget and Impoundment Control Act of 1974 [2 U.S.C. 621 et seq.] and the Budget and Accounting Act, 1921 [31 U.S.C. 1101 et seq.], such modifications in the United States cruise missile programs as the President might recommend to facilitate either negotiation or agreement in arms limitation or reduction talks.

Report to Congressional Committees on Material Readiness Requirements for Armed Forces

Pub. L. 95–79, title VIII, §812, July 30, 1977, 91 Stat. 336, as amended by Pub. L. 97–295, §6(b), Oct. 12, 1982, 96 Stat. 1314, directed Secretary of Defense to submit to Congress, not later than February 15, 1978, a report setting forth quantifiable and measurable material readiness requirements for the Armed Forces, including the Reserve components thereof, monthly readiness status of the Armed Forces, including the reserve components thereof, during fiscal year 1977, and any changes in such requirements and status projected for fiscal years 1978 and 1979 and in the five-year defense program, and to inform Congress of any subsequent changes in the aforementioned materiel readiness requirements and the reasons for such changes.

Modifications in United States Strategic Arms Programs on Recommendation of President

Pub. L. 95–79, title VIII, §813, July 30, 1977, 91 Stat. 337, provided that in authorizing procurement under section 101 of that Act and research and development under section 201 of that Act, Congress was asserting its readiness to consider, in accordance with the processes set forth in the Congressional Budget and Impoundment Control Act of 1974 [2 U.S.C. 621 et seq.] and the Budget and Accounting Act, 1921 [31 U.S.C. 1101 et seq.], such modifications in United States strategic arms programs as the President might recommend to facilitate either negotiation or agreement in the Strategic Arms Limitation Talks.

§2204. Obligation of appropriations

To prevent overdrafts and deficiencies in the fiscal year for which appropriations are made, appropriations made to the Department of Defense or to a military department, and reimbursements thereto, are available for obligation and expenditure only under scheduled rates of obligation, or changes thereto, that have been approved by the Secretary of Defense. This section does not prohibit the Department of Defense from incurring a deficiency that it has been authorized by law to incur.

(Added Pub. L. 87–651, title II, §207(a), Sept. 7, 1962, 76 Stat. 520.)

Historical and Revision Notes
Revised sectionSource (U.S. Code)Source (Statutes at Large)
2204 5:172c. July 26, 1947, ch. 343, §404; added Aug. 10, 1949, ch. 412, §11 (7th par.), 63 Stat. 587.

The words “on and after the beginning of the next fiscal year following August 10, 1949,” are omitted as executed. The last sentence is substituted for the proviso in 5 U.S.C. 172c.

§2205. Reimbursements

(a) Availability of Reimbursements.—Reimbursements made to appropriations of the Department of Defense or a department or agency thereof under sections 1535 and 1536 of title 31, or other amounts paid by or on behalf of a department or agency of the Department of Defense to another department or agency of the Department of Defense, or by or on behalf of personnel of any department or organization, for services rendered or supplies furnished, may be credited to authorized accounts. Funds so credited are available for obligation for the same period as the funds in the account so credited. Such an account shall be accounted for as one fund on the books of the Department of the Treasury.

(b) Fixed Rate for Reimbursement for Certain Services.—The Secretary of Defense and the Secretaries of the military departments may charge a fixed rate for reimbursement of the costs of providing planning, supervision, administrative, or overhead services incident to any construction, maintenance, or repair project to real property or for providing facility services, irrespective of the appropriation financing the project or facility services.

(Added Pub. L. 87–651, title II, §207(a), Sept. 7, 1962, 76 Stat. 520; amended Pub. L. 96–513, title V, §511(71), Dec. 12, 1980, 94 Stat. 2926; Pub. L. 97–258, §3(b)(4), Sept. 13, 1982, 96 Stat. 1063; Pub. L. 103–337, div. B, title XXVIII, §2804(a), (b)(1), Oct. 5, 1994, 108 Stat. 3053.)

Historical and Revision Notes
Revised sectionSource (U.S. Code)Source (Statutes at Large)
2205 5:172g. July 26, 1947, ch. 343, §408; added Aug. 10, 1949, ch. 412, §11 (23d par.), 63 Stat. 590.

5 U.S.C. 172g is restated to reflect more clearly its purpose to authorize the Department of Defense to operate as an integrated department by permitting supplies to be furnished and services to be rendered within and among agencies of the Department of Defense and provide that reimbursements therefor be credited to authorized accounts and be available for the same purpose and period as the accounts so credited. (See Senate Report No. 366, 81st Congress, pp. 23, 24.)

Amendments

1994—Pub. L. 103–337 substituted “Reimbursements” for “Availability of reimbursements” as section catchline, designated existing provisions as subsec. (a) and inserted subsec. heading, and added subsec. (b).

1982—Pub. L. 97–258 substituted “sections 1535 and 1536 of title 31” for “the Act of March 4, 1915 (31 U.S.C. 686)”.

1980—Pub. L. 96–513 substituted “the Act of March 4, 1915 (31 U.S.C. 686)” for “section 686 of title 31”.

Effective Date of 1980 Amendment

Amendment by Pub. L. 96–513 effective Dec. 12, 1980, see section 701(b)(3) of Pub. L. 96–513, set out as a note under section 101 of this title.

§2206. Disbursement of funds of military department to cover obligation of another agency of Department of Defense

As far as authorized by the Secretary of Defense, a disbursing official of a military department may, out of available advances, make disbursements to cover obligations in connection with any function, power, or duty of another department or agency of the Department of Defense and charge those disbursements on vouchers, to the appropriate appropriation of that department or agency. Disbursements so made shall be adjusted in settling the accounts of the disbursing official.

(Added Pub. L. 87–651, title II, §207(a), Sept. 7, 1962, 76 Stat. 520; amended Pub. L. 97–258, §2(b)(1)(A), Sept. 13, 1982, 96 Stat. 1052.)

Historical and Revision Notes
Revised sectionSource (U.S. Code)Source (Statutes at Large)
2206 5:172h.

5:171n(a) (as applicable to 5:172h).

July 26, 1947, ch. 343, §409; added Aug. 10, 1949, ch. 412, §11 (24th par.), 63 Stat. 590.
  July 26, 1947, ch. 343, §308(a) (as applicable to §409), 61 Stat. 509.

The word “agency” is substituted for the word “organization”. The last sentence is substituted for the proviso in 5 U.S.C. 172h.

Amendments

1982—Pub. L. 97–258 substituted “official” for “officer” wherever appearing.

§2207. Expenditure of appropriations: limitation

(a) Money appropriated to the Department of Defense may not be spent under a contract other than a contract for personal services unless that contract provides that—

(1) the United States may, by written notice to the contractor, terminate the right of the contractor to proceed under the contract if the Secretary concerned or his designee finds, after notice and hearing, that the contractor, or his agent or other representative, offered or gave any gratuity, such as entertainment or a gift, to an officer, official, or employee of the United States to obtain a contract or favorable treatment in the awarding, amending, or making of determinations concerning the performance, of a contract; and

(2) if a contract is terminated under clause (1), the United States has the same remedies against the contractor that it would have had if the contractor had breached the contract and, in addition to other damages, is entitled to exemplary damages in an amount at least three, but not more than 10, as determined by the Secretary or his designee, times the cost incurred by the contractor in giving gratuities to the officer, official, or employee concerned.


The existence of facts upon which the Secretary makes findings under clause (1) may be reviewed by any competent court.

(b) This section does not apply to a contract that is for an amount not greater than the simplified acquisition threshold (as defined in section 4(11) of the Office of Federal Procurement Policy Act (41 U.S.C. 403(11))).

(Added Pub. L. 87–651, title II, §207(a), Sept. 7, 1962, 76 Stat. 520; amended Pub. L. 104–106, div. A, title VIII, §801, Feb. 10, 1996, 110 Stat. 389.)

Historical and Revision Notes
Revised sectionSource (U.S. Code)Source (Statutes at Large)
2207 5:174d. June 30, 1954, ch. 432, §719, 68 Stat. 353.

The following substitutions are made: “spent” for “expended”; “United States” for “Government”; “if a contract is terminated under clause (1)” for “that in the event any such contract is so terminated”; and “has . . . that it would have had if” for “shall be entitled . . . to pursue . . . as it could pursue in the event of”. The word “official” is inserted for clarity. The words “entered into after June 30, 1954” are omitted as executed.

Amendments

1996—Pub. L. 104–106 designated existing provisions as subsec. (a) and added subsec. (b).

§2208. Working-capital funds

(a) To control and account more effectively for the cost of programs and work performed in the Department of Defense, the Secretary of Defense may require the establishment of working-capital funds in the Department of Defense to—

(1) finance inventories of such supplies as he may designate; and

(2) provide working capital for such industrial-type activities, and such commercial-type activities that provide common services within or among departments and agencies of the Department of Defense, as he may designate.


(b) Upon the request of the Secretary of Defense, the Secretary of the Treasury shall establish working-capital funds established under this section on the books of the Department of the Treasury.

(c) Working-capital funds shall be charged, when appropriate, with the cost of—

(1) supplies that are procured or otherwise acquired, manufactured, repaired, issued, or used; and

(2) services or work performed;


including applicable administrative expenses, and be reimbursed from available appropriations or otherwise credited for those costs, including applicable administrative expenses and costs of using equipment.

(d) The Secretary of Defense may provide capital for working-capital funds by capitalizing inventories. In addition, such amounts may be appropriated for the purpose of providing capital for working-capital funds as have been specifically authorized by law.

(e) Subject to the authority and direction of the Secretary of Defense, the Secretary of each military department shall allocate responsibility for its functions, powers, and duties to accomplish the most economical and efficient organization and operation of the activities, and the most economical and efficient use of the inventories, for which working-capital funds are authorized by this section.

(f) The requisitioning agency may not incur a cost for supplies drawn from inventories, or services or work performed by industrial-type or commercial-type activities for which working-capital funds may be established under this section, that is more than the amount of appropriations or other funds available for those purposes.

(g) The appraised value of supplies returned to working-capital funds by a department, activity, or agency may be charged to that fund. The proceeds thereof shall be credited to current applicable appropriations and are available for expenditure for the same purposes that those appropriations are so available. Credits may not be made to appropriations under this subsection as the result of capitalization of inventories under subsection (d).

(h) The Secretary of Defense shall prescribe regulations governing the operation of activities and use of inventories authorized by this section. The regulations may, if the needs of the Department of Defense require it and it is otherwise authorized by law, authorize supplies to be sold to, or services to be rendered or work performed for, persons outside the Department of Defense. However, supplies available in inventories financed by working capital funds established under this section may be sold to contractors for use in performing contracts with the Department of Defense. Working-capital funds shall be reimbursed for supplies so sold, services so rendered, or work so performed by charges to applicable appropriations or payments received in cash.

(i) For provisions relating to sales outside the Department of Defense of manufactured articles and services by a working-capital funded Army industrial facility (including a Department of the Army arsenal) that manufactures large caliber cannons, gun mounts, recoil mechanisms, ammunition, munitions, or components thereof, see section 4543 of this title.

(j)(1) The Secretary of a military department may authorize a working capital funded industrial facility of that department to manufacture or remanufacture articles and sell these articles, as well as manufacturing, remanufacturing, and engineering services provided by such facilities, to persons outside the Department of Defense if—

(A) the person purchasing the article or service is fulfilling a Department of Defense contract or a subcontract under a Department of Defense contract, and the solicitation for the contract or subcontract is open to competition between Department of Defense activities and private firms; or

(B) the Secretary would advance the objectives set forth in section 2474(b)(2) of this title by authorizing the facility to do so.


(2) The Secretary of Defense may waive the conditions in paragraph (1) in the case of a particular sale if the Secretary determines that the waiver is necessary for reasons of national security and notifies Congress regarding the reasons for the waiver.

(k)(1) Subject to paragraph (2), a contract for the procurement of a capital asset financed by a working-capital fund may be awarded in advance of the availability of funds in the working-capital fund for the procurement.

(2) Paragraph (1) applies to any of the following capital assets that have a development or acquisition cost of not less than $100,000:

(A) An unspecified minor military construction project under section 2805(c)(1) of this title.

(B) Automatic data processing equipment or software.

(C) Any other equipment.

(D) Any other capital improvement.


(l)(1) An advance billing of a customer of a working-capital fund may be made if the Secretary of the military department concerned submits to Congress written notification of the advance billing within 30 days after the end of the month in which the advanced billing was made. The notification shall include the following:

(A) The reasons for the advance billing.

(B) An analysis of the effects of the advance billing on military readiness.

(C) An analysis of the effects of the advance billing on the customer.


(2) The Secretary of Defense may waive the notification requirements of paragraph (1)—

(A) during a period of war or national emergency; or

(B) to the extent that the Secretary determines necessary to support a contingency operation.


(3) The total amount of the advance billings rendered or imposed for all working-capital funds of the Department of Defense in a fiscal year may not exceed $1,000,000,000.

(4) In this subsection:

(A) The term “advance billing”, with respect to a working-capital fund, means a billing of a customer by the fund, or a requirement for a customer to reimburse or otherwise credit the fund, for the cost of goods or services provided (or for other expenses incurred) on behalf of the customer that is rendered or imposed before the customer receives the goods or before the services have been performed.

(B) The term “customer” means a requisitioning component or agency.


(m) Capital Asset Subaccounts.—Amounts charged for depreciation of capital assets shall be credited to a separate capital asset subaccount established within a working-capital fund.

(n) Separate Accounting, Reporting, and Auditing of Funds and Activities.—The Secretary of Defense, with respect to the working-capital funds of each Defense Agency, and the Secretary of each military department, with respect to the working-capital funds of the military department, shall provide for separate accounting, reporting, and auditing of funds and activities managed through the working-capital funds.

(o) Charges for Goods and Services Provided Through the Fund.—(1) Charges for goods and services provided for an activity through a working-capital fund shall include the following:

(A) Amounts necessary to recover the full costs of the goods and services provided for that activity.

(B) Amounts for depreciation of capital assets, set in accordance with generally accepted accounting principles.


(2) Charges for goods and services provided through a working-capital fund may not include the following:

(A) Amounts necessary to recover the costs of a military construction project (as defined in section 2801(b) of this title), other than a minor construction project financed by the fund pursuant to section 2805(c)(1) of this title.

(B) Amounts necessary to cover costs incurred in connection with the closure or realignment of a military installation.

(C) Amounts necessary to recover the costs of functions designated by the Secretary of Defense as mission critical, such as ammunition handling safety, and amounts for ancillary tasks not directly related to the mission of the function or activity managed through the fund.


(p) Procedures For Accumulation of Funds.—The Secretary of Defense, with respect to each working-capital fund of a Defense Agency, and the Secretary of a military department, with respect to each working-capital fund of the military department, shall establish billing procedures to ensure that the balance in that working-capital fund does not exceed the amount necessary to provide for the working-capital requirements of that fund, as determined by the Secretary.

(q) Annual Reports and Budget.—The Secretary of Defense, with respect to each working-capital fund of a Defense Agency, and the Secretary of each military department, with respect to each working-capital fund of the military department, shall annually submit to Congress, at the same time that the President submits the budget under section 1105 of title 31, the following:

(1) A detailed report that contains a statement of all receipts and disbursements of the fund (including such a statement for each subaccount of the fund) for the fiscal year ending in the year preceding the year in which the budget is submitted.

(2) A detailed proposed budget for the operation of the fund for the fiscal year for which the budget is submitted.

(3) A comparison of the amounts actually expended for the operation of the fund for the fiscal year referred to in paragraph (1) with the amount proposed for the operation of the fund for that fiscal year in the President's budget.

(4) A report on the capital asset subaccount of the fund that contains the following information:

(A) The opening balance of the subaccount as of the beginning of the fiscal year in which the report is submitted.

(B) The estimated amounts to be credited to the subaccount in the fiscal year in which the report is submitted.

(C) The estimated amounts of outlays to be paid out of the subaccount in the fiscal year in which the report is submitted.

(D) The estimated balance of the subaccount at the end of the fiscal year in which the report is submitted.

(E) A statement of how much of the estimated balance at the end of the fiscal year in which the report is submitted will be needed to pay outlays in the immediately following fiscal year that are in excess of the amount to be credited to the subaccount in the immediately following fiscal year.


(r) Notification of Transfers.—(1) Notwithstanding any authority provided in this section to transfer funds, the transfer of funds from a working-capital fund, including a transfer to another working-capital fund, shall not be made under such authority unless the Secretary of Defense submits, in advance, a notification of the proposed transfer to the congressional defense committees in accordance with customary procedures.

(2) The amount of a transfer covered by a notification under paragraph (1) that is made in a fiscal year does not count toward any limitation on the total amount of transfers that may be made for that fiscal year under authority provided to the Secretary of Defense in a law authorizing appropriations for a fiscal year for military activities of the Department of Defense or a law making appropriations for the Department of Defense.

(Added Pub. L. 87–651, title II, §207(a), Sept. 7, 1962, 76 Stat. 521; amended Pub. L. 97–295, §1(22), Oct. 12, 1982, 96 Stat. 1290; Pub. L. 98–94, title XII, §1204(a), Sept. 24, 1983, 97 Stat. 683; Pub. L. 98–525, title III, §305, Oct. 19, 1984, 98 Stat. 2513; Pub. L. 100–26, §7(d)(2), Apr. 21, 1987, 101 Stat. 280; Pub. L. 101–510, div. A, title VIII, §801, title XIII, §1301(6), Nov. 5, 1990, 104 Stat. 1588, 1668; Pub. L. 102–172, title VIII, §8137, Nov. 26, 1991, 105 Stat. 1212; Pub. L. 102–484, div. A, title III, §374, Oct. 23, 1992, 106 Stat. 2385; Pub. L. 103–160, div. A, title I, §158(b), Nov. 30, 1993, 107 Stat. 1582; Pub. L. 105–85, div. A, title X, §1011(a), (b), Nov. 18, 1997, 111 Stat. 1873; Pub. L. 105–261, div. A, title X, §§1007(e)(1), 1008(a), Oct. 17, 1998, 112 Stat. 2115; Pub. L. 105–262, title VIII, §8146(d)(1), Oct. 17, 1998, 112 Stat. 2340; Pub. L. 106–65, div. A, title III, §§331(a)(1), 332, title X, §1066(a)(16), Oct. 5, 1999, 113 Stat. 566, 567, 771; Pub. L. 106–398, §1 [[div. A], title III, §341(f)], Oct. 30, 2000, 114 Stat. 1654, 1654A–64; Pub. L. 108–375, div. A, title X, §1009, Oct. 28, 2004, 118 Stat. 2037.)

Historical and Revision Notes
1956 Act
Revised sectionSource (U.S. Code)Source (Statutes at Large)
2208(a)

2208(b)

2208(c)

 

2208(d)

5:172d(a).

5:172d(b).

5:172d(c) (less 2d sentence).

5:172d(d).

July 26, 1947, ch. 343, §405; added Aug. 10, 1949, ch. 412, §11 (8th through 15th pars.), 63 Stat. 587.
2208(e) 5:172d(e)
2208(f) 5:172d(f).
2208(g) 5:172d(h).
2208(h) 5:172d(g).
2208(i) 5:172d(c) (2d sentence).

In subsection (a)(1), (c)(1), (f), (g), and (h), the words “stores, . . . materials, and equipment” are omitted as covered by the word “supplies”, as defined in section 101(26) of title 10.

In subsection (c), the word “used” is substituted for the word “consumed”. The words “and costs of using equipment” are inserted to reflect an opinion of the Assistant General Counsel (Fiscal Matters), Department of Defense, February 2, 1960.

In subsection (d), the first sentence (less 1st 18 words) of 5 U.S.C. 172d(d) is omitted as executed.

In subsection (h), the following substitutions are made: “prescribe” for “issue”; and “persons” for “purchasers or users”. The word “shall” is substituted for the words “is authorized to” in the first sentence and for the word “may” in the last sentence to reflect the opinion of the Assistant General Counsel (Fiscal Matters), October 2, 1959, that the source law requires the action in question.

1982 Act
Revised sectionSource (U.S. Code)Source (Statutes at Large)
2208(h) (3d sentence) 10:2208 (note). Dec. 21, 1979, Pub. L. 96–154, §767, 93 Stat. 1163.

The word “hereafter” is omitted as executed.

Prior Provisions

Provisions similar to those in subsecs. (m) to (q) of this section were contained in section 2216a of this title prior to repeal by Pub. L. 105–261, §1008(b).

Amendments

2004—Subsec. (r). Pub. L. 108–375 added subsec. (r).

2000—Subsec. (j)(1). Pub. L. 106–398 substituted “contract, and the solicitation” for “contract; and” at end of subpar. (A) and all that follows through “(B) the solicitation”, substituted “; or” for period after “private firms”, and added a new subpar. (B).

1999—Subsec. (j). Pub. L. 106–65, §§331(a)(1), 332, designated existing provisions as par. (1), redesignated former pars. (1) and (2) as subpars. (A) and (B), respectively, substituted “, remanufacturing, and engineering” for “or remanufacturing” in introductory provisions, inserted “or a subcontract under a Department of Defense contract” before the semicolon in subpar. (A), substituted “solicitation for the contract or subcontract” for “Department of Defense solicitation for such contract” in subpar. (B), and added par. (2).

Subsec. (l)(2)(A). Pub. L. 106–65, §1066(a)(16), inserted “of” after “during a period”.

1998—Subsec. (l)(3), (4). Pub. L. 105–261, §1007(e)(1), and Pub. L. 105–262 amended subsec. (l) identically, adding par. (3) and redesignating former par. (3) as (4).

Subsecs. (m) to (q). Pub. L. 105–261, §1008(a), added subsecs. (m) to (q).

1997—Subsec. (k). Pub. L. 105–85, §1011(a), added subsec. (k) and struck out former subsec. (k) which read as follows: “The Secretary of Defense shall provide that of the total amount of payments received in a fiscal year by funds established under this section for industrial-type activities, not less than 3 percent during fiscal year 1985, not less than 4 percent during fiscal year 1986, and not less than 5 percent during fiscal year 1987 shall be used for the acquisition of capital equipment for such activities.”

Subsec. (l). Pub. L. 105–85, §1011(b), added subsec. (l).

1993—Subsec. (i). Pub. L. 103–160 amended subsec. (i) generally. Prior to amendment, subsec. (i) required that regulations under subsec. (h) authorize working-capital funded Army industrial facilities to sell manufactured articles and services to persons outside the Department of Defense in specified cases.

1992—Subsec. (j). Pub. L. 102–484 substituted “The Secretary of a military department may authorize a working capital funded industrial facility of that department” for “The Secretary of the Army may authorize a working capital funded Army industrial facility”.

1991—Subsecs. (j), (k). Pub. L. 102–172 added subsec. (j) and redesignated former subsec. (j) as (k).

1990—Subsec. (i)(1). Pub. L. 101–510, §801, added par. (1), redesignated par. (3) as (2), and struck out former pars. (1) and (2) which read as follows:

“(1) Regulations under subsection (h) may authorize an article manufactured by a working-capital funded Department of the Army arsenal that manufactures large caliber cannons, gun mounts, or recoil mechanisms to be sold to a person outside the Department of Defense if—

“(A) the article is sold to a United States manufacturer, assembler, or developer (i) for use in developing new products, or (ii) for incorporation into items to be sold to, or to be used in a contract with, an agency of the United States or a friendly foreign government;

“(B) the purchaser is determined by the Department of Defense to be qualified to carry out the proposed work involving the article to be purchased;

“(C) the article is not readily available from a commercial source in the United States; and

“(D) the sale is to be made on a basis that does not interfere with performance of work by the arsenal for the Department of Defense or for a contractor of the Department of Defense.

“(2) Services related to an article sold under this subsection may also be sold to the purchaser if the services are to be performed in the United States for the purchaser.”

Subsec. (k). Pub. L. 101–510, §1301(6), struck out subsec. (k) which read as follows: “Reports annually shall be made to the President and to Congress on the condition and operation of working-capital funds established under this section.”

1987—Subsec. (i)(3). Pub. L. 100–26 inserted “(22 U.S.C. 2778)” after “Arms Export Control Act”.

1984—Subsecs. (i) to (k). Pub. L. 98–525 added subsecs. (i) and (j) and redesignated former subsec. (i) as (k).

1983—Subsec. (d). Pub. L. 98–94 substituted “In addition, such amounts may be appropriated for the purpose of providing capital for working-capital funds as have been specifically authorized by law” for “If this method does not, in the determination of the Secretary of Defense, provide adequate amounts of working capital, such amounts as may be necessary may be appropriated for that purpose”.

1982—Subsec. (h). Pub. L. 97–295 inserted provision that supplies available in inventories financed by working capital funds established under this section may be sold to contractors for use in performing contracts with the Department of Defense.

Effective Date of 1998 Amendment

Pub. L. 105–261, div. A, title X, §1007(e)(2), Oct. 17, 1998, 112 Stat. 2115, and Pub. L. 105–262, title VIII, §8146(d)(2), Oct. 17, 1998, 112 Stat. 2340, provided that: “Section 2208(l)(3) of such title, as added by paragraph (1), applies to fiscal years after fiscal year 1999.”

Effective Date of 1983 Amendment

Section 1204(b) of Pub. L. 98–94 provided that: “The amendment made by subsection (a) [amending this section] shall apply only with respect to appropriations for fiscal years beginning after September 30, 1984.”

Advance Billing for Fiscal Year 2006

Pub. L. 109–234, title I, §1206, June 15, 2006, 120 Stat. 430, provided in part that: “Notwithstanding 10 U.S.C. 2208(l), the total amount of advance billings rendered or imposed for all working capital funds of the Department of Defense in fiscal year 2006 shall not exceed $1,200,000,000”.

Advance Billing for Fiscal Year 2005

Pub. L. 109–13, div. A, title I, §1005, May 11, 2005, 119 Stat. 243, provided that for fiscal year 2005, the limitation under subsec. (l)(3) of this section on the total amount of advance billings rendered or imposed for all working capital funds of the Department of Defense in a fiscal year would be applied by substituting “$1,500,000,000” for “$1,000,000,000”.

Oversight of Defense Business Operations Fund

Pub. L. 103–337, div. A, title III, §311(b)–(e), Oct. 5, 1994, 108 Stat. 2708, which related to purchase from other sources, limitation on inclusion of certain costs in DBOF charges, procedures for accumulation of funds, and annual reports and budget, was repealed and restated in section 2216a(d)(2)(B), (f) to (h)(3) of this title by Pub. L. 104–106, div. A, title III, §371(a)(1), (b)(1), Feb. 10, 1996, 110 Stat. 277–279.

Pub. L. 103–337, div. A, title III, §311(f), (g), Oct. 5, 1994, 108 Stat. 2709, required Secretary of Defense to submit to congressional defense committees, not later than Feb. 1, 1995, a report on progress made in implementing the Defense Business Operations Fund Improvement Plan, dated September 1993, and required Comptroller General to monitor and evaluate the Department of Defense implementation of the Plan and to report to congressional defense committees not later than Mar. 1, 1995.

Charges for Goods and Services Provided Through Defense Business Operations Fund

Section 333(a), (b) of Pub. L. 103–160, which provided that charges for goods and services provided through Defense Business Operations Fund were to include amounts necessary to recover full costs of development, implementation, operation, and maintenance of systems supporting wholesale supply and maintenance activities of Department of Defense and use of military personnel in provision of goods and services, and were not to include amounts necessary to recover costs of military construction project other than minor construction project financed by Defense Business Operations Fund pursuant to section 2805(c)(1) of this title, and which required full cost of operation of Defense Finance Accounting Service to be financed within Defense Business Operations Fund through charges for goods and services provided through Fund, was repealed and restated in section 2216a(d)(1)(A), (C), (2)(A) of this title by Pub. L. 104–106, div. A, title III, §371(a)(1), (b)(2), Feb. 10, 1996, 110 Stat. 277–279.

Capital Asset Subaccount

Section 342 of Pub. L. 102–484, as amended by Pub. L. 103–160, div. A, title III, §333(c), Nov. 30, 1993, 107 Stat. 1622, which provided that charges for goods and services provided through the Defense Business Operations Fund include amounts for depreciation of capital assets which were to be credited to a separate capital asset subaccount in the Fund, authorized Secretary of Defense to award contracts for capital assets of the Fund in advance of availability of funds in the subaccount, required Secretary to submit annual reports to congressional defense committees, authorized appropriations to the Fund for fiscal years 1993 and 1994, and defined terms, was repealed and restated in section 2216a(d)(1)(B), (e), (h)(4), and (i) of this title by Pub. L. 104–106, div. A, title III, §371(a)(1), (b)(3), Feb. 10, 1996, 110 Stat. 277–279.

Limitations on Use of Defense Business Operations Fund

Pub. L. 102–190, div. A, title III, §316, Dec. 5, 1991, 105 Stat. 1338, as amended by Pub. L. 102–484, div. A, title III, §341, Oct. 23, 1992, 106 Stat. 2374; Pub. L. 103–160, div. A, title III, §§331, 332, Nov. 30, 1993, 107 Stat. 1620; Pub. L. 103–337, div. A, title III, §311(a), Oct. 5, 1994, 108 Stat. 2708, which authorized Secretary of Defense to manage performance of certain working-capital funds established under this section, the Defense Finance and Accounting Service, the Defense Industrial Plan Equipment Center, the Defense Commissary Agency, the Defense Technical Information Service, the Defense Reutilization and Marketing Service, and certain activities funded through use of working-capital fund established under this section, directed Secretary to maintain separate accounting, reporting, and auditing of such funds and activities, required Secretary to submit to congressional defense committees, by not later than 30 days after Nov. 30, 1993, a comprehensive management plan and, by not later than Feb. 1, 1994, a progress report on plan's implementation, and directed Comptroller General to monitor and evaluate the plan and submit to congressional defense committees, not later than Mar. 1, 1994, a report, was repealed and restated in section 2216a(a)–(c) of this title by Pub. L. 104–106, div. A, title III, §371(a)(1), (b)(4), Feb. 10, 1996, 110 Stat. 277, 279.

Defense Business Operations Fund

Section 8121 of Pub. L. 102–172, which established on the books of the Treasury a fund entitled the “Defense Business Operations Fund” to be operated as a working capital fund under the provisions of this section and to include certain existing organizations including the Defense Finance and Accounting Service, the Defense Commissary Agency, the Defense Technical Information Center, the Defense Reutilization and Marketing Service, and the Defense Industrial Plant Equipment Service, directed transfer of assets and balances of those organizations to the Fund, provided for budgeting and accounting of charges for supplies and services provided by the Fund, and directed that capital asset charges collected be credited to a subaccount of the Fund, was repealed by Pub. L. 104–106, div. A, title III, §371(b)(5), Feb. 10, 1996, 110 Stat. 280.

Sale of Inventories for Performance of Contracts With Defense Department

Pub. L. 96–154, title VII, §767, Dec. 21, 1979, 93 Stat. 1163, which had provided that supplies available in inventories financed by working capital funds established pursuant to this section could, on and after Dec. 21, 1979, be sold to contractors for use in performing contracts with the Department of Defense, was repealed and restated in subsec. (h) of this section by Pub. L. 97–295, §§1(22), 6(b), Oct. 12, 1982, 96 Stat. 1290, 1315.

§2209. Management funds

(a) To conduct economically and efficiently the operations of the Department of Defense that are financed by at least two appropriations but whose costs cannot be immediately distributed and charged to those appropriations, there is the Army Management Fund, the Navy Management Fund, and the Air Force Management Fund, each within its respective department and under the direction of the Secretary of that department. Each such fund shall consist of a corpus of $1,000,000 and such amounts as may be appropriated thereto from time to time. An account for an operation that is to be financed by such a fund may be established only with the approval of the Secretary of Defense.

(b) Under such regulations as the Secretary of Defense may prescribe, expenditures may be made from a management fund for material (other than for stock), personal services, and services under contract. However, obligation may not be incurred against that fund if it is not chargeable to funds available under an appropriation of the department concerned or funds of another department or agency of the Department of Defense. The fund shall be promptly reimbursed from those funds for expenditures made from it.

(c) Notwithstanding any other provision of law, advances, by check or warrant, or reimbursements, may be made from available appropriations to a management fund on the basis of the estimated cost of a project. As adequate data becomes available, the estimated cost shall be revised and necessary adjustments made. Final adjustment shall be made with the appropriate funds for the fiscal year in which the advances or reimbursements are made. Except as otherwise provided by law, amounts advanced to management funds are available for obligation only during the fiscal year in which they are advanced.

(Added Pub. L. 87–651, title II, §207(a), Sept. 7, 1962, 76 Stat. 522.)

Historical and Revision Notes
Revised sectionSource (U.S. Code)Source (Statutes at Large)
2209(a)

2209(b)

2209(c)

5:172e(a), (b).

5:172e(c) (last sentence).

5:172e(c) (less last sentence).

5:172e(d).

July 3, 1942, ch. 484; restated Aug. 10, 1949, ch. 412, §11 (16th through 19th pars.), 63 Stat. 588.

In subsection (a), the second sentence is substituted for the second sentence of 5 U.S.C. 172e(a) and the first sentence (less last 21 words) of 5 U.S.C. 172e(b) which are omitted as unnecessary.

In subsection (c), the 13th through 33d words of 5 U.S.C. 172e(d) are omitted as surplusage.

§2210. Proceeds of sales of supplies: credit to appropriations

(a)(1) A working-capital fund established pursuant to section 2208 of this title may retain so much of the proceeds of disposals of property referred to in paragraph (2) as is necessary to recover the expenses incurred by the fund in disposing of such property. Proceeds from the sale or disposal of such property in excess of amounts necessary to recover the expenses may be credited to current applicable appropriations of the Department of Defense.

(2) Paragraph (1) applies to disposals of supplies, material, equipment, and other personal property that were not financed by stock funds established under section 2208 of this title.

(b) Obligations may, without regard to fiscal year limitations, be incurred against anticipated reimbursements to stock funds in such amounts and for such period as the Secretary of Defense, with the approval of the President, may determine to be necessary to maintain stock levels consistently with planned operations for the next fiscal year.

(Added Pub. L. 87–651, title II, §207(a), Sept. 7, 1962, 76 Stat. 522; amended Pub. L. 96–513, title V, §511(72), Dec. 12, 1980, 94 Stat. 2926; Pub. L. 105–261, div. A, title X, §1009, Oct. 17, 1998, 112 Stat. 2117.)

Historical and Revision Notes
Revised sectionSource (U.S. Code)Source (Statutes at Large)
2210(a)

2210(b)

5:172d–1 (less proviso).

5:172d–1 (proviso).

Aug. 1, 1953, ch. 305, §645, 67 Stat. 357.

In section (a), the words “proceeds of the disposal” are substituted for the words “moneys arising from the disposition”.

Amendments

1998—Subsec. (a). Pub. L. 105–261 amended subsec. (a) generally. Prior to amendment, subsec. (a) read as follows: “Current applicable appropriations of the Department of Defense may be credited with proceeds of the disposals of supplies that are not financed by stock funds established under section 2208 of this title.”

1980—Subsec. (b). Pub. L. 96–513 substituted “President” for “Director of the Bureau of the Budget”.

Effective Date of 1980 Amendment

Amendment by Pub. L. 96–513 effective Dec. 12, 1980, see section 701(b)(3) of Pub. L. 96–513, set out as a note under section 101 of this title.

§2211. Reimbursement for equipment, material, or services furnished members of the United Nations

Amounts paid by members of the United Nations for equipment or materials furnished, or services performed, in joint military operations shall be credited to appropriate appropriations of the Department of Defense in the manner authorized by section 632(d) of the Foreign Assistance Act of 1961 (22 U.S.C. 2392(d)).

(Added Pub. L. 87–651, title II, §207(a), Sept. 7, 1962, 76 Stat. 522; amended Pub. L. 96–513, title V, §511(73), Dec. 12, 1980, 94 Stat. 2926.)

Historical and Revision Notes
Revised sectionSource (U.S. Code)Source (Statutes at Large)
2211 5:171m–1. Jan. 6, 1951, ch. 1213, §703, 64 Stat. 1235.

The reference to section 2392(d) of title 22 is substituted for the reference to section 1574(b) of that title to reflect section 542(b) of the Act of August 26, 1954, ch. 937 (68 Stat. 861) and section 642(a)(2) and (b) of the Act of September 4, 1961, Pub. L. 87–195 (75 Stat. 460).

Amendments

1980—Pub. L. 96–513 substituted “section 632(d) of the Foreign Assistance Act of 1961 (22 U.S.C. 2392(d))” for “section 2392(d) of title 22”.

Effective Date of 1980 Amendment

Amendment by Pub. L. 96–513 effective Dec. 12, 1980, see section 701(b)(3) of Pub. L. 96–513, set out as a note under section 101 of this title.

§2212. Obligations for contract services: reporting in budget object classes

(a) Limitation on Reporting in Miscellaneous Services Object Class.—The Secretary of Defense shall ensure that, in reporting to the Office of Management and Budget (pursuant to OMB Circular A–11 (relating to preparation and submission of budget estimates)) obligations of the Department of Defense for any period of time for contract services, no more than 15 percent of the total amount of obligations so reported is reported in the miscellaneous services object class.

(b) Definition of Reporting Categories for Advisory and Assistance Services.—In carrying out section 1105(g) of title 31 for the Department of Defense (and in determining what services are to be reported to the Office of Management and Budget in the advisory and assistance services object class), the Secretary of Defense shall apply to the terms used for the definition of “advisory and assistance services” in paragraph (2)(A) of that section the following meanings (subject to the authorized exemptions):

(1) Management and professional support services.—The term “management and professional support services” (used in clause (i) of section 1105(g)(2)(A) of title 31) means services that provide engineering or technical support, assistance, advice, or training for the efficient and effective management and operation of organizations, activities, or systems. Those services—

(A) are closely related to the basic responsibilities and mission of the using organization; and

(B) include efforts that support or contribute to improved organization or program management, logistics management, project monitoring and reporting, data collection, budgeting, accounting, auditing, and administrative or technical support for conferences and training programs.


(2) Studies, analyses, and evaluations.—The term “studies, analyses, and evaluations” (used in clause (ii) of section 1105(g)(2)(A) of title 31) means services that provide organized, analytic assessments to understand or evaluate complex issues to improve policy development, decisionmaking, management, or administration and that result in documents containing data or leading to conclusions or recommendations. Those services may include databases, models, methodologies, and related software created in support of a study, analysis, or evaluation.

(3) Engineering and technical services.—The term “engineering and technical services” (used in clause (iii) of section 1105(g)(2)(A) of title 31) means services that take the form of advice, assistance, training, or hands-on training necessary to maintain and operate fielded weapon systems, equipment, and components (including software when applicable) at design or required levels of effectiveness.


(c) Proper Classification of Advisory and Assistance Services.—Before the submission to the Office of Management and Budget of the proposed Department of Defense budget for inclusion in the President's budget for a fiscal year pursuant to section 1105 of title 31, the Secretary of Defense, acting through the Under Secretary of Defense (Comptroller), shall conduct a review of Department of Defense services expected to be performed as contract services during the fiscal year for which that budget is to be submitted in order to ensure that those services that are advisory and assistance services (as defined in accordance with subsection (b)) are in fact properly classified, in accordance with that subsection, in the advisory and assistance services object class.

(d) Report to Congress.—The Secretary shall submit to Congress each year, not later than 30 days after the date on which the budget for the next fiscal year is submitted pursuant to section 1105 of title 31, a report containing the information derived from the review under subsection (c).

(e) Assessment by Comptroller General.—(1) The Comptroller General shall conduct a review of the report of the Secretary of Defense under subsection (d) each year and shall—

(A) assess the methodology used by the Secretary in obtaining the information submitted to Congress in that report; and

(B) assess the information submitted to Congress in that report.


(2) Not later than 120 days after the date on which the Secretary submits to Congress the report required under subsection (d) for any year, the Comptroller General shall submit to Congress the Comptroller General's report containing the results of the review for that year under paragraph (1).

(f) Definitions.—In this section:

(1) The term “contract services” means all services that are reported to the Office of Management and Budget pursuant to OMB Circular A–11 (relating to preparation and submission of budget estimates) in budget object classes that are designated in the Object Class 25 series.

(2) The term “advisory and assistance services object class” means those contract services constituting the budget object class that is denominated “Advisory and Assistance Service” and designated (as of October 17, 1998) as Object Class 25.1 (or any similar object class established after October 17, 1998, for the reporting of obligations for advisory and assistance contract services).

(3) The term “miscellaneous services object class” means those contract services constituting the budget object class that is denominated “Other Services (services not otherwise specified in the 25 series)” and designated (as of October 17, 1998) as Object Class 25.2 (or any similar object class established after October 17, 1998, for the reporting of obligations for miscellaneous or unspecified contract services).

(4) The term “authorized exemptions” means those exemptions authorized (as of October 17, 1998) under Department of Defense Directive 4205.2, captioned “Acquiring and Managing Contracted Advisory and Assistance Services (CAAS)” and issued by the Under Secretary of Defense for Acquisition and Technology on February 10, 1992, such exemptions being set forth in Enclosure 3 to that directive (captioned “CAAS Exemptions”).

(Added Pub. L. 105–261, div. A, title IX, §911(a)(1), Oct. 17, 1998, 112 Stat. 2097; amended Pub. L. 106–65, div. A, title X, §1066(a)(17), Oct. 5, 1999, 113 Stat. 771.)

Prior Provisions

A prior section 2212, added Pub. L. 100–370, §1(d)(2)(A), July 19, 1988, 102 Stat. 842, directed Secretary of Defense to maintain within each military department an accounting procedure to aid in identification and control of expenditures for contracted advisory and assistance services, prior to repeal by Pub. L. 103–355, title II, §2454(c)(1), Oct. 13, 1994, 108 Stat. 3326.

Another prior section 2212, added Pub. L. 95–356, title VIII, §802(a)(1), Sept. 8, 1978, 92 Stat. 585; amended Pub. L. 97–258, §3(b)(5), Sept. 18, 1982, 96 Stat. 1063, related to transmission of annual military construction authorization request, prior to repeal by Pub. L. 97–214, §7(1), July 12, 1982, 96 Stat. 173, eff. Oct. 1, 1982, applicable to military construction projects, and to construction and acquisition of military family housing authorized before, on, or after such date. See section 2859 of this title.

Amendments

1999—Subsec. (f)(2), (3). Pub. L. 106–65 substituted “as of October 17, 1998” for “as of the date of the enactment of this section” and “after October 17, 1998,” for “after the date of the enactment of this section”.

Subsec. (f)(4). Pub. L. 106–65, §1066(a)(17)(B), substituted “as of October 17, 1998” for “as of the date of the enactment of this section”.

Change of Name

Reference to Under Secretary of Defense for Acquisition and Technology deemed to refer to Under Secretary of Defense for Acquisition, Technology, and Logistics, pursuant to section 911(a)(1) of Pub. L. 106–65, set out as a note under section 133 of this title.

Transition

Pub. L. 105–261, div. A, title IX, §911(b), Oct. 17, 1998, 112 Stat. 2099, provided that for the budget for fiscal year 2000, and the reporting of information to the Office of Management and Budget in connection with the preparation of that budget, this section would be applied by substituting “30 percent” in subsec. (a) for “15 percent”.

§2213. Limitation on acquisition of excess supplies

(a) Two-Year Supply.—The Secretary of Defense may not incur any obligation against a stock fund of the Department of Defense for the acquisition of any item of supply if that acquisition is likely to result in an on-hand inventory (excluding war reserves) of that item of supply in excess of two years of operating stocks.

(b) Exceptions.—The head of a procuring activity may authorize the acquisition of an item of supply in excess of the limitation contained in subsection (a) if that activity head determines in writing—

(1) that the acquisition is necessary to achieve an economical order quantity and will not result in an on-hand inventory (excluding war reserves) in excess of three years of operating stocks and that the need for the item is unlikely to decline during the period for which the acquisition is made; or

(2) that the acquisition is necessary for purposes of maintaining the industrial base or for other reasons of national security.

(Added Pub. L. 102–190, div. A, title III, §317(a), Dec. 5, 1991, 105 Stat. 1338.)

Prior Provisions

A prior section 2213 was renumbered section 2350c of this title.

§2214. Transfer of funds: procedure and limitations

(a) Procedure for Transfer of Funds.—Whenever authority is provided in an appropriation Act to transfer amounts in working capital funds or to transfer amounts provided in appropriation Acts for military functions of the Department of Defense (other than military construction) between such funds or appropriations (or any subdivision thereof), amounts transferred under such authority shall be merged with and be available for the same purposes and for the same time period as the fund or appropriations to which transferred.

(b) Limitations on Programs for Which Authority May Be Used.—Such authority to transfer amounts—

(1) may not be used except to provide funds for a higher priority item, based on unforeseen military requirements, than the items for which the funds were originally appropriated; and

(2) may not be used if the item to which the funds would be transferred is an item for which Congress has denied funds.


(c) Notice to Congress.—The Secretary of Defense shall promptly notify the Congress of each transfer made under such authority to transfer amounts.

(d) Limitations on Requests to Congress for Reprogrammings.—Neither the Secretary of Defense nor the Secretary of a military department may prepare or present to the Congress, or to any committee of either House of the Congress, a request with respect to a reprogramming of funds—

(1) unless the funds to be transferred are to be used for a higher priority item, based on unforeseen military requirements, than the item for which the funds were originally appropriated; or

(2) if the request would be for authority to reprogram amounts to an item for which the Congress has denied funds.

(Added Pub. L. 101–510, div. A, title XIV, §1482(c)(1), Nov. 5, 1990, 104 Stat. 1709.)

Effective Date

Section effective Oct. 1, 1991, see section 1482(d) of Pub. L. 101–510, set out as an Effective Date of 1990 Amendment note under section 119 of this title.

§2215. Transfer of funds to other departments and agencies: limitation

Funds available for military functions of the Department of Defense may not be made available to any other department or agency of the Federal Government pursuant to a provision of law enacted after November 29, 1989, unless, not less than 30 days before such funds are made available to such other department or agency, the Secretary of Defense submits to the congressional defense committees a certification that making those funds available to such other department or agency is in the national security interest of the United States.

(Added Pub. L. 103–160, div. A, title XI, §1106(a)(1), Nov. 30, 1993, 107 Stat. 1750; amended Pub. L. 104–106, div. A, title XV, §1502(a)(14), Feb. 10, 1996, 110 Stat. 503; Pub. L. 106–65, div. A, title X, §1067(1), Oct. 5, 1999, 113 Stat. 774; Pub. L. 108–375, div. A, title X, §1084(b)(1), Oct. 28, 2004, 118 Stat. 2060.)

Prior Provisions

A prior section 2215, added Pub. L. 99–661, div. A, title XIII, §1307(a)(1), Nov. 14, 1986, 100 Stat. 3980, related to reports on unobligated balances, prior to repeal by Pub. L. 101–510, div. A, title XIII, §1301(7), Nov. 5, 1990, 104 Stat. 1668.

Provisions similar to those in this section were contained in Pub. L. 101–189, div. A, title XVI, §1604, Nov. 29, 1989, 103 Stat. 1598, which was set out as a note under section 1531 of Title 31, Money and Finance, prior to repeal by Pub. L. 103–160, §1106(b).

Amendments

2004—Pub. L. 108–375 struck out subsec. (a) designation and heading before “Funds available”, substituted “congressional defense committees” for “congressional committees specified in subsection (b)”, and struck out heading and text of subsec. (b). Text of subsec. (b) read as follows: “The committees referred to in subsection (a) are—

“(1) the Committee on Armed Services and the Committee on Appropriations of the Senate; and

“(2) the Committee on Armed Services and the Committee on Appropriations of the House of Representatives.”

1999—Subsec. (b)(2). Pub. L. 106–65 substituted “Committee on Armed Services” for “Committee on National Security”.

1996—Pub. L. 104–106 designated existing provisions as subsec. (a), inserted heading, substituted “to the congressional committees specified in subsection (b)” for “to the Committees on Armed Services and the Committees on Appropriations of the Senate and House of Representatives”, and added subsec. (b).

§2216. Defense Modernization Account

(a) Establishment.—There is established in the Treasury an account to be known as the “Defense Modernization Account”.

(b) Funds Available for Account.—The Defense Modernization Account shall consist of the following:

(1) Amounts appropriated to the Defense Modernization Account for the costs of commencing projects described in subsection (d)(1), and amounts reimbursed to the Defense Modernization Account under subsection (c)(1)(B)(iii) out of savings derived from such projects.

(2) Amounts transferred to the Defense Modernization Account under subsection (c).


(c) Transfers to Account.—(1)(A) Upon a determination by the Secretary of a military department or the Secretary of Defense with respect to Defense-wide appropriations accounts of the availability and source of funds described in subparagraph (B), that Secretary may transfer to the Defense Modernization Account during any fiscal year any amount of funds available to the Secretary described in that subparagraph. Such funds may be transferred to that account only after the Secretary concerned notifies the congressional defense committees in writing of the amount and source of the proposed transfer.

(B) This subsection applies to the following funds available to the Secretary concerned:

(i) Unexpired funds in appropriations accounts that are available for procurement and that, as a result of economies, efficiencies, and other savings achieved in carrying out a particular procurement, are excess to the requirements of that procurement.

(ii) Unexpired funds that are available during the final 30 days of a fiscal year for support of installations and facilities and that, as a result of economies, efficiencies, and other savings, are excess to the requirements for support of installations and facilities.

(iii) Unexpired funds in appropriations accounts that are available for procurement or operation and maintenance of a system, if and to the extent that savings are achieved for such accounts through reductions in life cycle costs of such system that result from one or more projects undertaken with respect to such systems with funds made available from the Defense Modernization Account under subsection (b)(1).


(C) Any transfer under subparagraph (A) shall be made under regulations prescribed by the Secretary of Defense.

(2) Funds referred to in paragraph (1), other than funds referred to in subparagraph (B)(iii) of such paragraph, may not be transferred to the Defense Modernization Account if—

(A) the funds are necessary for programs, projects, and activities that, as determined by the Secretary, have a higher priority than the purposes for which the funds would be available if transferred to that account; or

(B) the balance of funds in the account, after transfer of funds to the account, would exceed $1,000,000,000.


(3) Amounts credited to the Defense Modernization Account shall remain available for transfer until the end of the third fiscal year that follows the fiscal year in which the amounts are credited to the account.

(4) The period of availability of funds for expenditure provided for in sections 1551 and 1552 of title 31 may not be extended by transfer into the Defense Modernization Account.

(d) Authorized Use of Funds.—Funds in the Defense Modernization Account may be used for the following purposes:

(1) For paying the costs of commencing any project that, in accordance with criteria prescribed by the Secretary of Defense, is undertaken by the Secretary of a military department or the head of a Defense Agency or other element of the Department of Defense to reduce the life cycle cost of a new or existing system.

(2) For increasing, subject to subsection (e), the quantity of items and services procured under a procurement program in order to achieve a more efficient production or delivery rate.

(3) For research, development, test, and evaluation and for procurement necessary for modernization of an existing system or of a system being procured under an ongoing procurement program.


(e) Limitations.—(1) Funds in the Defense Modernization Account may not be used to increase the quantity of an item or services procured under a particular procurement program to the extent that doing so would—

(A) result in procurement of a total quantity of items or services in excess of—

(i) a specific limitation provided by law on the quantity of the items or services that may be procured; or

(ii) the requirement for the items or services as approved by the Joint Requirements Oversight Council and reported to Congress by the Secretary of Defense; or


(B) result in an obligation or expenditure of funds in excess of a specific limitation provided by law on the amount that may be obligated or expended, respectively, for that procurement program.


(2) Funds in the Defense Modernization Account may not be used for a purpose or program for which Congress has not authorized appropriations.

(3) Funds may not be transferred from the Defense Modernization Account in any year for the purpose of—

(A) making an expenditure for which there is no corresponding obligation; or

(B) making an expenditure that would satisfy an unliquidated or unrecorded obligation arising in a prior fiscal year.


(f) Transfer of Funds.—(1) The Secretary of Defense may transfer funds in the Defense Modernization Account to appropriations available for purposes set forth in subsection (d).

(2) Funds in the Defense Modernization Account may not be transferred under paragraph (1) until 30 days after the date on which the Secretary concerned notifies the congressional defense committees in writing of the amount and purpose of the proposed transfer.

(3) The total amount of transfers from the Defense Modernization Account during any fiscal year under this subsection may not exceed $500,000,000.

(g) Availability of Funds by Appropriation.—In addition to transfers under subsection (f), funds in the Defense Modernization Account may be made available for purposes set forth in subsection (d) in accordance with the provisions of appropriations Acts, but only to the extent authorized in an Act other than an appropriations Act.

(h) Secretary To Act Through Comptroller.—(1) The Secretary of Defense shall carry out this section through the Under Secretary of Defense (Comptroller), who shall be authorized to implement this section through the issuance of any necessary regulations, policies, and procedures after consultation with the General Counsel and Inspector General of the Department of Defense.

(2) The regulations prescribed under paragraph (1) shall, at a minimum, provide for—

(A) the submission of proposals by the Secretaries concerned or heads of Defense Agencies or other elements of the Department of Defense to the Comptroller for the use of Defense Modernization Account funds for purposes set forth in subsection (d);

(B) the use of a competitive process for the evaluation of such proposals and the selection of programs, projects, and activities to be funded out of the Defense Modernization Account from among those proposed for such funding; and

(C) the calculation of—

(i) the savings to be derived from projects described in subsection (d)(1) that are to be funded out of the Defense Modernization Account; and

(ii) the amounts to be reimbursed to the Defense Modernization Account out of such savings pursuant to subsection (c)(1)(B)(iii).


(i) Annual Report.—(1) Not later than 15 days after the end of each fiscal year, the Secretary of Defense shall submit to the congressional committees specified in paragraph (2) a report on the Defense Modernization Account. Each such report shall set forth the following:

(A) The amount and source of each credit to the account during that fiscal year.

(B) The amount and purpose of each transfer from the account during that fiscal year.

(C) The balance in the account at the end of the fiscal year and, of such balance, the amount attributable to transfers to the account from each Secretary concerned.


(2) The committees referred to in paragraph (1) are the congressional defense committees and the Committee on Governmental Affairs of the Senate and the Committee on Government Reform and Oversight of the House of Representatives.

(j) Definitions.—In this section:

(1) The term “Secretary concerned” includes the Secretary of Defense with respect to Defense-wide appropriations accounts.

(2) The term “unexpired funds” means funds appropriated for a definite period that remain available for obligation.


(k) Expiration of Authority and Account.—(1) The authority under subsection (c) to transfer funds into the Defense Modernization Account terminates at the close of September 30, 2006.

(2) Three years after the termination date specified in paragraph (1), the Defense Modernization Account shall be closed and any remaining balance in the account shall be canceled and thereafter shall not be available for any purpose.

(Added Pub. L. 104–106, div. A, title IX, §912(a)(1), Feb. 10, 1996, 110 Stat. 407; amended Pub. L. 106–65, div. A, title X, §1067(1), Oct. 5, 1999, 113 Stat. 774; Pub. L. 108–136, div. A, title X, §§1008(a)–(f)(1), 1043(b)(8), Nov. 24, 2003, 117 Stat. 1586, 1587, 1611; Pub. L. 109–364, div. A, title X, §1071(a)(16), Oct. 17, 2006, 120 Stat. 2399.)

Codification

Another section 2216 was renumbered section 2216a of this title and subsequently repealed.

Prior Provisions

A prior section 2216, added Pub. L. 99–661, div. A, title XIII, §1307(a)(1), Nov. 14, 1986, 100 Stat. 3980, related to annual reports on budgeting for inflation, prior to repeal by Pub. L. 101–510, div. A, title XIII, §1301(8), Nov. 5, 1990, 104 Stat. 1668.

Amendments

2006—Subsec. (b)(1). Pub. L. 109–364 substituted “subsection (c)(1)(B)(iii)” for “subsections (c)(1)(B)(iii)”.

2003—Subsec. (b). Pub. L. 108–136, §1008(a)(3), added subsec. (b). Former subsec. (b) redesignated (c).

Subsec. (c). Pub. L. 108–136, §1008(a)(1), (2), redesignated subsec. (b) as (c) and struck out heading and text of former subsec. (c). Text read as follows: “Funds transferred to the Defense Modernization Account from funds appropriated for a military department, Defense Agency, or other element of the Department of Defense shall be available in accordance with subsections (f) and (g) only for transfer to funds available for that military department, Defense Agency, or other element.”

Subsec. (c)(1)(B)(iii). Pub. L. 108–136, §1008(c)(1), added cl. (iii).

Subsec. (c)(2). Pub. L. 108–136, §1008(c)(2), inserted “, other than funds referred to in subparagraph (B)(iii) of such paragraph,” after “Funds referred to in paragraph (1)”.

Subsec. (d). Pub. L. 108–136, §1008(b), substituted “in the Defense Modernization Account” for “available from the Defense Modernization Account pursuant to subsection (f) or (g)” in introductory provisions, added par. (1), and redesignated former pars. (1) and (2) as (2) and (3), respectively.

Subsec. (h). Pub. L. 108–136, §1008(d), designated existing provisions as par. (1) and added par. (2).

Subsec. (i). Pub. L. 108–136, §1008(e)(1), substituted “Annual Report” for “Quarterly Reports” in heading.

Subsec. (i)(1). Pub. L. 108–136, §1008(e)(1), (2), substituted “fiscal year” for “calendar quarter” in introductory provisions and “fiscal year” for “quarter” in subpars. (A) to (C).

Subsec. (j)(3). Pub. L. 108–136, §1043(b)(8), struck out par. (3) which read as follows: “The term ‘congressional defense committees’ means—

“(A) the Committee on Armed Services and the Committee on Appropriations of the Senate; and

“(B) the Committee on Armed Services and the Committee on Appropriations of the House of Representatives.”

Subsec. (k). Pub. L. 108–136, §1008(f)(1), added subsec. (k).

1999—Subsec. (j)(3)(B). Pub. L. 106–65 substituted “Committee on Armed Services” for “Committee on National Security”.

Change of Name

Committee on Governmental Affairs of Senate changed to Committee on Homeland Security and Governmental Affairs of Senate, effective Jan. 4, 2005, by Senate Resolution No. 445, One Hundred Eighth Congress, Oct. 9, 2004.

Committee on Government Reform and Oversight of House of Representatives changed to Committee on Government Reform of House of Representatives by House Resolution No. 5, One Hundred Sixth Congress, Jan. 6, 1999.

Effective Date

Section 912(b) of Pub. L. 104–106 provided that: “Section 2216 of title 10, United States Code (as added by subsection (a)), shall apply only to funds appropriated for fiscal years after fiscal year 1995.”

Expiration of Authority and Account

Pub. L. 104–106, div. A, title IX, §912(c), Feb. 10, 1996, 110 Stat. 410, as amended by Pub. L. 107–314, div. A, title VIII, §825(a)(1), Dec. 2, 2002, 116 Stat. 2615, provided that authority under section 2216(b) of this title to transfer funds into Defense Modernization Account terminated at close of Sept. 30, 2002, and the Account was to be closed three years later, prior to repeal by Pub. L. 108–136, div. A, title X, §1008(f)(2), Nov. 24, 2003, 117 Stat. 1587.

GAO Reviews

Pub. L. 104–106, div. A, title IX, §912(d), Feb. 10, 1996, 110 Stat. 410, required Comptroller General of the United States to conduct two reviews of the administration of the Defense Modernization Account, prior to repeal by Pub. L. 107–314, div. A, title VIII, §825(a)(2), Dec. 2, 2002, 116 Stat. 2615.

§2216a

[§2216a. Repealed. Pub. L. 105–261, div. A, title X, §1008(b), Oct. 17, 1998, 112 Stat. 2117]

Section, added Pub. L. 104–106, div. A, title III, §371(a)(1), Feb. 10, 1996, 110 Stat. 277, §2216; renumbered §2216a and amended Pub. L. 104–201, div. A, title III, §§363(c), 364, title X, §1074(a)(10), Sept. 23, 1996, 110 Stat. 2493, 2494, 2659, related to Defense Business Operations Fund.

§2217. Comparable budgeting for common procurement weapon systems

(a) Matters To Be Included in Annual Defense Budgets.—In preparing the defense budget for any fiscal year, the Secretary of Defense shall—

(1) specifically identify each common procurement weapon system included in the budget;

(2) take all feasible steps to minimize variations in procurement unit costs for any such system as shown in the budget requests of the different armed forces requesting procurement funds for the system; and

(3) identify and justify in the budget all such variations in procurement unit costs for common procurement weapon systems.


(b) Comptroller.—The Secretary shall carry out this section through the Under Secretary of Defense (Comptroller).

(c) Definitions.—In this section:

(1) The term “defense budget” means the budget of the Department of Defense included in the President's budget submitted to Congress under section 1105 of title 31 for a fiscal year.

(2) The term “common procurement weapon system” means a weapon system for which two or more of the Army, Navy, Air Force, and Marine Corps request procurement funds in a defense budget.

(Added Pub. L. 100–370, §1(d)(3)(A), July 19, 1988, 102 Stat. 843; amended Pub. L. 104–106, div. A, title XV, §1503(a)(20), Feb. 10, 1996, 110 Stat. 512.)

Historical and Revision Notes

Section is based on Pub. L. 99–500, §101(c) [title X, §955], Oct. 18, 1986, 100 Stat. 1783–82, 1783–173, and Pub. L. 99–591, §101(c) [title X, §955], Oct. 30, 1986, 100 Stat. 3341–82, 3341–173; Pub. L. 99–661, div. A, title IX, formerly title IV, §955, Nov. 14, 1986, 100 Stat. 3953, renumbered title IX, Pub. L. 100–26, §3(5), Apr. 21, 1987, 101 Stat. 273.

Amendments

1996—Subsec. (b). Pub. L. 104–106 substituted “Under Secretary of Defense (Comptroller)” for “Comptroller of the Department of Defense”.

§2218. National Defense Sealift Fund

(a) Establishment.—There is established in the Treasury of the United States a fund to be known as the “National Defense Sealift Fund”.

(b) Administration of Fund.—The Secretary of Defense shall administer the Fund consistent with the provisions of this section.

(c) Fund Purposes.—(1) Funds in the National Defense Sealift Fund shall be available for obligation and expenditure only for the following purposes:

(A) Construction (including design of vessels), purchase, alteration, and conversion of Department of Defense sealift vessels.

(B) Operation, maintenance, and lease or charter of Department of Defense vessels for national defense purposes.

(C) Installation and maintenance of defense features for national defense purposes on privately owned and operated vessels that are constructed in the United States and documented under the laws of the United States.

(D) Research and development relating to national defense sealift.

(E) Expenses for maintaining the National Defense Reserve Fleet under section 11 of the Merchant Ship Sales Act of 1946 (50 U.S.C. App. 1744), and for the costs of acquisition of vessels for, and alteration and conversion of vessels in (or to be placed in), the fleet, but only for vessels built in United States shipyards.


(2) Funds in the National Defense Sealift Fund may be obligated or expended only in amounts authorized by law.

(3) Funds obligated and expended for a purpose set forth in subparagraph (B) or (D) of paragraph (1) may be derived only from funds deposited in the National Defense Sealift Fund pursuant to subsection (d)(1).

(d) Deposits.—There shall be deposited in the Fund the following:

(1) All funds appropriated to the Department of Defense for—

(A) construction (including design of vessels), purchase, alteration, and conversion of national defense sealift vessels;

(B) operations, maintenance, and lease or charter of national defense sealift vessels;

(C) installation and maintenance of defense features for national defense purposes on privately owned and operated vessels; and

(D) research and development relating to national defense sealift.


(2) All receipts from the disposition of national defense sealift vessels, excluding receipts from the sale, exchange, or scrapping of National Defense Reserve Fleet vessels under sections 57101–57104 and chapter 573 of title 46.

(3) All receipts from the charter of vessels under section 1424(c) of the National Defense Authorization Act for Fiscal Year 1991 (10 U.S.C. 7291 note).


(e) Acceptance of Support.—(1) The Secretary of Defense may accept from any person, foreign government, or international organization any contribution of money, personal property (excluding vessels), or assistance in kind for support of the sealift functions of the Department of Defense.

(2) Any contribution of property accepted under paragraph (1) may be retained and used by the Department of Defense or disposed of in accordance with procedures prescribed by the Secretary of Defense.

(3) The Secretary of Defense shall deposit in the Fund money and receipts from the disposition of any property accepted under paragraph (1).

(f) Limitations.—(1) A vessel built in a foreign ship yard may not be purchased with funds in the National Defense Sealift Fund pursuant to subsection (c)(1), unless specifically authorized by law.

(2) Construction, alteration, or conversion of vessels with funds in the National Defense Sealift Fund pursuant to subsection (c)(1) shall be conducted in United States ship yards and shall be subject to section 1424(b) of Public Law 101–510 (104 Stat. 1683).

(g) Expiration of Funds After 5 Years.—No part of an appropriation that is deposited in the National Defense Sealift Fund pursuant to subsection (d)(1) shall remain available for obligation more than five years after the end of fiscal year for which appropriated except to the extent specifically provided by law.

(h) Budget Requests.—Budget requests submitted to Congress for the National Defense Sealift Fund shall separately identify—

(1) the amount requested for programs, projects, and activities for construction (including design of vessels), purchase, alteration, and conversion of national defense sealift vessels;

(2) the amount requested for programs, projects, and activities for operation, maintenance, and lease or charter of national defense sealift vessels;

(3) the amount requested for programs, projects, and activities for installation and maintenance of defense features for national defense purposes on privately owned and operated vessels that are constructed in the United States and documented under the laws of the United States; and

(4) the amount requested for programs, projects, and activities for research and development relating to national defense sealift.


(i) Title or Management of Vessels.—Nothing in this section (other than subsection (c)(1)(E)) shall be construed to affect or modify title to, management of, or funding responsibilities for, any vessel of the National Defense Reserve Fleet, or assigned to the Ready Reserve Force component of the National Defense Reserve Fleet, as established by section 11 of the Merchant Ship Sales Act of 1946 (50 U.S.C. App. 1744).

(j) Authority for Certain Use of Funds.—Upon a determination by the Secretary of Defense that such action serves the national defense interest and after consultation with the congressional defense committees, the Secretary may use funds available for obligation or expenditure for a purpose specified under subsection (c)(1)(A), (B), (C), and (D) for any purpose under subsection (c)(1).

(k) Contracts for Incorporation of Defense Features in Commercial Vessels.—(1) The head of an agency may enter into a contract with a company submitting an offer for that company to install and maintain defense features for national defense purposes in one or more commercial vessels owned or controlled by that company in accordance with the purpose for which funds in the National Defense Sealift Fund are available under subsection (c)(1)(C). The head of the agency may enter into such a contract only after the head of the agency makes a determination of the economic soundness of the offer. As consideration for a contract with the head of an agency under this subsection, the company entering into the contract shall agree with the Secretary of Defense to make any vessel covered by the contract available to the Secretary, fully crewed and ready for sea, at any time at any port determined by the Secretary, and for whatever duration the Secretary determines necessary.

(2) The head of an agency may make advance payments to the contractor under a contract under paragraph (1) in a lump sum, in annual payments, or in a combination thereof for costs associated with the installation and maintenance of the defense features on a vessel covered by the contract, as follows:

(A) The costs to build, procure, and install a defense feature in the vessel.

(B) The costs to periodically maintain and test any defense feature on the vessel.

(C) Any increased costs of operation or any loss of revenue attributable to the installation or maintenance of any defense feature on the vessel.

(D) Any additional costs associated with the terms and conditions of the contract.

(E) Payments of such sums as the Government would otherwise expend, if the vessel were placed in the Ready Reserve Fleet, for maintaining the vessel in the status designated as “ROS–4 status” in the Ready Reserve Fleet for 25 years.


(3) For any contract under paragraph (1) under which the United States makes advance payments under paragraph (2) for the costs associated with installation or maintenance of any defense feature on a commercial vessel, the contractor shall provide to the United States such security interests in the vessel, by way of a preferred mortgage under section 31322 of title 46 or otherwise, as the head of the agency may prescribe in order to adequately protect the United States against loss for the total amount of those costs.

(4) Each contract entered into under this subsection shall—

(A) set forth terms and conditions under which, so long as a vessel covered by the contract is owned or controlled by the contractor, the contractor is to operate the vessel for the Department of Defense notwithstanding any other contract or commitment of that contractor; and

(B) provide that the contractor operating the vessel for the Department of Defense shall be paid for that operation at fair and reasonable rates.


(5) The head of an agency may not delegate authority under this subsection to any officer or employee in a position below the level of head of a procuring activity.

(6) The head of an agency may not enter into a contract under paragraph (1) that would provide for payments to the contractor as authorized in paragraph (2)(E) until notice of the proposed contract is submitted to the congressional defense committees and a period of 90 days has elapsed.

(l) Definitions.—In this section:

(1) The term “Fund” means the National Defense Sealift Fund established by subsection (a).

(2) The term “Department of Defense sealift vessel” means any ship owned, operated, controlled, or chartered by the Department of Defense that is any of the following:

(A) A fast sealift ship, including any vessel in the Fast Sealift Program established under section 1424 of Public Law 101–510 (104 Stat. 1683).

(B) A maritime prepositioning ship.

(C) An afloat prepositioning ship.

(D) An aviation maintenance support ship.

(E) A hospital ship.

(F) A strategic sealift ship.

(G) A combat logistics force ship.

(H) A maritime prepositioned ship.

(I) Any other auxiliary support vessel.


(3) The term “national defense sealift vessel” means—

(A) a Department of Defense sealift vessel; and

(B) a national defense reserve fleet vessel, including a vessel in the Ready Reserve Force maintained under section 11 of the Merchant Ship Sales Act of 1946 (50 U.S.C. App. 1744).


(4) The term “head of an agency” has the meaning given that term in section 2302(1) of this title.

(Added Pub. L. 102–484, div. A, title X, §1024(a)(1), Oct. 23, 1992, 106 Stat. 2486; amended Pub. L. 102–396, title V, Oct. 6, 1992, 106 Stat. 1896; Pub. L. 104–106, div. A, title X, §1014(a), title XV, §1502(a)(15), Feb. 10, 1996, 110 Stat. 423, 503; Pub. L. 106–65, div. A, title X, §§1014(b), 1015, 1067(1), Oct. 5, 1999, 113 Stat. 742, 743, 774; Pub. L. 106–398, §1 [[div. A], title X, §1011], Oct. 30, 2000, 114 Stat. 1654, 1654A–251; Pub. L. 107–107, div. A, title X, §1048(e)(9), Dec. 28, 2001, 115 Stat. 1228; Pub. L. 108–136, div. A, title X, §1043(b)(9), Nov. 24, 2003, 117 Stat. 1611; Pub. L. 109–163, div. A, title X, §1018(d), Jan. 6, 2006, 119 Stat. 3426; Pub. L. 109–304, §17(a)(2), Oct. 6, 2006, 120 Stat. 1706.)

References in Text

Section 1424 of Public Law 101–510, referred to in subsecs. (d)(3), (f)(2), and (l)(2)(A), is section 1424 of the National Defense Authorization Act for Fiscal Year 1991 which is set out as a note under section 7291 of this title.

Codification

Pub. L. 102–396, title V, Oct. 6, 1992, 106 Stat. 1896, provided that section 1024 of the National Defense Authorization Act for Fiscal Year 1993 [H.R. 5006, Pub. L. 102–484], as it passed the Senate on Oct. 3, 1992, shall be amended in subsection 2218(c)(2) proposed for inclusion in this chapter by deleting all after “expended only” down to and including “appropriations Act” and inserting in lieu thereof “in amounts authorized by law”. It further provided that for purposes of that amendment, Pub. L. 102–396 shall be treated as having been enacted after Pub. L. 102–484, regardless of the actual dates of enactment. The date of Oct. 3, 1992, referred to as the date the Senate passed the National Defense Authorization Act for Fiscal Year 1993, apparently is based on an order adopted by the Senate on Oct. 3, 1992 [Cong. Rec., vol. 138, p. 30919] providing that when the conference report on the National Defense Authorization Act for Fiscal Year 1993 was received by the Senate from the House of Representatives it would be deemed to have been agreed to. On Oct. 5, 1992, the Senate received the conference report from the House, and it was considered adopted pursuant to that order [Cong. Rec., vol. 138, p. 31565].

Amendments

2006—Subsec. (d)(2). Pub. L. 109–304 substituted “sections 57101–57104 and chapter 573 of title 46” for “sections 508 and 510 of the Merchant Marine Act of 1936 (46 U.S.C. App. 1158, 1160), shall be deposited in the Fund”.

Subsec. (f)(1). Pub. L. 109–163 substituted “A vessel built in a foreign ship yard may not be” for “Not more than a total of five vessels built in foreign ship yards may be” and inserted “, unless specifically authorized by law” before period at end.

2003—Subsec. (l)(4), (5). Pub. L. 108–136 redesignated par. (5) as (4) and struck out former par. (4) which read as follows: “The term ‘congressional defense committees’ means—

“(A) the Committee on Armed Services and the Committee on Appropriations of the Senate; and

“(B) the Committee on Armed Services and the Committee on Appropriations of the House of Representatives.”

2001—Subsec. (d)(1). Pub. L. 107–107 struck out “for fiscal years after fiscal year 1993” after “Department of Defense” in introductory provisions.

2000—Subsec. (k)(1). Pub. L. 106–398, §1 [[div. A], title X, §1011(1)], inserted at end “As consideration for a contract with the head of an agency under this subsection, the company entering into the contract shall agree with the Secretary of Defense to make any vessel covered by the contract available to the Secretary, fully crewed and ready for sea, at any time at any port determined by the Secretary, and for whatever duration the Secretary determines necessary.”

Subsec. (k)(2)(E). Pub. L. 106–398, §1 [[div. A], title X, §1011(2)], added subpar. (E).

Subsec. (k)(6). Pub. L. 106–398, §1 [[div. A], title X, §1011(3)], added par. (6).

1999—Subsec. (k). Pub. L. 106–65, §1015(a)(2), added subsec. (k). Former subsec. (k) redesignated (l).

Subsec. (k)(2). Pub. L. 106–65, §1014(b), substituted “that is any of the following:” for “that is—” in introductory provisions, substituted “A” for “a” and a period for the semicolon in subpars. (A) and (B), “An” for “an” and a period for the semicolon in subpar. (C), “An” for “an” and a period for “; or” in subpar. (D), and “A” for “a” in subpar. (E), and added subpars. (F) to (I).

Subsec. (l). Pub. L. 106–65, §1015(a)(1), redesignated subsec. (k) as (l).

Subsec. (l)(4)(B). Pub. L. 106–65, §1067(1), substituted “Committee on Armed Services” for “Committee on National Security”.

Subsec. (l)(5). Pub. L. 106–65, §1015(b), added par. (5).

1996—Subsec. (c)(1). Pub. L. 104–106, §1014(a)(1)(A), substituted “only for the following purposes:” for “only for—”.

Subsec. (c)(1)(A). Pub. L. 104–106, §1014(a)(1)(B), (C), substituted “Construction” for “construction” and “vessels.” for “vessels;”.

Subsec. (c)(1)(B). Pub. L. 104–106, §1014(a)(1)(B), (C), substituted “Operation” for “operation” and “purposes.” for “purposes;”.

Subsec. (c)(1)(C). Pub. L. 104–106, §1014(a)(1)(B), (D), substituted “Installation” for “installation” and “States.” for “States; and”.

Subsec. (c)(1)(D). Pub. L. 104–106, §1014(a)(1)(B), substituted “Research” for “research”.

Subsec. (c)(1)(E). Pub. L. 104–106, §1014(a)(1)(E), added subpar. (E).

Subsec. (i). Pub. L. 104–106, §1014(a)(2), inserted “(other than subsection (c)(1)(E))” after “Nothing in this section”.

Subsec. (j). Pub. L. 104–106, §1502(a)(15)(A), substituted “the congressional defense committees” for “the Committees on Armed Services and on Appropriations of the Senate and the House of Representatives”.

Subsec. (k)(4). Pub. L. 104–106, §1502(a)(15)(B), added par. (4).

1992—Subsec. (c)(2). Pub. L. 102–396 substituted “in amounts authorized by law” for “for programs, projects, and activities and only in amounts authorized in, or otherwise permitted under, an Act other than an appropriations Act”. See Codification note above.

[§2219. Renumbered §2491c]

§2220. Performance based management: acquisition programs

(a) Establishment of Goals.—The Secretary of Defense shall approve or define the cost, performance, and schedule goals for major defense acquisition programs of the Department of Defense and for each phase of the acquisition cycle of such programs.

(b) Evaluation of Cost Goals.—The Under Secretary of Defense (Comptroller) shall evaluate the cost goals proposed for each major defense acquisition program of the Department.

(Added Pub. L. 103–355, title V, §5001(a)(1), Oct. 13, 1994, 108 Stat. 3349; amended Pub. L. 104–106, div. A, title XV, §1503(a)(20), div. D, title XLIII, §4321(b)(1), Feb. 10, 1996, 110 Stat. 512, 671; Pub. L. 105–85, div. A, title VIII, §841(a), Nov. 18, 1997, 111 Stat. 1843; Pub. L. 107–314, div. A, title X, §1041(a)(8), Dec. 2, 2002, 116 Stat. 2645.)

Amendments

2002—Subsec. (a). Pub. L. 107–314, §1041(a)(8)(B), (C), struck out par. (1) designation and redesignated par. (2) as subsec. (b).

Subsec. (b). Pub. L. 107–314, §1041(a)(8)(A), (C), redesignated subsec. (a)(2) as (b) and struck out heading and text of former subsec. (b). Text read as follows: “The Secretary of Defense shall include in the annual report submitted to Congress pursuant to section 113(c) of this title an assessment of whether major acquisition programs of the Department of Defense are achieving, on average, 90 percent of cost, performance, and schedule goals established pursuant to subsection (a) and whether the average period for converting emerging technology into operational capability has decreased by 50 percent or more from the average period required for such conversion as of October 13, 1994. The Secretary shall use data from existing management systems in making the assessment.”

Subsec. (c). Pub. L. 107–314, §1041(a)(8)(A), struck out heading and text of subsec. (c). Text read as follows: “Whenever the Secretary of Defense, in the assessment required by subsection (b), determines that major defense acquisition programs of the Department of Defense are not achieving, on average, 90 percent of cost, performance, and schedule goals established pursuant to subsection (a), the Secretary shall ensure that there is a timely review of major defense acquisition programs and other programs as appropriate. In conducting the review, the Secretary shall—

“(1) determine whether there is a continuing need for programs that are significantly behind schedule, over budget, or not in compliance with performance or capability requirements; and

“(2) identify suitable actions to be taken, including termination, with respect to such programs.”

1997—Subsec. (b). Pub. L. 105–85 substituted “whether major acquisition programs” for “whether major and nonmajor acquisition programs”.

1996—Subsec. (a)(2). Pub. L. 104–106, §1503(a)(20), substituted “Under Secretary of Defense (Comptroller)” for “Comptroller of the Department of Defense”.

Subsec. (b). Pub. L. 104–106, §4321(b)(1), substituted “October 13, 1994” for “the date of the enactment of the Federal Acquisition Streamlining Act of 1994”.

Effective Date of 1996 Amendment

For effective date and applicability of amendment by section 4321(b)(1) of Pub. L. 104–106, see section 4401 of Pub. L. 104–106, set out as a note under section 251 of Title 41, Public Contracts.

Pilot Programs for Testing Program Manager Performance of Product Support Oversight Responsibilities for Life Cycle of Acquisition Programs

Pub. L. 105–261, div. A, title VIII, §816, Oct. 17, 1998, 112 Stat. 2088, provided that:

“(a) Designation of Pilot Programs.—The Secretary of Defense, acting through the Secretaries of the military departments, shall designate 10 acquisition programs of the military departments as pilot programs on program manager responsibility for product support.

“(b) Responsibilities of Program Managers.—The program manager for each acquisition program designated as a pilot program under this section shall have the responsibility for ensuring that the product support functions for the program are properly carried out over the entire life cycle of the program.

“(c) Report.—Not later than February 1, 1999, the Secretary of Defense shall submit to the congressional defense committees [Committees on Armed Services and Appropriations of Senate and House of Representatives] a report on the pilot programs. The report shall contain the following:

“(1) A description of the acquisition programs designated as pilot programs under subsection (a).

“(2) For each such acquisition program, the specific management actions taken to ensure that the program manager has the responsibility for oversight of the performance of the product support functions.

“(3) Any proposed change to law, policy, regulation, or organization that the Secretary considers desirable, and determines feasible to implement, for ensuring that the program managers are fully responsible under the pilot programs for the performance of all such responsibilities.”

Enhanced System of Performance Incentives

Pub. L. 103–355, title V, §5001(b), Oct. 13, 1994, 108 Stat. 3350, provided that: “Within one year after the date of the enactment of this Act [Oct. 13, 1994], the Secretary of Defense shall review the incentives and personnel actions available to the Secretary of Defense for encouraging excellence in the management of defense acquisition programs and provide an enhanced system of incentives to facilitate the achievement of goals approved or defined pursuant to section 2220(a) of title 10, United States Code. The enhanced system of incentives shall, to the maximum extent consistent with applicable law—

“(1) relate pay to performance (including the extent to which the performance of personnel in such programs contributes to achieving the cost goals, performance goals, and schedule goals established for acquisition programs of the Department of Defense pursuant to section 2220(a) of title 10, as added by subsection (a)); and

“(2) provide for consideration, in personnel evaluations and promotion decisions, of the extent to which the performance of personnel in such programs contributes to achieving the cost goals, performance goals, and schedule goals established for acquisition programs of the Department of Defense pursuant to section 2220(a) of title 10, United States Code, as added by subsection (a).”

Recommended Legislation

Pub. L. 103–355, title V, §5001(c), Oct. 13, 1994, 108 Stat. 3350, directed the Secretary of Defense, not later than one year after Oct 13, 1994, to submit to Congress any recommended legislation that the Secretary considered necessary to carry out this section and otherwise to facilitate and enhance management of Department of Defense acquisition programs on the basis of performance.

§2221

[§2221. Repealed. Pub. L. 105–261, div. A, title IX, §906(f)(1), Oct. 17, 1998, 112 Stat. 2096]

Section, added Pub. L. 104–106, div. A, title IX, §914(a)(1), Feb. 10, 1996, 110 Stat. 412; amended Pub. L. 104–201, div. A, title X, §1008(a), Sept. 23, 1996, 110 Stat. 2633; Pub. L. 105–85, div. A, title X, §1006(a), Nov. 18, 1997, 111 Stat. 1869; Pub. L. 105–261, div. A, title X, §1069(b)(2), Oct. 17, 1998, 112 Stat. 2136, related to Fisher House trust funds. See section 2493 of this title.

Effective Date of Repeal

Repeal effective 90 days after Oct. 17, 1998, see section 906(f)(3) of Pub. L. 105–261, set out as an Effective Date of 1998 Amendment note under section 1321 of Title 31, Money and Finance.

§2222. Defense business systems: architecture, accountability, and modernization

(a) Conditions for Obligation of Funds for Defense Business System Modernization.—Effective October 1, 2005, funds appropriated to the Department of Defense may not be obligated for a defense business system modernization that will have a total cost in excess of $1,000,000 unless—

(1) the approval authority designated for the defense business system certifies to the Defense Business Systems Management Committee established by section 186 of this title that the defense business system modernization—

(A) is in compliance with the enterprise architecture developed under subsection (c);

(B) is necessary to achieve a critical national security capability or address a critical requirement in an area such as safety or security; or

(C) is necessary to prevent a significant adverse effect on a project that is needed to achieve an essential capability, taking into consideration the alternative solutions for preventing such adverse effect; and


(2) the certification by the approval authority is approved by the Defense Business Systems Management Committee.


(b) Obligation of Funds in Violation of Requirements.—The obligation of Department of Defense funds for a business system modernization in excess of the amount specified in subsection (a) that has not been certified and approved in accordance with such subsection is a violation of section 1341(a)(1)(A) of title 31.

(c) Enterprise Architecture for Defense Business Systems.—Not later than September 30, 2005, the Secretary of Defense, acting through the Defense Business Systems Management Committee, shall develop—

(1) an enterprise architecture to cover all defense business systems, and the functions and activities supported by defense business systems, which shall be sufficiently defined to effectively guide, constrain, and permit implementation of interoperable defense business system solutions and consistent with the policies and procedures established by the Director of the Office of Management and Budget, and

(2) a transition plan for implementing the enterprise architecture for defense business systems.


(d) Composition of Enterprise Architecture.—The defense business enterprise architecture developed under subsection (c)(1) shall include the following:

(1) An information infrastructure that, at a minimum, would enable the Department of Defense to—

(A) comply with all Federal accounting, financial management, and reporting requirements;

(B) routinely produce timely, accurate, and reliable financial information for management purposes;

(C) integrate budget, accounting, and program information and systems; and

(D) provide for the systematic measurement of performance, including the ability to produce timely, relevant, and reliable cost information.


(2) Policies, procedures, data standards, and system interface requirements that are to apply uniformly throughout the Department of Defense.


(e) Composition of Transition Plan.—(1) The transition plan developed under subsection (c)(2) shall include the following:

(A) The acquisition strategy for new systems that are expected to be needed to complete the defense business enterprise architecture.

(B) A listing of the defense business systems as of December 2, 2002 (known as “legacy systems”), that will not be part of the objective defense business enterprise architecture, together with the schedule for terminating those legacy systems that provides for reducing the use of those legacy systems in phases.

(C) A listing of the legacy systems (referred to in subparagraph (B)) that will be a part of the objective defense business system, together with a strategy for making the modifications to those systems that will be needed to ensure that such systems comply with the defense business enterprise architecture.


(2) Each of the strategies under paragraph (1) shall include specific time-phased milestones, performance metrics, and a statement of the financial and nonfinancial resource needs.

(f) Approval Authorities and Accountability for Defense Business Systems.—The Secretary of Defense shall delegate responsibility for review, approval, and oversight of the planning, design, acquisition, deployment, operation, maintenance, and modernization of defense business systems as follows:

(1) The Under Secretary of Defense for Acquisition, Technology and Logistics shall be responsible and accountable for any defense business system the primary purpose of which is to support acquisition activities, logistics activities, or installations and environment activities of the Department of Defense.

(2) The Under Secretary of Defense (Comptroller) shall be responsible and accountable for any defense business system the primary purpose of which is to support financial management activities or strategic planning and budgeting activities of the Department of Defense.

(3) The Under Secretary of Defense for Personnel and Readiness shall be responsible and accountable for any defense business system the primary purpose of which is to support human resource management activities of the Department of Defense.

(4) The Assistant Secretary of Defense for Networks and Information Integration and the Chief Information Officer of the Department of Defense shall be responsible and accountable for any defense business system the primary purpose of which is to support information technology infrastructure or information assurance activities of the Department of Defense.

(5) The Deputy Secretary of Defense or an Under Secretary of Defense, as designated by the Secretary of Defense, shall be responsible for any defense business system the primary purpose of which is to support any activity of the Department of Defense not covered by paragraphs (1) through (4).


(g) Defense Business System Investment Review.—(1) The Secretary of Defense shall require each approval authority designated under subsection (f) to establish, not later than March 15, 2005, an investment review process, consistent with section 11312 of title 40, to review the planning, design, acquisition, development, deployment, operation, maintenance, modernization, and project cost benefits and risks of all defense business systems for which the approval authority is responsible. The investment review process so established shall specifically address the responsibilities of approval authorities under subsection (a).

(2) The review of defense business systems under the investment review process shall include the following:

(A) Review and approval by an investment review board of each defense business system as an investment before the obligation of funds on the system.

(B) Periodic review, but not less than annually, of every defense business system investment.

(C) Representation on each investment review board by appropriate officials from among the armed forces, combatant commands, the Joint Chiefs of Staff, and Defense Agencies.

(D) Use of threshold criteria to ensure an appropriate level of review within the Department of Defense of, and accountability for, defense business system investments depending on scope, complexity, and cost.

(E) Use of procedures for making certifications in accordance with the requirements of subsection (a).

(F) Use of procedures for ensuring consistency with the guidance issued by the Secretary of Defense and the Defense Business Systems Management Committee, as required by section 186(c) of this title, and incorporation of common decision criteria, including standards, requirements, and priorities that result in the integration of defense business systems.


(h) Budget Information.—In the materials that the Secretary submits to Congress in support of the budget submitted to Congress under section 1105 of title 31 for fiscal year 2006 and fiscal years thereafter, the Secretary of Defense shall include the following information:

(1) Identification of each defense business system for which funding is proposed in that budget.

(2) Identification of all funds, by appropriation, proposed in that budget for each such system, including—

(A) funds for current services (to operate and maintain the system); and

(B) funds for business systems modernization, identified for each specific appropriation.


(3) For each such system, identification of the official to whom authority for such system is delegated under subsection (f).

(4) For each such system, a description of each certification made under subsection (d) with regard to such system.


(i) Congressional Reports.—Not later than March 15 of each year from 2005 through 2009, the Secretary of Defense shall submit to the congressional defense committees a report on Department of Defense compliance with the requirements of this section. The first report shall define plans and commitments for meeting the requirements of subsection (a), including specific milestones and performance measures. Subsequent reports shall—

(1) describe actions taken and planned for meeting the requirements of subsection (a), including—

(A) specific milestones and actual performance against specified performance measures, and any revision of such milestones and performance measures; and

(B) specific actions on the defense business system modernizations submitted for certification under such subsection;


(2) identify the number of defense business system modernizations so certified;

(3) identify any defense business system modernization with an obligation in excess of $1,000,000 during the preceding fiscal year that was not certified under subsection (a), and the reasons for the waiver; and

(4) discuss specific improvements in business operations and cost savings resulting from successful defense business systems modernization efforts.


(j) Definitions.—In this section:

(1) The term “approval authority”, with respect to a defense business system, means the Department of Defense official responsible for the defense business system, as designated by subsection (f).

(2) The term “defense business system” means an information system, other than a national security system, operated by, for, or on behalf of the Department of Defense, including financial systems, mixed systems, financial data feeder systems, and information technology and information assurance infrastructure, used to support business activities, such as acquisition, financial management, logistics, strategic planning and budgeting, installations and environment, and human resource management.

(3) The term “defense business system modernization” means—

(A) the acquisition or development of a new defense business system; or

(B) any significant modification or enhancement of an existing defense business system (other than necessary to maintain current services).


(4) The term “enterprise architecture” has the meaning given that term in section 3601(4) of title 44.

(5) The terms “information system” and “information technology” have the meanings given those terms in section 11101 of title 40.

(6) The term “national security system” has the meaning given that term in section 3542(b)(2) of title 44.

(Added Pub. L. 108–375, div. A, title III, §332(a)(1), Oct. 28, 2004, 118 Stat. 1851; amended Pub. L. 109–364, div. A, title IX, §906(a), Oct. 17, 2006, 120 Stat. 2354.)

Prior Provisions

A prior section 2222, added Pub. L. 105–85, div. A, title X, §1008(a)(1), Nov. 18, 1997, 111 Stat. 1870; amended Pub. L. 107–107, div. A, title X, §1009(b)(1)–(3)(A), Dec. 28, 2001, 115 Stat. 1208, 1209, required Secretary of Defense to submit to Congress an annual strategic plan for improvement of financial management within Department of Defense and specified statements and matters to be included in the plan, prior to repeal by Pub. L. 107–314, div. A, title X, §1004(h)(1), Dec. 2, 2002, 116 Stat. 2631.

Amendments

2006—Subsec. (j)(6). Pub. L. 109–364 substituted “in section 3542(b)(2) of title 44” for “in section 2315 of this title”.

Limitation on Financial Management Improvement and Audit Initiatives Within the Department of Defense

Pub. L. 109–364, div. A, title III, §321, Oct. 17, 2006, 120 Stat. 2144, provided that:

“(a) Limitation.—The Secretary of Defense may not obligate or expend any funds for the purpose of any financial management improvement activity relating to the preparation, processing, or auditing of financial statements until the Secretary submits to the congressional defense committees [Committees on Armed Services and Appropriations of the Senate and the House of Representatives] a written determination that each activity proposed to be funded is—

“(1) consistent with the financial management improvement plan of the Department of Defense required by section 376(a)(1) of the National Defense Authorization Act for Fiscal Year 2006 (Public Law 190–163 [109–163]; 119 Stat. 3213); and

“(2) likely to improve internal controls or otherwise result in sustained improvements in the ability of the Department to produce timely, reliable, and complete financial management information.

“(b) Exception.—The limitation in subsection (a) shall not apply to an activity directed exclusively at assessing the adequacy of internal controls and remediating any inadequacy identified pursuant to such assessment.”

Time-Certain Development for Department of Defense Information Technology Business Systems

Pub. L. 109–364, div. A, title VIII, §811, Oct. 17, 2006, 120 Stat. 2316, provided that:

“(a) Milestone A Limitation.—The Department of Defense executive or entity that is the milestone decision authority for an information system described in subsection (c) may not provide Milestone A approval for the system unless, as part of the decision process for such approval, that authority determines that the system will achieve initial operational capability within a specified period of time not exceeding five years.

“(b) Initial Operational Capability Limitation.—If an information system described in subsection (c), having received Milestone A approval, has not achieved initial operational capability within five years after the date of such approval, the system shall be deemed to have undergone a critical change in program requiring the evaluation and report required by section 2445c(d) of title 10, United States Code (as added by section 816 of this Act).

“(c) Covered Systems.—An information system described in this subsection is any Department of Defense information technology business system that is not a national security system, as defined in 3542(b)(2) of title 44, United States Code.

“(d) Definitions.—In this section:

“(1) Milestone decision authority.—The term ‘milestone decision authority’ has the meaning given that term in Department of Defense Instruction 5000.2, dated May 12, 2003.

“(2) Milestone a.—The term ‘Milestone A’ has the meaning given that term in Department of Defense Instruction 5000.2, dated May 12, 2003.”

§2223. Information technology: additional responsibilities of Chief Information Officers

(a) Additional Responsibilities of Chief Information Officer of Department of Defense.—In addition to the responsibilities provided for in chapter 35 of title 44 and in section 11315 of title 40, the Chief Information Officer of the Department of Defense shall—

(1) review and provide recommendations to the Secretary of Defense on Department of Defense budget requests for information technology and national security systems;

(2) ensure the interoperability of information technology and national security systems throughout the Department of Defense;

(3) ensure that information technology and national security systems standards that will apply throughout the Department of Defense are prescribed;

(4) provide for the elimination of duplicate information technology and national security systems within and between the military departments and Defense Agencies; and

(5) maintain a consolidated inventory of Department of Defense mission critical and mission essential information systems, identify interfaces between those systems and other information systems, and develop and maintain contingency plans for responding to a disruption in the operation of any of those information systems.


(b) Additional Responsibilities of Chief Information Officer of Military Departments.—In addition to the responsibilities provided for in chapter 35 of title 44 and in section 11315 of title 40, the Chief Information Officer of a military department, with respect to the military department concerned, shall—

(1) review budget requests for all information technology and national security systems;

(2) ensure that information technology and national security systems are in compliance with standards of the Government and the Department of Defense;

(3) ensure that information technology and national security systems are interoperable with other relevant information technology and national security systems of the Government and the Department of Defense; and

(4) coordinate with the Joint Staff with respect to information technology and national security systems.


(c) Definitions.—In this section:

(1) The term “Chief Information Officer” means the senior official designated by the Secretary of Defense or a Secretary of a military department pursuant to section 3506 of title 44.

(2) The term “information technology” has the meaning given that term by section 11101 of title 40.

(3) The term “national security system” has the meaning given that term by section 3542(b)(2) of title 44.

(Added Pub. L. 105–261, div. A, title III, §331(a)(1), Oct. 17, 1998, 112 Stat. 1967; amended Pub. L. 106–398, §1 [[div. A], title VIII, §811(a)], Oct. 30, 2000, 114 Stat. 1654, 1654A–210; Pub. L. 107–217, §3(b)(1), Aug. 21, 2002, 116 Stat. 1295; Pub. L. 109–364, div. A, title IX, §906(b), Oct. 17, 2006, 120 Stat. 2354.)

Amendments

2006—Subsec. (c)(3). Pub. L. 109–364 substituted “section 3542(b)(2) of title 44” for “section 11103 of title 40”.

2002—Subsecs. (a), (b). Pub. L. 107–217, §3(b)(1)(A), (B), substituted “section 11315 of title 40” for “section 5125 of the Clinger-Cohen Act of 1996 (40 U.S.C. 1425)” in introductory provisions.

Subsec. (c)(2). Pub. L. 107–217, §3(b)(1)(C), substituted “section 11101 of title 40” for “section 5002 of the Clinger-Cohen Act of 1996 (40 U.S.C. 1401)”.

Subsec. (c)(3). Pub. L. 107–217, §3(b)(1)(D), substituted “section 11103 of title 40” for “section 5142 of the Clinger-Cohen Act of 1996 (40 U.S.C. 1452)”.

2000—Subsec. (a)(5). Pub. L. 106–398 added par. (5).

Effective Date

Pub. L. 105–261, div. A, title III, §331(b), Oct. 17, 1998, 112 Stat. 1968, provided that: “Section 2223 of title 10, United States Code, as added by subsection (a), shall take effect on October 1, 1998.”

§2224. Defense Information Assurance Program

(a) Defense Information Assurance Program.—The Secretary of Defense shall carry out a program, to be known as the “Defense Information Assurance Program”, to protect and defend Department of Defense information, information systems, and information networks that are critical to the Department and the armed forces during day-to-day operations and operations in times of crisis.

(b) Objectives of the Program.—The objectives of the program shall be to provide continuously for the availability, integrity, authentication, confidentiality, nonrepudiation, and rapid restitution of information and information systems that are essential elements of the Defense Information Infrastructure.

(c) Program Strategy.—In carrying out the program, the Secretary shall develop a program strategy that encompasses those actions necessary to assure the readiness, reliability, continuity, and integrity of Defense information systems, networks, and infrastructure, including through compliance with subchapter II of chapter 35 of title 44, including through compliance with subchapter III of chapter 35 of title 44. The program strategy shall include the following:

(1) A vulnerability and threat assessment of elements of the defense and supporting nondefense information infrastructures that are essential to the operations of the Department and the armed forces.

(2) Development of essential information assurances technologies and programs.

(3) Organization of the Department, the armed forces, and supporting activities to defend against information warfare.

(4) Joint activities of the Department with other departments and agencies of the Government, State and local agencies, and elements of the national information infrastructure.

(5) The conduct of exercises, war games, simulations, experiments, and other activities designed to prepare the Department to respond to information warfare threats.

(6) Development of proposed legislation that the Secretary considers necessary for implementing the program or for otherwise responding to the information warfare threat.


(d) Coordination.—In carrying out the program, the Secretary shall coordinate, as appropriate, with the head of any relevant Federal agency and with representatives of those national critical information infrastructure systems that are essential to the operations of the Department and the armed forces on information assurance measures necessary to the protection of these systems.

[(e) Repealed. Pub. L. 108–136, div. A, title X, §1031(a)(12), Nov. 24, 2003, 117 Stat. 1597.]

(f) Information Assurance Test Bed.—The Secretary shall develop an information assurance test bed within the Department of Defense to provide—

(1) an integrated organization structure to plan and facilitate the conduct of simulations, war games, exercises, experiments, and other activities to prepare and inform the Department regarding information warfare threats; and

(2) organization and planning means for the conduct by the Department of the integrated or joint exercises and experiments with elements of the national information systems infrastructure and other non-Department of Defense organizations that are responsible for the oversight and management of critical information systems and infrastructures on which the Department, the armed forces, and supporting activities depend for the conduct of daily operations and operations during crisis.

(Added Pub. L. 106–65, div. A, title X, §1043(a), Oct. 5, 1999, 113 Stat. 760; amended Pub. L. 106–398, §1 [[div. A], title X, §1063], Oct. 30, 2000, 114 Stat. 1654, 1654A–274; Pub. L. 107–296, title X, §1001(c)(1)(B), Nov. 25, 2002, 116 Stat. 2267; Pub. L. 107–347, title III, §301(c)(1)(B), Dec. 17, 2002, 116 Stat. 2955; Pub. L. 108–136, div. A, title X, §1031(a)(12), Nov. 24, 2003, 117 Stat. 1597; Pub. L. 108–375, div. A, title X, §1084(d)(17), Oct. 28, 2004, 118 Stat. 2062.)

Amendments

2004—Subsec. (c). Pub. L. 108–375 substituted “subchapter II” for “subtitle II” in introductory provisions.

2003—Subsec. (e). Pub. L. 108–136 struck out subsec. (e) which directed the Secretary of Defense to annually submit to Congress a report on the Defense Information Assurance Program.

2002—Subsec. (b). Pub. L. 107–296, §1001(c)(1)(B)(i), and Pub. L. 107–347, §301(c)(1)(B)(i), amended subsec. (b) identically, substituting “Objectives of the Program” for “Objectives and Minimum Requirements” in heading and striking out par. (1) designation before “The objectives”.

Subsec. (b)(2). Pub. L. 107–347, §301(c)(1)(B)(ii), struck out par. (2) which read as follows: “The program shall at a minimum meet the requirements of sections 3534 and 3535 of title 44.”

Pub. L. 107–296, §1001(c)(1)(B)(ii), which directed the striking out of “(2) the program shall at a minimum meet the requirements of section 3534 and 3535 of title 44, United States Code.” could not be executed. See above par.

Subsec. (c). Pub. L. 107–347, §301(c)(1)(B)(iii), inserted “, including through compliance with subchapter III of chapter 35 of title 44” after “infrastructure” in introductory provisions.

Pub. L. 107–296, §1001(c)(1)(B)(iii), inserted “, including through compliance with subtitle II of chapter 35 of title 44” after “infrastructure” in introductory provisions.

2000—Subsec. (b). Pub. L. 106–398, §1 [[div. A], title X, §1063(a)], substituted “Objectives and Minimum Requirements” for “Objectives of the Program” in heading, designated existing provisions as par. (1), and added par. (2).

Subsec. (e)(7). Pub. L. 106–398, §1 [[div. A], title X, §1063(b)], added par. (7).

Effective Date of 2002 Amendment

Amendment by Pub. L. 107–296 effective 60 days after Nov. 25, 2002, see section 4 of Pub. L. 107–296, set out as an Effective Date note under section 101 of Title 6, Domestic Security.

Effective Date of 2000 Amendment

Amendment by Pub. L. 106–398 effective 30 days after Oct. 30, 2000, see section 1 [[div. A], title X, §1065] of Pub. L. 106–398, set out as an Effective Date note under section 3531 of Title 44, Public Printing and Documents.

Institute for Defense Computer Security and Information Protection

Pub. L. 106–398, §1 [[div. A], title IX, §921], Oct. 30, 2000, 114 Stat. 1654, 1654A–233, provided that:

“(a) Establishment.—The Secretary of Defense shall establish an Institute for Defense Computer Security and Information Protection.

“(b) Mission.—The Secretary shall require the institute—

“(1) to conduct research and technology development that is relevant to foreseeable computer and network security requirements and information assurance requirements of the Department of Defense with a principal focus on areas not being carried out by other organizations in the private or public sector; and

“(2) to facilitate the exchange of information regarding cyberthreats, technology, tools, and other relevant issues.

“(c) Contractor Operation.—The Secretary shall enter into a contract with a not-for-profit entity, or a consortium of not-for-profit entities, to organize and operate the institute. The Secretary shall use competitive procedures for the selection of the contractor to the extent determined necessary by the Secretary.

“(d) Funding.—Of the amount authorized to be appropriated by section 301(5) [114 Stat. 1654A–52], $5,000,000 shall be available for the Institute for Defense Computer Security and Information Protection.

“(e) Report.—Not later than April 1, 2001, the Secretary shall submit to the congressional defense committees [Committees on Armed Services and Appropriations of the Senate and the House of Representatives] the Secretary's plan for implementing this section.”

§2224a. Information security: continued applicability of expiring Governmentwide requirements to the Department of Defense

(a) In General.—The provisions of subchapter II of chapter 35 of title 44 shall continue to apply through September 30, 2004, with respect to the Department of Defense, notwithstanding the expiration of authority under section 3536 1 of such title.

(b) Responsibilities.—In administering the provisions of subchapter II of chapter 35 of title 44 with respect to the Department of Defense after the expiration of authority under section 3536 1 of such title, the Secretary of Defense shall perform the duties set forth in that subchapter for the Director of the Office of Management and Budget.

(Added Pub. L. 107–314, div. A, title X, §1052(b)(1), Dec. 2, 2002, 116 Stat. 2648.)

References in Text

Provisions relating to the expiration of authority of subchapter II of chapter 35 of title 44, referred to in text, did not appear in section 3536 of title 44 subsequent to the general revision of subchapter II by Pub. L. 107–296, title X, §1001(b)(1), Nov. 25, 2002, 116 Stat. 2259.

1 See References in Text note below.

§2225. Information technology purchases: tracking and management

(a) Collection of Data Required.—To improve tracking and management of information technology products and services by the Department of Defense, the Secretary of Defense shall provide for the collection of the data described in subsection (b) for each purchase of such products or services made by a military department or Defense Agency in excess of the simplified acquisition threshold, regardless of whether such a purchase is made in the form of a contract, task order, delivery order, military interdepartmental purchase request, or any other form of interagency agreement.

(b) Data To Be Collected.—The data required to be collected under subsection (a) includes the following:

(1) The products or services purchased.

(2) Whether the products or services are categorized as commercially available off-the-shelf items, other commercial items, nondevelopmental items other than commercial items, other noncommercial items, or services.

(3) The total dollar amount of the purchase.

(4) The form of contracting action used to make the purchase.

(5) In the case of a purchase made through an agency other than the Department of Defense—

(A) the agency through which the purchase is made; and

(B) the reasons for making the purchase through that agency.


(6) The type of pricing used to make the purchase (whether fixed price or another type of pricing).

(7) The extent of competition provided in making the purchase.

(8) A statement regarding whether the purchase was made from—

(A) a small business concern;

(B) a small business concern owned and controlled by socially and economically disadvantaged individuals; or

(C) a small business concern owned and controlled by women.


(9) A statement regarding whether the purchase was made in compliance with the planning requirements under sections 11312 and 11313 of title 40.


(c) Responsibility To Ensure Fairness of Certain Prices.—The head of each contracting activity in the Department of Defense shall have responsibility for ensuring the fairness and reasonableness of unit prices paid by the contracting activity for information technology products and services that are frequently purchased commercially available off-the-shelf items.

(d) Limitation on Certain Purchases.—No purchase of information technology products or services in excess of the simplified acquisition threshold shall be made for the Department of Defense from a Federal agency outside the Department of Defense unless—

(1) the purchase data is collected in accordance with subsection (a); or

(2)(A) in the case of a purchase by a Defense Agency, the purchase is approved by the Under Secretary of Defense for Acquisition, Technology, and Logistics; or

(B) in the case of a purchase by a military department, the purchase is approved by the senior procurement executive of the military department.


(e) Annual Report.—Not later than March 15 of each year, the Secretary of Defense shall submit to the Committees on Armed Services of the Senate and the House of Representatives a report containing a summary of the data collected in accordance with subsection (a).

(f) Definitions.—In this section:

(1) The term “senior procurement executive”, with respect to a military department, means the official designated as the senior procurement executive for the military department for the purposes of section 16(c) of the Office of Federal Procurement Policy Act (41 U.S.C. 414(c)).

(2) The term “simplified acquisition threshold” has the meaning given the term in section 4(11) of the Office of Federal Procurement Policy Act (41 U.S.C. 403(11)).

(3) The term “small business concern” means a business concern that meets the applicable size standards prescribed pursuant to section 3(a) of the Small Business Act (15 U.S.C. 632(a)).

(4) The term “small business concern owned and controlled by socially and economically disadvantaged individuals” has the meaning given that term in section 8(d)(3)(C) of the Small Business Act (15 U.S.C. 637(d)(3)(C)).

(5) The term “small business concern owned and controlled by women” has the meaning given that term in section 8(d)(3)(D) of the Small Business Act (15 U.S.C. 637(d)(3)(D)).

(Added Pub. L. 106–398, §1 [[div. A], title VIII, §812(a)(1)], Oct. 30, 2000, 114 Stat. 1654, 1654A–212; amended Pub. L. 108–178, §4(b)(2), Dec. 15, 2003, 117 Stat. 2640; Pub. L. 109–364, div. A, title X, §1071(a)(2), Oct. 17, 2006, 120 Stat. 2398.)

Amendments

2006—Subsec. (f)(1). Pub. L. 109–364 substituted “section 16(c) of the Office of Federal Procurement Policy Act (41 U.S.C. 414(c))” for “section 16(3) of the Office of Federal Procurement Policy Act (41 U.S.C. 414(3))”.

2003—Subsec. (b)(9). Pub. L. 108–178 substituted “sections 11312 and 11313 of title 40” for “sections 5122 and 5123 of the Clinger-Cohen Act of 1996 (40 U.S.C. 1422, 1423)”.

Effective Date of 2003 Amendment

Amendment by Pub. L. 108–178 effective Aug. 21, 2002, see section 5 of Pub. L. 108–178, set out as a note under section 5334 of Title 5, Government Organization and Employees.

Time for Implementation; Applicability

Pub. L. 106–398, §1 [[div. A], title VIII, §812(b)], Oct. 30, 2000, 114 Stat. 1654, 1654A–214, provided that:

“(1) The Secretary of Defense shall collect data as required under section 2225 of title 10, United States Code (as added by subsection (a)) for all contractual actions covered by such section entered into on or after the date that is one year after the date of the enactment of this Act [Oct. 30, 2000].

“(2) Subsection (d) of such section shall apply with respect to purchases described in that subsection for which solicitations of offers are issued on or after the date that is one year after the date of the enactment of this Act.”

GAO Report

Pub. L. 106–398, §1 [[div. A], title VIII, §812(c)], Oct. 30, 2000, 114 Stat. 1654, 1654A–214, directed the Comptroller General to submit to committees of Congress a report on the collection of data under this section not later than 15 months after Oct. 30, 2000.

§2226. Contracted property and services: prompt payment of vouchers

(a) Requirement.—Of the contract vouchers that are received by the Defense Finance and Accounting Service by means of the mechanization of contract administration services system, the number of such vouchers that remain unpaid for more than 30 days as of the last day of each month may not exceed 5 percent of the total number of the contract vouchers so received that remain unpaid on that day.

(b) Contract Voucher Defined.—In this section, the term “contract voucher” means a voucher or invoice for the payment to a contractor for services, commercial items (as defined in section 4(12) of the Office of Federal Procurement Policy Act (41 U.S.C. 403(12))), or other deliverable items provided by the contractor under a contract funded by the Department of Defense.

(Added Pub. L. 106–398, §1 [[div. A], title X, §1006(a)(1)], Oct. 30, 2000, 114 Stat. 1654, 1654A–247.)

Effective Date

Pub. L. 106–398, §1 [[div. A], title X, §1006(b)], Oct. 30, 2000, 114 Stat. 1654, 1654A–248, provided that: “Section 2226 of title 10, United States Code (as added by subsection (a)), shall take effect on December 1, 2000.”

Conditional Requirement for Report

Pub. L. 106–398, §1 [[div. A], title X, §1006(c)], Oct. 30, 2000, 114 Stat. 1654, 1654A–248, provided that:

“(1) If for any month of the noncompliance reporting period the requirement in section 2226 of title 10, United States Code (as added by subsection (a)), is not met, the Secretary of Defense shall submit to the Committee on Armed Services of the Senate and the Committee on Armed Services of the House of Representatives a report on the magnitude of the unpaid contract vouchers. The report for a month shall be submitted not later than 30 days after the end of that month.

“(2) A report for a month under paragraph (1) shall include information current as of the last day of the month as follows:

“(A) The number of the vouchers received by the Defense Finance and Accounting Service by means of the mechanization of contract administration services system during each month.

“(B) The number of the vouchers so received, whenever received by the Defense Finance and Accounting Service, that remain unpaid for each of the following periods:

“(i) Over 30 days and not more than 60 days.

“(ii) Over 60 days and not more than 90 days.

“(iii) More than 90 days.

“(C) The number of the vouchers so received that remain unpaid for the major categories of procurements, as defined by the Secretary of Defense.

“(D) The corrective actions that are necessary, and those that are being taken, to ensure compliance with the requirement in subsection (a).

“(3) For purposes of this subsection:

“(A) The term ‘noncompliance reporting period’ means the period beginning on December 1, 2000, and ending on November 30, 2004.

“(B) The term ‘contract voucher’ has the meaning given that term in section 2226(b) of title 10, United States Code (as added by subsection (a)).”

§2227. Electronic submission and processing of claims for contract payments

(a) Submission of Claims.—The Secretary of Defense shall require that any claim for payment under a Department of Defense contract shall be submitted to the Department of Defense in electronic form.

(b) Processing.—A contracting officer, contract administrator, certifying official, or other officer or employee of the Department of Defense who receives a claim for payment in electronic form in accordance with subsection (a) and is required to transmit the claim to any other officer or employee of the Department of Defense for processing under procedures of the department shall transmit the claim and any additional documentation necessary to support the determination and payment of the claim to such other officer or employee electronically.

(c) Waiver Authority.—If the Secretary of Defense determines that the requirement for using electronic means for submitting claims under subsection (a), or for transmitting claims and supporting documentation under subsection (b), is unduly burdensome in any category of cases, the Secretary may exempt the cases in that category from the application of the requirement.

(d) Implementation of Requirements.—In implementing subsections (a) and (b), the Secretary of Defense shall provide for the following:

(1) Policies, requirements, and procedures for using electronic means for the submission of claims for payment to the Department of Defense and for the transmission, between Department of Defense officials, of claims for payment received in electronic form, together with supporting documentation (such as receiving reports, contracts and contract modifications, and required certifications).

(2) The format in which information can be accepted by the corporate database of the Defense Finance and Accounting Service.

(3) The requirements to be included in contracts regarding the electronic submission of claims for payment by contractors.


(e) Claim for Payment Defined.—In this section, the term “claim for payment” means an invoice or any other demand or request for payment.

(Added Pub. L. 106–398, §1 [[div. A], title X, §1008(a)(1)], Oct. 30, 2000, 114 Stat. 1654, 1654A–249.)

Effective Date

Pub. L. 106–398, §1 [[div. A], title X, §1008(c)], Oct. 30, 2000, 114 Stat. 1654, 1654A–250, provided that:

“(1) Subject to paragraph (2), the Secretary of Defense shall apply section 2227 of title 10, United States Code (as added by subsection (a)), with respect to contracts for which solicitations of offers are issued after June 30, 2001.

“(2)(A) The Secretary may delay the implementation of section 2227 to a date after June 30, 2001, upon a finding that it is impracticable to implement that section until that later date. In no event, however, may the implementation be delayed to a date after October 1, 2002.

“(B) Upon determining to delay the implementation of such section 2227 to a later date under subparagraph (A), the Secretary shall promptly publish a notice of the delay in the Federal Register. The notice shall include a specification of the later date on which the implementation of that section is to begin. Not later than 30 days before the later implementation date, the Secretary shall publish in the Federal Register another notice that such section is being implemented beginning on that date.”

[Notice by Department of Defense of delay in the implementation of this section from June 30, 2001, until Oct. 1, 2002, was published on Aug. 21, 2001, at 66 F.R. 43841.]

Implementation Plan

Pub. L. 106–398, §1 [[div. A], title X, §1008(b)], Oct. 30, 2000, 114 Stat. 1654, 1654A–250, directed the Secretary of Defense, not later than Mar. 30, 2001, to submit to committees of Congress a plan for the implementation of the requirements imposed under this section.

§2228. Military equipment and infrastructure: prevention and mitigation of corrosion

(a) Designation of Responsible Official or Organization.—The Secretary of Defense shall designate an officer or employee of the Department of Defense, or a standing board or committee of the Department of Defense, as the senior official or organization responsible in the Department to the Secretary of Defense (after the Under Secretary of Defense for Acquisition, Technology, and Logistics) for the prevention and mitigation of corrosion of the military equipment and infrastructure of the Department.

(b) Duties.—(1) The official or organization designated under subsection (a) shall oversee and coordinate efforts throughout the Department of Defense to prevent and mitigate corrosion of the military equipment and infrastructure of the Department. The duties under this paragraph shall include the duties specified in paragraphs (2) through (5).

(2) The designated official or organization shall develop and recommend any policy guidance on the prevention and mitigation of corrosion to be issued by the Secretary of Defense.

(3) The designated official or organization shall review the programs and funding levels proposed by the Secretary of each military department during the annual internal Department of Defense budget review process as those programs and funding proposals relate to programs and funding for the prevention and mitigation of corrosion and shall submit to the Secretary of Defense recommendations regarding those programs and proposed funding levels.

(4) The designated official or organization shall provide oversight and coordination of the efforts within the Department of Defense to prevent or mitigate corrosion during—

(A) the design, acquisition, and maintenance of military equipment; and

(B) the design, construction, and maintenance of infrastructure.


(5) The designated official or organization shall monitor acquisition practices within the Department of Defense—

(A) to ensure that the use of corrosion prevention technologies and the application of corrosion prevention treatments are fully considered during research and development in the acquisition process; and

(B) to ensure that, to the extent determined appropriate for each acquisition program, such technologies and treatments are incorporated into that program, particularly during the engineering and design phases of the acquisition process.


(c) Long-Term Strategy.—(1) The Secretary of Defense shall develop and implement a long-term strategy to reduce corrosion and the effects of corrosion on the military equipment and infrastructure of the Department of Defense.

(2) The strategy under paragraph (1) shall include the following:

(A) Expansion of the emphasis on corrosion prevention and mitigation within the Department of Defense to include coverage of infrastructure.

(B) Application uniformly throughout the Department of Defense of requirements and criteria for the testing and certification of new corrosion-prevention technologies for equipment and infrastructure with similar characteristics, similar missions, or similar operating environments.

(C) Implementation of programs, including supporting databases, to ensure that a focused and coordinated approach is taken throughout the Department of Defense to collect, review, validate, and distribute information on proven methods and products that are relevant to the prevention of corrosion of military equipment and infrastructure.

(D) Establishment of a coordinated research and development program for the prevention and mitigation of corrosion for new and existing military equipment and infrastructure that includes a plan to transition new corrosion prevention technologies into operational systems.


(3) The strategy shall include, for the matters specified in paragraph (2), the following:

(A) Policy guidance.

(B) Performance measures and milestones.

(C) An assessment of the necessary personnel and funding necessary to accomplish the long-term strategy.


(d) Definitions.—In this section:

(1) The term “corrosion” means the deterioration of a material or its properties due to a reaction of that material with its chemical environment.

(2) The term “military equipment” includes all weapon systems, weapon platforms, vehicles, and munitions of the Department of Defense, and the components of such items.

(3) The term “infrastructure” includes all buildings, structures, airfields, port facilities, surface and subterranean utility systems, heating and cooling systems, fuel tanks, pavements, and bridges.

(Added Pub. L. 107–314, div. A, title X, §1067(a)(1), Dec. 2, 2002, 116 Stat. 2657.)

Deadline for Designation of Responsible Official or Organization; Interim Report; Deadline for Long-Term Strategy; GAO Review

Pub. L. 107–314, div. A, title X, §1067(b)–(e), Dec. 2, 2002, 116 Stat. 2658, 2659, directed the Secretary of Defense to designate a responsible official or organization under subsec. (a) of this section not later than 90 days after Dec. 2, 2002, directed the Secretary to submit to Congress a report setting forth the long-term strategy required under subsec. (c) of this section not later than one year after Dec. 2, 2002, and required the Comptroller General to monitor the implementation of such long-term strategy and, not later than 18 months after Dec. 2, 2002, to submit to Congress an assessment of the extent to which that strategy had been implemented.

§2229. Strategic policy on prepositioning of materiel and equipment

(a) Policy Required.—The Secretary of Defense shall maintain a strategic policy on the programs of the Department of Defense for the prepositioning of materiel and equipment. Such policy shall take into account national security threats, strategic mobility, service requirements, and the requirements of the combatant commands.

(b) Limitation of Diversion of Prepositioned Materiel.—The Secretary of a military department may not divert materiel or equipment from prepositioned stocks except—

(1) in accordance with a change made by the Secretary of Defense to the policy maintained under subsection (a); or

(2) for the purpose of directly supporting a contingency operation or providing humanitarian assistance under chapter 20 of this title.


(c) Congressional Notification.—The Secretary of Defense may not implement or change the policy required under subsection (a) until the Secretary submits to the congressional defense committees a report describing the policy or change to the policy.

(Added Pub. L. 109–364, div. A, title III, §351(a), Oct. 17, 2006, 120 Stat. 2160.)

Deadline for Establishment of Policy

Pub. L. 109–364, div. A, title III, §351(c), Oct. 17, 2006, 120 Stat. 2160, provided that:

“(1) Deadline.—Not later than six months after the date of the enactment of this Act [Oct. 17, 2006], the Secretary of Defense shall establish the strategic policy on the programs of the Department of Defense for the prepositioning of materiel and equipment required under section 2229 of title 10, United States Code, as added by subsection (a).

“(2) Limitation on diversion of prepositioned materiel.—During the period beginning on the date of the enactment of this Act [Oct. 17, 2006] and ending on the date on which the Secretary of Defense submits the report required under section 2229(c) of title 10, United States Code, on the policy referred to in paragraph (1), the Secretary of a military department may not divert materiel or equipment from prepositioned stocks except for the purpose of directly supporting a contingency operation or providing humanitarian assistance under chapter 20 of that title.”

CHAPTER 133—FACILITIES FOR RESERVE COMPONENTS

Sec.
2231.
Reference to chapter 1803.

        

Prior Provisions

A prior chapter 133 was transferred to end of part V of subtitle E of this title and renumbered chapter 1803.

§2231. Reference to chapter 1803

Provisions of law relating to facilities for reserve components are set forth in chapter 1803 of this title (beginning with section 18231).

(Added Pub. L. 103–337, div. A, title XVI, §1664(b)(11), Oct. 5, 1994, 108 Stat. 3011.)

Prior Provisions

Prior sections 2231 to 2239 were renumbered sections 18231 to 18239 of this title, respectively.

Effective Date

Section effective Dec. 1, 1994, except as otherwise provided, see section 1691 of Pub. L. 103–337, set out as a note under section 10001 of this title.

CHAPTER 134—MISCELLANEOUS ADMINISTRATIVE PROVISIONS

Subchap.
Sec.
  I.
Miscellaneous Authorities, Prohibitions, and Limitations on the Use of Appropriated Funds
2241
  II.
Miscellaneous Administrative Authority
2251

        

SUBCHAPTER I—MISCELLANEOUS AUTHORITIES, PROHIBITIONS, AND LIMITATIONS ON THE USE OF APPROPRIATED FUNDS

Sec.
2241.
Availability of appropriations for certain purposes.
2242.
Authority to use appropriated funds for certain investigations and security services.
2243.
Authority to use appropriated funds to support student meal programs in overseas dependents’ schools.
2244.
Security investigations.
2244a.
Equipment scheduled for retirement or disposal: limitation on expenditures for modifications.
2245.
Use of aircraft for proficiency flying: limitation.
2245a.
Use of operation and maintenance funds for purchase of investment items: limitation.
[2246 to 2248. Renumbered or Repealed.]
2249.
Prohibition on use of funds for documenting economic or employment impact of certain acquisition programs.
2249a.
Prohibition on providing financial assistance to terrorist countries.
2249b.
Display of State flags: prohibition on use of funds to arbitrarily exclude flag; position and manner of display.
2249c.
Regional Defense Combating Terrorism Fellowship Program: authority to use appropriated funds for costs associated with education and training of foreign officials.

        

Amendments

2006—Pub. L. 109–364, div. A, title XII, §1204(d)(3), Oct. 17, 2006, 120 Stat. 2416, substituted “Regional Defense Combating Terrorism Fellowship Program: authority to use appropriated funds for costs associated with education and training of foreign officials” for “Authority to use appropriated funds for costs of attendance of foreign visitors under Regional Defense Counterterrorism Fellowship Program” in item 2249c.

Pub. L. 109–163, div. A, title III, §§372(b), 373(b), Jan. 6, 2006, 119 Stat. 3210, 3211, added items 2244a and 2245a.

2004—Pub. L. 108–375, div. A, title VI, §651(f)(3), Oct. 28, 2004, 118 Stat. 1972, struck out items 2246 “Department of Defense golf courses: limitation on use of appropriated funds” and 2247 “Use of appropriated funds for operation of Armed Forces Recreation Center, Europe: limitation”.

2003—Pub. L. 108–136, div. A, title X, §1045(a)(5)(B), title XII, §1221(a)(2), Nov. 24, 2003, 117 Stat. 1612, 1651, struck out item 2248 “Purchase of surety bonds: prohibition” and added item 2249c.

1996—Pub. L. 104–201, div. A, title X, §1071(b), Sept. 23, 1996, 110 Stat. 2657, added item 2249b.

Pub. L. 104–106, div. A, title XIII, §1341(b), div. D, title XLIII, §4321(b)(2)(B), Feb. 10, 1996, 110 Stat. 485, 672, redesignated item 2247, relating to prohibition on use of funds for documenting economic or employment impact of certain acquisition programs, as 2249 and added item 2249a.

1994—Pub. L. 103–355, title VII, §7202(a)(2), Oct. 13, 1994, 108 Stat. 3379, added item 2247 relating to prohibition on use of funds for documenting economic or employment impact of certain acquisition programs.

Pub. L. 103–337, div. A, title III, §372(b), title X, §1063(b), Oct. 5, 1994, 108 Stat. 2736, 2848, added item 2247 relating to use of appropriated funds for operation of Armed Forces Recreation Center, Europe: limitation and item 2248.

1993—Pub. L. 103–160, div. A, title III, §312(b), Nov. 30, 1993, 107 Stat. 1618, added item 2246.

1991—Pub. L. 102–190, div. A, title X, §1062(a)(3), Dec. 5, 1991, 105 Stat. 1475, made technical correction to directory language of Pub. L. 101–510, div. A, title XIV, §1481(e)(2), Nov. 5, 1990, 104 Stat. 1706. See 1990 amendment note below.

1990—Pub. L. 101–510, div. A, title XIV, §1481(e)(2), Nov. 5, 1990, 104 Stat. 1706, as amended by Pub. L. 102–190, div. A, title X, §1062(a)(3), Dec. 5, 1991, 105 Stat. 1475, added item 2245.

Pub. L. 101–510, div. A, title IX, §904(b), Nov. 5, 1990, 104 Stat. 1621, added item 2244.

1989—Pub. L. 101–189, div. A, title III, §326(b), Nov. 29, 1989, 103 Stat. 1416, added item 2243.

§2241. Availability of appropriations for certain purposes

(a) Operation and Maintenance Appropriations.—Amounts appropriated to the Department of Defense for operation and maintenance of the active forces may be used for the following purposes:

(1) Morale, welfare, and recreation.

(2) Modification of personal property.

(3) Design of vessels.

(4) Industrial mobilization.

(5) Military communications facilities on merchant vessels.

(6) Acquisition of services, special clothing, supplies, and equipment.

(7) Expenses for the Reserve Officers’ Training Corps and other units at educational institutions.


(b) Necessary Expenses.—Amounts appropriated to the Department of Defense may be used for all necessary expenses, at the seat of the Government or elsewhere, in connection with communication and other services and supplies that may be necessary for the national defense.

(c) Activities of the National Committee for Employer Support of the Guard and Reserve.—Amounts appropriated for operation and maintenance may, under regulations prescribed by the Secretary of Defense, be used by the Secretary for official reception, representation, and advertising activities and materials of the National Committee for Employer Support of the Guard and Reserve to further employer commitments to their employees who are members of a reserve component.

(Added Pub. L. 100–370, §1(e)(1), July 19, 1988, 102 Stat. 844; amended Pub. L. 108–136, div. A, title V, §518, Nov. 24, 2003, 117 Stat. 1462.)

Historical and Revision Notes

Subsection (a) of this section and sections 2253(b) and 2661(a) of this title are based on Pub. L. 98–212, title VII, §735, Dec. 8, 1983, 97 Stat. 1444, as amended by Pub. L. 98–525, title XIV, §§1403(a)(2), 1404, Oct. 19, 1984, 98 Stat. 2621.

In two instances, the source section for provisions to be codified provides that defense appropriations may be used for “welfare and recreation” or “welfare and recreational” purposes. (Section 735 of Public Law 98–212 and section 8006(b) of Public Law 99–190, to be codified as 10 U.S.C. 2241(a)(1) and 2490(2), respectively). The committee added the term “morale” in both of these two instances to conform to the usual “MWR” usage for morale, welfare, and recreation activities.

Subsection (b) of this section and sections 2242(1), (4) and 2253(a)(1) of this title are based on Pub. L. 98–212, title VII, §705, Dec. 8, 1983, 97 Stat. 1437.

Section 705 of Public Law 98–212, to be codified as 10 U.S.C. 2241(b), provides that defense appropriations may be used in connection with certain services and supplies “as may be necessary to carry out the purposes of this Act”. The reference to “this Act” means Public Law 98–212, the FY84 Defense Appropriations Act. Language similar to section 705 had been enacted as part of the annual defense appropriation Act for many years. In the FY84 Act, section 705 was enacted as a permanent provision. The quoted phrase above was not, however, revised from the traditional annual wording as the provision had appeared in annual appropriations Acts in order to give it effect beyond the fiscal year concerned. Since the general purpose of a defense appropriations Act is to provide funds for national defense purposes, the committee, in codifying this provision, revised the quoted phrase so as to read “that may be necessary for the national defense”. No change in meaning is intended.

Amendments

2003—Subsec. (c). Pub. L. 108–136 added subsec. (c).

Obligation of Funds for Installation Support Functions

Pub. L. 108–287, title VIII, §8070, Aug. 5, 2004, 118 Stat. 987, provided that: “Hereafter, funds appropriated for Operation and maintenance and for the Defense Health Program in this Act [see Tables for classification], and in future appropriations acts for the Department of Defense, for supervision and administration costs for facilities maintenance and repair, minor construction, or design projects, or any planning studies, environmental assessments, or similar activities related to installation support functions, may be obligated at the time the reimbursable order is accepted by the performing activity: Provided, That for the purpose of this section, supervision and administration costs includes all in-house Government cost.”

Similar provisions were contained in the following prior appropriation acts:

Pub. L. 108–87, title VIII, §8071, Sept. 30, 2003, 117 Stat. 1088.

Pub. L. 107–248, title VIII, §8072, Oct. 23, 2002, 116 Stat. 1553.

Pub. L. 107–117, div. A, title VIII, §8080, Jan. 10, 2002, 115 Stat. 2265.

Pub. L. 106–259, title VIII, §8079, Aug. 9, 2000, 114 Stat. 691.

Pub. L. 106–79, title VIII, §8084, Oct. 25, 1999, 113 Stat. 1251.

Pub. L. 105–262, title VIII, §8085, Oct. 17, 1998, 112 Stat. 2318.

Pub. L. 105–56, title VIII, §8093, Oct. 8, 1997, 111 Stat. 1241.

Pub. L. 104–208, div. A, title I, §101(b) [title VIII, §8119], Sept. 30, 1996, 110 Stat. 3009–71, 3009–114.

Limitation on Payment of Facilities Charges Assessed by Department of State

Pub. L. 108–136, div. A, title X, §1007, Nov. 24, 2003, 117 Stat. 1585, provided that:

“(a) Costs of Goods and Services Provided to Department of State.—Funds appropriated for the Department of Defense may be transferred to the Department of State as remittance for a fee charged to the Department of Defense by the Department of State for any year for the maintenance, upgrade, or construction of United States diplomatic facilities only to the extent that the amount charged (when added to other amounts previously so charged for that fiscal year) exceeds the total amount of the unreimbursed costs incurred by the Department of Defense during that year in providing goods and services to the Department of State.

“(b) Effective Date.—Subsection (a) shall take effect as of October 1, 2003.”

Total Information Awareness Program

Pub. L. 108–7, div. M, §111, Feb. 20, 2003, 117 Stat. 534, provided that:

“(a) Limitation on Use of Funds for Research and Development on Total Information Awareness Program.—Notwithstanding any other provision of law, commencing 90 days after the date of the enactment of this Act [Feb. 20, 2003], no funds appropriated or otherwise made available to the Department of Defense, whether to an element of the Defense Advanced Research Projects Agency or any other element, or to any other department, agency, or element of the Federal Government, may be obligated or expended on research and development on the Total Information Awareness program unless—

“(1) the report described in subsection (b) is submitted to Congress not later than 90 days after the date of the enactment of this Act; or

“(2) the President certifies to Congress in writing, that—

“(A) the submittal of the report to Congress within 90 days after the date of the enactment of this Act is not practicable; and

“(B) the cessation of research and development on the Total Information Awareness program would endanger the national security of the United States.

“(b) Report.—The report described in this subsection is a report, in writing, of the Secretary of Defense, the Attorney General, and the Director of Central Intelligence, acting jointly, that—

“(1) contains—

“(A) a detailed explanation of the actual and intended use of funds for each project and activity of the Total Information Awareness program, including an expenditure plan for the use of such funds;

“(B) the schedule for proposed research and development on each project and activity of the Total Information Awareness program; and

“(C) target dates for the deployment of each project and activity of the Total Information Awareness program;

“(2) assesses the likely efficacy of systems such as the Total Information Awareness program in providing practically valuable predictive assessments of the plans, intentions, or capabilities of terrorists or terrorist groups;

“(3) assesses the likely impact of the implementation of a system such as the Total Information Awareness program on privacy and civil liberties;

“(4) sets forth a list of the laws and regulations that govern the information to be collected by the Total Information Awareness program, and a description of any modifications of such laws that will be required to use the information in the manner proposed under such program; and

“(5) includes recommendations, endorsed by the Attorney General, for practices, procedures, regulations, or legislation on the deployment, implementation, or use of the Total Information Awareness program to eliminate or minimize adverse effects of such program on privacy and other civil liberties.

“(c) Limitation on Deployment of Total Information Awareness Program.—(1) Notwithstanding any other provision of law and except as provided in paragraph (2), if and when research and development on the Total Information Awareness program, or any component of such program, permits the deployment or implementation of such program or component, no department, agency, or element of the Federal Government may deploy or implement such program or component, or transfer such program or component to another department, agency, or element of the Federal Government, until the Secretary of Defense—

“(A) notifies Congress of that development, including a specific and detailed description of—

“(i) each element of such program or component intended to be deployed or implemented; and

“(ii) the method and scope of the intended deployment or implementation of such program or component (including the data or information to be accessed or used); and

“(B) has received specific authorization by law from Congress for the deployment or implementation of such program or component, including—

“(i) a specific authorization by law for the deployment or implementation of such program or component; and

“(ii) a specific appropriation by law of funds for the deployment or implementation of such program or component.

“(2) The limitation in paragraph (1) shall not apply with respect to the deployment or implementation of the Total Information Awareness program, or a component of such program, in support of the following:

“(A) Lawful military operations of the United States conducted outside the United States.

“(B) Lawful foreign intelligence activities conducted wholly against non-United States persons.

“(d) Sense of Congress.—It is the sense of Congress that—

“(1) the Total Information Awareness program should not be used to develop technologies for use in conducting intelligence activities or law enforcement activities against United States persons without appropriate consultation with Congress or without clear adherence to principles to protect civil liberties and privacy; and

“(2) the primary purpose of the Defense Advanced Research Projects Agency is to support the lawful activities of the Department of Defense and the national security programs conducted pursuant to the laws assembled for codification purposes in title 50, United States Code.

“(e) Definitions.—In this section:

“(1) Total information awareness program.—The term ‘Total Information Awareness program’—

“(A) means the computer hardware and software components of the program known as Total Information Awareness, any related information awareness program, or any successor program under the Defense Advanced Research Projects Agency or another element of the Department of Defense; and

“(B) includes a program referred to in subparagraph (1), or a component of such program, that has been transferred from the Defense Advanced Research Projects Agency or another element of the Department of Defense to any other department, agency, or element of the Federal Government.

“(2) Non-united states person.—The term ‘non-United States person’ means any person other than a United States person.

“(3) United states person.—The term ‘United States person’ has the meaning given that term in section 101(i) of the Foreign Intelligence Surveillance Act of 1978 (50 U.S.C. 1801(i)).”

[Reference to the Director of Central Intelligence or the Director of the Central Intelligence Agency in the Director's capacity as the head of the intelligence community deemed to be a reference to the Director of National Intelligence. Reference to the Director of Central Intelligence or the Director of the Central Intelligence Agency in the Director's capacity as the head of the Central Intelligence Agency deemed to be a reference to the Director of the Central Intelligence Agency. See section 1081(a), (b) of Pub. L. 108–458, set out as a note under section 401 of Title 50, War and National Defense.]

Funds Prohibited for Contracts With Persons Convicted of Unlawful Manufacture or Sale of Congressional Medals of Honor

Pub. L. 105–262, title VIII, §8118, Oct. 17, 1998, 112 Stat. 2331, provided that: “During the current fiscal year and hereafter, no funds appropriated or otherwise available to the Department of Defense may be used to award a contract to, extend a contract with, or approve the award of a subcontract to any person who within the preceding 15 years has been convicted under section 704 of title 18, United States Code, of the unlawful manufacture or sale of the Congressional Medal of Honor.”

Use of Funds for Modification of Retired Aircraft, Weapon, Ship or Other Item of Equipment

Pub. L. 105–56, title VIII, §8053, Oct. 8, 1997, 111 Stat. 1232, which provided that none of the funds provided in the Act and hereafter would be available for use by a military department to modify an aircraft, weapon, ship or other item of equipment, that the military department concerned planned to retire or otherwise dispose of within 5 years after completion of the modification, was repealed and restated in section 2244a of this title by Pub. L. 109–163, div. A, title III, §372(a), (c), 119 Stat. 3209, 3210.

Similar provisions were contained in the following prior appropriation acts:

Pub. L. 104–208, div. A, title I, §101(b) [title VIII, §8055], Sept. 30, 1996, 110 Stat. 3009–71, 3009–99.

Pub. L. 104–61, title VIII, §8068, Dec. 1, 1995, 109 Stat. 664.

Pub. L. 103–335, title VIII, §8079, Sept. 30, 1994, 108 Stat. 2636.

Pub. L. 103–139, title VIII, §8098, Nov. 11, 1993, 107 Stat. 1462.

Pub. L. 102–396, title IX, §9034, Oct. 6, 1992, 106 Stat. 1908.

Pub. L. 102–172, title VIII, §8034, Nov. 26, 1991, 105 Stat. 1178.

Pub. L. 101–511, title VIII, §8035, Nov. 5, 1990, 104 Stat. 1882.

Demonstration Project for Uniform Funding of Morale, Welfare, and Recreation Activities at Certain Military Installations

Pub. L. 104–106, div. A, title III, §335, Feb. 10, 1996, 110 Stat. 262, directed the Secretary of Defense to conduct a demonstration project to evaluate the feasibility of using only nonappropriated funds to support morale, welfare, and recreation programs at military installations in order to facilitate the procurement of property and services for those programs and the management of employees used to carry out those programs, directed the Secretary to submit to Congress a final report on the results of the project not later than Dec. 31, 1998, and provided that the project would terminate not later than Sept. 30, 1998.

Interagency Courier Service

Pub. L. 103–335, title VIII, §8119, Sept. 30, 1994, 108 Stat. 2649, provided that: “During the current fiscal year and hereafter, the Department of State and the Department of Defense are authorized to provide interagency courier service on a non-reimbursable basis.”

Restrictions on Procurements From Outside of United States

Pub. L. 104–208, div. A, title I, §101(b) [title VIII, §8109], Sept. 30, 1996, 110 Stat. 3009–71, 3009–111, provided for application of section 9005 of Public Law 102–396 (formerly set out below), prior to repeal by Pub. L. 107–107, div. A, title VIII, §832(b)(2), Dec. 28, 2001, 115 Stat. 1190.

Pub. L. 102–396, title IX, §9005, Oct. 6, 1992, 106 Stat. 1900, as amended by Pub. L. 103–139, title VIII, §8005, Nov. 11, 1993, 107 Stat. 1438; Pub. L. 103–355, title IV, §4401(e), Oct. 13, 1994, 108 Stat. 3348, provided for restrictions on procurements from outside of the United States, prior to repeal by Pub. L. 107–107, div. A, title VIII, §832(b)(1), Dec. 28, 2001, 115 Stat. 1190.

Prohibition on Use of Funds To Purchase Dogs or Cats for Medical Training

Pub. L. 101–511, title VIII, §8019, Nov. 5, 1990, 104 Stat. 1879, provided that: “None of the funds appropriated by this Act [see Tables for classification] or hereafter shall be used to purchase dogs or cats or otherwise fund the use of dogs or cats for the purpose of training Department of Defense students or other personnel in surgical or other medical treatment of wounds produced by any type of weapon: Provided, That the standards of such training with respect to the treatment of animals shall adhere to the Federal Animal Welfare Law and to those prevailing in the civilian medical community.”

Restoration, Cancellation, or Closure of Certain Department of Defense Appropriation Account Balances

Pub. L. 101–511, title VIII, §8080, Nov. 5, 1990, 104 Stat. 1893, provided that:

“(a) Upon the date of enactment of this Act [Nov. 5, 1990], the balances of any unobligated amount of an appropriation of the Department of Defense which has been withdrawn under the provisions of section 1552(a)(2) of title 31, United States Code, the obligated balance of which has not been transferred pursuant to the provisions of section 1552(a)(1) of title 31, United States Code, shall be restored to that appropriation. Thirty days following enactment of this Act all balances of unobligated funds withdrawn from any account of the Department of Defense under the provisions of section 1552(a)(2) of title 31, United States Code, prior to the enactment of this Act, (other than those restored pursuant to the provisions of this subsection) are cancelled.

“(b) During the current fiscal year and thereafter—

“(1) on the 3rd September 30th after enactment of this section [Nov. 5, 1990], all obligated balances transferred under section 1552(a)(1) of title 31, United States Code;

“(2) on September 30th of the 5th fiscal year after the period of availability of an appropriation account of the Department of Defense available for obligation for a definite period ends or has ended, with respect to those accounts which, upon the date of enactment of this section have expired for obligation but whose obligated balances have not been transferred pursuant to the provisions of section 1552(a)(1) of title 31, United States Code; and

“(3) with respect to any appropriation account made available to the Department of Defense for an indefinite period against which no obligations have been made for two consecutive years and upon a determination by the Secretary of Defense or the President that the purposes of such indefinite appropriation have been carried out,

any remaining obligated or unobligated balance of such accounts are closed and thereafter shall not be available for obligation or expenditure for any purpose: Provided, That collections authorized to be credited to an account which were not credited to the account before it was closed shall be deposited in the Treasury as miscellaneous receipts: Provided further, That, without prior action by the Comptroller General but without relieving the Comptroller General of the duty to make decisions under any law or to settle claims and accounts, when an account is closed (including accounts covered by subsection (a) of this section) and currently applicable appropriations of the Department of Defense are not chargeable, obligations and adjustments to obligations that would have been chargeable to an account prior to closing, may be chargeable to currently applicable appropriations of the Department of Defense available for the same purpose in amounts equal to one percent of the total appropriation for the current account or the amount of the original appropriation, whichever is less: Provided further, That after the end of the period of availability of an appropriation account available for a definite period and before closing of that account under this section such account shall be available for recording, adjusting, and liquidating obligations properly chargeable to such account in amounts not to exceed the unobligated expired balances of such appropriation: Provided further, That with respect to a change to a contract under which the contractor is required to perform additional work, other than adjustments to pay claims or increases under an escalation clause (hereinafter referred to as a contract change), if such a charge for such a contract change with respect to a program, project or activity would cause the total amount of such obligations to exceed $4,000,000 in any single fiscal year for a program, project, or activity, the obligation may only be made if the obligation is approved by the Secretary of Defense or, if such a change would cause the total amount of such obligations to exceed $25,000,000 in any single fiscal year for a program, project or activity, the obligation may be made only after 30 days have elapsed after the Secretary of Defense submits to the Committees on Appropriations and Armed Services of the Senate and the House of Representatives a notice of the intention to obligate such funds, together with the legal basis and the policy reasons for making such an obligation.

“(c) The provisions of this section shall apply to any appropriation account now or hereafter made unless the appropriation Act for that account specifically provides for an extension of the availability of such account and provides an exception to the five year period of availability for recording, adjusting and liquidating obligations properly chargeable to that account.”

Availability of Appropriations

The following general provisions, that had been repeated as fiscal year provisions in prior appropriation acts, were enacted as permanent law in the Department of Defense Appropriations Act, 1990, Pub. L. 101–165, title IX, §§9002, 9006, 9020, 9025, 9030, 9079, Nov. 21, 1989, 103 Stat. 1129, 1130, 1133–1135, 1147:

Sec. 9002. [Authorized Secretaries of Defense, Army, Navy, and Air Force to procure services in accordance with section 3109 of Title 5, Government Organization and Employees, under regulations prescribed by the Secretary of Defense, and to pay in connection therewith travel expenses of individuals while traveling from their homes or places of business to official duty stations and return; and was repealed and restated in section 129b of this title by Pub. L. 101–510, div. A, title XIV, §1481(b)(1), (3), Nov. 5, 1990, 104 Stat. 1704, 1705.]

Sec. 9006. [Provided that no appropriations available to the Department of Defense could be used for operating aircraft under the jurisdiction of the armed forces for the purpose of proficiency flying, as defined in Department of Defense Directive 1340.4, except in accordance with regulations prescribed by the Secretary of Defense; and was repealed and restated in section 2245 of this title by Pub. L. 101–510, div. A, title XIV, §1481(e)(1), (3), Nov. 5, 1990, 104 Stat. 1706.]

Sec. 9020. [Provided that no funds available to the Department of Defense could be used to provide medical care in the United States on an inpatient basis to foreign military and diplomatic personnel or their dependents unless the Department is reimbursed for the costs of providing such care; and was repealed and restated in section 2549 of this title by Pub. L. 101–510, div. A, title XIV, §1481(f)(1), (3), Nov. 5, 1990, 104 Stat. 1707.]

Sec. 9025. [Provided that no funds available to the Department of Defense could be used to lease to non-Federal agencies in the United States aircraft or vehicles owned or operated by the Department when suitable aircraft or vehicles are commercially available in the private sector; and was repealed and restated in section 2550 of this title by Pub. L. 101–510, div. A, title XIV, §1481(g)(1), (4), Nov. 5, 1990, 104 Stat. 1707.]

Sec. 9030. [Provided that funds available to the Department of Defense could be used by the Department for helicopters and motorized equipment at Defense installations for removal of feral burros and horses; and was repealed and restated in section 2678 of this title by Pub. L. 101–510, div. A, title XIV, §1481(h)(1), (3), Nov. 5, 1990, 104 Stat. 1708.]

“Sec. 9079. None of the funds appropriated by this Act or hereafter shall be obligated for the second career training program authorized by Public Law 96–347 [amending sections 2109, 3307, 3381 to 3385, and 8335 of Title 5, Government Organization and Employees].”

The following general provision, that had been repeated as fiscal year provision in prior appropriation acts, was enacted as permanent law in the Department of Defense Appropriations Act, 1989, Pub. L. 100–463, title VIII, §8098, Oct. 1, 1988, 102 Stat. 2270–35, which provided that appropriations available to the Department of Defense for operation and maintenance could be used to pay claims authorized by law to be paid by the Department (except for civil functions), was repealed and restated in section 2732 of this title by Pub. L. 101–510, div. A, title XIV, §1481(j)(1), (3), Nov. 5, 1990, 104 Stat. 1708, 1709.

§2242. Authority to use appropriated funds for certain investigations and security services

The Secretary of Defense and the Secretary of each military department may—

(1) pay in advance for the expenses of conducting investigations in foreign countries incident to matters relating to the Department of Defense, to the extent such expenses are determined by the investigating officer to be necessary and in accord with local custom;

(2) pay expenses incurred in connection with the administration of occupied areas;

(3) pay expenses of military courts, boards, and commissions; and

(4) reimburse the Administrator of General Services for security guard services furnished by the Administrator to the Department of Defense for the protection of confidential files.

(Added Pub. L. 100–370, §1(e)(1), July 19, 1988, 102 Stat. 844.)

Historical and Revision Notes

Paragraphs (1) and (4) of this section and sections 2241(b) and 2253(a)(1) of this title are based on Pub. L. 98–212, title VII, §705, Dec. 8, 1983, 97 Stat. 1437.

Paragraphs (2) and (3) are based on Pub. L. 99–190, §101(b) [title VIII, §§8005(a), 8006(a)], Dec. 19, 1985, 99 Stat. 1185, 1202, 1203.

§2243. Authority to use appropriated funds to support student meal programs in overseas dependents’ schools

(a) Authority.—Subject to subsection (b), amounts appropriated to the Department of Defense for the operation of the defense dependents’ education system may be used by the Secretary of Defense to enable an overseas meal program to provide students enrolled in that system with meals at a price equal to the average price paid by students for equivalent meals under a comparable public school meal program in the United States.

(b) Limitation.—The authority provided by subsection (a) may be used only if the Secretary of Defense determines that Federal payments and commodities provided under section 20 of the Richard B. Russell National School Lunch Act (42 U.S.C. 1769b) and section 20 of the Child Nutrition Act of 1966 (42 U.S.C. 1789) to support an overseas meal program are insufficient to provide meals under that program at a price for students equal to the average price paid by students for equivalent meals under a comparable public school meal program in the United States.

(c) Determining Average Price.—In determining the average price paid by students in the United States for meals under a school meal program, the Secretary of Defense shall exclude free and reduced price meals provided pursuant to income guidelines.

(d) Overseas Meal Program Defined.—In this section, the term “overseas meal program” means a program administered by the Secretary of Defense to provide breakfasts or lunches to students attending Department of Defense dependents’ schools which are located outside the United States.

(Added Pub. L. 101–189, div. A, title III, §326(a), Nov. 29, 1989, 103 Stat. 1415; amended Pub. L. 106–78, title VII, §752(b)(7), Oct. 22, 1999, 113 Stat. 1169.)

Amendments

1999—Subsec. (b). Pub. L. 106–78 substituted “Richard B. Russell National School Lunch Act” for “National School Lunch Act”.

§2244. Security investigations

(a) Funds appropriated to the Department of Defense may not be used for the conduct of an investigation by the Department of Defense, or by any other Federal department or agency, for purposes of determining whether to grant a security clearance to an individual or a facility unless the Secretary of Defense determines both of the following:

(1) That a current, complete investigation file is not available from any other department or agency of the Federal Government with respect to that individual or facility.

(2) That no other department or agency of the Federal Government is conducting an investigation with respect to that individual or facility that could be used as the basis for determining whether to grant the security clearance.


(b) For purposes of subsection (a)(1), a current investigation file is a file on an investigation that has been conducted within the past five years.

(Added Pub. L. 101–510, div. A, title IX, §904(a), Nov. 5, 1990, 104 Stat. 1621; amended Pub. L. 102–190, div. A, title X, §1061(a)(11), Dec. 5, 1991, 105 Stat. 1473.)

Amendments

1991—Subsec. (a)(1), (2). Pub. L. 102–190 substituted “Government” for “government”.

§2244a. Equipment scheduled for retirement or disposal: limitation on expenditures for modifications

(a) Prohibition.—Except as otherwise provided in this section, the Secretary of a military department may not carry out a modification of an aircraft, weapon, vessel, or other item of equipment that the Secretary plans to retire or otherwise dispose of within five years after the date on which the modification, if carried out, would be completed.

(b) Exceptions.—

(1) Exception for below-threshold modifications.—The prohibition in subsection (a) does not apply to a modification for which the cost is less than $100,000.

(2) Exception for transfer of reusable items of value.—The prohibition in subsection (a) does not apply to a modification in a case in which—

(A) the reusable items of value, as determined by the Secretary, installed on the item of equipment as part of such modification will, upon the retirement or disposal of the item to be modified, be removed from such item of equipment, refurbished, and installed on another item of equipment; and

(B) the cost of such modification (including the cost of the removal and refurbishment of reusable items of value under subparagraph (A)) is less than $1,000,000.


(3) Exception for safety modifications.—The prohibition in subsection (a) does not apply to a safety modification.


(c) Waiver Authority.—The Secretary concerned may waive the prohibition in subsection (a) in the case of any modification otherwise subject to that subsection if the Secretary determines that carrying out the modification is in the national security interest of the United States. Whenever the Secretary issues such a waiver, the Secretary shall notify the congressional defense committees in writing.

(Added Pub. L. 109–163, div. A, title III, §372(a), Jan. 6, 2006, 119 Stat. 3209.)

Prior Provisions

Provisions similar to those in this section were contained in Pub. L. 105–56, title VIII, §8053, Oct. 8, 1997, 111 Stat. 1232, which was set out as a note under section 2241 of this title, prior to repeal by Pub. L. 109–163, div. A, title III, §372(c), 119 Stat. 3210.

§2245. Use of aircraft for proficiency flying: limitation

(a) An aircraft under the jurisdiction of a military department may not be used by a member of the armed forces for the purpose of proficiency flying except in accordance with regulations prescribed by the Secretary of Defense.

(b) Such regulations—

(1) may not require proficiency flying by a member except to the extent required for the member to maintain flying proficiency in anticipation of the member's assignment to combat operations; and

(2) may not permit proficiency flying in the case of a member who is assigned to a course of instruction of 90 days or more.


(c) In this section, the term “proficiency flying” has the meaning given that term in Department of Defense Directive 1340.4.

(Added Pub. L. 101–510, div. A, title XIV, §1481(e)(1), Nov. 5, 1990, 104 Stat. 1706.)

Prior Provisions

Provisions similar to those in this section were contained in Pub. L. 101–165, title IX, §9006, Nov. 21, 1989, 103 Stat. 1130, which was set out as a note under section 2241 of this title, prior to repeal by Pub. L. 101–510, §1481(e)(3).

§2245a. Use of operation and maintenance funds for purchase of investment items: limitation

Funds appropriated to the Department of Defense for operation and maintenance may not be used to purchase any item (including any item to be acquired as a replacement for an item) that has an investment item unit cost that is greater than $250,000.

(Added Pub. L. 109–163, div. A, title III, §373(a), Jan. 6, 2006, 119 Stat. 3210.)

[§2246. Renumbered §2491a]

[§2247. Renumbered §2491b]

Prior Provisions

Another section 2247 was renumbered section 2249 of this title.

[§2248. Repealed. Pub. L. 108–136, div. A, title X, §1045(a)(5)(A), Nov. 24, 2003, 117 Stat. 1612]

Section, added Pub. L. 103–337, div. A, title X, §1063(a), Oct. 5, 1994, 108 Stat. 2848, related to prohibition on purchase of surety bonds.

§2249. Prohibition on use of funds for documenting economic or employment impact of certain acquisition programs

No funds appropriated by the Congress may be obligated or expended to assist any contractor of the Department of Defense in preparing any material, report, lists, or analysis with respect to the actual or projected economic or employment impact in a particular State or congressional district of an acquisition program for which all research, development, testing, and evaluation has not been completed.

(Added Pub. L. 103–355, title VII, §7202(a)(1), Oct. 13, 1994, 108 Stat. 3379, §2247; renumbered §2249, Pub. L. 104–106, div. D, title XLIII, §4321(b)(2)(A), Feb. 10, 1996, 110 Stat. 672.)

Amendments

1996—Pub. L. 104–106 renumbered section 2247 of this title as this section.

Effective Date

For effective date and applicability of section, see section 10001 of Pub. L. 103–355 set out as an Effective Date of 1994 Amendment note under section 251 of Title 41, Public Contracts.

§2249a. Prohibition on providing financial assistance to terrorist countries

(a) Prohibition.—Funds available to the Department of Defense may not be obligated or expended to provide financial assistance to—

(1) any country with respect to which the Secretary of State has made a determination under section 6(j)(1)(A) of the Export Administration Act of 1979 (50 U.S.C. App. 2405 (j)(1)(A));

(2) any country identified in the latest report submitted to Congress under section 140 of the Foreign Relations Authorization Act, Fiscal Years 1988 and 1989 (22 U.S.C. 2656f), as providing significant support for international terrorism; or

(3) any other country that, as determined by the President—

(A) grants sanctuary from prosecution to any individual or group that has committed an act of international terrorism; or

(B) otherwise supports international terrorism.


(b) Waiver.—(1) The President may waive the application of subsection (a) to a country if the President determines—

(A) that it is in the national security interests of the United States to do so; or

(B) that the waiver should be granted for humanitarian reasons.


(2) The President shall—

(A) notify the Committee on Armed Services and the Committee on Foreign Relations of the Senate and the Committee on Armed Services and the Committee on International Relations of the House of Representatives at least 15 days before the waiver takes effect; and

(B) publish a notice of the waiver in the Federal Register.


(c) Definition.—In this section, the term “international terrorism” has the meaning given that term in section 140(d) of the Foreign Relations Authorization Act, Fiscal Years 1988 and 1989 (22 U.S.C. 2656f(d)).

(Added Pub. L. 104–106, div. A, title XIII, §1341(a), Feb. 10, 1996, 110 Stat. 485; amended Pub. L. 105–85, div. A, title X, §1073(a)(40), Nov. 18, 1997, 111 Stat. 1902; Pub. L. 106–65, div. A, title X, §1067(1), Oct. 5, 1999, 113 Stat. 774.)

Amendments

1999—Subsec. (b)(2)(A). Pub. L. 106–65 substituted “and the Committee on Armed Services” for “and the Committee on National Security”.

1997—Subsec. (a)(1). Pub. L. 105–85 substituted “50 U.S.C. App. 2405(j)(1)(A)” for “50 App. 2405(j)”.

§2249b. Display of State flags: prohibition on use of funds to arbitrarily exclude flag; position and manner of display

(a) Prohibition on Use of Funds.—Funds available to the Department of Defense may not be used to prescribe or enforce any rule that arbitrarily excludes the official flag of any State, territory, or possession of the United States from any display of the flags of the States, territories, and possessions of the United States at an official ceremony of the Department of Defense.

(b) Position and Manner of Display.—The display of an official flag of a State, territory, or possession of the United States at an installation or other facility of the Department shall be governed by section 7 of title 4 and any modification of section 7 under section 10 of title 4.

(Added Pub. L. 104–201, div. A, title X, §1071(a), Sept. 23, 1996, 110 Stat. 2656; amended Pub. L. 105–225, §4(a)(1), Aug. 12, 1998, 112 Stat. 1498.)

Amendments

1998—Subsec. (b). Pub. L. 105–225 substituted “section 7 of title 4 and any modification of section 7 under section 10 of title 4” for “the provisions of section 3 of the Joint Resolution of June 22, 1942 (56 Stat. 378, chapter 435; 36 U.S.C. 175), and any modification of such provisions under section 8 of that Joint Resolution (36 U.S.C. 178)”.

§2249c. Regional Defense Combating Terrorism Fellowship Program: authority to use appropriated funds for costs associated with education and training of foreign officials

(a) Authority To Use Funds.—Under regulations prescribed by the Secretary of Defense, funds appropriated to the Department of Defense may be used to pay any costs associated with the education and training of foreign military officers, ministry of defense officials, or security officials at military or civilian educational institutions, regional centers, conferences, seminars, or other training programs conducted under the Regional Defense Combating Terrorism Fellowship Program. Costs for which payment may be made under this section include the costs of transportation and travel and subsistence costs.

(b) Limitation.—The total amount of funds used under the authority in subsection (a) in any fiscal year may not exceed $25,000,000. Amounts available under the authority in subsection (a) for a fiscal year may be used for programs that begin in such fiscal year but end in the next fiscal year.

(c) Annual Report.—Not later than December 1 of each year, the Secretary of Defense shall submit to Congress a report on the administration of this section during the fiscal year ended in such year. The report shall include the following matters:

(1) A complete accounting of the expenditure of appropriated funds for purposes authorized under subsection (a), including—

(A) the countries of the foreign officers and officials for whom costs were paid; and

(B) for each such country, the total amount of the costs paid.


(2) The training courses attended by the foreign officers and officials, including a specification of which, if any, courses were conducted in foreign countries.

(3) An assessment of the effectiveness of the program referred to in subsection (a) in increasing the cooperation of the governments of foreign countries with the United States in the global war on terrorism.

(4) A discussion of any actions being taken to improve the program.

(Added Pub. L. 108–136, div. A, title XII, §1221(a)(1), Nov. 24, 2003, 117 Stat. 1651; amended Pub. L. 109–364, div. A, title XII, §1204(a)–(d)(2), Oct. 17, 2006, 120 Stat. 2415.)

Amendments

2006—Pub. L. 109–364, §1204(d)(2), substituted “Regional Defense Combating Terrorism Fellowship Program: authority to use appropriated funds for costs associated with education and training of foreign officials” for “Authority to use appropriated funds for costs of attendance of foreign visitors under Regional Defense Counterterrorism Fellowship Program” in section catchline.

Subsec. (a). Pub. L. 109–364, §1204(a), substituted “the education and training of foreign military officers, ministry of defense officials, or security officials at military or civilian educational institutions, regional centers, conferences, seminars, or other training programs conducted under the Regional Defense Combating Terrorism Fellowship Program” for “the attendance of foreign military officers, ministry of defense officials, or security officials at United States military educational institutions, regional centers, conferences, seminars, or other training programs conducted under the Regional Defense Counterterrorism Fellowship Program, including costs of transportation and travel and subsistence costs” and inserted at end “Costs for which payment may be made under this section include the costs of transportation and travel and subsistence costs.”

Subsec. (b). Pub. L. 109–364, §1204(b), (c), substituted “$25,000,000” for “$20,000,000” and inserted at end “Amounts available under the authority in subsection (a) for a fiscal year may be used for programs that begin in such fiscal year but end in the next fiscal year.”

Subsec. (c)(3). Pub. L. 109–364, §1204(d)(1), substituted “program referred to in subsection (a)” for “Regional Defense Counterterrorism Fellowship Program”.

Regulations

Pub. L. 108–136, div. A, title XII, §1221(b), Nov. 24, 2003, 117 Stat. 1651, provided that: “Not later than December 1, 2003, the Secretary of Defense shall—

“(1) prescribe the final regulations for carrying out section 2249c of title 10, United States Code, as added by subsection (a); and

“(2) notify the congressional defense committees [Committees on Armed Services and Appropriations of the Senate and House of Representatives] of the prescription of such regulations.”

SUBCHAPTER II—MISCELLANEOUS ADMINISTRATIVE AUTHORITY

Sec.
2251.
Household furnishings and other property: personnel outside the United States or in Alaska or Hawaii.
2252.
Rewards: missing property.
2253.
Motor vehicles.
2254.
Treatment of reports of aircraft accident investigations.
2255.
Aircraft accident investigation boards: composition requirements.
2257.
Use of recruiting materials for public relations.
2259.
Transit pass program: personnel in poor air quality areas.
2260.
Licensing of intellectual property: retention of fees.
2261.
Presentation of recognition items for recruitment and retention purposes.
2262.
Department of Defense conferences: collection of fees to cover Department of Defense costs.

        

Amendments

2006—Pub. L. 109–364, div. A, title X, §1051(b), Oct. 17, 2006, 120 Stat. 2396, added item 2262.

Pub. L. 109–163, div. A, title V, §589(a)(2), Jan. 6, 2006, 119 Stat. 3279, added item 2261.

2004—Pub. L. 108–375, div. A, title X, §1004(b), Oct. 28, 2004, 118 Stat. 2036, added item 2260.

2000—Pub. L. 106–398, §1 [[div. A], title X, §1082(a)(2)], Oct. 30, 2000, 114 Stat. 1654, 1654A–285, added item 2259.

1999—Pub. L. 106–65, div. A, title V, §574(b), Oct. 5, 1999, 113 Stat. 624, added item 2257.

1996—Pub. L. 104–201, div. A, title IX, §911(a)(2), Sept. 23, 1996, 110 Stat. 2622, added item 2255.

1992—Pub. L. 102–484, div. A, title X, §1071(a)(2), Oct. 23, 1992, 106 Stat. 2508, added item 2254.

§2251. Household furnishings and other property: personnel outside the United States or in Alaska or Hawaii

(a) In General.—Subject to subsection (b), the Secretary of the military department concerned may—

(1) purchase household furnishings and automobiles from members of the armed forces and civilian employees of the Department of Defense on duty outside the United States or in Hawaii for resale at cost to incoming personnel; and

(2) provide household furnishings, without charge, in other than public quarters occupied by members of the armed forces or civilian employees of the Department of Defense who are on duty outside the United States or in Alaska or Hawaii.


(b) Required Determination.—The authority provided in subsection (a) may be used only when it is determined, under regulations approved by the Secretary of Defense, that the use of that authority would be advantageous to the United States.

(Added Pub. L. 100–370, §1(e)(1), July 19, 1988, 102 Stat. 845.)

Historical and Revision Notes

Section is based on Pub. L. 98–212, title VII, §723, Dec. 8, 1983, 97 Stat. 1443.

§2252. Rewards: missing property

The Secretary of Defense and the Secretary of each military department may pay a reward of not more than $500 in any case for information leading to the discovery of missing property under the jurisdiction of that Secretary or leading to the recovery of such property.

(Added Pub. L. 100–370, §1(e)(1), July 19, 1988, 102 Stat. 845.)

Historical and Revision Notes

Section is based on Pub. L. 99–190, §101(b) [title VIII, §8005(b)], Dec. 19, 1985, 99 Stat. 1185, 1202.

Prior Provisions

Provisions similar to those in this section were contained in section 7209 of this title prior to repeal by Pub. L. 100–370, §1(e)(3)(A).

§2253. Motor vehicles

(a) General Authorities.—The Secretary of Defense and the Secretary of each military department may—

(1) provide for insurance of official motor vehicles in a foreign country when the laws of such country require such insurance; and

(2) purchase right-hand drive vehicles at a cost of not more than $30,000 each.


(b) Hire of Passenger Vehicles.—Amounts appropriated to the Department of Defense for operation and maintenance of the active forces may be used for the hire of passenger motor vehicles.

(Added Pub. L. 100–370, §1(e)(1), July 19, 1988, 102 Stat. 845; amended Pub. L. 105–85, div. A, title VIII, §805, Nov. 18, 1997, 111 Stat. 1834.)

Historical and Revision Notes

Subsection (a)(1) of this section and sections 2241(b) and 2242(1), (4) of this title are based on Pub. L. 98–212, title VII, §705, Dec. 8, 1983, 97 Stat. 1437.

Subsection (a)(2) is based on Pub. L. 99–190, §101(b) [title VIII, §8005(i)], Dec. 19, 1985, 99 Stat. 1185, 1202.

Subsection (b) of this section and sections 2241(a) and 2661(a) of this title are based on Pub. L. 98–212, title VII, §735, Dec. 8, 1983, 97 Stat. 1444, as amended by Pub. L. 98–525, title XIV, §§1403(a)(2), 1404, Oct. 19, 1984, 98 Stat. 2621.

Amendments

1997—Subsec. (a)(2). Pub. L. 105–85 substituted “$30,000” for “$12,000”.

§2254. Treatment of reports of aircraft accident investigations

(a) In General.—(1) Whenever the Secretary of a military department conducts an accident investigation of an accident involving an aircraft under the jurisdiction of the Secretary, the records and report of the investigations shall be treated in accordance with this section.

(2) For purposes of this section, an accident investigation is any form of investigation of an aircraft accident other than an investigation (known as a “safety investigation”) that is conducted solely to determine the cause of the accident and to obtain information that may prevent the occurrence of similar accidents.

(b) Public Disclosure of Certain Accident Investigation Information.—(1) The Secretary concerned, upon request, shall publicly disclose unclassified tapes, scientific reports, and other factual information pertinent to an aircraft accident investigation, before the release of the final accident investigation report relating to the accident, if the Secretary concerned determines—

(A) that such tapes, reports, or other information would be included within and releasable with the final accident investigation report; and

(B) that release of such tapes, reports, or other information—

(i) would not undermine the ability of accident or safety investigators to continue to conduct the investigation; and

(ii) would not compromise national security.


(2) A disclosure under paragraph (1) may not be made by or through officials with responsibility for, or who are conducting, a safety investigation with respect to the accident.

(c) Opinions Regarding Causation of Accident.—Following a military aircraft accident—

(1) if the evidence surrounding the accident is sufficient for the investigators who conduct the accident investigation to come to an opinion (or opinions) as to the cause or causes of the accident, the final report of the accident investigation shall set forth the opinion (or opinions) of the investigators as to the cause or causes of the accident; and

(2) if the evidence surrounding the accident is not sufficient for those investigators to come to an opinion as to the cause or causes of the accident, the final report of the accident investigation shall include a description of those factors, if any, that, in the opinion of the investigators, substantially contributed to or caused the accident.


(d) Use of Information in Civil Proceedings.—For purposes of any civil or criminal proceeding arising from an aircraft accident, any opinion of the accident investigators as to the cause of, or the factors contributing to, the accident set forth in the accident investigation report may not be considered as evidence in such proceeding, nor may such information be considered an admission of liability by the United States or by any person referred to in those conclusions or statements.

(e) Regulations.—The Secretary of each military department shall prescribe regulations to carry out this section.

(Added Pub. L. 102–484, div. A, title X, §1071(a)(1), Oct. 23, 1992, 106 Stat. 2507.)

Effective Date

Section 1071(c) of Pub. L. 102–484 provided that: “Section 2254 of title 10, United States Code, as added by subsection (a), shall apply with respect to accidents occurring on or after the date on which regulations are first prescribed under that section.”

Regulations

Pub. L. 105–261, div. A, title X, §1065(c), Oct. 17, 1998, 112 Stat. 2134, provided that: “The Secretary of Defense shall prescribe regulations, which shall be applied uniformly across the Department of Defense, establishing procedures by which the military departments shall provide to the family members of any person involved in a military aviation accident periodic update reports on the conduct and progress of investigations into the accident.”

Section 1071(b) of Pub. L. 102–484 provided that: “Regulations under section 2254 of title 10, United States Code, as added by subsection (a), shall be prescribed not later than 180 days after the date of the enactment of this Act [Oct. 23, 1992].”

§2255. Aircraft accident investigation boards: composition requirements

(a) Required Membership of Boards.—Whenever the Secretary of a military department convenes an aircraft accident investigation board to conduct an accident investigation (as described in section 2254(a)(2) of this title) with respect to a Class A accident involving an aircraft under the jurisdiction of the Secretary, the Secretary shall select the membership of the board so that—

(1) a majority of the members (or in the case of a board consisting of a single member, the member) is selected from units other than the mishap unit or a unit subordinate to the mishap unit; and

(2) in the case of a board consisting of more than one member, at least one member of the board is a member of the armed forces or an officer or an employee of the Department of Defense who possesses knowledge and expertise relevant to aircraft accident investigations.


(b) Exception.—The Secretary of the military department concerned may waive the requirement of subsection (a)(1) in the case of an aircraft accident if the Secretary determines that—

(1) it is not practicable to meet the requirement because of—

(A) the remote location of the aircraft accident;

(B) an urgent need to promptly begin the investigation; or

(C) a lack of available persons outside of the mishap unit who have adequate knowledge and expertise regarding the type of aircraft involved in the accident; and


(2) the objectivity and independence of the aircraft accident investigation board will not be compromised.

(c) Consultation Requirement.—In the case of an aircraft accident investigation board consisting of a single member, the member shall consult with a member of the armed forces or an officer or an employee of the Department of Defense who possesses knowledge and expertise relevant to aircraft accident investigations.

(d) Designation of Class A Accidents.—Not later than 60 days after an aircraft accident involving an aircraft under the jurisdiction of the Secretary of a military department, the Secretary shall determine whether the aircraft accident should be designated as a Class A accident for purposes of this section.

(e) Definitions.—In this section:

(1) The term “Class A accident” means an accident involving an aircraft that results in—

(A) the loss of life or permanent disability;

(B) damages to the aircraft, other property, or a combination of both, in an amount in excess of the amount specified by the Secretary of Defense for purposes of determining Class A accidents; or

(C) the destruction of the aircraft.


(2) The term “mishap unit”, with respect to an aircraft accident investigation, means the unit of the armed forces (at the squadron or battalion level or equivalent) to which was assigned the flight crew of the aircraft that sustained the accident that is the subject of the investigation.

(Added Pub. L. 104–201, div. A, title IX, §911(a)(1), Sept. 23, 1996, 110 Stat. 2621; amended Pub. L. 108–136, div. A, title X, §1031(a)(13), Nov. 24, 2003, 117 Stat. 1597.)

Amendments

2003—Subsec. (b). Pub. L. 108–136 struck out par. (1) designation before “The Secretary”, redesignated subpars. (A) and (B) of former par. (1) as pars. (1) and (2), respectively, redesignated cls. (i) to (iii) of former subpar. (A) as subpars. (A) to (C), respectively, of par. (1), and struck out par. (2) which read as follows: “The Secretary shall notify Congress of a waiver exercised under this subsection and the reasons therefor.”

Effective Date

Section 911(b) of Pub. L. 104–201 provided that: “Section 2255 of title 10, United States Code, as added by subsection (a), shall apply with respect to any aircraft accident investigation board convened by the Secretary of a military department after the end of the six-month period beginning on the date of the enactment of this Act [Sept. 23, 1996].”

§2257. Use of recruiting materials for public relations

The Secretary of Defense may use for public relations purposes of the Department of Defense any advertising materials developed for use for recruitment and retention of personnel for the armed forces. Any such use shall be under such conditions and subject to such restrictions as the Secretary of Defense shall prescribe.

(Added Pub. L. 106–65, div. A, title V, §574(a), Oct. 5, 1999, 113 Stat. 624.)

§2259. Transit pass program: personnel in poor air quality areas

(a) Establishment of Program.—To encourage Department of Defense personnel assigned to duty, or employed, in poor air quality areas to use means other than single-occupancy motor vehicles to commute to or from the location of their duty assignments, the Secretary of Defense shall exercise the authority provided in section 7905 of title 5 to establish a program to provide a transit pass benefit under subsection (b)(2)(A) of that section for members of the Army, Navy, Air Force, and Marine Corps who are assigned to duty, and to Department of Defense civilian officers and employees who are employed, in a poor air quality area.

(b) Poor Air Quality Areas.—In this section, the term “poor air quality area” means an area—

(1) that is subject to the national ambient air quality standards promulgated by the Administrator of the Environmental Protection Agency under section 109 of the Clean Air Act (42 U.S.C. 7409); and

(2) that, as determined by the Administrator of the Environmental Protection Agency, is a nonattainment area with respect to any of those standards.

(Added Pub. L. 106–398, §1 [[div. A], title X, §1082(a)(1)], Oct. 30, 2000, 114 Stat. 1654, 1654A–285.)

Time for Implementation

Pub. L. 106–398, §1 [[div. A], title X, §1082(b)], Oct. 30, 2000, 114 Stat. 1654, 1654A–285, provided that: “The Secretary of Defense shall prescribe the effective date for the transit pass program required under section 2259 of title 10, United States Code, as added by subsection (a). The effective date so prescribed may not be later than the first day of the first month that begins on or after the date that is 180 days after the date of the enactment of this Act [Oct. 30, 2000].”

§2260. Licensing of intellectual property: retention of fees

(a) Authority.—Under regulations prescribed by the Secretary of Defense, the Secretary concerned may license trademarks, service marks, certification marks, and collective marks owned or controlled by the Secretary concerned and may retain and expend fees received from such licensing in accordance with this section.

(b) Designated Marks.—The Secretary concerned shall designate the trademarks, service marks, certification marks, and collective marks regarding which the Secretary will exercise the authority to retain licensing fees under this section.

(c) Use of Fees.—The Secretary concerned shall use fees retained under this section for the following purposes:

(1) For payment of the following costs incurred by the Secretary:

(A) Costs of securing trademark registrations.

(B) Costs of operating the licensing program under this section.


(2) For morale, welfare, and recreation activities under the jurisdiction of the Secretary, to the extent (if any) that the total amount of the licensing fees available under this section for a fiscal year exceed the total amount needed for such fiscal year under paragraph (1).


(d) Availability.—Fees received in a fiscal year and retained under this section shall be available for obligation in such fiscal year and the following two fiscal years.

(e) Definitions.—In this section, the terms “trademark”, “service mark”, “certification mark”, and “collective mark” have the meanings given such terms in section 45 of the Act of July 5, 1946 (commonly referred to as the Trademark Act of 1946; 15 U.S.C. 1127).

(Added Pub. L. 108–375, div. A, title X, §1004(a), Oct. 28, 2004, 118 Stat. 2035.)

§2261. Presentation of recognition items for recruitment and retention purposes

(a) Expenditures for Recognition Items.—Under regulations prescribed by the Secretary of Defense, appropriated funds may be expended—

(1) to procure recognition items of nominal or modest value for recruitment or retention purposes; and

(2) to present such items—

(A) to members of the armed forces; and

(B) to members of the families of members of the armed forces, and other individuals, recognized as providing support that substantially facilitates service in the armed forces.


(b) Provision of Meals and Refreshments.—For purposes of section 520c of this title and any regulation prescribed to implement that section, functions conducted for the purpose of presenting recognition items described in subsection (a) shall be treated as recruiting functions, and recipients of such items shall be treated as persons who are the objects of recruiting efforts.

(c) Recognition Items of Nominal or Modest Value.—In this section, the term “recognition item of nominal or modest value” means a commemorative coin, medal, trophy, badge, flag, poster, painting, or other similar item that is valued at less than $50 per item and is designed to recognize or commemorate service in the armed forces.

(Added Pub. L. 109–163, div. A, title V, §589(a)(1), Jan. 6, 2006, 119 Stat. 3279; amended Pub. L. 109–364, div. A, title V, §594, Oct. 17, 2006, 120 Stat. 2235.)

Amendments

2006—Subsec. (d). Pub. L. 109–364 struck out heading and text of subsec. (d). Text read as follows: “The authority under this section shall expire December 31, 2007.”

§2262. Department of Defense conferences: collection of fees to cover Department of Defense costs

(a) Authority to Collect Fees.—(1) The Secretary of Defense may collect fees from any individual or commercial participant in a conference, seminar, exhibition, symposium, or similar meeting conducted by the Department of Defense (in this section referred to collectively as a “conference”).

(2) The Secretary may provide for the collection of fees under this section directly or by contract. The fees may be collected in advance of a conference.

(b) Use of Collected Fees.—Amounts collected under subsection (a) with respect to a conference shall be credited to the appropriation or account from which the costs of the conference are paid and shall be available to pay the costs of the Department of Defense with respect to the conference or to reimburse the Department for costs incurred with respect to the conference.

(c) Treatment of Excess Amounts.—In the event the total amount of fees collected under subsection (a) with respect to a conference exceeds the actual costs of the Department of Defense with respect to the conference, the amount of such excess shall be deposited into the Treasury as miscellaneous receipts.

(d) Annual Reports.—(1) Not later than 45 days after the President submits to Congress the budget for a fiscal year under section 1105 of title 31, the Secretary of Defense shall submit to the congressional defense committees a budget justification document summarizing the use of the fee-collection authority provided by this section.

(2) Each report shall include the following:

(A) A list of all conferences conducted during the preceding two calendar years for which fees were collected under this section.

(B) For each conference included on the list under subparagraph (A):

(i) The estimated costs of the Department for the conference.

(ii) The actual costs of the Department for the conference, including a separate statement of the amount of any conference coordinator fees associated with the conference.

(iii) The amount of fees collected under this section for the conference.


(C) An estimate of the number of conferences to be conducted during the calendar year in which the report is submitted for which the Department will collect fees under this section.

(Added Pub. L. 109–364, div. A, title X, §1051(a), Oct. 17, 2006, 120 Stat. 2395.)

CHAPTER 135—SPACE PROGRAMS

Sec.
2271.
Management of space programs: joint program offices and officer management programs.
2272.
Space science and technology strategy: coordination.
2273.
Policy regarding assured access to space: national security payloads.
2273a.
Operationally Responsive Space Program Office.
2274.
Space surveillance network: pilot program for provision of satellite tracking support to entities outside United States Government.

        

Amendments

2006—Pub. L. 109–364, div. A, title IX, §913(b)(2), Oct. 17, 2006, 120 Stat. 2357, substituted “Operationally Responsive Space Program Office” for “Operationally responsive national security payloads and buses: separate program element required” in item 2273a.

2004—Pub. L. 108–375, div. A, title IX, §913(a)(2), Oct. 28, 2004, 118 Stat. 2028, added item 2273a.

2003—Pub. L. 108–136, div. A, title IX, §§911(a)(2), 912(b), 913(b), Nov. 24, 2003, 117 Stat. 1564, 1565, 1567, added items 2272 to 2274.

§2271. Management of space programs: joint program offices and officer management programs

(a) Joint Program Offices.—The Secretary of Defense shall take appropriate actions to ensure, to the maximum extent practicable, that space development and acquisition programs of the Department of Defense are carried out through joint program offices.

(b) Officer Management Programs.—(1) The Secretary of Defense shall take appropriate actions to ensure, to the maximum extent practicable, that—

(A) Army, Navy, and Marine Corps officers, as well as Air Force officers, are assigned to the space development and acquisition programs of the Department of Defense; and

(B) Army, Navy, and Marine Corps officers, as well as Air Force officers, are eligible, on the basis of qualification, to hold leadership positions within the joint program offices referred to in subsection (a).


(2) The Secretary of Defense shall designate those positions in the Office of the National Security Space Architect of the Department of Defense (or any successor office) that qualify as joint duty assignment positions for purposes of chapter 38 of this title.

(Added Pub. L. 107–107, div. A, title IX, §911(a), Dec. 28, 2001, 115 Stat. 1195.)

Prior Provisions

A prior section 2271, act Aug. 10, 1956, ch. 1041, 70A Stat. 123, related to competitions for designs of aircraft, aircraft parts, and aeronautical accessories, prior to repeal by Pub. L. 103–160, div. A, title VIII, §821(a)(1), Nov. 30, 1993, 107 Stat. 1704.

Space Situational Awareness Strategy and Space Control Mission Review

Pub. L. 109–163, div. A, title IX, §911, Jan. 6, 2006, 119 Stat. 3405, provided that:

“(a) Findings.—The Congress finds that—

“(1) the Department of Defense has the responsibility, within the executive branch, for developing the strategy and the systems of the United States for ensuring freedom to operate United States space assets affecting national security; and

“(2) the foundation of any credible strategy for ensuring freedom to operate United States space assets is a comprehensive system for space situational awareness.

“(b) Space Situational Awareness Strategy.—

“(1) Requirement.—The Secretary of Defense shall develop a strategy, to be known as the ‘Space Situational Awareness Strategy’, for ensuring freedom to operate United States space assets affecting national security. The Secretary shall submit the Space Situational Awareness Strategy to Congress not later than April 15, 2006. The Secretary shall submit to Congress an updated, current version of the strategy not later than April 15 of every odd-numbered year thereafter.

“(2) Time periods.—The Space Situational Awareness Strategy shall cover—

“(A) the 20-year period from 2006 through 2025; and

“(B) three separate successive periods, the first beginning with 2006, designed to align with the next three periods for the Future-Years Defense Plan.

“(3) Matters to be included.—The Space Situational Awareness Strategy shall include the following for each period specified in paragraph (2):

“(A) A threat assessment describing the perceived threats to United States space assets affecting national security.

“(B) A list of the desired effects and required space situational awareness capabilities required for national security.

“(C) Details for a coherent and comprehensive strategy for the United States for space situational awareness, together with a description of the systems architecture to implement that strategy in light of the threat assessment and the desired effects and required capabilities identified under subparagraphs (A) and (B).

“(D) The space situational awareness capabilities roadmap required by subsection (c).

“(c) Space Situational Awareness Capabilities Roadmap.—The Space Situational Awareness Strategy shall include a roadmap, to be known as the ‘space situational awareness capabilities roadmap’, which shall include the following:

“(1) A description of each of the individual program concepts that will make up the systems architecture described pursuant to subsection (b)(3)(C).

“(2) For each such program concept, a description of the specific capabilities to be achieved and the threats to be abated.

“(d) Space Situational Awareness Implementation Plan.—

“(1) Requirement.—The Secretary of the Air Force shall develop a plan, to be known as the ‘space situational awareness implementation plan’, for the development of the systems architecture described pursuant to subsection (b)(3)(C).

“(2) Matters to be included.—The space situational awareness implementation plan shall include a description of the following:

“(A) The capabilities of all systems deployed as of mid-2005 or planned for modernization or acquisition from 2006 to 2015.

“(B) Recommended solutions for inadequacies in the architecture to address threats and the desired effects and required capabilities identified under subparagraphs (A) and (B) of subsection (b)(3).

“(e) Space Control Mission Review and Assessment.—

“(1) Requirement.—The Secretary of Defense shall provide for a review and assessment of the requirements of the Department of Defense for the space control mission. The review and assessment shall be conducted by an entity of the Department of Defense outside of the Department of the Air Force.

“(2) Matters to be included.—The review and assessment under paragraph (1) shall consider the following:

“(A) Whether current activities of the Department of Defense match current requirements of the Department for the current space control mission.

“(B) Whether there exists proper allocation of appropriate resources to fulfill the current space control mission.

“(C) The plans of the Department of Defense for the future space control mission.

“(3) Report.—Not later than 180 days after the date of the enactment of this Act [Jan. 6, 2006], the Secretary of Defense shall submit to the congressional defense committees [Committees on Armed Services and Appropriations of the Senate and the House of Representatives] a report on the results of the review and assessment under paragraph (1). The report shall include the following:

“(A) The findings and conclusions of the entity conducting the review and assessment on (A) requirements of the Department of Defense for the space control mission, and (B) the efforts of the Department to meet those requirements.

“(B) Recommendations regarding the best means by which the Department may meet those requirements.

“(4) Space control mission defined.—In this subsection, the term ‘space control mission’ means the mission of the Department of Defense involving the following:

“(A) Space situational awareness.

“(B) Defensive counterspace operations.

“(C) Offensive counterspace operations.”

Space Personnel Career Fields

Pub. L. 108–136, div. A, title V, §547, Nov. 24, 2003, 117 Stat. 1480, as amended by Pub. L. 108–271, §8(b), July 7, 2004, 118 Stat. 814, provided that:

“(a) Strategy Required.—The Secretary of Defense shall develop a strategy for the Department of Defense that will—

“(1) promote the development of space personnel career fields within each of the military departments; and

“(2) ensure that the space personnel career fields developed by the military departments are integrated with each other to the maximum extent practicable.

“(b) Report.—Not later than February 1, 2004, the Secretary shall submit to the Committees on Armed Services of the Senate and the House of Representatives a report on the strategy developed under subsection (a). The report shall include the following:

“(1) A statement of the strategy developed under subsection (a), together with an explanation of that strategy.

“(2) An assessment of the measures required for the Department of Defense and the military departments to integrate the space personnel career fields of the military departments.

“(3) A comprehensive assessment of the adequacy of the actions of the Secretary of Air Force pursuant to section 8084 of title 10, United States Code, to establish for Air Force officers a career field for space.

“(c) Government Accountability Office Review and Reports.—(1) The Comptroller General shall review the strategy developed under subsection (a) and the status of efforts by the military departments in developing space personnel career fields.

“(2) The Comptroller General shall submit to the committees referred to in subsection (b) two reports on the review under paragraph (1), as follows:

“(A) Not later than June 15, 2004, the Comptroller General shall submit a report that assesses how effective that Department of Defense strategy and the efforts by the military departments, when implemented, are likely to be for developing the personnel required by each of the military departments who are expert in development of space doctrine and concepts of space operations, the development of space systems, and operation of space systems.

“(B) Not later than March 15, 2005, the Comptroller General shall submit a report that assesses, as of the date of the report—

“(i) the effectiveness of that Department of Defense strategy and the efforts by the military departments in developing the personnel required by each of the military departments who are expert in development of space doctrine and concepts of space operations, the development of space systems, and in operation of space systems; and

“(ii) progress made in integrating the space career fields of the military departments.”

Comptroller General Assessment of Implementation of Recommendations of Space Commission

Pub. L. 107–107, div. A, title IX, §914, Dec. 28, 2001, 115 Stat. 1197, directed the Comptroller General to carry out an assessment through Feb. 15, 2003, of the actions taken by the Secretary of Defense in implementing the recommendations in the report of the Space Commission submitted to Congress pursuant to Pub. L. 106–65, §1623, formerly set out as a note under section 111 of this title, that were applicable to the Department of Defense, and to submit reports to committees of Congress, not later than Feb. 15, 2002, and Feb. 15, 2003, setting forth the results of the assessment.

§2272. Space science and technology strategy: coordination

(a) Space Science and Technology Strategy.—(1) The Secretary of Defense shall develop and implement a space science and technology strategy and shall review and, as appropriate, revise the strategy annually. Functions of the Secretary under this subsection shall be carried out jointly by the Director of Defense Research and Engineering and the official of the Department of Defense designated as the Department of Defense Executive Agent for Space.

(2) The strategy under paragraph (1) shall, at a minimum, address the following issues:

(A) Short-term and long-term goals of the space science and technology programs of the Department of Defense.

(B) The process for achieving the goals identified under subparagraph (A), including an implementation plan for achieving those goals.

(C) The process for assessing progress made toward achieving those goals.


(3) The strategy under paragraph (1) shall be included as part of the annual National Security Space Plan developed pursuant to Department of Defense regulations and shall be provided to Department of Defense components and science and technology entities of the Department of Defense to support the planning, programming, and budgeting processes of the Department.

(4) The strategy under paragraph (1) shall be developed in consultation with the directors of research laboratories of the Department of Defense, the directors of the other Department of Defense research components, and the heads of other organizations of the Department of Defense as identified by the Director of Defense Research and Engineering and the Department of Defense Executive Agent for Space.

(5) The strategy shall be available for review by the congressional defense committees.

(b) Required Coordination.—In carrying out the space science and technology strategy developed under subsection (a), the directors of the research laboratories of the Department of Defense, the directors of the other Department of Defense research components, and the heads of all other appropriate organizations identified jointly by the Director of Defense Research and Engineering and the Department of Defense Executive Agent for Space shall each—

(1) identify research projects in support of that strategy that contribute directly and uniquely to the development of space technology; and

(2) inform the Director of Defense Research and Engineering and the Department of Defense Executive Agent for Space of the planned budget and planned schedule for executing those projects.


(c) Definitions.—In this section:

(1) The term “research laboratory of the Department of Defense” means any of the following:

(A) The Air Force Research Laboratory.

(B) The Naval Research Laboratory.

(C) The Office of Naval Research.

(D) The Army Research Laboratory.


(2) The term “other Department of Defense research component” means either of the following:

(A) The Defense Advanced Research Projects Agency.

(B) The National Reconnaissance Office.

(Added Pub. L. 108–136, div. A, title IX, §911(a)(1), Nov. 24, 2003, 117 Stat. 1563.)

Prior Provisions

A prior section 2272, act Aug. 10, 1956, ch. 1041, 70A Stat. 124, related to contracts to obtain designs submitted in design competitions, prior to repeal by Pub. L. 103–160, div. A, title VIII, §821(a)(1), Nov. 30, 1993, 107 Stat. 1704.

§2273. Policy regarding assured access to space: national security payloads

(a) Policy.—It is the policy of the United States for the President to undertake actions appropriate to ensure, to the maximum extent practicable, that the United States has the capabilities necessary to launch and insert United States national security payloads into space whenever such payloads are needed in space.

(b) Included Actions.—The appropriate actions referred to in subsection (a) shall include, at a minimum, providing resources and policy guidance to sustain—

(1) the availability of at least two space launch vehicles (or families of space launch vehicles) capable of delivering into space any payload designated by the Secretary of Defense or the Director of Central Intelligence as a national security payload; and

(2) a robust space launch infrastructure and industrial base.


(c) Coordination.—The Secretary of Defense shall, to the maximum extent practicable, pursue the attainment of the capabilities described in subsection (a) in coordination with the Administrator of the National Aeronautics and Space Administration.

(Added Pub. L. 108–136, div. A, title IX, §912(a)(1), Nov. 24, 2003, 117 Stat. 1565.)

Prior Provisions

A prior section 2273, acts Aug. 10, 1956, ch. 1041, 70A Stat. 125; Apr. 2, 1982, Pub. L. 97–164, title I, §160(a)(4), 96 Stat. 48; Oct. 29, 1992, Pub. L. 102–572, title IX, §902(b)(1), 106 Stat. 4516, related to right of United States to designs, rights of designers to patents, and rights to sue United States, prior to repeal by Pub. L. 103–160, div. A, title VIII, §821(a)(1), Nov. 30, 1993, 107 Stat. 1704.

Change of Name

Reference to the Director of Central Intelligence or the Director of the Central Intelligence Agency in the Director's capacity as the head of the intelligence community deemed to be a reference to the Director of National Intelligence. Reference to the Director of Central Intelligence or the Director of the Central Intelligence Agency in the Director's capacity as the head of the Central Intelligence Agency deemed to be a reference to the Director of the Central Intelligence Agency. See section 1081(a), (b) of Pub. L. 108–458, set out as a note under section 401 of Title 50, War and National Defense.

§2273a. Operationally Responsive Space Program Office

(a) Establishment.—The Secretary of Defense shall establish within the Department of Defense an office to be known as the Operationally Responsive Space Program Office (in this section referred to as the “Office”).

(b) Head of Office.—The head of the Office shall be—

(1) the Department of Defense Executive Agent for Space; or

(2) the designee of the Secretary of Defense, who shall report to the Department of Defense Executive Agent for Space.


(c) Mission.—The mission of the Office shall be—

(1) to contribute to the development of low-cost, rapid reaction payloads, busses, spacelift, and launch control capabilities in order to fulfill joint military operational requirements for on-demand space support and reconstitution; and

(2) to coordinate and execute operationally responsive space efforts across the Department of Defense with respect to planning, acquisition, and operations.


(d) Elements.—The Secretary of Defense shall select the elements of the Department of Defense to be included in the Office so as to contribute to the development of capabilities for operationally responsive space and to achieve a balanced representation of the military departments in the Office to ensure proper acknowledgment of joint considerations in the activities of the Office, except that the Office shall include the following:

(1) A science and technology element that shall pursue innovative approaches to the development of capabilities for operationally responsive space through basic and applied research focused on (but not limited to) payloads, bus, and launch equipment.

(2) An acquisition element that shall undertake the acquisition of systems necessary to integrate, sustain, and launch assets for operationally responsive space.

(3) An operations element that shall—

(A) sustain and maintain assets for operationally responsive space prior to launch;

(B) integrate and launch such assets; and

(C) operate such assets in orbit.


(4) A combatant command support element that shall serve as the primary intermediary between the military departments and the combatant commands in order to—

(A) ascertain the needs of the commanders of the combatant commands; and

(B) integrate operationally responsive space capabilities into—

(i) operations plans of the combatant commands;

(ii) techniques, tactics, and procedures of the military departments; and

(iii) military exercises, demonstrations, and war games.


(5) Such other elements as the Secretary of Defense may consider necessary.


(e) Acquisition Authority.—The acquisition activities of the Office shall be subject to the following:

(1) The Department of Defense Executive Agent for Space shall be the senior acquisition executive of the Office.

(2) The Joint Capabilities Integration and Development System process shall not apply to acquisitions by the Office for operational experimentation.

(3) The commander of the United States Strategic Command, or the designee of the commander, shall—

(A) validate all system requirements for systems to be acquired by the Office; and

(B) participate in the approval of any acquisition program initiated by the Office.


(4) To the maximum extent practicable, the procurement unit cost of a launch vehicle procured by the Office for launch to low earth orbit should not exceed $20,000,000 (in constant dollars).

(5) To the maximum extent practicable, the procurement unit cost of an integrated satellite procured by the Office should not exceed $40,000,000 (in constant dollars).


(f) Required Program Element.—(1) The Secretary of Defense shall ensure that, within budget program elements for space programs of the Department of Defense, that—

(A) there is a separate, dedicated program element for operationally responsive space;

(B) to the extent applicable, relevant program elements should be consolidated into the program element required by subparagraph (A); and

(C) the Office executes its responsibilities through this program element.


(2) The Office shall manage the program element required by paragraph (1)(A).

(Added Pub. L. 108–375, div. A, title IX, §913(a)(1), Oct. 28, 2004, 118 Stat. 2028; amended Pub. L. 109–364, div. A, title IX, §913(b)(1), Oct. 17, 2006, 120 Stat. 2355.)

Amendments

2006—Pub. L. 109–364 amended section catchline and text generally, substituting provisions relating to establishment, control, mission, elements, and authority of the Operationally Responsive Space Program Office within the Department of Defense for provisions relating to requirement for a separate, dedicated program element for operationally responsive national security payloads and buses within budget program elements for space programs of the Department of Defense.

Effective Date

Pub. L. 108–375, div. A, title IX, §913(b), Oct. 28, 2004, 118 Stat. 2028, provided that: “Subsection (a) of section 2273a of title 10, United States Code, as added by subsection (a), shall apply with respect to fiscal years after fiscal year 2005.”

United States Policy on Operationally Responsive Space

Pub. L. 109–364, div. A, title IX, §913(a), Oct. 17, 2006, 120 Stat. 2355, provided that: “It is the policy of the United States to demonstrate, acquire, and deploy an effective capability for operationally responsive space to support military users and operations from space, which shall consist of—

“(1) responsive satellite payloads and busses built to common technical standards;

“(2) low-cost space launch vehicles and supporting range operations that facilitate the timely launch and on-orbit operations of satellites;

“(3) responsive command and control capabilities; and

“(4) concepts of operations, tactics, techniques, and procedures that permit the use of responsive space assets for combat and military operations other than war.”

Joint Operationally Responsive Space Payload Technology Organization

Pub. L. 109–163, div. A, title IX, §913(a), Jan. 6, 2006, 119 Stat. 3408, which directed the Secretary of Defense to establish or designate an organization in the Department of Defense to coordinate joint operationally responsive space payload technology, was repealed by Pub. L. 109–364, div. A, title IX, §913(d), Oct. 17, 2006, 120 Stat. 2358.

§2274. Space surveillance network: pilot program for provision of satellite tracking support to entities outside United States Government

(a) Pilot Program.—The Secretary of Defense may carry out a pilot program to determine the feasibility and desirability of providing to non-United States Government entities space surveillance data support described in subsection (b).

(b) Space Surveillance Data Support.—Under such a pilot program, the Secretary may provide to a non-United States Government entity, subject to an agreement described in subsection (d), the following:

(1) Satellite tracking services from assets owned or controlled by the Department of Defense, but only if the Secretary determines, in the case of any such agreement, that providing such services to that entity is in the national security interests of the United States.

(2) Space surveillance data and the analysis of space surveillance data, but only if the Secretary determines, in the case of any such agreement, that providing such data and analysis to that entity is in the national security interests of the United States.


(c) Eligible Entities.—Under the pilot program, the Secretary may provide space surveillance data support to non-United States Government entities including the following:

(1) State governments.

(2) Governments of political subdivisions of States.

(3) United States commercial entities.

(4) Governments of foreign countries.

(5) Foreign commercial entities.


(d) Required Agreement.—The Secretary may not provide space surveillance data support to a non-United States Government entity under the pilot program unless that entity enters into an agreement with the Secretary under which the entity—

(1) agrees to pay an amount that may be charged by the Secretary under subsection (e); and

(2) agrees not to transfer any data or technical information received under the agreement, including the analysis of tracking data, to any other entity without the express approval of the Secretary.


(e) Rule of Construction Concerning Provision of Intelligence Assets or Data.—Nothing in this section shall be considered to authorize the provision of services or information concerning, or derived from, United States intelligence assets or data.

(f) Charges.—(1) As a condition of an agreement under subsection (d), the Secretary may (except as provided in paragraph (2)) require the non-United States Government entity entering into the agreement to pay to the Department of Defense such amounts as the Secretary determines to be necessary to reimburse the Department for the costs of the Department of providing space surveillance data support under the agreement.

(2) The Secretary may not require the government of a State or of a political subdivision of a State to pay any amount under paragraph (1).

(g) Crediting of Funds Received.—Funds received for the provision of space surveillance data support pursuant to an agreement under this section shall be credited to accounts of the Department of Defense that are current when the funds are received and that are available for the same purposes as the accounts originally charged to provide such support. Funds so credited shall merge with and become available for obligation for the same period as the accounts to which they are credited.

(h) Procedures.—The Secretary shall establish procedures for the conduct of the pilot program. As part of those procedures, the Secretary may allow space surveillance data and analysis of space surveillance data to be provided through a contractor of the Department of Defense.

(i) Duration of Pilot Program.—The pilot program under this section may be conducted through September 30, 2009.

(Added Pub. L. 108–136, div. A, title IX, §913(a), Nov. 24, 2003, 117 Stat. 1565; amended Pub. L. 109–364, div. A, title IX, §912, Oct. 17, 2006, 120 Stat. 2355.)

Prior Provisions

Prior sections 2274 to 2279 were repealed by Pub. L. 103–160, div. A, title VIII, §821(a)(1), Nov. 30, 1993, 107 Stat. 1704.

Section 2274, act Aug. 10, 1956, ch. 1041, 70A Stat. 126, related to procurement for experimental purposes.

Section 2275, act Aug. 10, 1956, ch. 1041, 70A Stat. 126, related to award of contracts and review of decisions.

Section 2276, acts Aug. 10, 1956, ch. 1041, 70A Stat. 126; Sept. 7, 1962, Pub. L. 87–651, title I, §131, 76 Stat. 514, related to inspection and audit of plants and books of contractors and provided criminal penalties for violations.

Section 2277, act Aug. 10, 1956, ch. 1041, 70A Stat. 127, related to availability of appropriations.

Section 2278, act Aug. 10, 1956, ch. 1041, 70A Stat. 127, related to purchases of sample aircraft.

Section 2279, act Aug. 10, 1956, ch. 1041, 70A Stat. 127, related to restrictions on alien employees of contractors as to access to plans and specifications.

Amendments

2006—Subsec. (i). Pub. L. 109–364 substituted “may be conducted through September 30, 2009” for “shall be conducted during the three-year period beginning on a date specified by the Secretary of Defense, which date shall be not later than 180 days after the date of the enactment of this section”.

CHAPTER 136—PROVISIONS RELATING TO SPECIFIC PROGRAMS

Sec.
2281.
Global Positioning System.
2282.
B–2 bomber: annual report.

        

Amendments

2000—Pub. L. 106–398, §1 [[div. A], title I, §131(a)(2)], Oct. 30, 2000, 114 Stat. 1654, 1654A–29, added item 2282.

§2281. Global Positioning System

(a) Sustainment and Operation for Military Purposes.—The Secretary of Defense shall provide for the sustainment of the capabilities of the Global Positioning System (hereinafter in this section referred to as the “GPS”), and the operation of basic GPS services, that are beneficial for the national security interests of the United States. In doing so, the Secretary shall—

(1) develop appropriate measures for preventing hostile use of the GPS so as to make it unnecessary for the Secretary to use the selective availability feature of the system continuously while not hindering the use of the GPS by the United States and its allies for military purposes; and

(2) ensure that United States armed forces have the capability to use the GPS effectively despite hostile attempts to prevent the use of the system by such forces.


(b) Sustainment and Operation for Civilian Purposes.—The Secretary of Defense shall provide for the sustainment and operation of the GPS Standard Positioning Service for peaceful civil, commercial, and scientific uses on a continuous worldwide basis free of direct user fees. In doing so, the Secretary—

(1) shall provide for the sustainment and operation of the GPS Standard Positioning Service in order to meet the performance requirements of the Federal Radionavigation Plan prepared jointly by the Secretary of Defense and the Secretary of Transportation pursuant to subsection (c);

(2) shall coordinate with the Secretary of Transportation regarding the development and implementation by the Government of augmentations to the basic GPS that achieve or enhance uses of the system in support of transportation;

(3) shall coordinate with the Secretary of Commerce, the United States Trade Representative, and other appropriate officials to facilitate the development of new and expanded civil and commercial uses for the GPS;

(4) shall develop measures for preventing hostile use of the GPS in a particular area without hindering peaceful civil use of the system elsewhere; and

(5) may not agree to any restriction on the Global Positioning System proposed by the head of a department or agency of the United States outside the Department of Defense in the exercise of that official's regulatory authority that would adversely affect the military potential of the Global Positioning System.


(c) Federal Radionavigation Plan.—The Secretary of Defense and the Secretary of Transportation shall jointly prepare the Federal Radionavigation Plan. The plan shall be revised and updated not less often than every two years. The plan shall be prepared in accordance with the requirements applicable to such plan as first prepared pursuant to section 507 of the International Maritime Satellite Telecommunications Act 1 (47 U.S.C. 756). The plan, and any amendment to the plan, shall be published in the Federal Register.

(d) Biennial Report.—(1) Not later than 30 days after the end of each even-numbered fiscal year, the Secretary of Defense shall submit to the Committee on Armed Services of the Senate and the Committee on Armed Services of the House of Representatives a report on the Global Positioning System. The report shall include a discussion of the following matters:

(A) The operational status of the system.

(B) The capability of the system to satisfy effectively (i) the military requirements for the system that are current as of the date of the report, and (ii) the performance requirements of the Federal Radionavigation Plan.

(C) The status of cooperative activities undertaken by the United States with the governments of other countries concerning the capability of the system or any augmentation of the system to satisfy civil, commercial, scientific, and military requirements, including a discussion of the status and results of activities undertaken under any regional international agreement.

(D) Progress and challenges in establishing GPS as an international standard for consistency of navigational service.

(E) Progress and challenges in protecting GPS from jamming, disruption, and interference.

(F) Progress and challenges in developing the enhanced Global Positioning System required by section 218(b) of the Strom Thurmond National Defense Authorization Act for Fiscal Year 1999 (Public Law 105–261; 112 Stat. 1951; 10 U.S.C. 2281 note).

(G) The effects of use of the system on national security, regional security, and the economic competitiveness of United States industry, including the Global Positioning System equipment and service industry and user industries.


(2) In preparing the parts of each such report required under subparagraphs (C), (D), (E), (F), and (G) of paragraph (1), the Secretary of Defense shall consult with the Secretary of State, the Secretary of Commerce, and the Secretary of Transportation.

(e) Definitions.—In this section:

(1) The term “basic GPS services” means the following components of the Global Positioning System that are operated and maintained by the Department of Defense:

(A) The constellation of satellites.

(B) The navigation payloads that produce the Global Positioning System signals.

(C) The ground stations, data links, and associated command and control facilities.


(2) The term “GPS Standard Positioning Service” means the civil and commercial service provided by the basic Global Positioning System as defined in the 1996 Federal Radionavigation Plan (published jointly by the Secretary of Defense and the Secretary of Transportation in July 1997).

(Added Pub. L. 105–85, div. A, title X, §1074(d)(1), Nov. 18, 1997, 111 Stat. 1909; amended Pub. L. 106–65, div. A, title X, §1067(1), Oct. 5, 1999, 113 Stat. 774; Pub. L. 108–136, div. A, title IX, §914, Nov. 24, 2003, 117 Stat. 1567.)

References in Text

Section 507 of the International Maritime Satellite Telecommunications Act, referred to in subsec. (c), is section 507 of Pub. L. 87–624 which was classified to section 756 of Title 47, Telegraphs, Telephones, and Radiotelegraphs, prior to repeal by Pub. L. 103–414, title III, §304(b)(5), Oct. 25, 1994, 108 Stat. 4298.

Amendments

2003—Subsec. (d)(1)(C). Pub. L. 108–136, §914(a)(1), (2), redesignated subpar. (D) as (C) and struck out former subpar. (C) which read as follows: “The most recent determination by the President regarding continued use of the selective availability feature of the system and the expected date of any change or elimination of the use of that feature.”

Subsec. (d)(1)(D). Pub. L. 108–136, §914(a)(3), redesignated subpar. (E) as (D) and substituted “Progress and challenges in” for “Any progress made toward”. Former subpar. (D) redesignated (C).

Subsec. (d)(1)(E). Pub. L. 108–136, §914(a)(4), added subpar. (E). Former subpar. (E) redesignated (D).

Subsec. (d)(1)(F). Pub. L. 108–136, §914(a)(4), added subpar. (F) and struck out former subpar. (F) which read as follows: “Any progress made toward protecting GPS from disruption and interference.”

Subsec. (d)(2). Pub. L. 108–136, §914(b), inserted “(C),” after “under subparagraphs”.

1999—Subsec. (d)(1). Pub. L. 106–65 substituted “and the Committee on Armed Services” for “and the Committee on National Security” in introductory provisions.

Authorization of Interagency Support for Global Positioning System

Pub. L. 106–405, §8, Nov. 1, 2000, 114 Stat. 1753, as amended by Pub. L. 109–364, div. A, title IX, §911, Oct. 17, 2006, 120 Stat. 2354, provided that: “The use of multi-agency funding and other forms of support is hereby authorized for the functions and activities of the following organizations established pursuant to the United States Space-Based Position, Navigation, and Timing Policy issued December 8, 2004 (and any successor organization, to the extent the successor organization performs the functions of the specified organization):

“(1) The interagency committee known as the National Space-Based Positioning, Navigation, and Timing Executive Committee.

“(2) The support office for the committee specified in paragraph (1) known as the National Space-Based Positioning, Navigation, and Timing Coordination Office.

“(3) The Federal advisory committee known as the National Space-Based Positioning, Navigation, and Timing Advisory Board.”

Enhanced Global Positioning System Program

Pub. L. 105–261, div. A, title II, §218, Oct. 17, 1998, 112 Stat. 1951, provided that:

“(a) Policy on Priority for Development of Enhanced GPS System.—The development of an enhanced Global Positioning System is an urgent national security priority.

“(b) Development Required.—To fulfill the requirements described in section 279(b) of the National Defense Authorization Act for Fiscal Year 1996 (Public Law 104–106; 110 Stat. 243) [set out as a note below] and section 2281 of title 10, United States Code, the Secretary of Defense shall develop an enhanced Global Positioning System in accordance with the priority declared in subsection (a). The enhanced Global Positioning System shall include the following elements:

“(1) An evolved satellite system that includes increased signal power and other improvements such as regional-level directional signal enhancements.

“(2) Enhanced receivers and user equipment that are capable of providing military users with direct access to encrypted Global Positioning System signals.

“(3) To the extent funded by the Secretary of Transportation, additional civil frequencies and other enhancements for civil users.

“(c) Sense of Congress Regarding Funding.—It is the sense of Congress that—

“(1) the Secretary of Defense should ensure that the future-years defense program provides for sufficient funding to develop and deploy an enhanced Global Positioning System in accordance with the priority declared in subsection (a); and

“(2) the Secretary of Transportation should provide sufficient funding to support additional civil frequencies for the Global Positioning System and other enhancements of the system for civil users.

“(d) Plan for Development of Enhanced Global Positioning System.—Not later than April 15, 1999, the Secretary of Defense shall submit to Congress a plan for carrying out the requirements of subsection (b).

“(e) Delayed Effective Date for Limitation on Procurement of Systems Not GPS-Equipped.—[Amended section 152(b) of Pub. L. 103–160, set out as a note below.]

“(f) Funding From Authorized Appropriations for Fiscal Year 1999.—Of the amounts authorized to be appropriated under section 201(3) [112 Stat. 1946], $44,000,000 shall be available to establish and carry out an enhanced Global Positioning System program.”

Sustainment and Operation of Global Positioning System

Section 1074(a), (b) of Pub. L. 105–85 provided that:

“(a) Findings.—Congress makes the following findings:

“(1) The Global Positioning System (consisting of a constellation of satellites and associated facilities capable of providing users on earth with a highly precise statement of their location on earth) makes significant contributions to the attainment of the national security and foreign policy goals of the United States, the safety and efficiency of international transportation, and the economic growth, trade, and productivity of the United States.

“(2) The infrastructure for the Global Positioning System (including both space and ground segments of the infrastructure) is vital to the effectiveness of United States and allied military forces and to the protection of the national security interests of the United States.

“(3) In addition to having military uses, the Global Positioning System has essential civil, commercial, and scientific uses.

“(4) As a result of the increasing demand of civil, commercial, and scientific users of the Global Positioning System—

“(A) there has emerged in the United States a new commercial industry to provide Global Positioning System equipment and related services to the many and varied users of the system; and

“(B) there have been rapid technical advancements in Global Positioning System equipment and services that have contributed significantly to reductions in the cost of the Global Positioning System and increases in the technical capabilities and availability of the system for military uses.

“(5) It is in the national interest of the United States for the United States—

“(A) to support continuation of the multiple-use character of the Global Positioning System;

“(B) to promote broader acceptance and use of the Global Positioning System and the technological standards that facilitate expanded use of the system for civil purposes;

“(C) to coordinate with other countries to ensure (i) efficient management of the electromagnetic spectrum used by the Global Positioning System, and (ii) protection of that spectrum in order to prevent disruption of signals from the system and interference with that portion of the electromagnetic spectrum used by the system; and

“(D) to encourage open access in all international markets to the Global Positioning System and supporting equipment, services, and techniques.

“(b) International Cooperation.—Congress urges the President to promote the security of the United States and its allies, the public safety, and commercial interests by taking the following steps:

“(1) Undertaking a coordinated effort within the executive branch to seek to establish the Global Positioning System, and augmentations to the system, as a worldwide resource.

“(2) Seeking to enter into international agreements to establish signal and service standards that protect the Global Positioning System from disruption and interference.

“(3) Undertaking efforts to eliminate any barriers to, and other restrictions of foreign governments on, peaceful uses of the Global Positioning System.

“(4) Requiring that any proposed international agreement involving nonmilitary use of the Global Positioning System or any augmentation to the system not be agreed to by the United States unless the proposed agreement has been reviewed by the Secretary of State, the Secretary of Defense, the Secretary of Transportation, and the Secretary of Commerce (acting as the Interagency Global Positioning System Executive Board established by Presidential Decision Directive NSTC–6, dated March 28, 1996).”

Access to Global Positioning System

Pub. L. 104–106, div. A, title II, §279, Feb. 10, 1996, 110 Stat. 243, provided that:

“(a) Conditional Prohibition on Use of Selective Availability Feature.—Except as provided in subsection (b), after May 1, 1996, the Secretary of Defense may not (through use of the feature known as ‘selective availability’) deny access of non-Department of Defense users to the full capabilities of the Global Positioning System.

“(b) Plan.—Subsection (a) shall cease to apply upon submission by the Secretary of Defense to the Committee on Armed Services of the Senate and the Committee on National Security of the House of Representatives of a plan for enhancement of the Global Positioning System that provides for—

“(1) development and acquisition of effective capabilities to deny hostile military forces the ability to use the Global Positioning System without hindering the ability of United States military forces and civil users to have access to and use of the system, together with a specific date by which those capabilities could be operational; and

“(2) development and acquisition of receivers for the Global Positioning System and other techniques for weapons and weapon systems that provide substantially improved resistance to jamming and other forms of electronic interference or disruption, together with a specific date by which those receivers and other techniques could be operational with United States military forces.”

Limitation on Procurement of Systems Not GPS-Equipped

Pub. L. 103–160, div. A, title I, §152(b), Nov. 30, 1993, 107 Stat. 1578, as amended by Pub. L. 105–261, div. A, title II, §218(e), Oct. 17, 1998, 112 Stat. 1952; Pub. L. 109–163, div. A, title II, §260(a), Jan. 6, 2006, 119 Stat. 3185, provided that: “After September 30, 2007, funds may not be obligated to modify or procure any Department of Defense aircraft, ship, armored vehicle, or indirect-fire weapon system that is not equipped with a Global Positioning System receiver.”

[Pub. L. 109–163, div. A, title II, §260(b), Jan. 6, 2006, 119 Stat. 3186, provided that: “The amendment made by subsection (a) [amending section 152(b) of Pub. L. 103–160, set out above] shall be deemed to have taken effect at the close of September 30, 2005, and any obligation or expenditure of funds by the Department of Defense during the period beginning on October 1, 2005, and ending on the date of the enactment of this Act [Jan. 6, 2006] to modify or procure a Department of Defense aircraft, ship, armored vehicle, or indirect-fire weapon system that is not equipped with a Global Positioning System receiver is hereby ratified with respect to the provision of law specified in subsection (a).”]

1 See References in Text note below.

§2282. B–2 bomber: annual report

Not later than March 1 of each year through 2008, the Secretary of Defense shall submit to the Committee on Armed Services of the Senate and the Committee on Armed Services of the House of Representatives a report on the B–2 bomber aircraft. Each such report shall include the following:

(1) Identification of the average full-mission capable rate of B–2 aircraft for the preceding fiscal year and the Secretary's overall assessment of the implications of that full-mission capable rate on mission accomplishment for the B–2 aircraft, together with the Secretary's determination as to whether that rate is adequate for the accomplishment of each of the missions assigned to the B–2 aircraft as of the date of the assessment.

(2) An assessment of the technical capabilities of the B–2 aircraft and whether these capabilities are adequate to accomplish each of the missions assigned to that aircraft as of the date of the assessment.

(3) Identification of all ongoing and planned development of technologies to enhance the capabilities of that aircraft.

(4) Identification and assessment of additional technologies that would make that aircraft more capable or survivable against known and evolving threats.

(5) A fiscally phased program for each technology identified in paragraphs (3) and (4) for the budget year and the future-years defense program, based on the following three funding situations:

(A) The President's current budget.

(B) The President's current budget and the current Department of Defense unfunded priority list.

(C) The maximum executable funding for the B–2 aircraft given the requirement to maintain enough operationally ready aircraft to accomplish missions assigned to the B–2 aircraft.

(Added Pub. L. 106–398, §1 [[div. A], title I, §131(a)(1)], Oct. 30, 2000, 114 Stat. 1654, 1654A–28; amended Pub. L. 108–136, div. A, title X, §1031(a)(14), Nov. 24, 2003, 117 Stat. 1597.)

Amendments

2003—Pub. L. 108–136 inserted “through 2008” after “March 1 of each year” in introductory provisions.

CHAPTER 137—PROCUREMENT GENERALLY

Sec.
[2301.
Repealed.]
2302.
Definitions.
2302a.
Simplified acquisition threshold.
2302b.
Implementation of simplified acquisition procedures.
2302c.
Implementation of electronic commerce capability.
2302d.
Major system: definitional threshold amounts.
2303.
Applicability of chapter.
[2303a.
Repealed.]
2304.
Contracts: competition requirements.
2304a.
Task and delivery order contracts: general authority.
2304b.
Task order contracts: advisory and assistance services.
2304c.
Task and delivery order contracts: orders.
2304d.
Task and delivery order contracts: definitions.
2304e.
Contracts: prohibition on competition between Department of Defense and small businesses and certain other entities.
2305.
Contracts: planning, solicitation, evaluation, and award procedures.
2305a.
Design-build selection procedures.
2306.
Kinds of contracts.
2306a.
Cost or pricing data: truth in negotiations.
2306b.
Multiyear contracts: acquisition of property.
2306c.
Multiyear contracts: acquisition of services.
2307.
Contract financing.
2308.
Buy-to-budget acquisition: end items.
2309.
Allocation of appropriations.
2310.
Determinations and decisions.
2311.
Assignment and delegation of procurement functions and responsibilities.
2312.
Remission of liquidated damages.
2313.
Examination of records of contractor.
2314.
Laws inapplicable to agencies named in section 2303 of this title.
2315.
Law inapplicable to the procurement of automatic data processing equipment and services for certain defense purposes.
2316.
Disclosure of identity of contractor.
[2317.
Repealed.]
2318.
Advocates for competition.
2319.
Encouragement of new competitors.
2320.
Rights in technical data.
2321.
Validation of proprietary data restrictions.
[2322.
Repealed.]
2323.
Contract goal for small disadvantaged businesses and certain institutions of higher education.
2323a.
Credit for Indian contracting in meeting certain subcontracting goals for small disadvantaged businesses and certain institutions of higher education.
2324.
Allowable costs under defense contracts.
2325.
Restructuring costs.
2326.
Undefinitized contractual actions: restrictions.
2327.
Contracts: consideration of national security objectives.
2328.
Release of technical data under Freedom of Information Act: recovery of costs.
[2329.
Repealed.]
2330.
Procurement of contract services: management structure.
2330a.
Procurement of services: tracking of purchases.
2331.
Procurement of services: contracts for professional and technical services.
2332.
Share-in-savings contracts.
2333.
Joint policies on requirements definition, contingency contracting, and program management.1

        

Amendments

2006—Pub. L. 109–364, div. A, title VIII, §854(a)(2), Oct. 17, 2006, 120 Stat. 2346, added item 2333.

Pub. L. 109–163, div. A, title VIII, §812(a)(2), Jan. 6, 2006, 119 Stat. 3378, substituted “Procurement of contract services: management structure” for “Procurement of services: management structure” in item 2330.

2002—Pub. L. 107–347, title II, §210(a)(2), Dec. 17, 2002, 116 Stat. 2934, added item 2332.

Pub. L. 107–314, div. A, title VIII, §801(a)(2), Dec. 2, 2002, 116 Stat. 2602, added item 2308.

2001—Pub. L. 107–107, div. A, title VIII, §801(g)(2), Dec. 28, 2001, 115 Stat. 1178, added items 2330, 2330a, and 2331 and struck out former item 2331 “Contracts for professional and technical services”.

2000—Pub. L. 106–398, §1 [[div. A], title VIII, §802(a)(2)], Oct. 30, 2000, 114 Stat. 1654, 1654A–205, added item 2306c.

1998—Pub. L. 105–261, div. A, title X, §1069(a)(3), Oct. 17, 1998, 112 Stat. 2135, substituted “electronic commerce capability” for “FACNET capability” in item 2302c.

1997—Pub. L. 105–85, div. A, title VIII, §804(a)(2), title X, §1073(a)(48)(B), Nov. 18, 1997, 111 Stat. 1833, 1903, substituted “contracts: acquisition of property” for “contracts” in item 2306b and added item 2325.

1996—Pub. L. 104–201, div. A, title VIII, §805(b), Sept. 23, 1996, 110 Stat. 2606, added item 2302d.

Pub. L. 104–106, div. D, title XLI, §4105(a)(2), title XLIII, §4321(b)(6)(B), Feb. 10, 1996, 110 Stat. 647, 672, redesignated item 2304a, relating to contracts: prohibition on competition between Department of Defense and small businesses and certain other entities, as 2304e and added item 2305a.

1994—Pub. L. 103–355, title I, §§1004(a)(2), 1022(a)(2), 1501(b), 1503(a)(2), (b)(2), 1506(b), title II, §§2001(i), 2201(a)(2), title IV, §§4002(b), 4203(a)(2), title VIII, §8104(b)(2), title IX, §9002(b), Oct. 13, 1994, 108 Stat. 3253, 3260, 3296–3298, 3303, 3318, 3338, 3346, 3391, 3402, struck out items 2301 “Congressional defense procurement policy”, 2308 “Assignment and delegation of procurement functions and responsibilities”, 2325 “Preference for nondevelopmental items”, and 2329 “Production special tooling and production special test equipment: contract terms and conditions”, added items 2302a to 2302c, 2304a relating to task and delivery order contracts: general authority, 2304b to 2304d, and 2306b, and substituted “Contract financing” for “Advance payments” in item 2307, “Assignment and delegation of procurement functions and responsibilities” for “Delegation” in item 2311, and “Examination of records of contractor” for “Examination of books and records of contractor” in item 2313.

1993—Pub. L. 103–160, div. A, title VIII, §§828(a)(1), 848(a)(2), Nov. 30, 1993, 107 Stat. 1713, 1725, added item 2304a and struck out item 2317 “Encouragement of competition and cost savings”.

1992—Pub. L. 102–484, div. A, title VIII, §801(a)(2), (g)(2), title X, §1052(25)(B), div. D, title XLII, §4271(b)(2), Oct. 23, 1992, 106 Stat. 2442, 2445, 2500, 2695, struck out items 2322 “Limitation on small business set-asides” and 2330 “Integrated financing policy” and added items 2323 and 2323a.

1990—Pub. L. 101–510, div. A, title VIII, §§804(b), 834(a)(2), Nov. 5, 1990, 104 Stat. 1591, 1614, struck out item 2323 “Commercial pricing for spare or repair parts” and added item 2331.

1988—Pub. L. 100–456, div. A, title VIII, §801(a)(2), Sept. 29, 1988, 102 Stat. 2007, added item 2330.

1987—Pub. L. 100–180, div. A, title VIII, §810(a)(2), Dec. 4, 1987, 101 Stat. 1132, added item 2329.

Pub. L. 100–26, §7(a)(7)(B)(ii), (b)(9)(B), Apr. 21, 1987, 101 Stat. 278, 280, transferred item 2305a “Major programs: competitive alternative sources”, to chapter 144 as item 2438 and substituted “Release of technical data under Freedom of Information Act: recovery of costs” for “Release of technical data” in item 2328.

Pub. L. 100–26, §5(4), (6), made technical amendments to directory language of sections 926(a)(2) and 954(a)(2), respectively, of Pub. L. 99–500, Pub. L. 99–591, and Pub. L. 99–661. See 1986 Amendment note below.

1986—Pub. L. 99–661, div. A, title XIII, §1343(a)(12), Nov. 14, 1986, 100 Stat. 3993, substituted “competitors” for “competition” in item 2319.

Pub. L. 99–500, §101(c) [title X, §§907(a)(2), 908(d)(1)(B), 926(a)(2), 951(a)(2), 952(c)(2), 954(a)(2)], Oct. 18, 1986, 100 Stat. 1783–82, 1783–138, 1783–141, 1783–155, 1783–165, 1783–169, 1783–173, and Pub. L. 99–591, §101(c) [title X, §§907(a)(2), 908(d)(1)(B), 926(a)(2), 951(a)(2), 952(c)(2), 954(a)(2)], Oct. 30, 1986, 100 Stat. 3341–82, 3341–138, 3341–141, 3341–155, 3341–165, 3341–169, 3341–173; Pub. L. 99–661, div. A, title IX, formerly title IV, §§907(a)(2), 908(d)(1)(B), 926(a)(2), 951(a)(2), 952(c)(2), 954(a)(2), Nov. 14, 1986, 100 Stat. 3917, 3921, 3935, 3945, 3949, 3953, renumbered title IX, Pub. L. 100–26, §3(5), Apr. 21, 1987, 101 Stat. 273; as amended by Pub. L. 100–26, §5(4), (6), Apr. 21, 1987, 101 Stat. 274, amended chapter analysis identically striking out “: cost or pricing data: truth in negotiations” after “contracts” in item 2306, substituting “spare or repair parts” for “supplies” in item 2323, and adding items 2306a and 2325 to 2328.

1985—Pub. L. 99–145, title IX, §§911(a)(2), 912(a)(2), Nov. 8, 1985, 99 Stat. 685, 686, added items 2305a and 2324.

1984—Pub. L. 98–577, title III, §302(c)(2), Oct. 30, 1984, 98 Stat. 3077, struck out item 2303a “Publication of proposed regulations”.

Pub. L. 98–525, title XII, §1217, Oct. 19, 1984, 98 Stat. 2599, added items 2303a and 2317 to 2323.

Pub. L. 98–369, div. B, title VII, §2727(a), July 18, 1984, 98 Stat. 1194, substituted “Congressional defense procurement policy” for “Declaration of policy” in item 2301, “Contracts: competition requirements” for “Purchases and contracts: formal advertising; exceptions” in item 2304, “Contracts: planning, solicitation, evaluation, and award procedures” for “Formal advertisements for bids; time; opening; award; rejection” in item 2305, and “Kinds of contracts; cost or pricing data: truth in negotiation” for “Kinds of contracts” in item 2306.

1982—Pub. L. 97–295, §1(26)(B), Oct. 12, 1982, 96 Stat. 1291, added item 2316.

1981—Pub. L. 97–86, title IX, §908(a)(2), Dec. 1, 1981, 95 Stat. 1118, added item 2315.

1980—Pub. L. 96–513, title V, §511(75), Dec. 12, 1980, 94 Stat. 2926, inserted “formal” before “advertising” in item 2304.

§2301

1 So in original. Does not conform to section catchline.

[§2301. Repealed. Pub. L. 103–355, title I, §1501(a), Oct. 13, 1994, 108 Stat. 3296]

Section, acts Aug. 10, 1956, ch. 1041, 70A Stat. 127; Dec. 1, 1981, Pub. L. 97–86, title IX, §909(a), 95 Stat. 1118; July 18, 1984, Pub. L. 98–369, div. B, title VII, §2721, 98 Stat. 1185; Oct. 18, 1986, Pub. L. 99–500, §101(c) [title X, §925(a)], 100 Stat. 1783–82, 1783–153, and Oct. 30, 1986, Pub. L. 99–591, §101(c) [title X, §925(a)], 100 Stat. 3341–82, 3341–153; Nov. 14, 1986, Pub. L. 99–661, div. A, title IX, formerly title IV, §925(a), 100 Stat. 3933, renumbered title IX, Apr. 21, 1987, Pub. L. 100–26, §3(5), 101 Stat. 273; Oct. 23, 1992, Pub. L. 102–484, div. A, title VIII, §808(a), 106 Stat. 2449, related to Congressional defense procurement policy.

Effective Date of Repeal

For effective date and applicability of repeal, see section 10001 of Pub. L. 103–355, set out as an Effective Date of 1994 Amendment note under section 251 of Title 41, Public Contracts.

§2302. Definitions

In this chapter:

(1) The term “head of an agency” means the Secretary of Defense, the Secretary of the Army, the Secretary of the Navy, the Secretary of the Air Force, the Secretary of Homeland Security, and the Administrator of the National Aeronautics and Space Administration.

(2) The term “competitive procedures” means procedures under which the head of an agency enters into a contract pursuant to full and open competition. Such term also includes—

(A) procurement of architectural or engineering services conducted in accordance with chapter 11 of title 40;

(B) the competitive selection for award of basic research proposals resulting from a general solicitation and the peer review or scientific review (as appropriate) of such proposals;

(C) the procedures established by the Administrator of General Services for the multiple award schedule program of the General Services Administration if—

(i) participation in the program has been open to all responsible sources; and

(ii) orders and contracts under such program result in the lowest overall cost alternative to meet the needs of the United States;


(D) procurements conducted in furtherance of section 15 of the Small Business Act (15 U.S.C. 644) as long as all responsible business concerns that are entitled to submit offers for such procurements are permitted to compete; and

(E) a competitive selection of research proposals resulting from a general solicitation and peer review or scientific review (as appropriate) solicited pursuant to section 9 of the Small Business Act (15 U.S.C. 638).


(3) The following terms have the meanings provided such terms in section 4 of the Office of Federal Procurement Policy Act (41 U.S.C. 403):

(A) The term “procurement”.

(B) The term “procurement system”.

(C) The term “standards”.

(D) The term “full and open competition”.

(E) The term “responsible source”.

(F) The term “item”.

(G) The term “item of supply”.

(H) The term “supplies”.

(I) The term “commercial item”.

(J) The term “nondevelopmental item”.

(K) The term “commercial component”.

(L) The term “component”.


(4) The term “technical data” means recorded information (regardless of the form or method of the recording) of a scientific or technical nature (including computer software documentation) relating to supplies procured by an agency. Such term does not include computer software or financial, administrative, cost or pricing, or management data or other information incidental to contract administration.

(5) The term “major system” means a combination of elements that will function together to produce the capabilities required to fulfill a mission need. The elements may include hardware, equipment, software or any combination thereof, but excludes construction or other improvements to real property. A system shall be considered a major system if (A) the conditions of section 2302d of this title are satisfied, or (B) the system is designated a “major system” by the head of the agency responsible for the system.

(6) The term “Federal Acquisition Regulation” means the Federal Acquisition Regulation issued pursuant to section 25(c)(1) of the Office of Federal Procurement Policy Act (41 U.S.C. 421(c)(1)).

(7) The term “simplified acquisition threshold” has the meaning provided that term in section 4 of the Office of Federal Procurement Policy Act (41 U.S.C. 403), except that, in the case of any contract to be awarded and performed, or purchase to be made, outside the United States in support of a contingency operation or a humanitarian or peacekeeping operation, the term means an amount equal to two times the amount specified for that term in section 4 of such Act.

(8) The term “humanitarian or peacekeeping operation” means a military operation in support of the provision of humanitarian or foreign disaster assistance or in support of a peacekeeping operation under chapter VI or VII of the Charter of the United Nations. The term does not include routine training, force rotation, or stationing.

(Aug. 10, 1956, ch. 1041, 70A Stat. 127; Pub. L. 85–568, title III, §301(b), July 29, 1958, 72 Stat. 432; Pub. L. 85–861, §1(43A), Sept. 2, 1958, 72 Stat. 1457; Pub. L. 96–513, title V, §511(74), Dec. 12, 1980, 94 Stat. 2926; Pub. L. 98–369, div. B, title VII, §2722(a), July 18, 1984, 98 Stat. 1186; Pub. L. 98–525, title XII, §1211, Oct. 19, 1984, 98 Stat. 2589; Pub. L. 98–577, title V, §504(b)(3), Oct. 30, 1984, 98 Stat. 3087; Pub. L. 99–661, div. A, title XIII, §1343(a)(13), Nov. 14, 1986, 100 Stat. 3993; Pub. L. 100–26, §7(k)(2), Apr. 21, 1987, 101 Stat. 284; Pub. L. 101–189, div. A, title VIII, §853(b)(1), Nov. 29, 1989, 103 Stat. 1518; Pub. L. 102–25, title VII, §701(d)(1), Apr. 6, 1991, 105 Stat. 113; Pub. L. 102–190, div. A, title VIII, §805, Dec. 5, 1991, 105 Stat. 1417; Pub. L. 103–355, title I, §1502, Oct. 13, 1994, 108 Stat. 3296; Pub. L. 104–106, div. D, title XLIII, §4321(b)(3), Feb. 10, 1996, 110 Stat. 672; Pub. L. 104–201, div. A, title VIII, §§805(a)(1), 807(a), Sept. 23, 1996, 110 Stat. 2605, 2606; Pub. L. 105–85, div. A, title VIII, §803(b), Nov. 18, 1997, 111 Stat. 1832; Pub. L. 107–217, §3(b)(2), Aug. 21, 2002, 116 Stat. 1295; Pub. L. 107–296, title XVII, §1704(b)(1), Nov. 25, 2002, 116 Stat. 2314.)

Historical and Revision Notes
1956 Act
Revised sectionSource (U.S. Code)Source (Statutes at Large)
2302 41:158 (less clause (b)). Feb. 19, 1948, ch. 65, §9 (less clause (b)), 62 Stat. 24.

In clause (1), the words “(if any)” are omitted as surplusage. The words “Secretary of the Treasury” are substituted for the words “Commandant, United States Coast Guard, Treasury Department”, since the functions of the Coast Guard and its officers, while operating under the Department of the Treasury, were vested in the Secretary of the Treasury by 1950 Reorganization Plan No. 26, effective July 31, 1950, 64 Stat. 1280. Under that plan the Secretary of the Treasury was authorized to delegate any of those functions to the agencies and employees of the Department of the Treasury.

Clauses (2) and (3) are inserted for clarity, and are based on the usage of those terms throughout the revised chapter.

1958 Act
Revised sectionSource (U.S. Code)Source (Statutes at Large)
2302(3) [No source]. [No source].

The amendments reflect section 1(44) of the bill [amending section 2305 of Title 10].

Amendments

2002—Par. (1). Pub. L. 107–296 substituted “of Homeland Security” for “of Transportation”.

Par. (2)(A). Pub. L. 107–217 substituted “chapter 11 of title 40” for “title IX of the Federal Property and Administrative Services Act of 1949 (40 U.S.C. 541 et seq.)”.

1997—Pars. (7), (8). Pub. L. 105–85 struck out “(A)” before “The term ‘simplified” in par. (7), redesignated par. (7)(B) as par. (8), and substituted “The” for “In subparagraph (A), the” in that par.

1996—Par. (3)(K). Pub. L. 104–106 inserted period at end.

Par. (5). Pub. L. 104–201, §805(a)(1), substituted “A system shall be considered a major system if (A) the conditions of section 2302d of this title are satisfied, or (B) the system is designated a ‘major system’ by the head of the agency responsible for the system.” for “A system shall be considered a major system if (A) the Department of Defense is responsible for the system and the total expenditures for research, development, test, and evaluation for the system are estimated to be more than $75,000,000 (based on fiscal year 1980 constant dollars) or the eventual total expenditure for procurement of more than $300,000,000 (based on fiscal year 1980 constant dollars); (B) a civilian agency is responsible for the system and total expenditures for the system are estimated to exceed $750,000 (based on fiscal year 1980 constant dollars) or the dollar threshold for a ‘major system’ established by the agency pursuant to Office of Management and Budget (OMB) Circular A–109, entitled ‘Major Systems Acquisitions’, whichever is greater; or (C) the system is designated a ‘major system’ by the head of the agency responsible for the system.”

Par. (7). Pub. L. 104–201, §807(a), designated existing provisions as subpar. (A), inserted “or a humanitarian or peacekeeping operation” after “contingency operation”, and added subpar. (B).

1994—Par. (3). Pub. L. 103–355, §1502(1), added par. (3) and struck out former par. (3) which read as follows: “The terms ‘full and open competition’ and ‘responsible source’ have the same meanings provided such terms in section 4 of the Office of Federal Procurement Policy Act (41 U.S.C. 403).”

Par. (7). Pub. L. 103–355, §1502(2), added par. (7) and struck out former par. (7) which read as follows: “The term ‘small purchase threshold’ has the meaning given that term in section 4(11) of the Office of Federal Procurement Policy Act (41 U.S.C. 403(11)), except that, in the case of any contract to be awarded and performed, or purchase to be made, outside the United States in support of a contingency operation, the term means $100,000.”

1991—Par. (7). Pub. L. 102–190 inserted before period “, except that, in the case of any contract to be awarded and performed, or purchase to be made, outside the United States in support of a contingency operation, the term means $100,000”.

Pub. L. 102–25 added par. (7).

1989—Par. (6). Pub. L. 101–189 added par. (6).

1987—Pub. L. 100–26, §7(k)(2)(A), inserted “The term” after each par. designation except par. (3) and struck out uppercase letter of first word after first quotation marks in each par. and substituted lowercase letter.

1986—Par. (2)(A). Pub. L. 99–661 substituted “(40 U.S.C.” for “(41 U.S.C.”.

1984—Pub. L. 98–369 amended section generally, substituting in cl. (1) “the Secretary of Defense, the Secretary of the Army, the Secretary of the Navy, the Secretary of the Air Force” for “the Secretary, the Under Secretary, or any Assistant Secretary, of the Army, Navy, or Air Force”, in cl. (2) definition of “competitive procedures” for a definition of “negotiate”, and in cl. (3) definition of the terms “full and open competition” and “responsible source” for a definition of “formal advertising”.

Cl. (2)(D), (E). Pub. L. 98–577 added subpars. (D) and (E).

Cls. (4), (5). Pub. L. 98–525 added cls. (4) and (5).

1980—Cl. (1). Pub. L. 96–513 substituted “Secretary of Transportation” for “Secretary of the Treasury”.

1958—Cl. (1). Pub. L. 85–568 substituted “Administrator of the National Aeronautics and Space Administration” for “Executive Secretary of the National Advisory Committee for Aeronautics”, in cl. (1).

Cl. (3). Pub. L. 85–861 substituted “section 2305 of this title” for “section 2305(a) and (b) of this title”.

Effective Date of 2002 Amendment

Amendment by Pub. L. 107–296 effective on the date of transfer of the Coast Guard to the Department of Homeland Security, see section 1704(g) of Pub. L. 107–296, set out as a note under section 101 of this title.

Effective Date of 1996 Amendment

For effective date and applicability of amendment by Pub. L. 104–106, see section 4401 of Pub. L. 104–106, set out as a note under section 251 of Title 41, Public Contracts.

Effective Date of 1994 Amendment

For effective date and applicability of amendment by Pub. L. 103–355, see section 10001 of Pub. L. 103–355, set out as a note under section 251 of Title 41, Public Contracts.

Effective Date of 1984 Amendment

Amendment by Pub. L. 98–369 applicable with respect to any solicitation for bids or proposals issued after Mar. 31, 1985, see section 2751 of Pub. L. 98–369, set out as a note under section 251 of Title 41, Public Contracts.

Effective Date of 1980 Amendment

Amendment by Pub. L. 96–513 effective Dec. 12, 1980, see section 701(b)(3) of Pub. L. 96–513, set out as a note under section 101 of this title.

Effective Date of 1958 Amendment

Section 301(e) of Pub. L. 85–568 provided that: “This section [amending this section, section 2303 of this title, section 22–1 of former Title 5, and sections 511 to 513 and 515 of Title 50, War and National Defense, and enacting provisions set out as a note under section 2472 of Title 42, The Public Health and Welfare] shall take effect ninety days after the date of the enactment of this Act [July 29, 1958], or on any earlier date on which the Administrator [of the National Aeronautics and Space Administration] shall determine, and announce by proclamation published in the Federal Register, that the Administration has been organized and is prepared to discharge the duties and exercise the powers conferred upon it by this Act.”

Short Title of 1986 Amendment

Section 101(c) [title X, §900] of Pub. L. 99–500 and Pub. L. 99–591, and section 900 of title IX of division A of Pub. L. 99–661, renumbered title IX, Pub. L. 100–26, §3(5), Apr. 21, 1987, 101 Stat. 273, provided that: “This title [enacting sections 133a, 2306a, 2325–2328, 2365–2367, 2397b, 2397c, 2408, 2409, 2416, and 2435–2437 of this title, amending sections 133, 134, 135, 138, 171, 1622, 2301, 2304, 2305, 2306, 2320, 2321, 2323, 2384, 2406, 2411, 2413, 2432, and 2433 of this title, sections 5314 and 5315 of Title 5, Government Organization and Employees, sections 632, 637, and 644 of Title 15, Commerce and Trade, and section 416 of Title 41, Public Contracts, renumbering section 2416 as 2417 of this title, enacting provisions set out as notes under sections 113, 1621, 2304, 2305, 2306a, 2320, 2323, 2325–2328, 2365–2367, 2384, 2397b, 2406, 2408, 2409, 2416, 2432, 2435–2437 of this title and section 632 of Title 15, amending provisions set out as a note under this section, and repealing provisions set out as notes under section 2304 and 2397a of this title] may be cited as the ‘Defense Acquisition Improvement Act of 1986’.”

Short Title of 1985 Amendment

Pub. L. 99–145, title IX, §901, Nov. 8, 1985, 99 Stat. 682, provided that: “This title [enacting sections 1621 to 1624, 2305a, 2324, 2397a, and 2406 of this title, amending sections 2304, 2313, 2320, 2323, 2397, and 2411 to 2415 of this title, section 759 of former Title 40, Public Buildings, Property, and Works, sections 253 and 418a of Title 41, Public Contracts, and section 2168 of Title 50, Appendix, War and National Defense, enacting provisions set out as notes under this section and sections 139, 139c, 1622 to 1624, 2304, 2305a, 2307, 2324, 2397a, and 2411 of this title, section 287 of Title 18, Crimes and Criminal Procedure, section 3729 of Title 31, Money and Finance, and section 2168 of Title 50, Appendix, and amending provisions set out as a note under section 418a of Title 41] may be cited as the ‘Defense Procurement Improvement Act of 1985’.”

Short Title of 1984 Amendment

Section 1201 of title XII of Pub. L. 98–525 provided that: “This title [enacting sections 2303a, 2317 to 2323, 2384a, 2402 to 2405, and 2411 to 2416 of this title, amending sections 139a, 139b, 2302, 2305, 2311, 2384, and 2401 of this title, enacting provisions set out as notes under this section and sections 139, 139a, 2303a, 2305, 2318, 2319, 2322, 2323, 2384, 2384a, 2392, and 2402 of this title, amending provisions set out as notes under sections 2392, 2401, and 2452 of this title, and repealing provisions set out as notes under section 2304 of this title] may be cited as the ‘Defense Procurement Reform Act of 1984’.”

Quality Control in Procurement of Ship Critical Safety Items and Related Services

Pub. L. 109–364, div. A, title I, §130(a)–(c), Oct. 17, 2006, 120 Stat. 2110, provided that:

“(a) Quality Control Policy.—The Secretary of Defense shall prescribe in regulations a quality control policy for the procurement of the following:

“(1) Ship critical safety items.

“(2) Modifications, repair, and overhaul of ship critical safety items.

“(b) Elements.—The policy required under subsection (a) shall include requirements as follows:

“(1) That the head of the design control activity for ship critical safety items establish processes to identify and manage the procurement, modification, repair, and overhaul of such items.

“(2) That the head of the contracting activity for a ship critical safety item enter into a contract for the procurement, modification, repair, or overhaul of such item only with a source on a qualified manufacturers list or a source approved by the design control activity in accordance with section 2319 of title 10, United States Code (as amended by subsection (d)).

“(3) That the ship critical safety items delivered, and the services performed with respect to such items, meet all technical and quality requirements specified by the design control activity.

“(c) Definitions.—In this section, the terms ‘ship critical safety item’ and ‘design control activity’ have the meanings given such terms in subsection (g) of section 2319 of title 10, United States Code (as so amended).”

Pilot Program on Time-Certain Development in Acquisition of Major Weapon Systems

Pub. L. 109–364, div. A, title VIII, §812, Oct. 17, 2006, 120 Stat. 2317, provided that:

“(a) Pilot Program Authorized.—The Secretary of Defense may carry out a pilot program on the use of time-certain development in the acquisition of major weapon systems.

“(b) Purpose of Pilot Program.—The purpose of the pilot program authorized by subsection (a) is to assess the feasibility and advisability of utilizing time-certain development in the acquisition of major weapon systems in order to deliver new capabilities to the warfighter more rapidly through—

“(1) disciplined decision-making;

“(2) emphasis on technological maturity; and

“(3) appropriate trade-offs between—

“(A) cost and system performance; and

“(B) program schedule.

“(c) Inclusion of Systems in Pilot Program.—

“(1) In general.—The Secretary of Defense may include a major weapon system in the pilot program only if—

“(A) the major weapon system meets the criteria under paragraph (2) in accordance with that paragraph; and

“(B) the Milestone Decision Authority nominates such program to the Secretary of Defense for inclusion in the program.

“(2) Criteria.—For purposes of paragraph (1) a major weapon system meets the criteria under this paragraph only if the Milestone Decision Authority determines, in consultation with the service acquisition executive for the military department carrying out the acquisition program for the system and one or more combatant commanders responsible for fielding the system, that—

“(A) the certification requirements of section 2366a of title 10, United States Code (as amended by section 805 of this Act), have been met, and no waivers have been granted from such requirements;

“(B) a preliminary design has been reviewed using systems engineering, and the system, as so designed, will meet battlefield needs identified by the relevant combatant commanders after appropriate requirements analysis;

“(C) a representative model or prototype of the system, or key subsystems, has been demonstrated in a relevant environment, such as a well-simulated operational environment;

“(D) an independent cost estimate has been conducted and used as the basis for funding requirements for the acquisition program for the system;

“(E) the budget of the military department responsible for carrying out the acquisition program for the system provides the funding necessary to execute the product development and production plan consistent with the requirements identified pursuant to subparagraph (D);

“(F) an appropriately qualified program manager has entered into a performance agreement with the Milestone Decision Authority that establishes expected parameters for the cost, schedule, and performance of the acquisition program for the system, consistent with a business case for such acquisition program;

“(G) the service acquisition executive and the program manager have developed a strategy to ensure stability in program management until, at a minimum, the delivery of the initial operational capability under the acquisition program for the system has occurred;

“(H) the service acquisition executive, the relevant combatant commanders, and the program manager have agreed that no additional requirements that would be inconsistent with the agreed-upon program schedule will be added during the development phase of the acquisition program for the system; and

“(I) a planned initial operational capability will be delivered to the relevant combatant commanders within a defined period of time as prescribed in regulations by the Secretary of Defense.

“(3) Timing of decision.—The decision whether to include a major weapon system in the pilot program shall be made at the time of milestone approval for the acquisition program for the system.

“(d) Limitation on Number of Weapons Systems in Pilot Program.—The number of major weapon systems included in the pilot program at any time may not exceed six major weapon systems.

“(e) Limitation on Cost of Weapons Systems in Pilot Program.—The Secretary of Defense may include a major weapon system in the pilot program only if, at the time a major weapon system is proposed for inclusion, the total cost for system design and development of the weapon system, as set forth in the cost estimate referred to in subsection (c)(2)(D), does not exceed $1,000,000,000 during the period covered by the current future-years defense program.

“(f) Special Funding Authority.—

“(1) Authority for reserve account.—Notwithstanding any other provision of law, the Secretary of Defense may establish a special reserve account utilizing funds made available for the major weapon systems included in the pilot program.

“(2) Elements.—The special reserve account may include—

“(A) funds made available for any major weapon system included in the pilot program to cover termination liability;

“(B) funds made available for any major weapon system included in the pilot program for award fees that may be earned by contractors; and

“(C) funds appropriated to the special reserve account.

“(3) Availability of funds.—Funds in the special reserve account may be used, in accordance with guidance issued by the Secretary for purposes of this section, for the following purposes:

“(A) To cover termination liability for any major weapon system included in the pilot program.

“(B) To pay award fees that are earned by any contractor for a major weapon system included in the pilot program.

“(C) To address unforeseen contingencies that could prevent a major weapon system included in the pilot program from meeting critical schedule or performance requirements.

“(4) Reports on use of funds.—Not later than 30 days after the use of funds in the special reserve account for the purpose specified in paragraph (3)(C), the Secretary shall submit to the congressional defense committees [Committees on Armed Services and Appropriations of the Senate and the House of Representatives] a report on the use of funds in the account for such purpose. The report shall set forth the purposes for which the funds were used and the reasons for the use of the funds for such purposes.

“(5) Relationship to appropriations.—Nothing in this subsection may be construed as extending any period of time for which appropriated funds are made available.

“(g) Administration of Pilot Program.—The Secretary of Defense shall prescribe policies and procedures on the administration of the pilot program. Such policies and procedures shall—

“(1) provide for the use of program status reports based on earned value data to track progress on a major weapon system under the pilot program against baseline estimates applicable to such system at each systems engineering technical review point; and

“(2) grant authority, to the maximum extent practicable, to the program manager for the acquisition program for a major weapon system to make key program decisions and trade-offs, subject to management reviews only if cost or schedule deviations exceed the baselines for such acquisition program by 10 percent or more.

“(h) Removal of Weapons Systems From Pilot Program.—The Secretary of Defense shall remove a major weapon system from the pilot program if—

“(1) the weapon system receives Milestone C approval; or

“(2) the Secretary determines that the weapon system is no longer in substantial compliance with the criteria in subsection (c)(2) or is otherwise no longer appropriate for inclusion in the pilot program.

“(i) Expiration of Authority To Include Additional Systems in Pilot Program.—

“(1) Expiration.—A major weapon system may not be included in the pilot program after September 30, 2012.

“(2) Retention of systems.—A major weapon system included in the pilot program before the date specified in paragraph (1) in accordance with the requirements of this section may remain in the pilot program after that date.

“(j) Annual Report.—

“(1) In general.—Not later than one year after including the first major weapon system in the pilot program, and annually thereafter, the Secretary shall submit to the congressional defense committees [Committees on Armed Services and Appropriations of the Senate and the House of Representatives] a report on the pilot program, and the major weapon systems included in the pilot program, during the one-year period ending on the date of such report.

“(2) Elements.—Each report under this subsection shall include—

“(A) a description of progress under the pilot program, and on each major weapon system included in the pilot program, during the period covered by such report;

“(B) a description of the use of all funds in the special reserve account established under subsection (f); and

“(C) such other matters as the Secretary considers appropriate.

“(k) Major Weapon System Defined.—In this section, the term ‘major weapon system’ means a weapon system that is treatable as a major system under section 2302(5) of title 10, United States Code.”

Linking of Award and Incentive Fees to Acquisition Outcomes

Pub. L. 109–364, div. A, title VIII, §814, Oct. 17, 2006, 120 Stat. 2321, provided that:

“(a) Guidance on Linking of Award and Incentive Fees to Acquisition Outcomes.—Not later than 180 days after the date of the enactment of this Act [Oct. 17, 2006], the Secretary of Defense shall issue guidance, with detailed implementation instructions (including definitions), for the Department of Defense on the appropriate use of award and incentive fees in Department of Defense acquisition programs.

“(b) Elements.—The guidance under subsection (a) shall—

“(1) ensure that all new contracts using award fees link such fees to acquisition outcomes (which shall be defined in terms of program cost, schedule, and performance);

“(2) establish standards for identifying the appropriate level of officials authorized to approve the use of award and incentive fees in new contracts;

“(3) provide guidance on the circumstances in which contractor performance may be judged to be ‘excellent’ or ‘superior’ and the percentage of the available award fee which contractors should be paid for such performance;

“(4) establish standards for determining the percentage of the available award fee, if any, which contractors should be paid for performance that is judged to be ‘acceptable’, ‘average’, ‘expected’, ‘good’, or ‘satisfactory’;

“(5) ensure that no award fee may be paid for contractor performance that is judged to be below satisfactory performance or performance that does not meet the basic requirements of the contract;

“(6) provide specific direction on the circumstances, if any, in which it may be appropriate to roll over award fees that are not earned in one award fee period to a subsequent award fee period or periods;

“(7) ensure consistent use of guidelines and definitions relating to award and incentive fees across the military departments and Defense Agencies;

“(8) ensure that the Department of Defense—

“(A) collects relevant data on award and incentive fees paid to contractors; and

“(B) has mechanisms in place to evaluate such data on a regular basis;

“(9) include performance measures to evaluate the effectiveness of award and incentive fees as a tool for improving contractor performance and achieving desired program outcomes; and

“(10) provide mechanisms for sharing proven incentive strategies for the acquisition of different types of products and services among contracting and program management officials.

“(c) Assessment of Independent Evaluation Mechanisms.—

“(1) In general.—The Secretary of Defense shall select a federally funded research and development center to assess various mechanisms that could be used to ensure an independent evaluation of contractor performance for the purpose of making determinations applicable to the judging and payment of award fees.

“(2) Considerations.—The assessment conducted pursuant to paragraph (1) shall include consideration of the advantages and disadvantages of a system in which award fees are—

“(A) held in a separate fund or funds of the Department of Defense; and

“(B) allocated to a specific program only upon a determination by an independent board, charged with comparing contractor performance across programs, that such fees have been earned by the contractor for such program.

“(3) Report.—The Secretary shall submit to the congressional defense committees [Committees on Armed Services and Appropriations of the Senate and the House of Representatives] a report on the assessment conducted pursuant to paragraph (1) not later than one year after the date of the enactment of this Act [Oct. 17, 2006].”

Limitation on Contracts for the Acquisition of Certain Services

Pub. L. 109–364, div. A, title VIII, §832, Oct. 17, 2006, 120 Stat. 2331, provided that:

“(a) Limitation.—Except as provided in subsection (b), the Secretary of Defense may not enter into a service contract to acquire a military flight simulator.

“(b) Waiver.—The Secretary of Defense may waive subsection (a) with respect to a contract if the Secretary—

“(1) determines that a waiver is necessary for national security purposes; and

“(2) provides to the congressional defense committees [Committees on Armed Services and Appropriations of the Senate and the House of Representatives] an economic analysis as described in subsection (c) at least 30 days before the waiver takes effect.

“(c) Economic Analysis.—The economic analysis provided under subsection (b) shall include, at a minimum, the following:

“(1) A clear explanation of the need for the contract.

“(2) An examination of at least two alternatives for fulfilling the requirements that the contract is meant to fulfill, including the following with respect to each alternative:

“(A) A rationale for including the alternative.

“(B) A cost estimate of the alternative and an analysis of the quality of each cost estimate.

“(C) A discussion of the benefits to be realized from the alternative.

“(D) A best value determination of each alternative and a detailed explanation of the life-cycle cost calculations used in the determination.

“(d) Definitions.—In this section:

“(1) The term ‘military flight simulator’ means any major system to simulate the form, fit, and function of a military aircraft that has no commonly available commercial variant.

“(2) The term ‘service contract’ means any contract entered into by the Department of Defense the principal purpose of which is to furnish services in the United States through the use of service employees.

“(3) The term ‘service employees’ has the meaning provided in section 8(b) of the Service Contract Act of 1965 (41 U.S.C. 357(b)).”

Congressional Notification of Cancellation of Major Automated Information Systems

Pub. L. 109–163, div. A, title VIII, §806, Jan. 6, 2006, 119 Stat. 3373, provided that:

“(a) Report Required.—The Secretary of Defense shall notify the congressional defense committees [Committees on Armed Services and Appropriations of the Senate and the House of Representatives] not less than 60 days before cancelling a major automated information system program that has been fielded or approved to be fielded, or making a change that will significantly reduce the scope of such a program, of the proposed cancellation or change.

“(b) Content.—Each notification submitted under subsection (a) with respect to a proposed cancellation or change shall include—

“(1) the specific justification for the proposed cancellation or change;

“(2) a description of the impact of the proposed cancellation or change on the ability of the Department to achieve the objectives of the program proposed for cancellation or change;

“(3) a description of the steps that the Department plans to take to achieve those objectives; and

“(4) other information relevant to the change in acquisition strategy.

“(c) Definitions.—In this section:

“(1) The term ‘major automated information system’ has the meaning given that term in Department of Defense directive 5000.1.

“(2) The term ‘approved to be fielded’ means having received Milestone C approval.”

Joint Policy on Contingency Contracting

Pub. L. 109–163, div. A, title VIII, §817, Jan. 6, 2006, 119 Stat. 3382, provided that:

“(a) Joint Policy.—

“(1) Requirement.—Not later than one year after the date of the enactment of this Act [Jan. 6, 2006], the Secretary of Defense, in consultation with the Chairman of the Joint Chiefs of Staff, shall develop a joint policy for contingency contracting during combat operations and post-conflict operations.

“(2) Matters covered.—The joint policy for contingency contracting required by paragraph (1) shall, at a minimum, provide for—

“(A) the designation of a senior commissioned officer in each military department with the responsibility for administering the policy;

“(B) the assignment of a senior commissioned officer with appropriate acquisition experience and qualifications to act as head of contingency contracting during combat operations, post-conflict operations, and contingency operations, who shall report directly to the commander of the combatant command in whose area of responsibility the operations occur;

“(C) an organizational approach to contingency contracting that is designed to ensure that each military department is prepared to conduct contingency contracting during combat operations and post-conflict operations;

“(D) a requirement to provide training (including training under a program to be created by the Defense Acquisition University) to contingency contracting personnel in—

“(i) the use of law, regulations, policies, and directives related to contingency contracting operations;

“(ii) the appropriate use of rapid acquisition methods, including the use of exceptions to competition requirements under section 2304 of title 10, United States Code, sealed bidding, letter contracts, indefinite delivery indefinite quantity task orders, set asides under section 8(a) of the Small Business Act (15 U.S.C. 637(a)), undefinitized contract actions, and other tools available to expedite the delivery of goods and services during combat operations or post-conflict operations;

“(iii) the appropriate use of rapid acquisition authority, commanders’ emergency response program funds, and other tools unique to contingency contracting; and

“(iv) instruction on the necessity for the prompt transition from the use of rapid acquisition authority to the use of full and open competition and other methods of contracting that maximize transparency in the acquisition process;

“(E) appropriate steps to ensure that training is maintained for such personnel even when they are not deployed in a contingency operation; and

“(F) such steps as may be needed to ensure jointness and cross-service coordination in the area of contingency contracting.

“(b) Reports.—

“(1) Interim report.—

“(A) Requirement.—Not later than 270 days after the date of the enactment of this Act [Jan. 6, 2006], the Secretary of Defense shall submit to the Committees on Armed Services of the Senate and the House of Representatives an interim report on contingency contracting.

“(B) Matters covered.—The report shall include discussions of the following:

“(i) Progress in the development of the joint policy under subsection (a).

“(ii) The ability of the Armed Forces to support contingency contracting.

“(iii) The ability of commanders of combatant commands to request contingency contracting support and the ability of the military departments and the acquisition support agencies to respond to such requests and provide such support, including the availability of rapid acquisition personnel for such support.

“(iv) The ability of the current civilian and military acquisition workforce to deploy to combat theaters of operations and to conduct contracting activities during combat and during post-conflict, reconstruction, or other contingency operations.

“(v) The effect of different periods of deployment on continuity in the acquisition process.

“(2) Final report.—Not later than 18 months after the date of the enactment of this Act [Jan. 6, 2006], the Secretary of Defense shall submit to the committees listed in paragraph (1)(A) a final report on contingency contracting, containing a discussion of the implementation of the joint policy developed under subsection (a), including updated discussions of the matters covered in the interim report.

“(c) Definitions.—In this section:

“(1) Contingency contracting personnel.—The term ‘contingency contracting personnel’ means members of the Armed Forces and civilian employees of the Department of Defense who are members of the defense acquisition workforce and, as part of their duties, are assigned to provide support to contingency operations (whether deployed or not).

“(2) Contingency contracting.—The term ‘contingency contracting’ means all stages of the process of acquiring property or services by the Department of Defense during a contingency operation.

“(3) Contingency operation.—The term ‘contingency operation’ has the meaning provided in section 101(13) of title 10, United States Code.

“(4) Acquisition support agencies.—The term ‘acquisition support agencies’ means Defense Agencies and Department of Defense Field Activities that carry out and provide support for acquisition-related activities.”

Prohibition on Procurements From Communist Chinese Military Companies

Pub. L. 109–163, div. A, title XII, §1211, Jan. 6, 2006, 119 Stat. 3461, provided that:

“(a) Prohibition.—The Secretary of Defense may not procure goods or services described in subsection (b), through a contract or any subcontract (at any tier) under a contract, from any Communist Chinese military company.

“(b) Goods and Services Covered.—For purposes of subsection (a), the goods and services described in this subsection are goods and services on the munitions list of the International Trafficking in Arms Regulations, other than goods or services procured—

“(1) in connection with a visit by a vessel or an aircraft of the United States Armed Forces to the People's Republic of China;

“(2) for testing purposes; or

“(3) for purposes of gathering intelligence.

“(c) Waiver Authorized.—The Secretary of Defense may waive the prohibition in subsection (a) if the Secretary determines such a waiver is necessary for national security purposes. The Secretary shall notify the congressional defense committees [Committees on Armed Services and Appropriations of the Senate and the House of Representatives] of each waiver made under this subsection.

“(d) Definitions.—In this section:

“(1) The term ‘Communist Chinese military company’ has the meaning provided that term by section 1237(b)(4) of the Strom Thurmond National Defense Authorization Act for Fiscal Year 1999 [Pub. L. 105–261] (50 U.S.C. 1701 note).

“(2) The term ‘munitions list of the International Trafficking in Arms Regulations’ means the United States Munitions List contained in part 121 of subchapter M of title 22 of the Code of Federal Regulations.”

Development of Deployable Systems To Include Consideration of Force Protection in Asymmetric Threat Environments

Pub. L. 108–375, div. A, title I, §141, Oct. 28, 2004, 118 Stat. 1829, provided that:

“(a) Requirement for Systems Development.—The Secretary of Defense shall require that the Department of Defense regulations, directives, and guidance governing the acquisition of covered systems be revised to require that—

“(1) an assessment of warfighter survivability and of system suitability against asymmetric threats shall be performed as part of the development of system requirements for any such system; and

“(2) requirements for key performance parameters for force protection and survivability shall be included as part of the documentation of system requirements for any such system.

“(b) Covered Systems.—In this section, the term ‘covered system’ means any of the following systems that is expected to be deployed in an asymmetric threat environment:

“(1) Any manned system.

“(2) Any equipment intended to enhance personnel survivability.

“(c) Inapplicability of Development Requirement to Systems Already Through Development.—The revisions pursuant subsection (a) to Department of Defense regulations, directives, and guidance shall not apply to a system that entered low-rate initial production before the date of the enactment of this Act [Oct. 28, 2004].

“(d) Deadline for Policy Revisions.—The revisions required by subsection (a) to Department of Defense regulations, directives, and guidance shall be made not later than 120 days after the date of the enactment of this Act [Oct. 28, 2004].”

Internal Controls for Department of Defense Procurements Through GSA Client Support Centers

Pub. L. 108–375, div. A, title VIII, §802, Oct. 28, 2004, 118 Stat. 2004, as amended by Pub. L. 109–313, §2(c)(2), Oct. 6, 2006, 120 Stat. 1735, provided that:

“(a) Initial Inspector General Review and Determination.—(1) Not later than March 15, 2005, the Inspector General of the Department of Defense and the Inspector General of the General Services Administration shall jointly—

“(A) review—

“(i) the policies, procedures, and internal controls of each GSA Client Support Center; and

“(ii) the administration of those policies, procedures, and internal controls; and

“(B) for each such Center, determine in writing whether—

“(i) the Center is compliant with defense procurement requirements;

“(ii) the Center is not compliant with defense procurement requirements, but the Center made significant progress during 2004 toward becoming compliant with defense procurement requirements; or

“(iii) neither of the conclusions stated in clauses (i) and (ii) is correct.

“(2) If the Inspectors General determine under paragraph (1) that the conclusion stated in clause (ii) or (iii) of subparagraph (B) of such paragraph is correct in the case of a GSA Client Support Center, those Inspectors General shall, not later than March 15, 2006, jointly—

“(A) conduct a second review regarding that GSA Client Support Center as described in paragraph (1)(A); and

“(B) determine in writing whether that GSA Client Support Center is or is not compliant with defense procurement requirements.

“(b) Compliance With Defense Procurement Requirements.—For the purposes of this section, a GSA Client Support Center is compliant with defense procurement requirements if the GSA Client Support Center's policies, procedures, and internal controls, and the manner in which they are administered, are adequate to ensure compliance of that Center with the requirements of laws and regulations that apply to procurements of property and services made directly by the Department of Defense.

“(c) Limitations on Procurements Through GSA Client Support Centers.—(1) After March 15, 2005, and before March 16, 2006, no official of the Department of Defense may, except as provided in subsection (d) or (e), order, purchase, or otherwise procure property or services in an amount in excess of $100,000 through any GSA Client Support Center for which a determination described in paragraph (1)(B)(iii) of subsection (a) has been made under that subsection.

“(2) After March 15, 2006, no official of the Department of Defense may, except as provided in subsection (d) or (e), order, purchase, or otherwise procure property or services in an amount in excess of $100,000 through any GSA Client Support Center that has not been determined under this section as being compliant with defense procurement requirements.

“(d) Exception From Applicability of Limitations.—(1) No limitation applies under subsection (c) with respect to the procurement of property and services from a particular GSA Client Support Center during any period that there is in effect a determination of the Under Secretary of Defense for Acquisition, Technology, and Logistics, made in writing, that it is necessary in the interest of the Department of Defense to continue to procure property and services through that GSA Client Support Center.

“(2) A written determination with respect to a GSA Client Support Center under paragraph (1) is in effect for the period, not in excess of one year, that the Under Secretary of Defense for Acquisition, Technology, and Logistics shall specify in the written determination. The Under Secretary may extend from time to time, for up to one year at a time, the period for which the written determination remains in effect.

“(e) Termination of Applicability of Limitations.—Subsection (c) shall cease to apply to a GSA Client Support Center on the date on which the Inspector General of the Department of Defense and the Inspector General of the General Services Administration jointly determine that such Center is compliant with defense procurement requirements and notify the Secretary of Defense of that determination.

“(f) GSA Client Support Center Defined.—In this section, the term ‘GSA Client Support Center’ means a Client Support Center of the Federal Acquisition Service of the General Services Administration.”

Quality Control in Procurement of Aviation Critical Safety Items and Related Services

Pub. L. 108–136, div. A, title VIII, §802(a)–(c), Nov. 24, 2003, 117 Stat. 1540, provided that:

“(a) Quality Control Policy.—The Secretary of Defense shall prescribe in regulations a quality control policy for the procurement of aviation critical safety items and the procurement of modifications, repair, and overhaul of such items.

“(b) Content of Regulations.—The policy set forth in the regulations shall include the following requirements:

“(1) That the head of the design control activity for aviation critical safety items establish processes to identify and manage the procurement, modification, repair, and overhaul of aviation critical safety items.

“(2) That the head of the contracting activity for an aviation critical safety item enter into a contract for the procurement, modification, repair, or overhaul of such item only with a source approved by the design control activity in accordance with section 2319 of title 10, United States Code.

“(3) That the aviation critical safety items delivered, and the services performed with respect to aviation critical safety items, meet all technical and quality requirements specified by the design control activity.

“(c) Definitions.—In this section, the terms ‘aviation critical safety item’ and ‘design control activity’ have the meanings given such terms in section 2319(g) of title 10, United States Code, as amended by subsection (d).”

Competitive Award of Contracts for Reconstruction Activities in Iraq

Pub. L. 108–136, div. A, title VIII, §805(a), Nov. 24, 2003, 117 Stat. 1542, provided that: “The Department of Defense shall fully comply with chapter 137 of title 10, United States Code, and other applicable procurement laws and regulations for any contract awarded for reconstruction activities in Iraq, and shall conduct a full and open competition for performing work needed for the reconstruction of the Iraqi oil industry.”

Demonstration Project for Contractors Employing Persons With Disabilities

Pub. L. 108–136, div. A, title VIII, §853, Nov. 24, 2003, 117 Stat. 1557, as amended by Pub. L. 108–199, div. H, §110, Jan. 23, 2004, 118 Stat. 438, provided that:

“(a) Authority.—The Secretary of Defense may carry out a demonstration project by entering into one or more contracts with an eligible contractor for the purpose of providing defense contracting opportunities for severely disabled individuals.

“(b) Evaluation Factor.—In evaluating an offer for a contract under the demonstration program, the percentage of the total workforce of the offeror consisting of severely disabled individuals employed by the offeror shall be one of the evaluation factors.

“(c) Credit Toward Certain Small Business Contracting Goals.—Department of Defense contracts entered into with eligible contractors under the demonstration project under this section, and subcontracts entered into with eligible contractors under such contracts, shall be credited toward the attainment of goals established under section 2323 of title 10, United States Code, and section 15(g)(1) of the Small Business Act (15 U.S.C. 644(g)(1)) regarding the extent of the participation of disadvantaged small business concerns in contracts of the Department of Defense and subcontracts under such contracts.

“(d) Definitions.—In this section:

“(1) Eligible contractor.—The term ‘eligible contractor’ means a business entity operated on a for-profit or nonprofit basis that—

“(A) employs severely disabled individuals at a rate that averages not less than 33 percent of its total workforce over a period prescribed by the Secretary;

“(B) pays not less than the minimum wage prescribed pursuant to section 6 of the Fair Labor Standards Act of 1938 (29 U.S.C. 206) to the employees who are severely disabled individuals; and

“(C) provides for its employees health insurance and a retirement plan comparable to those provided for employees by business entities of similar size in its industrial sector or geographic region.

“(2) Severely disabled individual.—The term ‘severely disabled individual’ means an individual with a disability (as defined in section 3 of the Americans with Disabilities Act of 1990 (42 U.S.C. 12102)) who has a severe physical or mental impairment that seriously limits one or more functional capacities.”

Procurement of Defense Biomedical Countermeasures

Pub. L. 108–136, div. A, title XVI, §1602, Nov. 24, 2003, 117 Stat. 1682, provided that:

“(a) Determination of Material Threats.—(1) The Secretary of Defense (in this section referred to as the ‘Secretary’) shall on an ongoing basis—

“(A) assess current and emerging threats of use of biological, chemical, radiological, and nuclear agents; and

“(B) identify, on the basis of such assessment, those agents that present a material risk of use against the Armed Forces.

“(2) The Secretary shall on an ongoing basis—

“(A) assess the potential consequences to the health of members of the Armed Forces of use against the Armed Forces of the agents identified under paragraph (1)(B); and

“(B) identify, on the basis of such assessment, those agents for which countermeasures are necessary to protect the health of members of the Armed Forces.

“(b) Assessment of Availability and Appropriateness of Countermeasures.—The Secretary shall on an ongoing basis assess the availability and appropriateness of specific countermeasures to address specific threats identified under subsection (a).

“(c) Secretary's Determination of Countermeasures Appropriate for Procurement.—(1) The Secretary, in accordance with paragraph (2), shall on an ongoing basis identify specific countermeasures that the Secretary determines to be appropriate for procurement for the Department of Defense stockpile of biomedical countermeasures.

“(2) The Secretary may not identify a specific countermeasure under paragraph (1) unless the Secretary determines that—

“(A) the countermeasure is a qualified countermeasure; and

“(B) it is reasonable to expect that producing and delivering, within 5 years, the quantity of that countermeasure required to meet the needs of the Department (as determined by the Secretary) is feasible.

“(d) Interagency Cooperation.—(1) Activities of the Secretary under this section shall be carried out in regular, structured, and close consultation and coordination with the Secretaries of Homeland Security and Health and Human Services, including the activities described in subsections (a), (b), and (c) and those activities with respect to interagency agreements described in paragraph (2).

“(2) The Secretary may enter into an interagency agreement with the Secretaries of Homeland Security and Health and Human Services to provide for acquisition by the Secretary of Defense for use by the Armed Forces of biomedical countermeasures procured for the Strategic National Stockpile by the Secretary of Health and Human Services. The Secretary may transfer such funds to the Secretary of Health and Human Services as are necessary to carry out such agreements (including administrative costs of the Secretary of Health and Human Services), and the Secretary of Health and Human Services may expend any such transferred funds to procure such countermeasures for use by the Armed Forces, or to replenish the stockpile. The Secretaries are authorized to establish such terms and conditions for such agreements as the Secretaries determine to be in the public interest. The transfer authority provided under this paragraph is in addition to any other transfer authority available to the Secretary.

“(e) Definitions.—In this section:

“(1) The term ‘qualified countermeasure’ means a biomedical countermeasure—

“(A) that is approved under section 505(a) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355) or licensed under section 351 of the Public Health Service Act (42 U.S.C. 262), or that is approved under section 515 or cleared under section 510(k) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360e and 360) for use as such a countermeasure to a biological, chemical, radiological, or nuclear agent identified as a material threat under subsection (a); or

“(B) with respect to which the Secretary of Health and Human Services makes a determination that sufficient and satisfactory clinical experience or research data (including data, if available, from preclinical and clinical trials) exists to support a reasonable conclusion that the product will qualify for such approval or licensing for use as such a countermeasure.

“(2) The term ‘biomedical countermeasure’ means a drug (as defined in section 201(g)(1) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321(g)(1))), device (as defined in section 201(h) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321(h))), or biological product (as defined in section 351(i) of the Public Health Service Act (42 U.S.C. 262(i))) that is—

“(A) used to treat, identify, or prevent harm from any biological, chemical, radiological, or nuclear agent that may cause a military health emergency affecting the Armed Forces; or

“(B) used to treat, identify, or prevent harm from a condition that may result in adverse health consequences or death and may be caused by administering a drug or biological product that is used as described in subparagraph (A).

“(3) The term ‘Strategic National Stockpile’ means the stockpile established under section 121(a) of the Public Health [Security] and Bioterrorism Preparedness and Response Act of 2002 (42 U.S.C. 300hh–12(a)).

“(f) Funding.—Of the amount authorized to be appropriated for the Department of Defense and available within the transfer authority established under section 1001 of this Act [117 Stat. 1582] for fiscal year 2004 and for each fiscal year thereafter, such sums are authorized as may be necessary for the costs incurred by the Secretary in the procurement of countermeasures under this section.”

Encouragement of Small Businesses and Nontraditional Defense Contractors To Submit Proposals Potentially Beneficial for Combating Terrorism

Pub. L. 107–314, div. A, title II, §244, Dec. 2, 2002, 116 Stat. 2498, provided that during fiscal years 2003, 2004, and 2005, the Secretary of Defense, acting through the Under Secretary of Defense for Acquisition, Technology, and Logistics, was to carry out a program of outreach to small businesses and nontraditional defense contractors with the purpose of providing a process for reviewing and evaluating research activities of, and new technologies being developed by, small businesses and nontraditional defense contractors that had the potential for meeting a defense requirement or technology development goal of the Department of Defense that related to the mission of the Department of Defense to combat terrorism.

Procurement of Environmentally Preferable Procurement Items

Pub. L. 107–314, div. A, title III, §314, Dec. 2, 2002, 116 Stat. 2508, as amended by Pub. L. 109–163, div. A, title X, §1056(e)(1), Jan. 6, 2006, 119 Stat. 3440, provided that:

“(a) Tracking System.—The Secretary of Defense shall develop and implement an effective and efficient tracking system to identify the extent to which the Defense Logistics Agency procures environmentally preferable procurement items or procurement items made with recovered material. The system shall provide for the separate tracking, to the maximum extent practicable, of the procurement of each category of procurement items that, as of the date of the enactment of this Act [Dec. 2, 2002], has been determined to be environmentally preferable or made with recovered material.

“(b) Assessment of Training and Education.—The Secretary of Defense shall assess the need to establish a program, or enhance existing programs, for training and educating Department of Defense procurement officials to ensure that they are aware of any Department requirements, preferences, or goals for the procurement of environmentally preferable procurement items or procurement items made with recovered material.

“(c) Reporting Requirement.—Not later than March 1, 2004, and each March 1 thereafter through 2007, the Secretary of Defense shall submit to the Committee on Armed Services of the Senate and the Committee on Armed Services of the House of Representatives a report detailing the results obtained from the tracking system developed under subsection (a).

“(d) Relation to Other Laws.—Nothing in this section shall be construed to alter the requirements of the Solid Waste Disposal Act (42 U.S.C. 6901 et seq.).

“(e) Definitions.—In this section:

“(1) The term ‘environmentally preferable’, in the case of a procurement item, means that the item has a lesser or reduced effect on human health and the environment when compared with competing products that serve the same purpose. The comparison may consider raw materials acquisition, production, manufacturing, packaging, distribution, reuse, operation, maintenance, or disposal of the product.

“(2) The terms ‘procurement item’ and ‘recovered material’ have the meanings given such terms in section 1004 of the Solid Waste Disposal Act (42 U.S.C. 6903).”

Policy Regarding Acquisition of Information Assurance and Information Assurance-Enabled Information Technology Products

Pub. L. 107–314, div. A, title III, §352, Dec. 2, 2002, 116 Stat. 2518, provided that:

“(a) Establishment of Policy.—The Secretary of Defense shall establish a policy to limit the acquisition of information assurance and information assurance-enabled information technology products to those products that have been evaluated and validated in accordance with appropriate criteria, schemes, or programs.

“(b) Waiver.—As part of the policy, the Secretary of Defense shall authorize specified officials of the Department of Defense to waive the limitations of the policy upon a determination in writing that application of the limitations to the acquisition of a particular information assurance or information assurance-enabled information technology product would not be in the national security interest of the United States.

“(c) Implementation.—The Secretary of Defense shall ensure that the policy is uniformly implemented throughout the Department of Defense.”

Logistics Support and Services for Weapon Systems Contractors

Pub. L. 107–314, div. A, title III, §365, Dec. 2, 2002, 116 Stat. 2520, as amended by Pub. L. 109–163, div. A, title III, §331, Jan. 6, 2006, 119 Stat. 3195, provided that:

“(a) Authority.—The Secretary of Defense may make available logistics support and logistics services to a contractor in support of the performance by the contractor of a contract for the construction, modification, or maintenance of a weapon system that is entered into by an official of the Department of Defense.

“(b) Support Contracts.—Any logistics support and logistics services to be provided under this section to a contractor in support of the performance of a contract described in subsection (a) shall be provided under a separate contract that is entered into by the Director of the Defense Logistics Agency with that contractor. The requirements of section 2208(h) of title 10, United States Code, and the regulations prescribed pursuant to such section shall apply to the contract between the Director of the Defense Logistics Agency and the contractor.

“(c) Scope of Support and Services.—The logistics support and logistics services that may be provided under this section in support of the performance of a contract described in subsection (a) are the distribution, disposal, and cataloging of materiel and repair parts necessary for the performance of that contract.

“(d) Limitations.—(1) The number of contracts described in subsection (a) for which the Secretary of Defense makes logistics support and logistics services available under the authority of this section may not exceed five contracts. The total amount of the estimated costs of all such contracts for which logistics support and logistics services are made available under this section may not exceed $100,000,000.

“(2) No contract entered into by the Director of the Defense Logistics Agency under subsection (b) may be for a period in excess of five years, including periods for which the contract is extended under options to extend the contract.

“(e) Regulations.—Before exercising the authority under this section, the Secretary of Defense shall prescribe in regulations such requirements, conditions, and restrictions as the Secretary determines appropriate to ensure that logistics support and logistics services are provided under this section only when it is in the best interests of the United States to do so. The regulations shall include, at a minimum, the following:

“(1) A requirement for the authority under this section to be used only for providing logistics support and logistics services in support of the performance of a contract that is entered into using competitive procedures (as defined in section 4 of the Office of Federal Procurement Policy Act (41 U.S.C. 403)).

“(2) A requirement for the solicitation of offers for a contract described in subsection (a), for which logistics support and logistics services are to be made available under this section, to include—

“(A) a statement that the logistics support and logistics services are to be made available under the authority of this section to any contractor awarded the contract, but only on a basis that does not require acceptance of the support and services; and

“(B) a description of the range of the logistics support and logistics services that are to be made available to the contractor.

“(3) A requirement for the rates charged a contractor for logistics support and logistics services provided to a contractor under this section to reflect the full cost to the United States of the resources used in providing the support and services, including the costs of resources used, but not paid for, by the Department of Defense.

“(4) With respect to a contract described in subsection (a) that is being performed for a department or agency outside the Department of Defense, a prohibition, in accordance with applicable contracting procedures, on the imposition of any charge on that department or agency for any effort of Department of Defense personnel or the contractor to correct deficiencies in the performance of such contract.

“(5) A prohibition on the imposition of any charge on a contractor for any effort of the contractor to correct a deficiency in the performance of logistics support and logistics services provided to the contractor under this section.

“(f) Relationship to Treaty Obligations.—The Secretary shall ensure that the exercise of authority under this section does not conflict with any obligation of the United States under any treaty or other international agreement.

“(g) Termination of Authority.—(1) The authority provided in this section shall expire on September 30, 2010.

“(2) The expiration of the authority under this section does not terminate—

“(A) any contract that was entered into by the Director of the Defense Logistics Agency under subsection (b) before the date specified in paragraph (1) or any obligation to provide logistics support and logistics services under that contract; or

“(B) any authority to enter into a contract described in subsection (a) for which a solicitation of offers was issued in accordance with the regulations prescribed pursuant to subsection (e)(2) before the date specified in paragraph (1) or to provide logistics support and logistics services to the contractor with respect to that contract in accordance with this section.”

Improvement of Software Acquisition Processes

Pub. L. 107–314, div. A, title VIII, §804, Dec. 2, 2002, 116 Stat. 2604, provided that:

“(a) Establishment of Programs.—(1) The Secretary of each military department shall establish a program to improve the software acquisition processes of that military department.

“(2) The head of each Defense Agency that manages a major defense acquisition program with a substantial software component shall establish a program to improve the software acquisition processes of that Defense Agency.

“(3) The programs required by this subsection shall be established not later than 120 days after the date of the enactment of this Act [Dec. 2, 2002].

“(b) Program Requirements.—A program to improve software acquisition processes under this section shall, at a minimum, include the following:

“(1) A documented process for software acquisition planning, requirements development and management, project management and oversight, and risk management.

“(2) Efforts to develop appropriate metrics for performance measurement and continual process improvement.

“(3) A process to ensure that key program personnel have an appropriate level of experience or training in software acquisition.

“(4) A process to ensure that each military department and Defense Agency implements and adheres to established processes and requirements relating to the acquisition of software.

“(c) Department of Defense Guidance.—The Assistant Secretary of Defense for Command, Control, Communications, and Intelligence, in consultation with the Under Secretary of Defense for Acquisition, Technology, and Logistics, shall—

“(1) prescribe uniformly applicable guidance for the administration of all of the programs established under subsection (a) and take such actions as are necessary to ensure that the military departments and Defense Agencies comply with the guidance; and

“(2) assist the Secretaries of the military departments and the heads of the Defense Agencies to carry out such programs effectively by—

“(A) ensuring that the criteria applicable to the selection of sources provides added emphasis on past performance of potential sources, as well as on the maturity of the software products offered by the potential sources; and

“(B) identifying, and serving as a clearinghouse for information regarding, best practices in software development and acquisition in both the public and private sectors.

“(d) Definitions.—In this section:

“(1) The term ‘Defense Agency’ has the meaning given the term in section 101(a)(11) of title 10, United States Code.

“(2) The term ‘major defense acquisition program’ has the meaning given such term in section 139(a)(2)(B) of title 10, United States Code.”

Rapid Acquisition and Deployment Procedures

Pub. L. 107–314, div. A, title VIII, §806, Dec. 2, 2002, 116 Stat. 2607, as amended by Pub. L. 108–136, div. A, title VIII, §845, Nov. 24, 2003, 117 Stat. 1553; Pub. L. 108–375, div. A, title VIII, §811, Oct. 28, 2004, 118 Stat. 2012; Pub. L. 109–364, div. A, title X, §1071(h), Oct. 17, 2006, 120 Stat. 2403, provided that:

“(a) Requirement To Establish Procedures.—Not later than 180 days after the date of the enactment of this Act [Dec. 2, 2002], the Secretary of Defense shall prescribe procedures for the rapid acquisition and deployment of items that are—

“(1) currently under development by the Department of Defense or available from the commercial sector; and

“(2) urgently needed to react to an enemy threat or to respond to significant and urgent safety situations.

“(b) Issues To Be Addressed.—The procedures prescribed under subsection (a) shall include the following:

“(1) A process for streamlined communications between the Chairman of the Joint Chiefs of Staff, the acquisition community, and the research and development community, including—

“(A) a process for the commanders of the combatant commands and the Joint Chiefs of Staff to communicate their needs to the acquisition community and the research and development community; and

“(B) a process for the acquisition community and the research and development community to propose items that meet the needs communicated by the combatant commands and the Joint Chiefs of Staff.

“(2) Procedures for demonstrating, rapidly acquiring, and deploying items proposed pursuant to paragraph (1)(B), including—

“(A) a process for demonstrating performance and evaluating for current operational purposes the existing capability of an item;

“(B) a process for developing an acquisition and funding strategy for the deployment of an item; and

“(C) a process for making deployment determinations based on information obtained pursuant to subparagraphs (A) and (B).

“(c) Response to Combat Emergencies.—(1) In the case of any equipment that, as determined in writing by the Secretary of Defense without delegation, is urgently needed to eliminate a combat capability deficiency that has resulted in combat fatalities, the Secretary shall use the procedures developed under this section in order to accomplish the rapid acquisition and deployment of the needed equipment.

“(2)(A) Whenever the Secretary makes a determination under paragraph (1) that certain equipment is urgently needed to eliminate a combat capability deficiency that has resulted in combat fatalities, the Secretary shall designate a senior official of the Department of Defense to ensure that the needed equipment is acquired and deployed as quickly as possible, with a goal of awarding a contract for the acquisition of the equipment within 15 days.

“(B) Upon designation of a senior official under subparagraph (A), the Secretary shall authorize that official to waive any provision of law, policy, directive, or regulation described in subsection (d) that such official determines in writing would unnecessarily impede the rapid acquisition and deployment of the needed equipment. In a case in which the needed equipment cannot be acquired without an extensive delay, the senior official shall require that an interim solution be implemented and deployed using the procedures developed under this section to minimize the combat capability deficiency and combat fatalities.

“(3) The authority of this section may not be used to acquire equipment in an amount aggregating more than $100,000,000 during any fiscal year. For acquisitions of equipment under this section during the fiscal year in which the Secretary makes the determination described in paragraph (1) with respect to such equipment, the Secretary may use any funds available to the Department of Defense for that fiscal year.

“(4) The Secretary of Defense shall notify the congressional defense committees [Committees on Armed Services and Appropriations of the Senate and the House of Representatives] within 15 days after each determination made under paragraph (1). Each such notice shall identify—

“(A) the equipment to be acquired;

“(B) the amount anticipated to be expended for the acquisition; and

“(C) the source of funds for the acquisition.

“(5) Any acquisition initiated under this subsection shall transition to the normal acquisition system not later than two years after the date on which the Secretary makes the determination described in paragraph (1) with respect to that equipment.

“(d) Waiver of Certain Statutes and Regulations.—(1) Upon a determination described in subsection (c)(1), the senior official designated in accordance with subsection (c)(2) with respect to that designation is authorized to waive any provision of law, policy, directive or regulation addressing—

“(A) the establishment of the requirement for the equipment;

“(B) the research, development, test, and evaluation of the equipment; or

“(C) the solicitation and selection of sources, and the award of the contract, for procurement of the equipment.

“(2) Nothing in this subsection authorizes the waiver of—

“(A) the requirements of this section or the regulations implementing this section; or

“(B) any provision of law imposing civil or criminal penalties.

“(e) Testing Requirement.—(1) The process for demonstrating performance and evaluating for current operational purposes the existing capability of an item prescribed under subsection (b)(2)(A) shall include—

“(A) an operational assessment in accordance with procedures prescribed by the Director of Operational Test and Evaluation; and

“(B) a requirement to provide information about any deficiency of the item in meeting the original requirements for the item (as stated in an operational requirements document or similar document) to the deployment decisionmaking authority.

“(2) The process may not include a requirement for any deficiency of an item to be the determining factor in deciding whether to deploy the item.

“(3) If items are deployed under the rapid acquisition and deployment procedures prescribed pursuant to this section, or under any other authority, before the completion of operational test and evaluation of the items, the Director of Operational Test and Evaluation shall have access to operational records and data relevant to such items in accordance with section 139(e)(3) of title 10, United States Code, for the purpose of completing operational test and evaluation of the items. The access to the operational records and data shall be provided in a time and manner determined by the Secretary of Defense consistent with requirements of operational security and other relevant operational requirements.

“(f) Limitation.—The quantity of items of a system procured using the procedures prescribed pursuant to this section may not exceed the number established for low-rate initial production for the system. Any such items shall be counted for purposes of the number of items of the system that may be procured through low-rate initial production.”

Procurement of Alternative Fueled and Hybrid Light Duty Trucks

Pub. L. 107–107, div. A, title III, §318, Dec. 28, 2001, 115 Stat. 1055, provided that:

“(a) Defense Fleets Not Covered by Requirement in Energy Policy Act of 1992.—(1) The Secretary of Defense shall coordinate with the Administrator of General Services to ensure that only hybrid vehicles are procured by the Administrator for the Department of Defense fleet of light duty trucks that is not in a fleet of vehicles to which section 303 of the Energy Policy Act of 1992 (42 U.S.C. 13212) applies.

“(2) The Secretary, in consultation with the Administrator, may waive the policy regarding the procurement of hybrid vehicles in paragraph (1) to the extent that the Secretary determines necessary—

“(A) in the case of trucks that are exempt from the requirements of section 303 of the Energy Policy Act of 1992 for national security reasons under subsection (b)(3)(E) of such section, to meet specific requirements of the Department of Defense for capabilities of light duty trucks;

“(B) to procure vehicles consistent with the standards applicable to the procurement of fleet vehicles for the Federal Government; or

“(C) to adjust to limitations on the commercial availability of light duty trucks that are hybrid vehicles.

“(3) This subsection applies with respect to procurements of light duty trucks in fiscal year 2005 and subsequent fiscal years.

“(b) Requirement To Exceed Requirement in Energy Policy Act of 1992.—(1) The Secretary of Defense shall coordinate with the Administrator of General Services to ensure that, of the light duty trucks procured in fiscal years after fiscal year 2004 for the fleets of light duty vehicles of the Department of Defense to which section 303 of the Energy Policy Act of 1992 [42 U.S.C. 13212] applies—

“(A) five percent of the total number of such trucks that are procured in each of fiscal years 2005 and 2006 are alternative fueled vehicles or hybrid vehicles; and

“(B) ten percent of the total number of such trucks that are procured in each fiscal year after fiscal year 2006 are alternative fueled vehicles or hybrid vehicles.

“(2) Light duty trucks acquired for the Department of Defense that are counted to comply with section 303 of the Energy Policy Act of 1992 for a fiscal year shall be counted to determine the total number of light duty trucks procured for the Department of Defense for that fiscal year for the purposes of paragraph (1), but shall not be counted to satisfy the requirement in that paragraph.

“(c) Report on Plans for Implementation.—At the same time that the President submits the budget for fiscal year 2003 to Congress under section 1105(a) of title 31, United States Code, the Secretary shall submit to Congress a report summarizing the plans for carrying out subsections (a) and (b).

“(d) Definitions.—In this section:

“(1) The term ‘hybrid vehicle’ means a motor vehicle that draws propulsion energy from onboard sources of stored energy that are both—

“(A) an internal combustion or heat engine using combustible fuel; and

“(B) a rechargeable energy storage system.

“(2) The term ‘alternative fueled vehicle’ has the meaning given that term in section 301 of the Energy Policy Act of 1992 (42 U.S.C. 13211).”

Temporary Emergency Procurement Authority to Facilitate the Defense Against Terrorism or Biological or Chemical Attack

Pub. L. 107–107, div. A, title VIII, §836, Dec. 28, 2001, 115 Stat. 1192, provided special authorities relating to increased flexibility for use of streamlined procedures and commercial item treatment for procurements of biotechnology to facilitate the defense against terrorism or biological or chemical attack which would be applicable to procurements for which funds had been obligated during fiscal years 2002 and 2003, directed the Secretary of Defense to submit to committees of Congress, not later than Mar. 1, 2002, a report containing the Secretary's recommendations for additional emergency procurement authority that the Secretary had determined necessary to support operations carried out to combat terrorism, and provided that no contract could be entered into pursuant to such authority after Sept. 30, 2003.

Improvements in Procurements of Services

Pub. L. 106–398, §1 [[div. A], title VIII, §821], Oct. 30, 2000, 114 Stat. 1654, 1654A–217, as amended by Pub. L. 108–136, div. A, title XIV, §1431(c), Nov. 24, 2003, 117 Stat. 1672, provided that:

“(a) Preference for Performance-Based Service Contracting.—Not later than 180 days after the date of the enactment of this Act [Oct. 30, 2000], the Federal Acquisition Regulation issued in accordance with sections 6 and 25 of the Office of Federal Procurement Policy Act (41 U.S.C. 405 and 421) shall be revised to establish a preference for use of contracts and task orders for the purchase of services in the following order of precedence:

“(1) A performance-based contract or performance-based task order that contains firm fixed prices for the specific tasks to be performed.

“(2) Any other performance-based contract or performance-based task order.

“(3) Any contract or task order that is not a performance-based contract or a performance-based task order.

“[(b) Repealed. Pub. L. 108–136, div. A, title XIV, §1431(c), Nov. 24, 2003, 117 Stat. 1672.]

“(c) Centers of Excellence in Service Contracting.—Not later than 180 days after the date of the enactment of this Act [Oct. 30, 2000], the Secretary of each military department shall establish at least one center of excellence in contracting for services. Each center of excellence shall assist the acquisition community by identifying, and serving as a clearinghouse for, best practices in contracting for services in the public and private sectors.

“(d) Enhanced Training in Service Contracting.—(1) The Secretary of Defense shall ensure that classes focusing specifically on contracting for services are offered by the Defense Acquisition University and the Defense Systems Management College and are otherwise available to contracting personnel throughout the Department of Defense.

“(2) The Secretary of each military department and the head of each Defense Agency shall ensure that the personnel of the department or agency, as the case may be, who are responsible for the awarding and management of contracts for services receive appropriate training that is focused specifically on contracting for services.

“(e) Definitions.—In this section:

“(1) The term ‘performance-based’, with respect to a contract, a task order, or contracting, means that the contract, task order, or contracting, respectively, includes the use of performance work statements that set forth contract requirements in clear, specific, and objective terms with measurable outcomes.

“(2) The term ‘commercial item’ has the meaning given the term in section 4(12) of the Office of Federal Procurement Policy Act (41 U.S.C. 403(12)).

“(3) The term ‘Defense Agency’ has the meaning given the term in section 101(a)(11) of title 10, United States Code.”

Program To Increase Business Innovation in Defense Acquisition Programs

Pub. L. 106–65, div. A, title VIII, §812(a)–(c), (e), Oct. 5, 1999, 113 Stat. 709, 710, provided that:

“(a) Requirement To Develop Plan.—Not later than March 1, 2000, the Secretary of Defense shall publish in the Federal Register for public comment a plan to provide for increased innovative technology for acquisition programs of the Department of Defense from commercial private sector entities, including small-business concerns.

“(b) Implementation of Plan.—Not later than March 1, 2001, the Secretary of Defense shall implement the plan required by subsection (a), subject to any modifications the Secretary may choose to make in response to comments received.

“(c) Elements of Plan.—The plan required by subsection (a) shall include, at a minimum, the following elements:

“(1) Procedures through which commercial private sector entities, including small-business concerns, may submit proposals recommending cost-saving and innovative ideas to acquisition program managers.

“(2) A review process designed to make recommendations on the merit and viability of the proposals submitted under paragraph (1) at appropriate times during the acquisition cycle.

“(3) Measures to limit potential disruptions to existing contracts and programs from proposals accepted and incorporated into acquisition programs of the Department of Defense.

“(4) Measures to ensure that research and development efforts of small-business concerns are considered as early as possible in a program's acquisition planning process to accommodate potential technology insertion without disruption to existing contracts and programs.

“(e) Small-Business Concern Defined.—In this section, the term ‘small-business concern’ has the same meaning as the meaning of such term as used in the Small Business Act (15 U.S.C. 631 et seq.).”

Year 2000 Software Conversion

Pub. L. 104–201, div. A, title VIII, §831, Sept. 23, 1996, 110 Stat. 2615, directed the Secretary of Defense to ensure that all information technology acquired by the Department of Defense pursuant to contracts entered into after Sept. 30, 1996, would have the capabilities to process date and date-related data in 2000, and directed the Secretary to assess all information technology within the Department to determine the extent to which such technology would have the capabilities to operate effectively, and to submit to Congress a detailed plan for eliminating any deficiencies not later than Jan. 1, 1997.

Defense Facility-Wide Pilot Program

Section 822 of Pub. L. 104–106, as amended by Pub. L. 106–65, div. A, title X, §1067(6), Oct. 5, 1999, 113 Stat. 774, provided that:

“(a) Authority To Conduct Defense Facility-Wide Pilot Program.—The Secretary of Defense may conduct a pilot program, to be known as the ‘defense facility-wide pilot program’, for the purpose of determining the potential for increasing the efficiency and effectiveness of the acquisition process in facilities by using commercial practices on a facility-wide basis.

“(b) Designation of Participating Facilities.—(1) Subject to paragraph (2), the Secretary may designate up to two facilities as participants in the defense facility-wide pilot program.

“(2) The Secretary may designate for participation in the pilot program only those facilities that are authorized to be so designated in a law authorizing appropriations for national defense programs that is enacted after the date of the enactment of this Act [Feb. 10, 1996].

“(c) Scope of Program.—At a facility designated as a participant in the pilot program, the pilot program shall consist of the following:

“(1) All contracts and subcontracts for defense supplies and services that are performed at the facility.

“(2) All Department of Defense contracts and all subcontracts under Department of Defense contracts performed elsewhere that the Secretary determines are directly and substantially related to the production of defense supplies and services at the facility and are necessary for the pilot program.

“(d) Criteria for Designation of Participating Facilities.—The Secretary shall establish criteria for selecting a facility for designation as a participant in the pilot program. In developing such criteria, the Secretary shall consider the following:

“(1) The number of existing and anticipated contracts and subcontracts performed at the facility—

“(A) for which contractors are required to provide certified cost or pricing data pursuant to section 2306a of title 10, United States Code; and

“(B) which are administered with the application of cost accounting standards under section 26(f) of the Office of Federal Procurement Policy Act (41 U.S.C. 422(f)).

“(2) The relationship of the facility to other organizations and facilities performing under contracts with the Department of Defense and subcontracts under such contracts.

“(3) The impact that the participation of the facility under the pilot program would have on competing domestic manufacturers.

“(4) Such other factors as the Secretary considers appropriate.

“(e) Notification.—(1) The Secretary shall transmit to the Committee on Armed Services of the Senate and the Committee on Armed Services of the House of Representatives a written notification of each facility proposed to be designated by the Secretary for participation in the pilot program.

“(2) The Secretary shall include in the notification regarding a facility designated for participation in the program a management plan addressing the following:

“(A) The proposed treatment of research and development contracts or subcontracts to be performed at the facility during the pilot program.

“(B) The proposed treatment of the cost impact of the use of commercial practices on the award and administration of contracts and subcontracts performed at the facility.

“(C) The proposed method for reimbursing the contractor for existing and new contracts.

“(D) The proposed method for measuring the performance of the facility for meeting the management goals of the Secretary.

“(E) Estimates of the annual amount and the total amount of the contracts and subcontracts covered under the pilot program.

“(3)(A) The Secretary shall ensure that the management plan for a facility provides for attainment of the following objectives:

“(i) A significant reduction of the cost to the Government for programs carried out at the facility.

“(ii) A reduction of the schedule associated with programs carried out at the facility.

“(iii) An increased use of commercial practices and procedures for programs carried out at the facility.

“(iv) Protection of a domestic manufacturer competing for contracts at such facility from being placed at a significant competitive disadvantage by the participation of the facility in the pilot program.

“(B) The management plan for a facility shall also require that all or substantially all of the contracts to be awarded and performed at the facility after the designation of that facility under subsection (b), and all or substantially all of the subcontracts to be awarded under those contracts and performed at the facility after the designation, be—

“(i) for the production of supplies or services on a firm-fixed price basis;

“(ii) awarded without requiring the contractors or subcontractors to provide certified cost or pricing data pursuant to section 2306a of title 10, United States Code; and

“(iii) awarded and administered without the application of cost accounting standards under section 26(f) of the Office of Federal Procurement Policy Act (41 U.S.C. 422(f)).

“(f) Exemption From Certain Requirements.—In the case of a contract or subcontract that is to be performed at a facility designated for participation in the defense facility-wide pilot program and that is subject to section 2306a of title 10, United States Code, or section 26(f) of the Office of Federal Procurement Policy Act (41 U.S.C. 422(f)), the Secretary of Defense may exempt such contract or subcontract from the requirement to obtain certified cost or pricing data under such section 2306a or the requirement to apply mandatory cost accounting standards under such section 26(f) if the Secretary determines that the contract or subcontract—

“(1) is within the scope of the pilot program (as described in subsection (c)); and

“(2) is fairly and reasonably priced based on information other than certified cost and pricing data.

“(g) Special Authority.—The authority provided under subsection (a) includes authority for the Secretary of Defense—

“(1) to apply any amendment or repeal of a provision of law made in this Act [see Tables for classification] to the pilot program before the effective date of such amendment or repeal; and

“(2) to apply to a procurement of items other than commercial items under such program—

“(A) the authority provided in section 34 of the Office of Federal Procurement Policy Act (41 U.S.C. 430) to waive a provision of law in the case of commercial items, and

“(B) any exception applicable under this Act or the Federal Acquisition Streamlining Act of 1994 (Public Law 103–355) [see Tables for classification] (or an amendment made by a provision of either Act) in the case of commercial items,

before the effective date of such provision (or amendment) to the extent that the Secretary determines necessary to test the application of such waiver or exception to procurements of items other than commercial items.

“(h) Applicability.—(1) Subsections (f) and (g) apply to the following contracts, if such contracts are within the scope of the pilot program at a facility designated for the pilot program under subsection (b):

“(A) A contract that is awarded or modified during the period described in paragraph (2).

“(B) A contract that is awarded before the beginning of such period, that is to be performed (or may be performed), in whole or in part, during such period, and that may be modified as appropriate at no cost to the Government.

“(2) The period referred to in paragraph (1), with respect to a facility designated under subsection (b), is the period that—

“(A) begins 45 days after the date of the enactment of the Act authorizing the designation of that facility in accordance with paragraph (2) of such subsection; and

“(B) ends on September 30, 2000.

“(i) Commercial Practices Encouraged.—With respect to contracts and subcontracts within the scope of the defense facility-wide pilot program, the Secretary of Defense may, to the extent the Secretary determines appropriate and in accordance with applicable law, adopt commercial practices in the administration of contracts and subcontracts. Such commercial practices may include the following:

“(1) Substitution of commercial oversight and inspection procedures for Government audit and access to records.

“(2) Incorporation of commercial oversight, inspection, and acceptance procedures.

“(3) Use of alternative dispute resolution techniques (including arbitration).

“(4) Elimination of contract provisions authorizing the Government to make unilateral changes to contracts.”

Elimination of Use of Class I Ozone-Depleting Substances in Certain Military Procurement Contracts

Section 326 of Pub. L. 102–484, as amended by Pub. L. 104–106, div. A, title XV, §§1502(c)(2)(A), 1504(c)(1), Feb. 10, 1996, 110 Stat. 506, 514; Pub. L. 106–65, div. A, title X, §1067(8), Oct. 5, 1999, 113 Stat. 774, provided that:

“(a) Elimination of Use of Class I Ozone-Depleting Substances.—(1) No Department of Defense contract awarded after June 1, 1993, may include a specification or standard that requires the use of a class I ozone-depleting substance or that can be met only through the use of such a substance unless the inclusion of the specification or standard in the contract is approved by the senior acquisition official for the procurement covered by the contract. The senior acquisition official may grant the approval only if the senior acquisition official determines (based upon the certification of an appropriate technical representative of the official) that a suitable substitute for the class I ozone-depleting substance is not currently available.

“(2)(A)(i) Not later than 60 days after the completion of the first modification, amendment, or extension after June 1, 1993, of a contract referred to in clause (ii), the senior acquisition official (or the designee of that official) shall carry out an evaluation of the contract in order to determine—

“(I) whether the contract includes a specification or standard that requires the use of a class I ozone-depleting substance or can be met only through the use of such a substance; and

“(II) in the event of a determination that the contract includes such a specification or standard, whether the contract can be carried out through the use of an economically feasible substitute for the ozone-depleting substance or through the use of an economically feasible alternative technology for a technology involving the use of the ozone-depleting substance.

“(ii) A contract referred to in clause (i) is any contract in an amount in excess of $10,000,000 that—

“(I) was awarded before June 1, 1993; and

“(II) as a result of the modification, amendment, or extension described in clause (i), will expire more than 1 year after the effective date of the modification, amendment, or extension.

“(iii) A contract under evaluation under clause (i) may not be further modified, amended, or extended until the evaluation described in that clause is complete.

“(B) If the acquisition official (or designee) determines that an economically feasible substitute substance or alternative technology is available for use in a contract under evaluation, the appropriate contracting officer shall enter into negotiations to modify the contract to require the use of the substitute substance or alternative technology.

“(C) A determination that a substitute substance or technology is not available for use in a contract under evaluation shall be made in writing by the senior acquisition official (or designee).

“(D) The Secretary of Defense may, consistent with the Federal Acquisition Regulation, adjust the price of a contract modified under subparagraph (B) to take into account the use by the contractor of a substitute substance or alternative technology in the modified contract.

“(3) The senior acquisition official authorized to grant an approval under paragraph (1) and the senior acquisition official and designees authorized to carry out an evaluation and make a determination under paragraph (2) shall be determined under regulations prescribed by the Secretary of Defense. A senior acquisition official may not delegate the authority provided in paragraph (1).

“(4) Each official who grants an approval authorized under paragraph (1) or makes a determination under paragraph (2)(B) shall submit to the Secretary of Defense a report on that approval or determination, as the case may be, as follows:

“(A) Beginning on October 1, 1993, and continuing for 8 calendar quarters thereafter, by submitting a report on the approvals granted or determinations made under such authority during the preceding quarter not later than 30 days after the end of such quarter.

“(B) Beginning on January 1, 1997, and continuing for 4 years thereafter, by submitting a report on the approvals granted or determinations made under such authority during the preceding year not later than 30 days after the end of such year.

“(5) The Secretary shall promptly transmit to the Committee on Armed Services of the Senate and the Committee on Armed Services of the House of Representatives each report submitted to the Secretary under paragraph (4). The Secretary shall transmit the report in classified and unclassified forms.

“(b) Cost Recovery.—In any case in which a Department of Defense contract is modified or a specification or standard for such a contract is waived at the request of a contractor in order to permit the contractor to use in the performance of the contract a substitute for a class I ozone-depleting substance or an alternative technology for a technology involving the use of a class I ozone-depleting substance, the Secretary of Defense may adjust the price of the contract in a manner consistent with the Federal Acquisition Regulation.

“(c) Definitions.—In this section:

“(1) The term ‘class I ozone-depleting substance’ means any substance listed under section 602(a) of the Clean Air Act (42 U.S.C. 7671a(a)).

“(2) The term ‘Federal Acquisition Regulation’ means the single Government-wide procurement regulation issued under section 25(c) of the Office of Federal Procurement Policy Act (41 U.S.C. 421(c)).”

Payment Protections for Subcontractors and Suppliers

Pub. L. 102–190, div. A, title VIII, §806, Dec. 5, 1991, 105 Stat. 1417, as amended by Pub. L. 102–484, div. A, title X, §1053(5), Oct. 23, 1992, 106 Stat. 2502; Pub. L. 103–355, title II, §2091, title VIII, §8105(k), Oct. 13, 1994, 108 Stat. 3306, 3393, provided that:

“(a) Regulations.—The Secretary of Defense shall prescribe in regulations the following requirements:

“(1) Information provided by department of defense relating to payment.—(A) Subject to section 552(b)(1) of title 5, United States Code, upon the request of a subcontractor or supplier of a contractor performing a Department of Defense contract, the Department of Defense shall promptly make available to such subcontractor or supplier the following information:

“(i) Whether requests for progress payments or other payments have been submitted by the contractor to the Department of Defense in connection with that contract.

“(ii) Whether final payment to the contractor has been made by the Department of Defense in connection with that contract.

“(B) This paragraph shall apply with respect to any Department of Defense contract that is in effect on the date which is 270 days after the date of enactment of this Act [Dec. 5, 1991] or that is awarded after such date.

“(2) Information provided by department of defense relating to payment bonds.—(A) Upon the request of a subcontractor or supplier described in subparagraph (B), the Department of Defense shall promptly make available to such subcontractor or supplier any of the following:

“(i) The name and address of the surety or sureties on the payment bond.

“(ii) The penal amount of the payment bond.

“(iii) A copy of the payment bond.

“(B) Subparagraph (A) applies to—

“(i) a subcontractor or supplier having a subcontract, purchase order, or other agreement to furnish labor or material for the performance of a Department of Defense contract with respect to which a payment bond has been furnished to the United States pursuant to the Miller Act; and

“(ii) a prospective subcontractor or supplier offering to furnish labor or material for the performance of such a Department of Defense contract.

“(C) With respect to the information referred to in subparagraphs (A)(i) and (A)(ii), the regulations shall include authority for such information to be provided verbally to the subcontractor or supplier.

“(D) With respect to the information referred to in subparagraph (A)(iii), the regulations may impose reasonable fees to cover the cost of copying and providing requested bonds.

“(E) This paragraph shall apply with respect to any Department of Defense contract covered by the Miller Act that is in effect on the date which is 270 days after the date of enactment of this Act [Dec. 5, 1991] or that is awarded after such date.

“(3) Information provided by contractors relating to payment bonds.—(A) Upon the request of a prospective subcontractor or supplier offering to furnish labor or material for the performance of a Department of Defense contract with respect to which a payment bond has been furnished to the United States pursuant to the Miller Act, the contractor shall promptly make available to such prospective subcontractor or supplier a copy of the payment bond.

“(B) This paragraph shall apply with respect to any Department of Defense contract covered by the Miller Act for which a solicitation is issued after the expiration of the 60-day period beginning on the effective date of the regulations promulgated under this subsection.

“(4) Procedures relating to compliance with payment terms.—(A) Under procedures established in the regulations, upon the assertion by a subcontractor or supplier of a contractor performing a Department of Defense contract that the subcontractor or supplier has not been paid by the prime contractor in accordance with the payment terms of the subcontract, purchase order, or other agreement with the prime contractor, the contracting officer may determine the following:

“(i) With respect to a construction contract, whether the contractor has made progress payments to the subcontractor or supplier in compliance with chapter 39 of title 31, United States Code.

“(ii) With respect to a contract other than a construction contract, whether the contractor has made progress or other payments to the subcontractor or supplier in compliance with the terms of the subcontract, purchase order, or other agreement with the prime contractor.

“(iii) With respect to either a construction contract or a contract other than a construction contract, whether the contractor has made final payment to the subcontractor or supplier in compliance with the terms of the subcontract, purchase order, or other agreement with the prime contractor.

“(iv) With respect to either a construction contract or a contract other than a construction contract, whether any certification of payment of the subcontractor or supplier accompanying the contractor's payment request to the Government is accurate.

“(B) If the contracting officer determines that the prime contractor is not in compliance with any matter referred to in clause (i), (ii), or (iii) of subparagraph (A), the contracting officer may, under procedures established in the regulations—

“(i) encourage the prime contractor to make timely payment to the subcontractor or supplier; or

“(ii) reduce or suspend progress payments with respect to amounts due to the prime contractor.

“(C) If the contracting officer determines that a certification referred to in clause (iv) of subparagraph (A) is inaccurate in any material respect, the contracting officer shall, under procedures established in the regulations, initiate appropriate administrative or other remedial action.

“(D) This paragraph shall apply with respect to any Department of Defense contract that is in effect on the date of promulgation of the regulations under this subsection or that is awarded after such date.

“(b) Inapplicability to Certain Contracts.—Regulations prescribed under this section shall not apply to a contract for the acquisition of commercial items (as defined in section 4(12) of the Office of Federal Procurement Policy Act [41 U.S.C. 403(12)]).

“(c) Government-Wide Applicability.—The Federal Acquisition Regulatory Council (established by section 25(a) of the Office of Federal Procurement Policy Act) shall modify the Federal Acquisition Regulation (issued pursuant to section 25(c)(1) of the Office of Federal Procurement Policy Act (41 U.S.C. 421(c)(1)) to apply Government-wide the requirements that the Secretary is required under subsection (a) to prescribe in regulations applicable with respect to the Department of Defense contracts.

“(d) Assistance to Small Business Concerns.—[Amended section 15(k)(5) of the Small Business Act (15 U.S.C. 644(k)(5)).]

“(e) GAO Report.—(1) The Comptroller General of the United States shall conduct an assessment of the matters described in paragraph (2) and submit a report pursuant to paragraph (3).

“(2) In addition to such other related matters as the Comptroller General considers appropriate, the matters to be assessed pursuant to paragraph (1) are the following:

“(A) Timely payment of progress or other periodic payments to subcontractors and suppliers by prime contractors on Federal contracts by—

“(i) identifying all existing statutory and regulatory provisions, categorized by types of contracts covered by such provisions;

“(ii) evaluating the feasibility and desirability of requiring that a prime contractor (other than a construction prime contractor subject to the provisions of sections 3903(b) and 3905 of title 31, United States Code) be required to—

“(I) include in its subcontracts a payment term requiring payment within 7 days (or some other fixed term) after receiving payment from the Government; and

“(II) submit with its payment request to the Government a certification that it has timely paid its subcontractors in accordance with their subcontracts from funds previously received as progress payments and will timely make required payments to such subcontractors from the proceeds of the progress payment covered by the certification;

“(iii) evaluating the feasibility and desirability of requiring that all prime contractors (other than a construction prime contractor subject to the provisions of sections 3903(b) and 3905 of title 31, United States Code) furnish with its payment request to the Government proof of payment of the amounts included in such payment request for payments made to subcontractors and suppliers;

“(iv) evaluating the feasibility and desirability of requiring a prime contractor to establish an escrow account at a federally insured financial institution and requiring direct disbursements to subcontractors and suppliers of amounts certified by the prime contractor in its payment request to the Government as being payable to such subcontractors and suppliers in accordance with their subcontracts; and

“(v) evaluating the feasibility and desirability of requiring direct disbursement of amounts certified by a prime contractor as being payable to its subcontractors and suppliers in accordance with their subcontracts (using techniques such as joint payee checks, escrow accounts, or direct payment by the Government), if the contracting officer has determined that the prime contractor is failing to make timely payments to its subcontractors and suppliers.

“(B) Payment protection of subcontractors and suppliers through the use of payment bonds or alternatives methods by—

“(i) evaluating the effectiveness of the modifications to part 28.2 of the Federal Acquisition Regulation Part 28.2 (48 C.F.R. 28.200) relating to the use of individual sureties, which became effective February 26, 1990;

“(ii) evaluating the effectiveness of requiring payment bonds pursuant to the Miller Act as a means of affording protection to construction subcontractors and suppliers relating to receiving—

“(I) timely payment of progress payments due in accordance with their subcontracts; and

“(II) ultimate payment of such amounts due;

“(iii) evaluating the feasibility and desirability of increasing the payment bond amounts required under the Miller Act from the current maximum amounts to an amount equal to 100 percent of the amount of the contract;

“(iv) evaluating the feasibility and desirability of requiring payment bonds for supply and services contracts (other than construction), and, if feasible and desirable, the amounts of such bonds; and

“(v) evaluating the feasibility and desirability of using letters of credit issued by federally insured financial institutions (or other alternatives) as substitutes for payment bonds in providing payment protection to subcontractors and suppliers on construction contracts (and other contracts).

“(C) Any evaluation of feasibility and desirability carried out pursuant to subparagraph (A) or (B) shall include the appropriateness of—

“(i) any differential treatment of, or impact on, small business concerns as opposed to concerns other than small business concerns;

“(ii) any differential treatment of subcontracts relating to commercial products entered into by the contractor in furtherance of its non-Government business, especially those subcontracts entered into prior to the award of a contract by the Government; and

“(iii) extending the protections regarding payment to all tiers of subcontractors or restricting them to first-tier subcontractors and direct suppliers.

“(3) The report required by paragraph (1) shall include a description of the results of the assessment carried out pursuant to paragraph (2) and may include recommendations pertaining to any of the following:

“(A) Statutory and regulatory changes providing payment protections for subcontractors and suppliers (other than a construction prime contractor subject to the provisions of sections 3903(b) and 3905 of title 31, United States Code) that the Comptroller General believes to be desirable and feasible.

“(B) Proposals to assess the desirability and utility of a specific payment protection on a test basis.

“(C) Such other recommendations as the Comptroller General considers appropriate in light of the matters assessed pursuant to paragraph (2).

“(4) The report required by paragraph (1) shall be submitted not later than by February 1, 1993, to the Committees on Armed Services and on Small Business [now the Committee on Small Business and Entrepreneurship of the Senate] of the Senate and House of Representatives.

“(f) Inspector General Report.—(1) The Inspector General of the Department of Defense shall submit to the Secretary of Defense a report on payment protections for subcontractors and suppliers under contracts entered into with the Department of Defense. The report shall include an assessment of the extent to which available judicial and administrative remedies, as well as suspension and debarment procedures, have been used (or recommended for use) by officials of the Department to deter false statements relating to (A) payment bonds provided by individuals pursuant to the Miller Act, and (B) certifications pertaining to payment requests by construction contractors pursuant to section 3903(b) of title 31, United States Code. The assessment shall cover actions taken during the period beginning on October 1, 1989, and ending on September 30, 1992.

“(2) The report required by paragraph (1) shall be submitted to the Secretary of Defense not later than March 1, 1993. The report may include recommendations by the Inspector General on ways to improve the effectiveness of existing methods of preventing false statements.

“(g) Miller Act Defined.—For purposes of this section, the term ‘Miller Act’ means the Act of August 24, 1935 (40 U.S.C. 270a–270d) [now 40 U.S.C. 3131, 3133].”

Advisory Panel on Streamlining and Codifying Acquisition Laws

Pub. L. 101–510, div. A, title VIII, §800, Nov. 5, 1990, 104 Stat. 1587, as amended by Pub. L. 103–160, div. A, title IX, §904(f), Nov. 30, 1993, 107 Stat. 1729, directed Under Secretary of Defense for Acquisition and Technology, not later than Jan. 15, 1991, to establish under sponsorship of Defense Systems Management College an advisory panel on streamlining and codifying acquisition laws, to review the acquisition laws applicable to Department of Defense with a view toward streamlining the defense acquisition process, to make any recommendations for repeal or amendment of such laws that the panel considers necessary, as a result of such review, and to prepare a proposed code of relevant acquisition laws, directed the advisory panel, not later than Dec. 15, 1992, to transmit a final report on the actions of the panel to the Under Secretary of Defense for Acquisition and Technology, and directed the Secretary of Defense, not later than Jan. 15, 1993, to transmit the final report, together with such comments as he deems appropriate, to Congress.

Mentor-Protege Pilot Program

Pub. L. 106–65, div. A, title VIII, §811(d)(2), (3), Oct. 5, 1999, 113 Stat. 708, 709, as amended by Pub. L. 107–107, div. A, title X, §1048(g)(5), Dec. 28, 2001, 115 Stat. 1228, directed the Secretary of Defense to conduct a review of the Mentor-Protege Program established in Pub. L. 101–510, §831, set out below, to assess the feasibility of transitioning such program to operation without a specific appropriation or authority to provide reimbursement to a mentor firm and to assess additional incentives that could be extended to mentor firms to ensure adequate support and participation in the Program, directed the Secretary to submit to committees of Congress a report on the results of the review and recommendations not later than Sept. 30, 2000, and directed the Comptroller General to conduct a study on the implementation of the Program and the extent to which the Program was achieving its purposes in a cost-effective manner and to submit to committees of Congress a report on the results of the study not later than Jan. 1, 2002.

Pub. L. 102–484, div. A, title VIII, §807(a), Oct. 23, 1992, 106 Stat. 2448, directed the Secretary of Defense, within 15 days after Oct. 23, 1992, to publish in the Department of Defense Supplement to the Federal Acquisition Regulation the Department of Defense policy for the pilot Mentor-Protege Program and the regulations, directives, and administrative guidance pertaining to such program as such policy, regulations, directives, and administrative guidance had existed on Dec. 6, 1991, and directed that proposed modifications to that policy and any amendments proposed in order to implement any of the amendments made by this section, amending Pub. L. 101–510, §831, set out below, were to be published in final form within 120 days after Oct. 23, 1992.


Pub. L. 101–510, div. A, title VIII, §831, Nov. 5, 1990, 104 Stat. 1607, as amended by Pub. L. 102–25, title VII, §704(c), Apr. 6, 1991, 105 Stat. 119; Pub. L. 102–172, title VIII, §8064A, Nov. 26, 1991, 105 Stat. 1186; Pub. L. 102–190, div. A, title VIII, §814(b), Dec. 5, 1991, 105 Stat. 1425; Pub. L. 102–484, div. A, title VIII, §§801(h)(4), 807(b)(1), title X, §1054(d), Oct. 23, 1992, 106 Stat. 2445, 2448, 2503; Pub. L. 103–160, div. A, title VIII, §813(b)(1), (c), Nov. 30, 1993, 107 Stat. 1703; Pub. L. 104–106, div. A, title VIII, §824, Feb. 10, 1996, 110 Stat. 399; Pub. L. 104–201, div. A, title VIII, §802, Sept. 23, 1996, 110 Stat. 2604; Pub. L. 105–85, div. A, title VIII, §821(a), title X, §1073(c)(6), Nov. 18, 1997, 111 Stat. 1840, 1904; Pub. L. 106–65, div. A, title VIII, §811(a)–(d)(1), (e), Oct. 5, 1999, 113 Stat. 706, 707, 709; Pub. L. 106–398, §1 [[div. A], title VIII, §807], Oct. 30, 2000, 114 Stat. 1654, 1654A–208; Pub. L. 107–107, div. A, title VIII, §812, Dec. 28, 2001, 115 Stat. 1181; Pub. L. 108–375, div. A, title VIII, §§841(a), (b), 842, Oct. 28, 2004, 118 Stat. 2018, 2019, provided that:

“(a) Establishment of Pilot Program.—The Secretary of Defense shall establish a pilot program to be known as the ‘Mentor-Protege Program’.

“(b) Purpose.—The purpose of the program is to provide incentives for major Department of Defense contractors to furnish disadvantaged small business concerns with assistance designed to enhance the capabilities of disadvantaged small business concerns to perform as subcontractors and suppliers under Department of Defense contracts and other contracts and subcontracts in order to increase the participation of such business concerns as subcontractors and suppliers under Department of Defense contracts, other Federal Government contracts, and commercial contracts.

“(c) Program Participants.—(1) A business concern meeting the eligibility requirements set out in subsection (d) may enter into agreements under subsection (e) and furnish assistance to disadvantaged small business concerns upon making application to the Secretary of Defense and being approved for participation in the pilot program by the Secretary. A business concern participating in the pilot program pursuant to such an approval shall be known, for the purposes of the program, as a ‘mentor firm’.

“(2) A disadvantaged small business concern eligible for the award of Federal contracts may obtain assistance from a mentor firm upon entering into an agreement with the mentor firm as provided in subsection (e). A disadvantaged small business concern may not be a party to more than one agreement to receive such assistance at any time. A disadvantaged small business concern receiving such assistance shall be known, for the purposes of the program, as a ‘protege firm’.

“(3) In entering into an agreement pursuant to subsection (e), a mentor firm may rely in good faith on a written representation of a business concern that such business concern is a disadvantaged small business concern. The Small Business Administration shall determine the status of such business concern as a disadvantaged small business concern in the event of a protest regarding the status of such business concern. If at any time the business concern is determined by the Small Business Administration not to be a disadvantaged small business concern, assistance furnished such business concern by the mentor firm after the date of the determination may not be considered assistance furnished under the program.

“(d) Mentor Firm Eligibility.—Subject to subsection (c)(1), a mentor firm eligible for award of Federal contracts may enter into an agreement with one or more protege firms under subsection (e) and provide assistance under the program pursuant to that agreement if—

“(1) during the fiscal year preceding the fiscal year in which the mentor firm enters into the agreement, the total amount of the Department of Defense contracts awarded such mentor firm and the subcontracts awarded such mentor firm under Department of Defense contracts was equal to or greater than $100,000,000; or

“(2) the mentor firm demonstrates the capability to assist in the development of protege firms, and is approved by the Secretary of Defense pursuant to criteria specified in the regulations prescribed pursuant to subsection (k).

“(e) Mentor-Protege Agreement.—Before providing assistance to a protege firm under the program, a mentor firm shall enter into a mentor-protege agreement with the protege firm regarding the assistance to be provided by the mentor firm. The agreement shall include the following:

“(1) A developmental program for the protege firm, in such detail as may be reasonable, including (A) factors to assess the protege firm's developmental progress under the program, and (B) the anticipated number and type of subcontracts to be awarded the protege firm.

“(2) A program participation term for any period of not more than three years, except that the term may be a period of up to five years if the Secretary of Defense determines in writing that unusual circumstances justify a program participation term in excess of three years.

“(3) Procedures for the protege firm to terminate the agreement voluntarily and for the mentor firm to terminate the agreement for cause.

“(f) Forms of Assistance.—A mentor firm may provide a protege firm the following:

“(1) Assistance, by using mentor firm personnel, in—

“(A) general business management, including organizational management, financial management, and personnel management, marketing, business development, and overall business planning;

“(B) engineering and technical matters such as production, inventory control, and quality assurance; and

“(C) any other assistance designed to develop the capabilities of the protege firm under the developmental program referred to in subsection (e).

“(2) Award of subcontracts on a noncompetitive basis to the protege firm under the Department of Defense or other contracts.

“(3) Payment of progress payments for performance of the protege firm under such a subcontract in amounts as provided for in the subcontract, but in no event may any such progress payment exceed 100 percent of the costs incurred by the protege firm for the performance.

“(4) Advance payments under such subcontracts.

“(5) Loans.

“(6) Cash in exchange for an ownership interest in the protege firm, not to exceed 10 percent of the total ownership interest.

“(7) Assistance obtained by the mentor firm for the protege firm from one or more of the following—

“(A) small business development centers established pursuant to section 21 of the Small Business Act (15 U.S.C. 648);

“(B) entities providing procurement technical assistance pursuant to chapter 142 of title 10, United States Code; or

“(C) a historically Black college or university or a minority institution of higher education.

“(g) Incentives for Mentor Firms.—(1) The Secretary of Defense may provide to a mentor firm reimbursement for the total amount of any progress payment or advance payment made under the program by the mentor firm to a protege firm in connection with a Department of Defense contract awarded the mentor firm.

“(2)(A) The Secretary of Defense may provide to a mentor firm reimbursement for the costs of the assistance furnished to a protege firm pursuant to paragraphs (1) and (7) of subsection (f) as provided for in a line item in a Department of Defense contract under which the mentor firm is furnishing products or services to the Department, subject to a maximum amount of reimbursement specified in such contract, except that this sentence does not apply in a case in which the Secretary of Defense determines in writing that unusual circumstances justify reimbursement using a separate contract.

“(B) The determinations made in annual performance reviews of a mentor firm's mentor-protege agreement under subsection (l)(2) shall be a major factor in the determinations of amounts of reimbursement, if any, that the mentor firm is eligible to receive in the remaining years of the program participation term under the agreement.

“(C) The total amount reimbursed under this paragraph to a mentor firm for costs of assistance furnished in a fiscal year to a protege firm may not exceed $1,000,000, except in a case in which the Secretary of Defense determines in writing that unusual circumstances justify a reimbursement of a higher amount.

“(3)(A) Costs incurred by a mentor firm in providing assistance to a protege firm that are not reimbursed pursuant to paragraph (2) shall be recognized as credit in lieu of subcontract awards for purposes of determining whether the mentor firm attains a subcontracting participation goal applicable to such mentor firm under a Department of Defense contract, under a contract with another executive agency, or under a divisional or company-wide subcontracting plan negotiated with the Department of Defense or another executive agency.

“(B) The amount of the credit given a mentor firm for any such unreimbursed costs shall be equal to—

“(i) four times the total amount of such costs attributable to assistance provided by entities described in subsection (f)(7);

“(ii) three times the total amount of such costs attributable to assistance furnished by the mentor firm's employees; and

“(iii) two times the total amount of any other such costs.

“(C) Under regulations prescribed pursuant to subsection (k), the Secretary of Defense shall adjust the amount of credit given a mentor firm pursuant to subparagraphs (A) and (B) if the Secretary determines that the firm's performance regarding the award of subcontracts to disadvantaged small business concerns has declined without justifiable cause.

“(4) A mentor firm shall receive credit toward the attainment of a subcontracting participation goal applicable to such mentor firm for each subcontract for a product or service awarded under such contract by a mentor firm to a business concern that, except for its size, would be a small business concern owned and controlled by socially and economically disadvantaged individuals, but only if—

“(A) the size of such business concern is not more than two times the maximum size specified by the Administrator of the Small Business Administration for purposes of determining whether a business concern furnishing such product or service is a small business concern; and

“(B) the business concern formerly had a mentor-protege agreement with such mentor firm that was not terminated for cause.

“(h) Relationship to Small Business Act.—(1) For purposes of the Small Business Act [15 U.S.C. 631 et seq.], no determination of affiliation or control (either direct or indirect) may be found between a protege firm and its mentor firm on the basis that the mentor firm has agreed to furnish (or has furnished) to its protege firm pursuant to a mentor-protege agreement any form of developmental assistance described in subsection (f).

“(2) Notwithstanding section 8 of the Small Business Act (15 U.S.C. 637), the Small Business Administration may not determine a disadvantaged small business concern to be ineligible to receive any assistance authorized under the Small Business Act on the basis that such business concern has participated in the Mentor-Protege Program or has received assistance pursuant to any developmental assistance agreement authorized under such program.

“(3) The Small Business Administration may not require a firm that is entering into, or has entered into, an agreement under subsection (e) as a protege firm to submit the agreement, or any other document required by the Secretary of Defense in the administration of the Mentor-Protege Program, to the Small Business Administration for review, approval, or any other purpose.

“(i) Participation in Mentor-Protege Program not To Be a Condition for Award of a Contract or Subcontract.—A mentor firm may not require a business concern to enter into an agreement with the mentor firm pursuant to subsection (e) as a condition for being awarded a contract by the mentor firm, including a subcontract under a contract awarded to the mentor firm.

“(j) Expiration of Authority.—(1) No mentor-protege agreement may be entered into under subsection (e) after September 30, 2010.

“(2) No reimbursement may be paid, and no credit toward the attainment of a subcontracting goal may be granted, under subsection (g) for any cost incurred after September 30, 2013.

“(k) Regulations.—The Secretary of Defense shall prescribe regulations to carry out the pilot Mentor-Protege Program. Such regulations shall include the requirements set forth in section 8(d) of the Small Business Act (15 U.S.C. 637(d)) and shall prescribe procedures by which mentor firms may terminate participation in the program. The Secretary shall publish the proposed regulations not later than the date 180 days after the date of the enactment of this Act [Nov. 5, 1990]. The Secretary shall promulgate the final regulations not later than the date 270 days after the date of the enactment of this Act. The Department of Defense policy regarding the pilot Mentor-Protege Program shall be published and maintained as an appendix to the Department of Defense Supplement to the Federal Acquisition Regulation.

“(l) Reports and Reviews.—(1) The mentor firm and protege firm under a mentor-protege agreement shall submit to the Secretary of Defense an annual report on the progress made by the protege firm in employment, revenues, and participation in Department of Defense contracts during the fiscal year covered by the report. The requirement for submission of an annual report applies with respect to each fiscal year covered by the program participation term under the agreement and each of the two fiscal years following the expiration of the program participation term. The Secretary shall prescribe the timing and form of the annual report.

“(2)(A) The Secretary shall conduct an annual performance review of each mentor-protege agreement that provides for reimbursement of costs. The Secretary shall determine on the basis of the review whether—

“(i) all costs reimbursed to the mentor firm under the agreement were reasonably incurred to furnish assistance to the protege firm in accordance with the requirements of this section and applicable regulations; and

“(ii) the mentor firm and protege firm accurately reported progress made by the protege firm in employment, revenues, and participation in Department of Defense contracts during the program participation term covered by the mentor-protege agreement and the two fiscal years following the expiration of the program participation term.

“(B) The Secretary shall act through the Commander of the Defense Contract Management Command in carrying out the reviews and making the determinations under subparagraph (A).

“(3) Not later than 6 months after the end of each of fiscal years 2000 through 2010, the Secretary of Defense shall submit to Congress an annual report on the Mentor-Protege Program for that fiscal year.

“(4) The annual report for a fiscal year shall include, at a minimum, the following:

“(A) The number of mentor-protege agreements that were entered into during the fiscal year.

“(B) The number of mentor-protege agreements that were in effect during the fiscal year.

“(C) The total amount reimbursed to mentor firms pursuant to subsection (g) during the fiscal year.

“(D) Each mentor-protege agreement, if any, that was approved during the fiscal year in accordance with subsection (e)(2) to provide a program participation term in excess of 3 years, together with the justification for the approval.

“(E) Each reimbursement of a mentor firm in excess of the limitation in subsection (g)(2)(C) that was made during the fiscal year pursuant to an approval granted in accordance with that subsection, together with the justification for the approval.

“(F) Trends in the progress made in employment, revenues, and participation in Department of Defense contracts by the protege firms participating in the program during the fiscal year and the protege firms that completed or otherwise terminated participation in the program during the preceding two fiscal years.

“(m) Definitions.—In this section:

“(1) The term ‘small business concern’ means a business concern that meets the requirements of section 3(a) of the Small Business Act (15 U.S.C. 632(a)) and the regulations promulgated pursuant thereto.

“(2) The term ‘disadvantaged small business concern’ means:

“(A) a small business concern owned and controlled by socially and economically disadvantaged individuals;

“(B) a business entity owned and controlled by an Indian tribe as defined by section 8(a)(13) of the Small Business Act (15 U.S.C. 637(a)(13));

“(C) a business entity owned and controlled by a Native Hawaiian Organization as defined by section 8(a)(15) of the Small Business Act (15 U.S.C. 637(a)(15));

“(D) a qualified organization employing the severely disabled;

“(E) a small business concern owned and controlled by women, as defined in section 8(d)(3)(D) of the Small Business Act (15 U.S.C. 637(d)(3)(D));

“(F) a small business concern owned and controlled by service–disabled veterans (as defined in section 8(d)(3) of the Small Business Act [15 U.S.C. 637(d)(3)]); and

“(G) a qualified HUBZone small business concern (as defined in section 3(p) of the Small Business Act [15 U.S.C. 632(p)]).

“(3) The term ‘small business concern owned and controlled by socially and economically disadvantaged individuals’ has the meaning given such term in section 8(d)(3)(C) of the Small Business Act (15 U.S.C. 637(d)(3)(C)).

“(4) The term ‘historically Black college and university’ means any of the historically Black colleges and universities referred to in section 2323 of title 10, United States Code.

“(5) The term ‘minority institution of higher education’ means an institution of higher education with a student body that reflects the composition specified in section 312(b)(3), (4), and (5) of the Higher Education Act of 1965 (20 U.S.C. 1058(b)(3), (4), and (5)).

“(6) The term ‘subcontracting participation goal’, with respect to a Department of Defense contract, means a goal for the extent of the participation by disadvantaged small business concerns in the subcontracts awarded under such contract, as established pursuant to section 2323 of title 10, United States Code, and section 8(d) of the Small Business Act (15 U.S.C. 637(d)).

“(7) The term ‘qualified organization employing the severely disabled’ means a business entity operated on a for-profit or nonprofit basis that—

“(A) uses rehabilitative engineering to provide employment opportunities for severely disabled individuals and integrates severely disabled individuals into its workforce;

“(B) employs severely disabled individuals at a rate that averages not less than 20 percent of its total workforce;

“(C) employs each severely disabled individual in its workforce generally on the basis of 40 hours per week; and

“(D) pays not less than the minimum wage prescribed pursuant to section 6 of the Fair Labor Standards Act (29 U.S.C. 206) to those employees who are severely disabled individuals.

“(8) The term ‘severely disabled individual’ means an individual who has a physical or mental disability which constitutes a substantial handicap to employment and which, in accordance with criteria prescribed by the Committee for the Purchase From the Blind and Other Severely Handicapped established by the first section of the Act of June 25, 1938 (41 U.S.C. 46; popularly known as the ‘Wagner-O'Day Act’) [now known as the “Javits-Wagner-O'Day Act”], is of such a nature that the individual is otherwise prevented from engaging in normal competitive employment.”

[Pub. L. 106–65, div. A, title VIII, §811(f), Oct. 5, 1999, 113 Stat. 709, provided that:

[“(1) The amendments made by this section [amending section 831 of Pub. L. 101–510, set out above] shall take effect on October 1, 1999, and shall apply with respect to mentor-protege agreements that are entered into under section 831(e) of the National Defense Authorization Act for Fiscal Year 1991 [Pub. L. 101–510, set out above] on or after that date.

[“(2) Section 831 of the National Defense Authorization Act for Fiscal Year 1991, as in effect on September 30, 1999, shall continue to apply with respect to mentor-protege agreements entered into before October 1, 1999.”]

[Section 807(b)(2) of Pub. L. 102–484 provided that: “The amendment made by this subsection [amending section 831 of Pub. L. 101–510, set out above] shall take effect as of November 5, 1990.”]

Credit for Indian Contracting in Meeting Certain Minority Subcontracting Goals

Pub. L. 101–189, div. A, title VIII, §832, Nov. 29, 1989, 103 Stat. 1508, which provided credit for Indian contracting in meeting certain minority contracting goals, was repealed and restated in section 2323a of this title by Pub. L. 102–484, §801(g)(1)(B), (h)(5).

Equitable Participation of American Small and Minority-Owned Business in Furnishing of Commodities and Services

Pub. L. 101–165, title IX, §9004, Nov. 21, 1989, 103 Stat. 1129, provided that: “During the current fiscal year and hereafter, the Secretary of Defense and each purchasing and contracting agency of the Department of Defense shall assist American small and minority-owned business to participate equitably in the furnishing of commodities and services financed with funds appropriated under this Act [see Tables for classification] by increasing, to an optimum level, the resources and number of personnel jointly assigned to promoting both small and minority business involvement in purchases financed with funds appropriated herein, and by making available or causing to be made available to such businesses, information, as far in advance as possible, with respect to purchases proposed to be financed with funds appropriated under this Act, and by assisting small and minority business concerns to participate equitably as subcontractors on contracts financed with funds appropriated herein, and by otherwise advocating and providing small and minority business opportunities to participate in the furnishing of commodities and services financed with funds appropriated by this Act.”

Requirement for Substantial Progress on Minority and Small Business Contract Awards

Pub. L. 100–180, div. A, title VIII, §806(a)–(c), Dec. 4, 1987, 101 Stat. 1126, 1127, directed Secretary of Defense to issue regulations to ensure that substantial progress was made in increasing awards of Department of Defense contracts to small business concerns, historically Black colleges and universities, and minority institutions described in section 1207(a) of Pub. L. 99–661 [formerly set out below], prior to repeal by Pub. L. 102–484, div. A, title VIII, §801(h)(7), Oct. 23, 1992, 106 Stat. 2446.

Definitions; Rule of Construction for Duplicate Authorization and Appropriation Provisions of Public Laws 99–500, 99–591, and 99–661

Pub. L. 100–26, §§2, 6, Apr. 21, 1987, 101 Stat. 273, 274, provided that:

“SEC. 2. REFERENCES TO 99TH CONGRESS LAWS

“For purposes of this Act [Pub. L. 100–26, see Short Title of 1987 Amendment note set out under section 101 of this title]:

“(1) The term ‘Defense Authorization Act’ means the Department of Defense Authorization Act, 1987 (division A of Public Law 99–661; 100 Stat. 3816 et seq.).

“(2) The term ‘Defense Appropriations Act’ means the Department of Defense Appropriations Act, 1987 (as contained in identical form in section 101(c) of Public Law 99–500 (100 Stat. 1783–82 et seq.) and section 101(c) of Public Law 99–591 (100 Stat. 3341–82 et seq.)).

“(3) The term ‘Defense Acquisition Improvement Act’ means title X of the Defense Appropriations Act [100 Stat. 1783–130, 3341–130] and title IX of the Defense Authorization Act [100 Stat. 3910] (as designated by the amendment made by section 3(5) [section 3(5) of Pub. L. 100–26]). Any reference in this Act to the Defense Acquisition Improvement Act shall be considered to be a reference to each such title.”

“SEC. 6. CONSTRUCTION OF DUPLICATE AUTHORIZATION AND APPROPRIATION PROVISIONS

“(a) Rule for Construction of Duplicate Provisions.—(1) In applying the provisions of Public Laws 99–500, 99–591, and 99–661 described in paragraph (2)—

“(A) the identical provisions of those public laws referred to in such paragraph shall be treated as having been enacted only once, and

“(B) in executing to the United States Code and other statutes of the United States the amendments made by such identical provisions, such amendments shall be executed so as to appear only once in the law as amended.

“(2) Paragraph (1) applies with respect to the provisions of the Defense Appropriations Act and the Defense Authorization Act (as amended by sections 3, 4, 5, and 10(a)) referred to across from each other in the following table:

 
“Section 101(c) of Public Law 99–500Section 101(c) of Public Law 99–591Division A of

Public Law 99–661

“Title X Title X Title IX
“Sec. 9122 Sec. 9122 Sec. 522
“Sec. 9036(b) Sec. 9036(b) Sec. 1203
“Sec. 9115 Sec. 9115 Sec. 1311

“(b) Rule for Date of Enactment.—(1) The date of the enactment of the provisions of law listed in the middle column, and in the right-hand column, of the table in subsection (a)(2) shall be deemed to be October 18, 1986 (the date of the enactment of Public Law 99–500).

“(2) Any reference in a provision of law referred to in paragraph (1) to ‘the date of the enactment of this Act’ shall be treated as a reference to October 18, 1986.”

[For classification of provisions listed in the table, see Tables.]

Contract Goal for Minorities

Section 1207 of Pub. L. 99–661, as amended by Pub. L. 100–180, div. A, title VIII, §806(d), 101 Stat. 1127; Pub. L. 100–456, div. A, title VIII, §844, Sept. 29, 1988, 102 Stat. 2027; Pub. L. 101–189, div. A, title VIII, §831, Nov. 29, 1989, 103 Stat. 1507; Pub. L. 101–510, div. A, title VIII, §§811, 832, title XIII, §§1302(d), 1312(b), Nov. 5, 1990, 104 Stat. 1596, 1612, 1669, 1670; Pub. L. 102–25, title VII, §§704(a)(6), 705(e), Apr. 6, 1991, 105 Stat. 118, 120, which set contract goals for small disadvantaged businesses and certain institutions of higher education, was repealed and restated in section 2323 of this title by Pub. L. 102–484, §801(a)(1)(B), (h)(1).

Minimum Percentage of Competitive Procurements

Pub. L. 99–145, title IX, §913, Nov. 8, 1985, 99 Stat. 687, as amended by Pub. L. 101–510, div. A, title XIII, §1322(d)(1), Nov. 5, 1990, 104 Stat. 1672, provided that:

“(a) Annual Goal.—The Secretary of Defense shall establish for each fiscal year a goal for the percentage of defense procurements to be made during that year (expressed in total dollar value of contracts entered into) that are to be competitive procurements.

“(b) Definition.—For the purposes of this section, the term ‘competitive procurements’ means procurements made by the Department of Defense through the use of competitive procedures, as defined in section 2304 of title 10, United States Code.”

Defense Procurement Reform: Congressional Findings and Policy

Section 1202 of Pub. L. 98–525, as amended by Pub. L. 99–500, §101(c) [title X, §953(c)], Oct. 18, 1986, 100 Stat. 1783–82, 1783–172, and Pub. L. 99–591, §101(c) [title X, §953(c)], Oct. 30, 1986, 100 Stat. 3341–82, 3341–172; Pub. L. 99–661, div. A, title IX, formerly title IV, §953(c), Nov. 14, 1986, 100 Stat. 3952, renumbered title IX, Pub. L. 100–26, §3(5), Apr. 21, 1987, 101 Stat. 273, provided that: “The Congress finds that recent disclosures of excessive payments by the Department of Defense for replenishment parts have undermined confidence by the public and Congress in the defense procurement system. The Secretary of Defense should make every effort to reform procurement practices relating to replenishment parts. Such efforts should, among other matters, be directed to the elimination of excessive pricing of replenishment spare parts and the recovery of unjustified payments. Specifically, the Secretary should—

“(1) direct that officials in the Department of Defense refuse to enter into contracts unless the proposed prices are fair and reasonable;

“(2) continue and accelerate ongoing efforts to improve defense contracting procedures in order to encourage effective competition and assure fair and reasonable prices;

“(3) direct that replenishment parts be acquired in economic order quantities and on a multiyear basis whenever feasible, practicable, and cost effective;

“(4) direct that standard or commercial parts be used whenever such use is technically acceptable and cost effective; and

“(5) vigorously continue reexamination of policies relating to acquisition, pricing, and management of replenishment parts and of technical data related to such parts.”

Modification of Regulations and Directives To Accommodate a Policy of Multiyear Procurement

Section 909(d) of Pub. L. 97–86 directed Secretary of Defense, not later than the end of the 90-day period beginning Dec. 1, 1981, to issue such modifications to existing regulations governing defense acquisitions as might be necessary to implement the amendments made by subsections (a), (b), and (c) [amending sections 139, 2301, and 2306 of this title] and directed Director of the Office of Management and Budget to issue such modifications to existing Office of Management and Budget directives as might be necessary to take into account the amendments made by subsections (a) and (b) [amending sections 2301 and 2306 of this title].

Procurement Requirements for Goods Which Are Not American Goods

Pub. L. 93–365, title VII, §707, Aug. 5, 1974, 88 Stat. 406, which prohibited contracts by the Department of Defense for other than American goods after Aug. 5, 1974, unless adequate consideration was first given to bids of firms in labor surplus areas of the United States, of small business firms, and of all other United States firms which had offered to furnish American goods, balance of payments, cost of shipping other than American goods, and any duty, tariff, or surcharge on such goods, was repealed and restated in section 2501 of this title by Pub. L. 100–370, §3(a), (c). Section 2501 of this title was renumbered section 2506 by Pub. L. 100–456, §821(b)(1)(A). Section 2506 of this title was renumbered section 2533 by Pub. L. 102–484, §4202(a).

§2302a. Simplified acquisition threshold

(a) Simplified Acquisition Threshold.—For purposes of acquisitions by agencies named in section 2303 of this title, the simplified acquisition threshold is as specified in section 4(11) of the Office of Federal Procurement Policy Act.

(b) Inapplicable Laws.—No law properly listed in the Federal Acquisition Regulation pursuant to section 33 of the Office of Federal Procurement Policy Act shall apply to or with respect to a contract or subcontract that is not greater than the simplified acquisition threshold.

(Added and amended Pub. L. 103–355, title IV, §§4002(a), 4102(a), Oct. 13, 1994, 108 Stat. 3338, 3340.)

References in Text

Sections 4(11) and 33 of the Office of Federal Procurement Policy Act, referred to in subsecs. (a) and (b), respectively, are classified to sections 403(11) and 429, respectively, of Title 41, Public Contracts.

Amendments

1994—Subsec. (b). Pub. L. 103–355, §4102(a), added subsec. (b).

Effective Date

For effective date and applicability of section, see section 10001 of Pub. L. 103–355, set out as an Effective Date of 1994 Amendment note under section 251 of Title 41, Public Contracts.

§2302b. Implementation of simplified acquisition procedures

The simplified acquisition procedures contained in the Federal Acquisition Regulation pursuant to section 31 of the Office of Federal Procurement Policy Act shall apply as provided in such section to the agencies named in section 2303(a) of this title.

(Added Pub. L. 103–355, title IV, §4203(a)(1), Oct. 13, 1994, 108 Stat. 3345.)

References in Text

Section 31 of the Office of Federal Procurement Policy Act, referred to in text, is classified to section 427 of Title 41, Public Contracts.

Effective Date

For effective date and applicability of section, see section 10001 of Pub. L. 103–355, set out as an Effective Date of 1994 Amendment note under section 251 of Title 41, Public Contracts.

§2302c. Implementation of electronic commerce capability

(a) Implementation of Electronic Commerce Capability.—(1) The head of each agency named in paragraphs (1), (5), and (6) of section 2303(a) of this title shall implement the electronic commerce capability required by section 30 of the Office of Federal Procurement Policy Act (41 U.S.C. 426).

(2) The Secretary of Defense shall act through the Under Secretary of Defense for Acquisition, Technology, and Logistics to implement the capability within the Department of Defense.

(3) In implementing the electronic commerce capability pursuant to paragraph (1), the head of an agency referred to in paragraph (1) shall consult with the Administrator for Federal Procurement Policy.

(b) Designation of Agency Official.—The head of each agency named in paragraph (5) or (6) of section 2303(a) of this title shall designate a program manager to implement the electronic commerce capability for that agency. The program manager shall report directly to an official at a level not lower than the senior procurement executive designated for the agency under section 16(c) of the Office of Federal Procurement Policy Act (41 U.S.C. 414(c)).

(Added Pub. L. 103–355, title IX, §9002(a), Oct. 13, 1994, 108 Stat. 3402; amended Pub. L. 105–85, div. A, title VIII, §850(f)(3)(A), Nov. 18, 1997, 111 Stat. 1850; Pub. L. 105–129, §1(a)(1), Dec. 1, 1997, 111 Stat. 2551; Pub. L. 106–65, div. A, title X, §1066(a)(18), Oct. 5, 1999, 113 Stat. 771; Pub. L. 107–107, div. A, title X, §1048(b)(2), Dec. 28, 2001, 115 Stat. 1225; Pub. L. 109–364, div. A, title X, §1071(a)(2), Oct. 17, 2006, 120 Stat. 2398.)

Amendments

2006—Subsec. (b). Pub. L. 109–364 substituted “section 16(c) of the Office of Federal Procurement Policy Act (41 U.S.C. 414(c))” for “section 16(3) of the Office of Federal Procurement Policy Act (41 U.S.C. 414(3))”.

2001—Subsec. (a)(2). Pub. L. 107–107 substituted “Under Secretary of Defense for Acquisition, Technology, and Logistics” for “Under Secretary of Defense for Acquisition and Technology”.

1999—Subsec. (b). Pub. L. 106–65 substituted “section 2303(a)” for “section 2303”.

1997—Pub. L. 105–85 substituted “electronic commerce” for “FACNET” in section catchline and amended text generally. Prior to amendment, text read as follows:

“(a) Implementation of FACNET Capability.—(1) The head of each agency named in section 2303 of this title shall implement the Federal acquisition computer network (‘FACNET’) capability required by section 30 of the Office of Federal Procurement Policy Act. In the case of the Department of Defense, the implementation shall be by the Secretary of Defense, acting through the Under Secretary of Defense for Acquisition and Technology, for the Department of Defense as a whole. For purposes of this section, the term ‘head of an agency’ does not include the Secretaries of the military departments.

“(2) In implementing the FACNET capability pursuant to paragraph (1), the head of an agency shall consult with the Administrator for Federal Procurement Policy.

“(b) Designation of Agency Official.—The head of each agency named in paragraph (5) or (6) of section 2303 of this title shall designate a program manager to have responsibility for implementation of FACNET capability for that agency and otherwise to implement this section. Such program manager shall report directly to the senior procurement executive designated for the agency under section 16(3) of the Office of Federal Procurement Policy Act (41 U.S.C. 414(3)).”

Subsec. (a)(1). Pub. L. 105–129 inserted “of section 2303(a) of this title” after “paragraphs (1), (5), and (6)”.

Effective Date of 1997 Amendments

Section 1(a)(2) of Pub. L. 105–129 provided that: “The amendment made by paragraph (1) [amending this section] shall take effect as if included in the amendment to section 2302c of title 10, United States Code, made by section 850(f)(3)(A) of the National Defense Authorization Act for Fiscal Year 1998 [Pub. L. 105–85] to which the amendment made by paragraph (1) relates.”

Section 850(g) of Pub. L. 105–85 provided that:

“(1) Except as provided in paragraph (2), the amendments made by this section [amending this section, section 2304 of this title, section 637 of Title 15, Commerce and Trade, section 1501 of former Title 40, Public Buildings, Property, and Works, and sections 252c, 253, 416, 426, and 427 of Title 41, Public Contracts, repealing section 426a of Title 41, amending provisions set out as a note under section 413 of Title 41, and repealing provisions set out as a note under section 426a of Title 41] shall take effect 180 days after the date of the enactment of this Act [Nov. 18, 1997].

“(2) The repeal made by subsection (c) of this section [repealing provisions set out as a note under section 426a of Title 41] shall take effect on the date of the enactment of this Act.”

Effective Date

Section 9002(c) of Pub. L. 103–355 provided that: “A FACNET capability may be implemented and used in an agency before the promulgation of regulations implementing this section (as provided in section 10002) [set out as a Regulations note under section 251 of Title 41, Public Contracts]. If such implementation and use occurs, the period for submission of bids or proposals under section 18(a)(3)(B) of the Office of Federal Procurement Policy Act [41 U.S.C. 416(a)(3)(B)], in the case of a solicitation through FACNET, may be less than the period otherwise applicable under that section, but shall be at least 10 days. The preceding sentence shall not be in effect after September 30, 1995.”

§2302d. Major system: definitional threshold amounts

(a) Department of Defense Systems.—For purposes of section 2302(5) of this title, a system for which the Department of Defense is responsible shall be considered a major system if—

(1) the total expenditures for research, development, test, and evaluation for the system are estimated to be more than $115,000,000 (based on fiscal year 1990 constant dollars); or

(2) the eventual total expenditure for procurement for the system is estimated to be more than $540,000,000 (based on fiscal year 1990 constant dollars).


(b) Civilian Agency Systems.—For purposes of section 2302(5) of this title, a system for which a civilian agency is responsible shall be considered a major system if total expenditures for the system are estimated to exceed the greater of—

(1) $750,000 (based on fiscal year 1980 constant dollars); or

(2) the dollar threshold for a “major system” established by the agency pursuant to Office of Management and Budget (OMB) Circular A–109, entitled “Major Systems Acquisitions”.


(c) Adjustment Authority.—(1) The Secretary of Defense may adjust the amounts and the base fiscal year provided in subsection (a) on the basis of Department of Defense escalation rates.

(2) An amount, as adjusted under paragraph (1), that is not evenly divisible by $5,000,000 shall be rounded to the nearest multiple of $5,000,000. In the case of an amount that is evenly divisible by $2,500,000 but not evenly divisible by $5,000,000, the amount shall be rounded to the next higher multiple of $5,000,000.

(3) An adjustment under this subsection shall be effective after the Secretary transmits to the Committee on Armed Services of the Senate and the Committee on Armed Services of the House of Representatives a written notification of the adjustment.

(Added Pub. L. 104–201, div. A, title VIII, §805(a)(2), Sept. 23, 1996, 110 Stat. 2605; amended Pub. L. 105–85, div. A, title X, §1073(a)(41), Nov. 18, 1997, 111 Stat. 1902; Pub. L. 106–65, div. A, title X, §1067(1), Oct. 5, 1999, 113 Stat. 774.)

Amendments

1999—Subsec. (c)(3). Pub. L. 106–65 substituted “and the Committee on Armed Services” for “and the Committee on National Security”.

1997—Subsec. (a)(2). Pub. L. 105–85 substituted “procurement for the system is estimated to be” for “procurement of”.

§2303. Applicability of chapter

(a) This chapter applies to the procurement by any of the following agencies, for its use or otherwise, of all property (other than land) and all services for which payment is to be made from appropriated funds:

(1) The Department of Defense.

(2) The Department of the Army.

(3) The Department of the Navy.

(4) The Department of the Air Force.

(5) The Coast Guard.

(6) The National Aeronautics and Space Administration.


(b) The provisions of this chapter that apply to the procurement of property apply also to contracts for its installation or alteration.

(Aug. 10, 1956, ch. 1041, 70A Stat. 128; Pub. L. 85–568, title III, §301(b), July 29, 1958, 72 Stat. 432; Pub. L. 98–369, div. B, title VII, §2722(b), July 18, 1984, 98 Stat. 1187.)

Historical and Revision Notes
Revised sectionSource (U.S. Code)Source (Statutes at Large)
2303(a)

2303(b)

41:151(a).

41:158 (clause (b), less last 5 words).

Feb. 19, 1948, ch. 65, §§2(a), 9 (clause (b)), 62 Stat. 21, 24.
2303(c) 41:158 (last 5 words of clause (b)).

In subsection (a), the words “all property named in subsection (b), and all services” are substituted for the words “for supplies or services”. The words “(each being hereinafter called the agency)”, are omitted, since the revised sections of this chapter make specific reference to the agencies named in this revised section. The words “United States” before the words “Coast Guard” are omitted, since they are not a part of the official name of the Coast Guard under section 1 of title 14.

In subsection (b), the introductory clause is substituted for the word “supplies”. Throughout the revised chapter reference is made to “property or services covered by this chapter”, instead of “supplies”, since the word “supplies” is defined in section 101(26) of this title in its usual and narrower sense, rather than the sense of the source statute for this revised chapter. It is desirable to avoid a usage which conflicts with the definition in section 101(26) of this title. The word “ships” and the words “of every character, type, and description”, after the word “vessels”, are omitted as covered by the definition of “vessel” in section 1 of title 1.

Amendments

1984—Subsec. (a). Pub. L. 98–369, §2722(b)(1)(A), (B), substituted in provisions preceding cl. (1) “procurement” for “purchase, and contract to purchase,” and “(other than land) and all services” for “named in subsection (b), and all services,”.

Subsec. (a)(1) to (6). Pub. L. 98–369, §2722(b)(1)(C), (D), added cl. (1) and redesignated existing cls. (1) to (5) as (2) to (6), respectively.

Subsecs. (b), (c). Pub. L. 98–369, §2722(b)(2), (3), redesignated subsec. (c) as (b). Former subsec. (b), which had provided that this chapter did not cover land but did cover public works, buildings, facilities, vessels, floating equipment, aircraft, parts, accessories, equipment, and machine tools, was struck out.

1958—Subsec. (a)(5). Pub. L. 85–568 substituted “The National Aeronautics and Space Administration” for “The National Advisory Committee for Aeronautics”.

Effective Date of 1984 Amendment

Amendment by Pub. L. 98–369 applicable with respect to any solicitation for bids or proposals issued after Mar. 31, 1985, see section 2751 of Pub. L. 98–369, set out as a note under section 251 of Title 41, Public Contracts.

Effective Date of 1958 Amendment

Amendment by Pub. L. 85–568 effective 90 days after July 29, 1958, or on any earlier date on which the Administrator of the National Aeronautics and Space Administration determines, and announces by proclamation, that the Administration has been organized and is prepared to discharge the duties and exercise the powers conferred upon it, see note set out under section 2302 of this title.

Transfer of Functions

For transfer of authorities, functions, personnel, and assets of the Coast Guard, including the authorities and functions of the Secretary of Transportation relating thereto, to the Department of Homeland Security, and for treatment of related references, see sections 468(b), 551(d), 552(d), and 557 of Title 6, Domestic Security, and the Department of Homeland Security Reorganization Plan of November 25, 2002, as modified, set out as a note under section 542 of Title 6.

Acquisition, Lease, or Rental for Use by the Armed Forces of Motor Buses Manufactured Outside the United States

Pub. L. 90–500, title IV, §404, Sept. 20, 1968, 82 Stat. 851, which provided that no funds for the armed forces were to be used to buy or lease buses other than those manufactured in the United States, except as regulation from the Secretary of Defense might authorize solely to avoid uneconomical procurement or one contrary to the national interest, was repealed and restated as section 2400 of this title by Pub. L. 97–295, §§1(29)(A), 6(b), Oct. 12, 1982, 96 Stat. 1294, 1314.

[§2303a. Repealed. Pub. L. 98–577, title III, §302(c)(1), Oct. 30, 1984, 98 Stat. 3077]

Section, Pub. L. 98–525, title XII, §1212(a), Oct. 19, 1984, 98 Stat. 2590, related to publication of proposed regulations. See section 418b of Title 41, Public Contracts.

Section, pursuant to section 1212(b) of Pub. L. 98–525, was to have taken effect with respect to procurement policies, regulations, procedures, or forms first proposed to be issued by an agency on or after the date which was 30 days after the date of enactment of Pub. L. 98–525. Pub. L. 98–525 was approved Oct. 19, 1984. However, before that effective date, the section was repealed by Pub. L. 98–577.

§2304. Contracts: competition requirements

(a)(1) Except as provided in subsections (b), (c), and (g) and except in the case of procurement procedures otherwise expressly authorized by statute, the head of an agency in conducting a procurement for property or services—

(A) shall obtain full and open competition through the use of competitive procedures in accordance with the requirements of this chapter and the Federal Acquisition Regulation; and

(B) shall use the competitive procedure or combination of competitive procedures that is best suited under the circumstances of the procurement.


(2) In determining the competitive procedure appropriate under the circumstances, the head of an agency—

(A) shall solicit sealed bids if—

(i) time permits the solicitation, submission, and evaluation of sealed bids;

(ii) the award will be made on the basis of price and other price-related factors;

(iii) it is not necessary to conduct discussions with the responding sources about their bids; and

(iv) there is a reasonable expectation of receiving more than one sealed bid; and


(B) shall request competitive proposals if sealed bids are not appropriate under clause (A).


(b)(1) The head of an agency may provide for the procurement of property or services covered by this chapter using competitive procedures but excluding a particular source in order to establish or maintain an alternative source or sources of supply for that property or service if the head of the agency determines that to do so—

(A) would increase or maintain competition and would likely result in reduced overall costs for such procurement, or for any anticipated procurement, of property or services;

(B) would be in the interest of national defense in having a facility (or a producer, manufacturer, or other supplier) available for furnishing the property or service in case of a national emergency or industrial mobilization;

(C) would be in the interest of national defense in establishing or maintaining an essential engineering, research, or development capability to be provided by an educational or other nonprofit institution or a federally funded research and development center;

(D) would ensure the continuous availability of a reliable source of supply of such property or service;

(E) would satisfy projected needs for such property or service determined on the basis of a history of high demand for the property or service; or

(F) in the case of medical supplies, safety supplies, or emergency supplies, would satisfy a critical need for such supplies.


(2) The head of an agency may provide for the procurement of property or services covered by this section using competitive procedures, but excluding concerns other than small business concerns in furtherance of sections 9 and 15 of the Small Business Act (15 U.S.C. 638, 644) and concerns other than small business concerns, historically Black colleges and universities, and minority institutions in furtherance of section 2323 of this title.

(3) A contract awarded pursuant to the competitive procedures referred to in paragraphs (1) and (2) shall not be subject to the justification and approval required by subsection (f)(1).

(4) A determination under paragraph (1) may not be made for a class of purchases or contracts.

(c) The head of an agency may use procedures other than competitive procedures only when—

(1) the property or services needed by the agency are available from only one responsible source or only from a limited number of responsible sources and no other type of property or services will satisfy the needs of the agency;

(2) the agency's need for the property or services is of such an unusual and compelling urgency that the United States would be seriously injured unless the agency is permitted to limit the number of sources from which it solicits bids or proposals;

(3) it is necessary to award the contract to a particular source or sources in order (A) to maintain a facility, producer, manufacturer, or other supplier available for furnishing property or services in case of a national emergency or to achieve industrial mobilization, (B) to establish or maintain an essential engineering, research, or development capability to be provided by an educational or other nonprofit institution or a federally funded research and development center, or (C) to procure the services of an expert for use, in any litigation or dispute (including any reasonably foreseeable litigation or dispute) involving the Federal Government, in any trial, hearing, or proceeding before any court, administrative tribunal, or agency, or to procure the services of an expert or neutral for use in any part of an alternative dispute resolution or negotiated rulemaking process, whether or not the expert is expected to testify;

(4) the terms of an international agreement or a treaty between the United States and a foreign government or international organization, or the written directions of a foreign government reimbursing the agency for the cost of the procurement of the property or services for such government, have the effect of requiring the use of procedures other than competitive procedures;

(5) subject to subsection (k), a statute expressly authorizes or requires that the procurement be made through another agency or from a specified source, or the agency's need is for a brand-name commercial item for authorized resale;

(6) the disclosure of the agency's needs would compromise the national security unless the agency is permitted to limit the number of sources from which it solicits bids or proposals; or

(7) the head of the agency—

(A) determines that it is necessary in the public interest to use procedures other than competitive procedures in the particular procurement concerned, and

(B) notifies the Congress in writing of such determination not less than 30 days before the award of the contract.


(d)(1) For the purposes of applying subsection (c)(1)—

(A) in the case of a contract for property or services to be awarded on the basis of acceptance of an unsolicited research proposal, the property or services shall be considered to be available from only one source if the source has submitted an unsolicited research proposal that demonstrates a concept—

(i) that is unique and innovative or, in the case of a service, for which the source demonstrates a unique capability of the source to provide the service; and

(ii) the substance of which is not otherwise available to the United States, and does not resemble the substance of a pending competitive procurement; and


(B) in the case of a follow-on contract for the continued development or production of a major system or highly specialized equipment, or the continued provision of highly specialized services, such property or services may be deemed to be available only from the original source and may be procured through procedures other than competitive procedures when it is likely that award to a source other than the original source would result in—

(i) substantial duplication of cost to the United States which is not expected to be recovered through competition; or

(ii) unacceptable delays in fulfilling the agency's needs.


(2) The authority of the head of an agency under subsection (c)(7) may not be delegated.

(e) The head of an agency using procedures other than competitive procedures to procure property or services by reason of the application of subsection (c)(2) or (c)(6) shall request offers from as many potential sources as is practicable under the circumstances.

(f)(1) Except as provided in paragraph (2), the head of an agency may not award a contract using procedures other than competitive procedures unless—

(A) the contracting officer for the contract justifies the use of such procedures in writing and certifies the accuracy and completeness of the justification;

(B) the justification is approved—

(i) in the case of a contract for an amount exceeding $500,000 (but equal to or less than $10,000,000), by the competition advocate for the procuring activity (without further delegation) or by an official referred to in clause (ii) or (iii);

(ii) in the case of a contract for an amount exceeding $10,000,000 (but equal to or less than $75,000,000), by the head of the procuring activity (or the head of the procuring activity's delegate designated pursuant to paragraph (6)(A)); or

(iii) in the case of a contract for an amount exceeding $75,000,000, by the senior procurement executive of the agency designated pursuant to section 16(c) of the Office of Federal Procurement Policy Act (41 U.S.C. 414(c)) (without further delegation) or in the case of the Under Secretary of Defense for Acquisition, Technology, and Logistics, acting in his capacity as the senior procurement executive for the Department of Defense, the Under Secretary's delegate designated pursuant to paragraph (6)(B); and


(C) any required notice has been published with respect to such contract pursuant to section 18 of the Office of Federal Procurement Policy Act (41 U.S.C. 416) and all bids or proposals received in response to that notice have been considered by the head of the agency.


(2) In the case of a procurement permitted by subsection (c)(2), the justification and approval required by paragraph (1) may be made after the contract is awarded. The justification and approval required by paragraph (1) is not required—

(A) when a statute expressly requires that the procurement be made from a specified source;

(B) when the agency's need is for a brand-name commercial item for authorized resale;

(C) in the case of a procurement permitted by subsection (c)(7);

(D) in the case of a procurement conducted under (i) the Javits-Wagner-O'Day Act (41 U.S.C. 46 et seq.), or (ii) section 8(a) of the Small Business Act (15 U.S.C. 637(a)); or

(E) in the case of a procurement permitted by subsection (c)(4), but only if the head of the contracting activity prepares a document in connection with such procurement that describes the terms of an agreement or treaty, or the written directions, referred to in that subsection that have the effect of requiring the use of procedures other than competitive procedures.


(3) The justification required by paragraph (1)(A) shall include—

(A) a description of the agency's needs;

(B) an identification of the statutory exception from the requirement to use competitive procedures and a demonstration, based on the proposed contractor's qualifications or the nature of the procurement, of the reasons for using that exception;

(C) a determination that the anticipated cost will be fair and reasonable;

(D) a description of the market survey conducted or a statement of the reasons a market survey was not conducted;

(E) a listing of the sources, if any, that expressed in writing an interest in the procurement; and

(F) a statement of the actions, if any, the agency may take to remove or overcome any barrier to competition before a subsequent procurement for such needs.


(4) The justification required by paragraph (1)(A) and any related information, and any document prepared pursuant to paragraph (2)(E), shall be made available for inspection by the public consistent with the provisions of section 552 of title 5.

(5) In no case may the head of an agency—

(A) enter into a contract for property or services using procedures other than competitive procedures on the basis of the lack of advance planning or concerns related to the amount of funds available to the agency for procurement functions; or

(B) procure property or services from another agency unless such other agency complies fully with the requirements of this chapter in its procurement of such property or services.


The restriction contained in clause (B) is in addition to, and not in lieu of, any other restriction provided by law.

(6)(A) The authority of the head of a procuring activity under paragraph (1)(B)(ii) may be delegated only to an officer or employee who—

(i) if a member of the armed forces, is a general or flag officer; or

(ii) if a civilian, is serving in a position with a grade under the General Schedule (or any other schedule for civilian officers or employees) that is comparable to or higher than the grade of brigadier general or rear admiral (lower half).


(B) The authority of the Under Secretary of Defense for Acquisition, Technology, and Logistics under paragraph (1)(B)(iii) may be delegated only to—

(i) an Assistant Secretary of Defense; or

(ii) with respect to the element of the Department of Defense (as specified in section 111(b) of this title), other than a military department, carrying out the procurement action concerned, an officer or employee serving in or assigned or detailed to that element who—

(I) if a member of the armed forces, is serving in a grade above brigadier general or rear admiral (lower half); or

(II) if a civilian, is serving in a position with a grade under the General Schedule (or any other schedule for civilian officers or employees) that is comparable to or higher than the grade of major general or rear admiral.


(g)(1) In order to promote efficiency and economy in contracting and to avoid unnecessary burdens for agencies and contractors, the Federal Acquisition Regulation shall provide for—

(A) special simplified procedures for purchases of property and services for amounts not greater than the simplified acquisition threshold; and

(B) special simplified procedures for purchases of property and services for amounts greater than the simplified acquisition threshold but not greater than $5,000,000 with respect to which the contracting officer reasonably expects, based on the nature of the property or services sought and on market research, that offers will include only commercial items.


(2) A proposed purchase or contract for an amount above the simplified acquisition threshold may not be divided into several purchases or contracts for lesser amounts in order to use the simplified procedures required by paragraph (1).

(3) In using simplified procedures, the head of an agency shall promote competition to the maximum extent practicable.

(4) The head of an agency shall comply with the Federal Acquisition Regulation provisions referred to in section 31(f) of the Office of Federal Procurement Policy Act (41 U.S.C. 427).

(h) For the purposes of the following, purchases or contracts awarded after using procedures other than sealed-bid procedures shall be treated as if they were made with sealed-bid procedures:

(1) The Walsh-Healey Act (41 U.S.C. 35 et seq.).

(2) Sections 3141–3144, 3146, and 3147 of title 40.


(i)(1) The Secretary of Defense shall prescribe by regulation the manner in which the Department of Defense negotiates prices for supplies to be obtained through the use of procedures other than competitive procedures, as defined in section 2302(2) of this title.

(2) The regulations required by paragraph (1) shall—

(A) specify the incurred overhead a contractor may appropriately allocate to supplies referred to in that paragraph; and

(B) require the contractor to identify those supplies which it did not manufacture or to which it did not contribute significant value.


(3) Such regulations shall not apply to an item of supply included in a contract or subcontract for which the price is based on established catalog or market prices of commercial items sold in substantial quantities to the general public.

(j) The Federal Acquisition Regulation shall ensure that the requirement to obtain full and open competition is implemented in a manner that is consistent with the need to efficiently fulfill the Government's requirements.

(k)(1) It is the policy of Congress that an agency named in section 2303(a) of this title should not be required by legislation to award a new contract to a specific non-Federal Government entity. It is further the policy of Congress that any program, project, or technology identified in legislation be procured through merit-based selection procedures.

(2) A provision of law may not be construed as requiring a new contract to be awarded to a specified non-Federal Government entity unless that provision of law—

(A) specifically refers to this subsection;

(B) specifically identifies the particular non-Federal Government entity involved; and

(C) specifically states that the award to that entity is required by such provision of law in contravention of the policy set forth in paragraph (1).


(3) For purposes of this subsection, a contract is a new contract unless the work provided for in the contract is a continuation of the work performed by the specified entity under a preceding contract.

(4) This subsection shall not apply with respect to any contract that calls upon the National Academy of Sciences to investigate, examine, or experiment upon any subject of science or art of significance to an agency named in section 2303(a) of this title and to report on such matters to the Congress or any agency of the Federal Government.

(Aug. 10, 1956, ch. 1041, 70A Stat. 128; Pub. L. 85–800, §8, Aug. 28, 1958, 72 Stat. 967; Pub. L. 85–861, §33(a)(12), Sept. 2, 1958, 72 Stat. 1565; Pub. L. 87–653, §1(a)–(c), Sept. 10, 1962, 76 Stat. 528; Pub. L. 90–268, §5, Mar. 16, 1968, 82 Stat. 50; Pub. L. 90–500, title IV, §405, Sept. 20, 1968, 82 Stat. 851; Pub. L. 93–356, §4, July 25, 1974, 88 Stat. 390; Pub. L. 96–513, title V, §511(76), Dec. 12, 1980, 94 Stat. 2926; Pub. L. 97–86, title IX, §907(a), Dec. 1, 1981, 95 Stat. 1117; Pub. L. 97–295, §1(24), Oct. 12, 1982, 96 Stat. 1290; Pub. L. 97–375, title I, §114, Dec. 21, 1982, 96 Stat. 1821; Pub. L. 98–369, div. B, title VII, §§2723(a), 2727(b), July 18, 1984, 98 Stat. 1187, 1194; Pub. L. 98–577, title V, §504(b)(1), (2), Oct. 30, 1984, 98 Stat. 3086; Pub. L. 99–145, title IX, §961(a)(1), title XIII, §1303(a)(13), Nov. 8, 1985, 99 Stat. 703, 739; Pub. L. 99–500, §101(c) [title X, §§923(a)–(c), 927(a)], Oct. 18, 1986, 100 Stat. 1783–82, 1783–152, 1783–155, and Pub. L. 99–591, §101(c) [title X, §§923(a)–(c), 927(a)], Oct. 30, 1986, 100 Stat. 3341–82, 3341–152, 3341–155; Pub. L. 99–661, div. A, title IX, formerly title IV, §§923(a)–(c), 927(a), title XIII, §1343(a)(14), Nov. 14, 1986, 100 Stat. 3932, 3935, 3993, renumbered title IX, Pub. L. 100–26, §3(5), Apr. 21, 1987, 101 Stat. 273; Pub. L. 100–26, §7(d)(3), Apr. 21, 1987, 101 Stat. 281; Pub. L. 100–456, div. A, title VIII, §803, Sept. 29, 1988, 102 Stat. 2008; Pub. L. 101–189, div. A, title VIII, §§812, 817, 818, 853(d), Nov. 29, 1989, 103 Stat. 1493, 1501, 1502, 1519; Pub. L. 101–510, div. A, title VIII, §806(b), Nov. 5, 1990, 104 Stat. 1592; Pub. L. 102–25, title VII, §701(d)(2), Apr. 6, 1991, 105 Stat. 114; Pub. L. 102–484, div. A, title VIII, §§801(h)(2), 816, title X, §1052(23), Oct. 23, 1992, 106 Stat. 2445, 2454, 2500; Pub. L. 103–160, div. A, title IX, §904(d)(1), Nov. 30, 1993, 107 Stat. 1728; Pub. L. 103–355, title I, §§1001–1003, 1004(b), 1005, title IV, §4401(a), title VII, §7203(a)(1), Oct. 13, 1994, 108 Stat. 3249, 3253, 3254, 3347, 3379; Pub. L. 104–106, div. D, title XLI, §§4101(a), 4102(a), title XLII, §4202(a)(1), title XLIII, §4321(b)(4), (5), Feb. 10, 1996, 110 Stat. 642, 643, 652, 672; Pub. L. 104–320, §§7(a)(1), 11(c)(1), Oct. 19, 1996, 110 Stat. 3871, 3873; Pub. L. 105–85, div. A, title VIII, §§841(b), 850(f)(3)(B), title X, §1073(a)(42), (43), Nov. 18, 1997, 111 Stat. 1843, 1850, 1902; Pub. L. 107–107, div. A, title X, §1048(b)(2), Dec. 28, 2001, 115 Stat. 1225; Pub. L. 107–217, §3(b)(3), Aug. 21, 2002, 116 Stat. 1295; Pub. L. 108–375, div. A, title VIII, §815, Oct. 28, 2004, 118 Stat. 2015; Pub. L. 109–364, div. A, title X, §1071(a)(2), Oct. 17, 2006, 120 Stat. 2398.)

Historical and Revision Notes
1956 Act
Revised sectionSource (U.S. Code)Source (Statutes at Large)
2304(a)

 

 

2304(b)

41:151(c) (less proviso of clause (11) and proviso of clause (16)).

41:156(d).

Feb. 19, 1948, ch. 65, §§2(b) (less 1st sentence), (c), (e), 7(d), 8, 62 Stat. 21, 22, 24.
2304(c) 41:151(e).
2304(d) 41:151(b) (less 1st sentence).
2304(e) 41:151(c) (proviso of clause (11) and proviso of clause (16)).
2304(f) 41:157.

In subsection (a)(1), the words “the period of” are omitted as surplusage.

In subsections (a)(4)–(10), and (12)–(15), the words “the purchase or contract is” are inserted for clarity.

In subsection (a)(5), the words “to be rendered” are omitted as surplusage.

In subsection (a)(6), the words “its Territories” are inserted for clarity. The words “the limits of” are omitted as surplusage.

In subsection (a)(14), the words “and for which” are substituted for the word “when”.

In subsection (a)(15), the words “and for which” are substituted for 41:151(c)(15) (1st 22 words of proviso).

In subsection (a)(16), the words “to have” are substituted for the words “be made or kept”.

In subsection (a)(17), the first 7 words are inserted for clarity.

In subsection (b), the words “shall be kept” are substituted for the words “shall be preserved in the files”. The words “six years after the date” are substituted for the words “a period of six years following”.

In subsection (c), the words “but such authorization shall be required in the same manner as heretofore” and “continental”, in 41:151(e), are omitted as surplusage.

In subsection (d), the words “before making” are substituted for the words “Whenever it is proposed to make”.

In subsection (e), the words “beginning six months after the effective date of this chapter” are omitted as executed. The words “on May 19 and November 19 of each year” are substituted for the words “and at the end of each six-month period thereafter”, since the effective date of the source statute was May 19, 1948, and the first report was made on November 19, 1948. The words “property and services covered by each contract” are substituted for the words “work required to be performed thereunder”.

1958 Act

The change is necessary to reflect the present Commonwealth status of Puerto Rico.

1982 Act
Revised sectionSource (U.S. Code)Source (Statutes at Large)
2304(a) (1st sentence) 10:2304 (note). Mar. 16, 1967, Pub. L. 90–5, §304, 81 Stat. 6.
2304(f)(1) 10:2304(f)(1).
2304(i) 10:2304 (note). Sept. 21, 1977, Pub. L. 95–111, §836, 91 Stat. 906.

In subsection (a), the words “The Secretary of Defense is hereby directed that insofar as practicable all contracts shall be formally advertised” are omitted as unnecessary because of 10:2304(a) (1st sentence).

Subsection (f)(1) is amended to correct a mistake in spelling.

In subsection (i)(1)(B), the words “or States” are omitted because of 1:1.

References in Text

The Javits-Wagner-O'Day Act, referred to in subsec. (f)(2)(D), is act June 25, 1938, ch. 697, 52 Stat. 1196, as amended, which is classified to sections 46 to 48c of Title 41, Public Contracts. For complete classification of this Act to the Code, see Short Title note set out under section 46 of Title 41 and Tables.

The Walsh-Healey Act, referred to in subsec. (h)(1), is act June 30, 1936, ch. 881, 49 Stat. 2036, as amended, which is classified generally to sections 35 et seq. of Title 41, Public Contracts. For complete classification of this Act to the Code, see Short Title note set out under section 35 of Title 41 and Tables. See also section 262 of Title 29, Labor.

Codification

Pub. L. 99–591 is a corrected version of Pub. L. 99–500.

Amendments

2006—Subsec. (f)(1)(B)(iii). Pub. L. 109–364 substituted “section 16(c) of the Office of Federal Procurement Policy Act (41 U.S.C. 414(c))” for “section 16(3) of the Office of Federal Procurement Policy Act (41 U.S.C. 414(3))”.

2004—Subsec. (f)(1)(B)(ii), (iii). Pub. L. 108–375 substituted “$75,000,000” for “$50,000,000”.

2002—Subsec. (h). Pub. L. 107–217, §3(b)(3)(A), struck out “laws” after “following” in introductory provisions.

Subsec. (h)(2). Pub. L. 107–217, §3(b)(3)(B), substituted “Sections 3141–3144, 3146, and 3147 of title 40” for “The Act entitled ‘An Act relating to the rate of wages for laborers and mechanics employed on public buildings of the United States and the District of Columbia by contractors and subcontractors, and for other purposes’, approved March 3, 1931 (commonly referred to as the ‘Davis-Bacon Act’) (40 U.S.C. 276a—276a–5)”.

2001—Subsec. (f)(1)(B)(iii), (6)(B). Pub. L. 107–107 substituted “Under Secretary of Defense for Acquisition, Technology, and Logistics” for “Under Secretary of Defense for Acquisition and Technology”.

1997—Subsec. (c)(5). Pub. L. 105–85, §1073(a)(42), substituted “subsection (k)” for “subsection (j)”.

Subsec. (f)(1)(B)(iii). Pub. L. 105–85, §1073(a)(43)(A), substituted “(6)(B)” for “(6)(C)”.

Subsec. (f)(2)(E). Pub. L. 105–85, §841(b), struck out “and such document is approved by the competition advocate for the procuring activity” after “requiring the use of procedures other than competitive procedures”.

Subsec. (f)(6)(B), (C). Pub. L. 105–85, §1073(a)(43)(B), redesignated subpar. (C) as (B), substituted “paragraph (1)(B)(iii)” for “paragraph (1)(B)(iv)” in introductory provisions, and struck out former subpar. (B), which read as follows: “The authority of the senior procurement executive under paragraph (1)(B)(iii) may be delegated only to an officer or employee within the senior procurement executive's organization who—

“(i) if a member of the armed forces, is a general or flag officer; or

“(ii) if a civilian, is serving in a position in grade GS–16 or above (or in a comparable or higher position under any other schedule for civilian officers or employees).”

Subsec. (g)(4). Pub. L. 105–85, §850(f)(3)(B), substituted “31(f)” for “31(g)”.

1996—Subsec. (c)(3)(C). Pub. L. 104–320 substituted “agency, or to procure the services of an expert or neutral for use” for “agency, or” and inserted “or negotiated rulemaking” after “alternative dispute resolution”.

Subsec. (f)(1)(B)(i). Pub. L. 104–106, §4102(a)(1), substituted “$500,000 (but equal to or less than $10,000,000)” for “$100,000 (but equal to or less than $1,000,000)” and “(ii) or (iii)” for “(ii), (iii), or (iv)”.

Subsec. (f)(1)(B)(ii). Pub. L. 104–106, §4102(a)(2), substituted “$10,000,000 (but equal to or less than $50,000,000)” for “$1,000,000 (but equal to or less than $10,000,000)” and inserted “or” at end.

Subsec. (f)(1)(B)(iii), (iv). Pub. L. 104–106, §4102(a)(3), (4), redesignated cl. (iv) as (iii) and struck out former cl. (iii) which read as follows: “in the case of a contract for an amount exceeding $10,000,000 (but equal to or less than $50,000,000), by the senior procurement executive of the agency designated pursuant to section 16(3) of the Office of Federal Procurement Policy Act (41 U.S.C. 414(3)) or the senior procurement executive's delegate designated pursuant to paragraph (6)(B), or in the case of the Under Secretary of Defense for Acquisition and Technology, acting in his capacity as the senior procurement executive for the Department of Defense, the Under Secretary's delegate designated pursuant to paragraph (6)(C); or”.

Subsec. (f)(2)(D). Pub. L. 104–106, §4321(b)(4), substituted “the Javits-Wagner-O'Day Act (41 U.S.C. 46 et seq.),” for “the Act of June 25, 1938 (41 U.S.C. 46 et seq.), popularly referred to as the Wagner-O'Day Act,”.

Subsec. (g)(1). Pub. L. 104–106, §4202(a)(1)(A), substituted “shall provide for—” and subpars. (A) and (B) for “shall provide for special simplified procedures for purchases of property and services for amounts not greater than the simplified acquisition threshold.”

Subsec. (g)(4). Pub. L. 104–106, §4202(a)(1)(B), added par. (4).

Subsec. (h)(1). Pub. L. 104–106, §4321(b)(5), added par. (1) and struck out former par. (1) which read as follows: “The Act entitled ‘An Act to provide conditions for the purchase of supplies and the making of contracts by the United States, and for other purposes’, approved June 30, 1936 (commonly referred to as the ‘Walsh-Healey Act’) (41 U.S.C. 35–45).”

Subsecs. (j), (k). Pub. L. 104–106, §4101(a), added subsec. (j) and redesignated former subsec. (j) as (k).

1994—Subsec. (a)(1)(A). Pub. L. 103–355, §1001(1), substituted “Federal Acquisition Regulation” for “modifications to regulations promulgated pursuant to section 2752 of the Competition in Contracting Act of 1984 (41 U.S.C. 403 note)”.

Subsec. (b)(1)(D) to (F). Pub. L. 103–355, §1002(a), added subpars. (D) to (F).

Subsec. (b)(4). Pub. L. 103–355, §1002(b), added par. (4).

Subsec. (c)(3)(C). Pub. L. 103–355, §1005, added subpar. (C).

Subsec. (c)(5). Pub. L. 103–355, §7203(a)(1)(A), inserted “subject to subsection (j),” after “(5)”.

Subsec. (f)(1)(B)(i). Pub. L. 103–355, §1003, inserted before semicolon at end “or by an official referred to in clause (ii), (iii), or (iv)”.

Subsec. (g)(1). Pub. L. 103–355, §§1001(2), 4401(a)(1), substituted “Federal Acquisition Regulation” for “regulations modified in accordance with section 2752 of the Competition in Contracting Act of 1984 (41 U.S.C. 403 note)” and “purchases of property and services for amounts not greater than the simplified acquisition threshold” for “small purchases of property and services”.

Subsec. (g)(2). Pub. L. 103–355, §4401(a)(4), substituted “simplified acquisition threshold” for “small purchase threshold” and “simplified procedures” for “small purchase procedures”.

Pub. L. 103–355, §4401(a)(2), (3), redesignated par. (3) as (2) and struck out former par. (2) which read as follows: “For the purposes of this subsection, a small purchase is a purchase or contract for an amount which does not exceed the small purchase threshold.”

Subsec. (g)(3). Pub. L. 103–355, §4401(a)(5), substituted “simplified procedures” for “small purchase procedures”.

Pub. L. 103–355, §4401(a)(3), redesignated par. (4) as (3). Former par. (3) redesignated (2).

Subsec. (g)(4). Pub. L. 103–355, §4401(a)(3), redesignated par. (4) as (3).

Subsec. (j). Pub. L. 103–355, §7203(a)(1)(B), added subsec. (j).

Pub. L. 103–355, §1004(b), struck out subsec. (j) which related to authority of Secretary of Defense to enter into master agreements for advisory and assistance services.

1993—Subsec. (f)(1)(B)(iii), (iv), (6)(C). Pub. L. 103–160 substituted “Under Secretary of Defense for Acquisition and Technology” for “Under Secretary of Defense for Acquisition”.

1992—Subsec. (b)(2). Pub. L. 102–484, §801(h)(2), substituted “section 2323 of this title” for “section 1207 of the National Defense Authorization Act for Fiscal Year 1987 (10 U.S.C. 2301 note)”.

Subsec. (j)(3)(A). Pub. L. 102–484, §1052(23), substituted “section 8(d) of the Small Business Act (15 U.S.C. 637(d))” for “section 8(e) of the Small Business Act (15 U.S.C. 637(e))”.

Subsec. (j)(5). Pub. L. 102–484, §816, substituted “on September 30, 1994.” for “at the end of the three-year period beginning on the date on which final regulations prescribed to carry out this subsection take effect.”

1991—Subsec. (g)(2). Pub. L. 102–25, §701(d)(2)(A)(i), substituted “subsection” for “chapter”.

Subsec. (g)(5). Pub. L. 102–25, §701(d)(2)(A)(ii), struck out par. (5) which provided that in this subsection, the term “small purchase threshold” has the meaning given such term in section 403(11) of title 41. See section 2302(7) of this title.

Subsec. (j)(3)(A). Pub. L. 102–25, §701(d)(2)(B), substituted “the small purchase threshold” for “$25,000”.

1990—Subsec. (g). Pub. L. 101–510 substituted “the small purchase threshold” for “$25,000” in pars. (2) and (3) and added par. (5).

1989—Subsec. (b)(2). Pub. L. 101–189, §853(d), substituted “The head of an agency” for “An executive agency” and “concerns other than” for “other than” and inserted before period at end “and concerns other than small business concerns, historically Black colleges and universities, and minority institutions in furtherance of section 1207 of the National Defense Authorization Act for Fiscal Year 1987 (10 U.S.C. 2301 note)”.

Subsec. (f)(1)(B)(iii). Pub. L. 101–189, §818(a)(1), (3), added cl. (iii). Former cl. (iii) redesignated (iv).

Subsec. (f)(1)(B)(iv). Pub. L. 101–189, §818(a)(2), (c)(1), redesignated cl. (iii) as (iv) and substituted “$50,000,000” for “$10,000,000” and “paragraph (6)(C)” for “paragraph (6)(B)”.

Subsec. (f)(2)(E). Pub. L. 101–189, §817(a), added subpar. (E).

Subsec. (f)(4). Pub. L. 101–189, §817(b), inserted “, and any document prepared pursuant to paragraph (2)(E),” after “any related information”.

Subsec. (f)(6)(B). Pub. L. 101–189, §818(b)(2), added subpar. (B). Former subpar. (B) redesignated (C).

Subsec. (f)(6)(C). Pub. L. 101–189, §818(b)(1), (c)(2), redesignated subpar. (B) as (C) and substituted “paragraph (1)(B)(iv)” for “paragraph (1)(B)(iii)”.

Subsec. (j). Pub. L. 101–189, §812, added subsec. (j).

1988—Subsec. (f)(1)(B)(ii). Pub. L. 100–456, §803(1), substituted “(or the head of the procuring activity's delegate designated pursuant to paragraph (6)(A));” for “or a delegate who, if a member of the armed forces, is a general or flag officer or, if a civilian, is serving in a position in grade GS–16 or above under the General Schedule (or in a comparable or higher position under another schedule);”.

Subsec. (f)(1)(B)(iii). Pub. L. 100–456, §803(2), inserted “or in the case of the Under Secretary of Defense for Acquisition, acting in his capacity as the senior procurement executive for the Department of Defense, the Under Secretary's delegate designated pursuant to paragraph (6)(B)” before semicolon at end.

Subsec. (f)(6). Pub. L. 100–456, §803(3), added par. (6).

1987—Subsec. (a)(1)(A). Pub. L. 100–26, §7(d)(3)(A), inserted “(41 U.S.C. 403 note)” after “Competition in Contracting Act of 1984”.

Subsec. (f)(1)(C). Pub. L. 100–26, §7(d)(3)(B), inserted “(41 U.S.C. 416)” after “Policy Act”.

Subsec. (g)(1). Pub. L. 100–26, §7(d)(3)(A), inserted “(41 U.S.C. 403 note)” after “Act of 1984”.

1986—Subsec. (b)(2). Pub. L. 99–661, §1343(a)(14), substituted “15 U.S.C. 638,” for “15 U.S.C. 639;”.

Subsec. (c)(1). Pub. L. 99–500 and Pub. L. 99–591, §101(c) [§923(a)], Pub. L. 99–661, §923(a), amended par. (1) identically, inserting “or only from a limited number of responsible sources”.

Subsec. (d)(1)(A). Pub. L. 99–500 and Pub. L. 99–591, §101(c) [§923(b)], Pub. L. 99–661, §923(b), amended subpar. (A) identically, substituting “a concept—” for “a unique and innovative concept”, adding cl. (i), and designating provision relating to nonavailability to the United States and nonresemblance to a pending competitive procurement as cl. (ii).

Subsec. (d)(1)(B). Pub. L. 99–500 and Pub. L. 99–591, §101(c) [§923(c)], Pub. L. 99–661, §923(c), amended subpar. (B) identically, inserting “, or the continued provision of highly specialized services, such property or services may be deemed to be available only from the original source and may be procured through procedures other than competitive procedures” after “highly specialized equipment”, inserted a one-em dash after “would result in”, paragraphed cls. (i) and (ii), in cl. (i) substituted “competition;” for “competition,”, and in cl. (ii) struck out “, such property may be deemed to be available only from the original source and may be procured through procedures other than competitive procedures” after “agency's needs”.

Subsec. (i). Pub. L. 99–500 and Pub. L. 99–591, §101(c) [§927(a)], Pub. L. 99–661, §927(a), amended section identically, adding subsec. (i).

1985—Subsec. (a)(1)(B). Pub. L. 99–145, §1303(a)(13), substituted “procedures” for “krocedures”.

Subsec. (f)(2). Pub. L. 99–145, §961(a)(1), amended second sentence generally. Prior to amendment, second sentence read as follows: “The justification and approval required by paragraph (1) is not required in the case of a procurement permitted by subsection (c)(7) or in the case of a procurement conducted under—

“(A) the Act of June 25, 1938 (41 U.S.C. 46 et seq.), popularly referred to as the Wagner-O'Day Act; or

“(B) the authority of section 8(a) of the Small Business Act (15 U.S.C. 637).”

1984—Pub. L. 98–369, §2723(a), substituted “Contracts: competition requirements” for “Purchases and contracts: formal advertising; exceptions” in section catchline and struck out subsecs. (a) to (e) and (g) to (i), redesignated subsec. (f) as (h), and added new subsecs. (a) through (g), thereby removing the prior statutory preference for formal advertising and installing instead more competitive procurement procedures, including dual sourcing, but with provision for the use of other than competitive procedures in specified situations.

Subsec. (b)(2). Pub. L. 98–577, §504(b)(1), substituted provisions to the effect that executive agencies may provide for procurement of property or services covered by this section using competitive procedures but excluding other than small business concerns for provisions which provided that executive agencies shall use competitive procedures but may restrict a solicitation to allow only small business concerns to compete.

Subsec. (b)(3). Pub. L. 98–577, §504(b)(1), added par. (3).

Subsec. (f)(2). Pub. L. 98–577, §504(b)(2), designated existing provisions as subpar. (A) and added subpar. (B).

Subsec. (h). Pub. L. 98–369, §2727(b), substituted “contracts awarded after using procedures other than sealed-bid procedures shall be treated as if they were made with sealed bid procedures” for “contracts negotiated under this section shall be treated as if they were made with formal advertising”.

Pub. L. 98–369, §2723(a)(1)(B), redesignated subsec. (f) as (h).

1982—Subsec. (a). Pub. L. 97–295, §1(24)(A), inserted “, and shall be awarded on a competitive bid basis to the lowest responsible bidder,” after “formal advertising”.

Subsec. (e). Pub. L. 97–375 repealed subsec. (e) which directed that a report be made on May and November 19 of each year of purchases and contracts under cls. (11) and (16) of subsec. (a) since the last report, and that the report name each contractor, state the amount of each contract, and describe, with consideration of the national security, the property and services covered by each contract.

Subsec. (f)(1). Pub. L. 97–295, §1(24)(B), substituted “Healey” for “Healy” after “Walsh–”.

Subsec. (i). Pub. L. 97–295, §1(24)(C), added subsec. (i).

1981—Subsecs. (a)(3), (g). Pub. L. 97–86 substituted “$25,000” for “$10,000”.

1980—Subsec. (f). Pub. L. 96–513 substituted “(1) The Act entitled ‘An Act to provide conditions for the purchase of supplies and the making of contracts by the United States, and for other purposes’, approved June 30, 1936 (commonly referred to as the ‘Walsh-Healy Act’) (41 U.S.C. 35–45).”, for “(1) Sections 35–45 of title 41.”, and “(2) The Act entitled ‘An Act relating to the rate of wages for laborers and mechanics employed on public buildings of the United States and the District of Columbia by contractors and subcontractors, and for other purposes’, approved March 3, 1931 (commonly referred to as the ‘Davis-Bacon Act’) (40 U.S.C. 276a—276a–5).” for “(2) Sections 276a—276a–5 of title 40.”, and struck out “(3) Sections 324 and 325a of title 40”.

1974—Subsec. (a)(3). Pub. L. 93–356, §4(a), substituted “$10,000” for “$2,500”.

Subsec. (g). Pub. L. 93–356, §4(b), substituted “$10,000” for “$2,500”.

1968—Subsec. (g). Pub. L. 90–500 required that the proposals solicited from the maximum number of qualified sources, consistent with the nature and requirements of the supplies or services to be procured, include price.

Subsec. (h). Pub. L. 90–268 added subsec. (h).

1962—Subsec. (a). Pub. L. 87–653, §1(a), (b), provided that formal advertising be used where feasible and practicable under existing conditions and circumstances, subjected the agency head to the requirements of section 2310 of this title before negotiating a contract where formal advertising is not feasible and practicable and, in par. (14), substituted “would be likely to result in additional cost to the Government by reason of duplication of investment or would result in duplication of necessary preparation which would unduly delay the procurement of the property;” for “and competitive bidding might require duplication of investment or preparation already made or would unduly delay the procurement of that property; or”.

Subsec. (g). Pub. L. 87–653, §1(c), added subsec. (g).

1958—Subsec. (a). Pub. L. 85–861 included Commonwealths in cl. (6).

Pub. L. 85–800 substituted “$2,500” for “$1,000” in cl. (3) and inserted “or nonperishable” in cl. (9).

Effective Date of 1997 Amendment

Amendment by section 850(f)(3)(B) of Pub. L. 105–85 effective 180 days after Nov. 18, 1997, see section 850(g) of Pub. L. 105–85, set out as a note under section 2302c of this title.

Effective Date of 1996 Amendment

For effective date and applicability of amendments by Pub. L. 104–106, see section 4401 of Pub. L. 104–106, set out as a note under section 251 of Title 41, Public Contracts.

Effective Date of 1994 Amendment

For effective date and applicability of amendment by Pub. L. 103–355, see section 10001 of Pub. L. 103–355, set out as a note under section 251 of Title 41, Public Contracts.

Effective Date of 1986 Amendment

Section 101(c) [title X, §923(d)] of Pub. L. 99–500 and Pub. L. 99–591, and section 923(d) of title IX, formerly title IV of Pub. L. 99–661, renumbered title IX, Pub. L. 100–26, §3(5), Apr. 21, 1987, 101 Stat. 273, provided that:

“(1) The amendment made by subsection (a) [amending this section] shall apply with respect to contracts for which solicitations are issued after the end of the 180-day period beginning on the date of the enactment of this Act [Oct. 18, 1986].

“(2) The amendment made by subsection (b) [amending this section] shall apply with respect to contracts awarded on the basis of unsolicited research proposals after the end of the 180-day period beginning on the date of the enactment of this Act.

“(3) The amendments made by subsection (c) [amending this section] shall apply with respect to follow-on contracts awarded after the end of the 180-day period beginning on the date of the enactment of this Act.”

Effective Date of 1985 Amendment

Section 961(e) of Pub. L. 99–145 provided that: “The amendments made by subsections (a) [amending this section and section 253 of Title 41, Public Contracts], (b) [amending section 2323 (now section 2343) of this title], and (c) [amending section 759 of former Title 40, Public Buildings, Property, and Works] shall take effect as if included in the enactment of the Competition in Contracting Act of 1984 (title VII of division B of Public Law 98–369) [see Effective Date of 1985 Amendment note set out under section 251 of Title 41].”

Effective Date of 1984 Amendment

Amendment by Pub. L. 98–369 applicable with respect to any solicitation for bids or proposals issued after Mar. 31, 1985, see section 2751 of Pub. L. 98–369, set out as a note under section 251 of Title 41, Public Contracts.

Effective Date of 1980 Amendment

Amendment by Pub. L. 96–513 effective Dec. 12, 1980, see section 701(b)(3) of Pub. L. 96–513, set out as a note under section 101 of this title.

Effective Date of 1962 Amendment

Section 1(h) of Pub. L. 87–653 provided that: “The amendments made by this Act [amending this section and sections 2306, 2310, and 2311 of this title] shall take effect on the first day of the third calendar month which begins after the date of enactment of this Act [Sept. 10, 1962].”

Effective Date of 1958 Amendment

Amendment by Pub. L. 85–861 effective Aug. 10, 1956, see section 33(g) of Pub. L. 85–861, set out as a note under section 101 of this title.

Construction of 1994 Amendment

Repeal of prior subsec. (j) of this section by section 1004(b) of Pub. L. 103–355 not to be construed as modifying or superseding, or as intended to impair or restrict, authorities or responsibilities under former section 759 or former subchapter VI (§541 et seq.) of chapter 10 of Title 40 [now chapter 11 of Title 40, Public Buildings, Property, and Works], see section 1004(d) of Pub. L. 103–355, set out as a note under section 2304a of this title.

Construction of 1984 Amendment

Section 2723(c) of Pub. L. 98–369 provided that: “The amendments made by this section [amending this section and section 2305 of this title] do not supersede or affect the provisions of section 8(a) of the Small Business Act (15 U.S.C. 637(a)).”

Internal Controls for Procurements on Behalf of the Department of Defense

Pub. L. 109–364, div. A, title VIII, §817, Oct. 17, 2006, 120 Stat. 2326, provided that:

“(a) Inspector General Reviews and Determinations.—

“(1) In general.—For each covered non-defense agency, the Inspector General of the Department of Defense and the Inspector General of such non-defense agency shall, not later than March 15, 2007, jointly—

“(A) review—

“(i) the procurement policies, procedures, and internal controls of such non-defense agency that are applicable to the procurement of property and services on behalf of the Department by such non-defense agency; and

“(ii) the administration of those policies, procedures, and internal controls; and

“(B) determine in writing whether—

“(i) such non-defense agency is compliant with defense procurement requirements;

“(ii) such non-defense agency is not compliant with defense procurement requirements, but has a program or initiative to significantly improve compliance with defense procurement requirements;

“(iii) neither of the conclusions stated in clauses (i) and (ii) is correct in the case of such non-defense agency; or

“(iv) such non-defense agency is not compliant with defense procurement requirements to such an extent that the interests of the Department of Defense are at risk in procurements conducted by such non-defense agency.

“(2) Actions following certain determinations.—If the Inspectors General determine under paragraph (1) that a conclusion stated in clause (ii), (iii), or (iv) of subparagraph (B) of that paragraph is correct in the case of a covered non-defense agency, such Inspectors General shall, not later than June 15, 2008, jointly—

“(A) conduct a second review, as described in subparagraph (A) of that paragraph, regarding such non-defense agency's procurement of property or services on behalf of the Department of Defense in fiscal year 2007; and

“(B) determine in writing whether such non-defense agency is or is not compliant with defense procurement requirements.

“(b) Compliance With Defense Procurement Requirements.—For the purposes of this section, a covered non-defense agency is compliant with defense procurement requirements if such non-defense agency's procurement policies, procedures, and internal controls applicable to the procurement of products and services on behalf of the Department of Defense, and the manner in which they are administered, are adequate to ensure such non-defense agency's compliance with the requirements of laws and regulations that apply to procurements of property and services made directly by the Department of Defense.

“(c) Memoranda of Understanding Between Inspectors General.—

“(1) In general.—Not later than 60 days after the date of the enactment of this Act [Oct. 17, 2006], the Inspector General of the Department of Defense and the Inspector General of each covered non-defense agency shall enter into a memorandum of understanding with each other to carry out the reviews and make the determinations required by this section.

“(2) Scope of memoranda.—The Inspector General of the Department of Defense and the Inspector General of a covered non-defense agency may by mutual agreement conduct separate reviews of the procurement of property and services on behalf of the Department of Defense that are conducted by separate business units, or under separate governmentwide acquisition contracts, of such non-defense agency. In any case where such separate reviews are conducted, the Inspectors General shall make separate determinations under paragraph (1) or (2) of subsection (a), as applicable, with respect to each such separate review.

“(d) Limitations on Procurements on Behalf of Department of Defense.—

“(1) Limitation during review period.—After March 15, 2007, and before June 16, 2008, no official of the Department of Defense may, except as provided in subsection (e) or (f), order, purchase, or otherwise procure property or services in an amount in excess of $100,000 through a covered non-defense agency for which a determination described in clause (iii) or (iv) of paragraph (1)(B) of subsection (a) has been made under subsection (a).

“(2) Limitation after review period.—After June 15, 2008, no official of the Department of Defense may, except as provided in subsection (e) or (f), order, purchase, or otherwise procure property or services in an amount in excess of $100,000 through a covered non-defense agency that, having been subject to review under this section, has not been determined under this section as being compliant with defense procurement requirements.

“(3) Limitation following failure to reach mou.—Commencing on the date that is 60 days after the date of the enactment of this Act [Oct. 17, 2006], if a memorandum of understanding between the Inspector General of the Department of Defense and the Inspector General of a covered non-defense agency cannot be attained causing the review required by this section to not be performed, no official of the Department of Defense, except as provided in subsection (e) or (f), may order, purchase or otherwise procure property or services in an amount in excess of $100,000 through such non-defense agency.

“(e) Exception From Applicability of Limitations.—

“(1) Exception.—No limitation applies under subsection (d) with respect to the procurement of property and services on behalf of the Department of Defense by a covered non-defense agency during any period that there is in effect a determination of the Under Secretary of Defense for Acquisition, Technology, and Logistics, made in writing, that it is necessary in the interest of the Department of Defense to continue to procure property and services through such non-defense agency.

“(2) Applicability of determination.—A written determination with respect to a covered non-defense agency under paragraph (1) is in effect for the period, not in excess of one year, that the Under Secretary shall specify in the written determination. The Under Secretary may extend from time to time, for up to one year at a time, the period for which the written determination remains in effect.

“(f) Termination of Applicability of Limitations.—Subsection (d) shall cease to apply to a covered non-defense agency on the date on which the Inspector General of the Department of Defense and the Inspector General of such non-defense agency jointly—

“(1) determine that such non-defense agency is compliant with defense procurement requirements; and

“(2) notify the Secretary of Defense of that determination.

“(g) Identification of Procurements Made During a Particular Fiscal Year.—For the purposes of subsection (a), a procurement shall be treated as being made during a particular fiscal year to the extent that funds are obligated by the Department of Defense for that procurement in that fiscal year.

“(h) Resolution of Disagreements.—If the Inspector General of the Department of Defense and the Inspector General of a covered non-defense agency are unable to agree on a joint determination under subsection (a) or (f), a determination by the Inspector General of the Department of Defense under such subsection shall be conclusive for the purposes of this section.

“(i) Definitions.—In this section:

“(1) The term ‘covered non-defense agency’ means each of the following:

“(A) The Department of Veterans Affairs.

“(B) The National Institutes of Health.

“(2) The term ‘governmentwide acquisition contract’, with respect to a covered non-defense agency, means a task or delivery order contract that—

“(A) is entered into by the non-defense agency; and

“(B) may be used as the contract under which property or services are procured for one or more other departments or agencies of the Federal Government.”

Pub. L. 109–163, div. A, title VIII, §811, Jan. 6, 2006, 119 Stat. 3374, provided that:

“(a) Inspector General Reviews and Determinations.—

“(1) In general.—For each covered non-defense agency, the Inspector General of the Department of Defense and the Inspector General of such non-defense agency shall, not later than March 15, 2006, jointly—

“(A) review—

“(i) the procurement policies, procedures, and internal controls of such non-defense agency that are applicable to the procurement of property and services on behalf of the Department by such non-defense agency; and

“(ii) the administration of those policies, procedures, and internal controls; and

“(B) determine in writing whether—

“(i) such non-defense agency is compliant with defense procurement requirements;

“(ii) such non-defense agency is not compliant with defense procurement requirements, but has a program or initiative to significantly improve compliance with defense procurement requirements; or

“(iii) neither of the conclusions stated in clauses (i) and (ii) is correct in the case of such non-defense agency.

“(2) Actions following certain determinations.—If the Inspectors General determine under paragraph (1) that the conclusion stated in clause (ii) or (iii) of subparagraph (B) of that paragraph is correct in the case of a covered non-defense agency, such Inspectors General shall, not later than June 15, 2007, jointly—

“(A) conduct a second review, as described in subparagraph (A) of that paragraph, regarding such non-defense agency's procurement of property or services on behalf of the Department of Defense in fiscal year 2006; and

“(B) determine in writing whether such non-defense agency is or is not compliant with defense procurement requirements.

“(b) Compliance With Defense Procurement Requirements.—For the purposes of this section, a covered non-defense agency is compliant with defense procurement requirements if such non-defense agency's procurement policies, procedures, and internal controls applicable to the procurement of products and services on behalf of the Department of Defense, and the manner in which they are administered, are adequate to ensure such non-defense agency's compliance with the requirements of laws and regulations that apply to procurements of property and services made directly by the Department of Defense.

“(c) Memoranda of Understanding Between Inspectors General.—

“(1) In general.—Not later than 60 days after the date of the enactment of this Act [Jan. 6, 2006], the Inspector General of the Department of Defense and the Inspector General of each covered non-defense agency shall enter into a memorandum of understanding with each other to carry out the reviews and make the determinations required by this section.

“(2) Scope of memoranda.—The Inspector General of the Department of Defense and the Inspector General of a covered non-defense agency may by mutual agreement conduct separate reviews of the procurement of property and services on behalf of the Department of Defense that are conducted by separate business units, or under separate governmentwide acquisition contracts, of such non-defense agency. In any case where such separate reviews are conducted, the Inspectors General shall make separate determinations under paragraph (1) or (2) of subsection (a), as applicable, with respect to each such separate review.

“(d) Limitations on Procurements on Behalf of Department of Defense.—

“(1) Limitation during review period.—After March 15, 2006, and before June 16, 2007, no official of the Department of Defense may, except as provided in subsection (e) or (f), order, purchase, or otherwise procure property or services in an amount in excess of $100,000 through a covered non-defense agency for which a determination described in paragraph (1)(B)(iii) of subsection (a) has been made under that subsection.

“(2) Limitation after review period.—After June 15, 2007, no official of the Department of Defense may, except as provided in subsection (e) or (f), order, purchase, or otherwise procure property or services in an amount in excess of $100,000 through a covered non-defense agency that, having been subject to review under this section, has not been determined under this section as being compliant with defense procurement requirements.

“(3) Limitation following failure to reach mou.—Commencing on the date that is 60 days after the date of the enactment of this Act [Jan. 6, 2006], if a memorandum of understanding between the Inspector General of the Department of Defense and the Inspector General of a covered non-defense agency cannot be attained causing the review required by this section to not be performed, no official of the Department of Defense, except as provided in subsection (e) or (f), may order, purchase or otherwise procure property or services in an amount in excess of $100,000 through such non-defense agency.

“(e) Exception From Applicability of Limitations.—

“(1) Exception.—No limitation applies under subsection (d) with respect to the procurement of property and services on behalf of the Department of Defense by a covered non-defense agency during any period that there is in effect a determination of the Under Secretary of Defense for Acquisition, Technology, and Logistics, made in writing, that it is necessary in the interest of the Department of Defense to continue to procure property and services through such non-defense agency.

“(2) Applicability of determination.—A written determination with respect to a covered non-defense agency under paragraph (1) is in effect for the period, not in excess of one year, that the Under Secretary shall specify in the written determination. The Under Secretary may extend from time to time, for up to one year at a time, the period for which the written determination remains in effect.

“(f) Termination of Applicability of Limitations.—Subsection (d) shall cease to apply to a covered non-defense agency on the date on which the Inspector General of the Department of Defense and the Inspector General of such non-defense agency jointly—

“(1) determine that such non-defense agency is compliant with defense procurement requirements; and

“(2) notify the Secretary of Defense of that determination.

“(g) Identification of Procurements Made During a Particular Fiscal Year.—For the purposes of subsection (a), a procurement shall be treated as being made during a particular fiscal year to the extent that funds are obligated by the Department of Defense for that procurement in that fiscal year.

“(h) Definitions.—In this section:

“(1) The term ‘covered non-defense agency’ means each of the following:

“(A) The Department of the Treasury.

“(B) The Department of the Interior.

“(C) The National Aeronautics and Space Administration.

“(2) The term ‘governmentwide acquisition contract’, with respect to a covered non-defense agency, means a task or delivery order contract that—

“(A) is entered into by the non-defense agency; and

“(B) may be used as the contract under which property or services are procured for 1 or more other departments or agencies of the Federal Government.”

Employment of State Residents in States Having Unemployment Rate in Excess of National Average

Pub. L. 109–289, div. A, title VIII, §8048, Sept. 29, 2006, 120 Stat. 1284, provided that: “Notwithstanding any other provision of law, each contract awarded by the Department of Defense during the current fiscal year and hereafter for construction or service performed in whole or in part in a State (as defined in section 381(d) of title 10, United States Code) which is not contiguous with another State and has an unemployment rate in excess of the national average rate of unemployment as determined by the Secretary of Labor, shall include a provision requiring the contractor to employ, for the purpose of performing that portion of the contract in such State that is not contiguous with another State, individuals who are residents of such State and who, in the case of any craft or trade, possess or would be able to acquire promptly the necessary skills: Provided, That the Secretary of Defense may waive the requirements of this section, on a case-by-case basis, in the interest of national security.”

Review and Demonstration Project Relating to Contractor Employees

Pub. L. 108–375, div. A, title VIII, §851, Oct. 28, 2004, 118 Stat. 2019, provided that:

“(a) General Review.—(1) The Secretary of Defense shall conduct a review of policies, procedures, practices, and penalties of the Department of Defense relating to employees of defense contractors for purposes of ensuring that the Department of Defense is in compliance with Executive Order No. 12989 [8 U.S.C. 1324a note] (relating to a prohibition on entering into contracts with contractors that are not in compliance with the Immigration and Nationality Act [8 U.S.C. 1101 et seq.]).

“(2) In conducting the review, the Secretary shall—

“(A) identify potential weaknesses and areas for improvement in existing policies, procedures, practices, and penalties;

“(B) develop and implement reforms to strengthen, upgrade, and improve policies, procedures, practices, and penalties of the Department of Defense and its contractors; and

“(C) review and analyze reforms developed pursuant to this paragraph to identify for purposes of national implementation those which are most efficient and effective.

“(3) The review under this subsection shall be completed not later than 180 days after the date of the enactment of this Act [Oct. 28, 2004].

“(b) Demonstration Project.—The Secretary of Defense shall conduct a demonstration project in accordance with this section, in one or more regions selected by the Secretary, for purposes of promoting greater contracting opportunities for contractors offering effective, reliable staffing plans to perform defense contracts that ensure all contract personnel employed for such projects, including management employees, professional employees, craft labor personnel, and administrative personnel, are lawful residents or persons properly authorized to be employed in the United States and properly qualified to perform services required under the contract. The demonstration project shall focus on contracts for construction, renovation, maintenance, and repair services for military installations.

“(c) Demonstration Project Procurement Procedures.—As part of the demonstration project under subsection (b), the Secretary of Defense may conduct a competition in which there is a provision in contract solicitations and request for proposal documents to require significant weight or credit be allocated to—

“(1) reliable, effective workforce programs offered by prospective contractors that provide background checks and other measures to ensure the contractor is in compliance with the Immigration and Nationality Act; and

“(2) reliable, effective project staffing plans offered by prospective contractors that specify for all contract employees (including management employees, professionals, and craft labor personnel) the skills, training, and qualifications of such persons and the labor supply sources and hiring plans or procedures used for employing such persons.

“(d) Implementation of Demonstration Project.—The Secretary of Defense shall begin operation of the demonstration project required under this section after completion of the review under subsection (a), but in no event later than 270 days after the date of the enactment of this Act.

“(e) Report on Demonstration Project.—Not later than six months after award of a contract under the demonstration project, the Secretary of Defense shall submit to the Committees on Armed Services of the Senate and House of Representatives a report setting forth a review of the demonstration project and recommendations on the actions, if any, that can be implemented to ensure compliance by the Department of Defense with Executive Order No. 12989.

“(f) Definition.—In this section, the term ‘military installation’ means a base, camp, post, station, yard, center, homeport facility for any ship, or other activity under the jurisdiction of the Department of Defense, including any leased facility, which is located within any of the several States, the District of Columbia, the Commonwealth of Puerto Rico, American Samoa, the Virgin Islands, or Guam. Such term does not include any facility used primarily for civil works, rivers and harbors projects, or flood control projects.”

Defense Procurements Made Through Contracts of Other Agencies

Pub. L. 108–375, div. A, title VIII, §854, Oct. 28, 2004, 118 Stat. 2022, provided that:

“(a) Limitation.—The head of an agency may not procure goods or services (under section 1535 of title 31, United States Code, pursuant to a designation under section 11302(e) of title 40, United States Code, or otherwise) through a contract entered into by an agency outside the Department of Defense for an amount greater than the simplified acquisition threshold referred to in section 2304(g) of title 10, United States Code, unless the procurement is done in accordance with procedures prescribed by that head of an agency for reviewing and approving the use of such contracts.

“(b) Effective Date.—The limitation in subsection (a) shall apply only with respect to orders for goods or services that are issued by the head of an agency to an agency outside the Department of Defense on or after the date that is 180 days after the date of the enactment of this Act [Oct. 28, 2004].

“(c) Inapplicability to Contracts for Certain Services.—This section does not apply to procurements of the following services:

“(1) Printing, binding, or blank-book work to which section 502 of title 44, United States Code, applies.

“(2) Services available under programs pursuant to section 103 of the Library of Congress Fiscal Operations Improvement Act of 2000 (Public Law 106–481; 114 Stat. 2187; 2 U.S.C. 182c).

“(d) Annual Report.—(1) For each of fiscal years 2005 and 2006, each head of an agency shall submit to the Secretary of Defense a report on the service charges imposed on purchases made for an amount greater than the simplified acquisition threshold during such fiscal year through a contract entered into by an agency outside the Department of Defense.

“(2) In the case of procurements made on orders issued by the head of a Defense Agency, Department of Defense Field Activity, or any other organization within the Department of Defense (other than a military department) under the authority of the Secretary of Defense as the head of an agency, the report under paragraph (1) shall be submitted by the head of that Defense Agency, Department of Defense Field Activity, or other organization, respectively.

“(3) The report for a fiscal year under this subsection shall be submitted not later than December 31 of the calendar year in which such fiscal year ends.

“(e) Definitions.—In this section:

“(1) The term ‘head of an agency’ means the Secretary of Defense, the Secretary of the Army, the Secretary of the Navy, the Secretary of the Air Force.

“(2) The term ‘Defense Agency’ has the meaning given such term in section 101(a)(11) of title 10, United States Code.

“(3) The term ‘Department of Defense Field Activity’ has the meaning given such term in section 101(a)(12) of such title.”

Resources-Based Schedules for Completion of Public-Private Competitions for Performance of Department of Defense Functions

Pub. L. 108–136, div. A, title III, §334, Nov. 24, 2003, 117 Stat. 1443, provided that:

“(a) Application of Timeframes.—Any interim or final deadline or other schedule-related milestone for the completion of a Department of Defense public-private competition shall be established solely on the basis of considered research and sound analysis regarding the availability of sufficient personnel, training, and technical resources to the Department of Defense to carry out such competition in a timely manner.

“(b) Extension of Timeframes.—(1) The Department of Defense official responsible for managing a Department of Defense public-private competition shall extend any interim or final deadline or other schedule-related milestone established (consistent with subsection (a)) for the completion of the competition if the official determines that the personnel, training, or technical resources available to the Department of Defense to carry out the competition in a timely manner are insufficient.

“(2) A determination under this subsection shall be made pursuant to procedures prescribed by the Secretary of Defense.”

Competition Requirement for Purchase of Services Pursuant to Multiple Award Contracts

Pub. L. 107–107, div. A, title VIII, §803, Dec. 28, 2001, 115 Stat. 1178, provided that:

“(a) Regulations Required.—Not later than 180 days after the date of the enactment of this Act [Dec. 28, 2001], the Secretary of Defense shall promulgate in the Department of Defense Supplement to the Federal Acquisition Regulation regulations requiring competition in the purchase of services by the Department of Defense pursuant to multiple award contracts.

“(b) Content of Regulations.—(1) The regulations required by subsection (a) shall provide, at a minimum, that each individual purchase of services in excess of $100,000 that is made under a multiple award contract shall be made on a competitive basis unless a contracting officer of the Department of Defense—

“(A) waives the requirement on the basis of a determination that—

“(i) one of the circumstances described in paragraphs (1) through (4) of section 2304c(b) of title 10, United States Code, applies to such individual purchase; or

“(ii) a statute expressly authorizes or requires that the purchase be made from a specified source; and

“(B) justifies the determination in writing.

“(2) For purposes of this subsection, an individual purchase of services is made on a competitive basis only if it is made pursuant to procedures that—

“(A) require fair notice of the intent to make that purchase (including a description of the work to be performed and the basis on which the selection will be made) to be provided to all contractors offering such services under the multiple award contract; and

“(B) afford all contractors responding to the notice a fair opportunity to make an offer and have that offer fairly considered by the official making the purchase.

“(3) Notwithstanding paragraph (2), notice may be provided to fewer than all contractors offering such services under a multiple award contract described in subsection (c)(2)(A) if notice is provided to as many contractors as practicable.

“(4) A purchase may not be made pursuant to a notice that is provided to fewer than all contractors under paragraph (3) unless—

“(A) offers were received from at least three qualified contractors; or

“(B) a contracting officer of the Department of Defense determines in writing that no additional qualified contractors were able to be identified despite reasonable efforts to do so.

“(c) Definitions.—In this section:

“(1) The term ‘individual purchase’ means a task order, delivery order, or other purchase.

“(2) The term ‘multiple award contract’ means—

“(A) a contract that is entered into by the Administrator of General Services under the multiple award schedule program referred to in section 2302(2)(C) of title 10, United States Code;

“(B) a multiple award task order contract that is entered into under the authority of sections 2304a through 2304d of title 10, United States Code, or sections 303H through 303K of the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 253h through 253k); and

“(C) any other indefinite delivery, indefinite quantity contract that is entered into by the head of a Federal agency with two or more sources pursuant to the same solicitation.

“(3) The term ‘Defense Agency’ has the meaning given that term in section 101(a)(11) of title 10, United States Code.

“(d) Applicability.—The regulations promulgated by the Secretary pursuant to subsection (a) shall take effect not later than 180 days after the date of the enactment of this Act [Dec. 28, 2001] and shall apply to all individual purchases of services that are made under multiple award contracts on or after the effective date, without regard to whether the multiple award contracts were entered into before, on, or after such effective date.”

Requirement To Disregard Certain Agreements in Awarding Contracts for Purchase of Firearms or Ammunition

Pub. L. 106–398, §1 [[div. A], title VIII, §826], Oct. 30, 2000, 114 Stat. 1654, 1654A–220, provided that: “In accordance with the requirements contained in the amendments enacted in the Competition in Contracting Act of 1984 (title VII of division B of Public Law 98–369; 98 Stat. 1175) [see Short Title of 1984 Amendments note set out under section 251 of Title 41, Public Contracts], the Secretary of Defense may not, in awarding a contract for the purchase of firearms or ammunition, take into account whether a manufacturer or vendor of firearms or ammunition is a party to an agreement under which the manufacturer or vendor agrees to adopt limitations with respect to importing, manufacturing, or dealing in firearms or ammunition in the commercial market.”

GAO Report

Pub. L. 106–65, div. A, title VIII, §806(b), Oct. 5, 1999, 113 Stat. 705, directed the Comptroller General, not later than Mar. 1, 2001, to submit to Congress an evaluation of the test program authorized by the provisions in Pub. L. 104–106, §4202 (amending this section and section 2305 of this title and sections 253, 253a, 416, and 427 of Title 41, Public Contracts, and enacting provisions set out as a note below), together with any recommendations that the Comptroller General considered appropriate regarding the test program or the use of special simplified procedures for purchases of commercial items in excess of the simplified acquisition threshold.

Procurement of Conventional Ammunition

Pub. L. 105–261, div. A, title VIII, §806, Oct. 17, 1998, 112 Stat. 2084, provided that:

“(a) Authority.—The official in the Department of Defense designated as the single manager for conventional ammunition in the Department shall have the authority to restrict the procurement of conventional ammunition to sources within the national technology and industrial base in accordance with the authority in section 2304(c) of title 10, United States Code.

“(b) Requirement.—The official in the Department of Defense designated as the single manager for conventional ammunition in the Department of Defense shall limit a specific procurement of ammunition to sources within the national technology and industrial base in accordance with section 2304(c)(3) of title 10, United States Code, in any case in which that manager determines that such limitation is necessary to maintain a facility, producer, manufacturer, or other supplier available for furnishing an essential item of ammunition or ammunition component in cases of national emergency or to achieve industrial mobilization.

“(c) Conventional Ammunition Defined.—For purposes of this section, the term ‘conventional ammunition’ has the meaning given that term in Department of Defense Directive 5160.65, dated March 8, 1995.”

Warranty Claims Recovery Pilot Program

Pub. L. 105–85, div. A, title III, §391, Nov. 18, 1997, 111 Stat. 1716, as amended by Pub. L. 106–65, div. A, title III, §382, Oct. 5, 1999, 113 Stat. 583; Pub. L. 107–107, div. A, title III, §364, Dec. 28, 2001, 115 Stat. 1068; Pub. L. 107–314, div. A, title III, §368, Dec. 2, 2002, 116 Stat. 2524; Pub. L. 108–375, div. A, title III, §343, Oct. 28, 2004, 118 Stat. 1857, provided that:

“(a) Pilot Program Required.—The Secretary of Defense may carry out a pilot program to use commercial sources of services to improve the collection of Department of Defense claims under aircraft engine warranties.

“(b) Contracts.—Exercising the authority provided in section 3718 of title 31, United States Code, the Secretary of Defense may enter into contracts under the pilot program to provide for the following services:

“(1) Collection services.

“(2) Determination of amounts owed the Department of Defense for repair of aircraft engines for conditions covered by warranties.

“(3) Identification and location of the sources of information that are relevant to collection of Department of Defense claims under aircraft engine warranties, including electronic data bases and document filing systems maintained by the Department of Defense or by the manufacturers and suppliers of the aircraft engines.

“(4) Services to define the elements necessary for an effective training program to enhance and improve the performance of Department of Defense personnel in collecting and organizing documents and other information that are necessary for efficient filing, processing, and collection of Department of Defense claims under aircraft engine warranties.

“(c) Contractor Fee.—Under the authority provided in section 3718(d) of title 31, United States Code, a contract entered into under the pilot program shall provide for the contractor to be paid, out of the amount recovered by the contractor under the program, such percentages of the amount recovered as the Secretary of Defense determines appropriate.

“(d) Retention of Recovered Funds.—Subject to any obligation to pay a fee under subsection (c), any amount collected for the Department of Defense under the pilot program for a repair of an aircraft engine for a condition covered by a warranty shall be credited to an appropriation available for repair of aircraft engines for the fiscal year in which collected and shall be available for the same purposes and same period as the appropriation to which credited.

“(e) Regulations.—The Secretary of Defense shall prescribe regulations to carry out this section.

“(f) Termination of Authority.—The pilot program shall terminate on September 30, 2006, and contracts entered into under this section shall terminate not later than that date.

“(g) Reporting Requirement.—Not later than February 1, 2006, the Secretary of Defense shall submit to Congress a report on the pilot program, including—

“(1) a description of the extent to which commercial firms have been used to provide the services specified in subsection (b) and the type of services procured;

“(2) a description of any problems that have limited the ability of the Secretary to utilize the pilot program to procure such services; and

“(3) the recommendation of the Secretary regarding whether the pilot program should be made permanent or extended beyond September 30, 2006.”

Requirements Relating to Micro-Purchases

Section 848 of Pub. L. 105–85 provided that:

“(a) Requirement.—(1) Not later than October 1, 1998, at least 60 percent of all eligible purchases made by the Department of Defense for an amount less than the micro-purchase threshold shall be made through streamlined micro-purchase procedures.

“(2) Not later than October 1, 2000, at least 90 percent of all eligible purchases made by the Department of Defense for an amount less than the micro-purchase threshold shall be made through streamlined micro-purchase procedures.

“(b) Eligible Purchases.—The Secretary of Defense shall establish which purchases are eligible for purposes of subsection (a). In establishing which purchases are eligible, the Secretary may exclude those categories of purchases determined not to be appropriate or practicable for streamlined micro-purchase procedures.

“(c) Plan.—Not later than March 1, 1998, the Secretary of Defense shall provide to the Committee on Armed Services of the Senate and the Committee on National Security of the House of Representatives a plan to implement this section.

“(d) Report.—Not later than March 1 in each of the years 1999, 2000, and 2001, the Secretary of Defense shall submit to the congressional defense committees [Committees on Armed Services and Appropriations of Senate and House of Representatives] a report on the implementation of this section. Each report shall include—

“(A) the total dollar amount of all Department of Defense purchases for an amount less than the micro-purchase threshold in the fiscal year preceding the year in which the report is submitted;

“(B) the total dollar amount of such purchases that were considered to be eligible purchases;

“(C) the total amount of such eligible purchases that were made through a streamlined micro-purchase method; and

“(D) a description of the categories of purchases excluded from the definition of eligible purchases established under subsection (b).

“(e) Definitions.—In this section:

“(1) The term ‘micro-purchase threshold’ has the meaning provided in section 32 of the Office of Federal Procurement Policy Act (41 U.S.C. 428).

“(2) The term ‘streamlined micro-purchase procedures’ means procedures providing for the use of the Government-wide commercial purchase card or any other method for carrying out micro-purchases that the Secretary of Defense prescribes in the regulations implementing this subsection.”

Termination of Authority To Issue Solicitations for Purchases of Commercial Items in Excess of Simplified Acquisition Threshold

Pub. L. 104–106, div. D, title XLII, §4202(e), Feb. 10, 1996, 110 Stat. 654, as amended by Pub. L. 106–65, div. A, title VIII, §806(a), Oct. 5, 1999, 113 Stat. 705; Pub. L. 107–107, div. A, title VIII, §823, Dec. 28, 2001, 115 Stat. 1183; Pub. L. 107–314, div. A, title VIII, §812(a), Dec. 2, 2002, 116 Stat. 2609; Pub. L. 108–136, div. A, title XIV, §1443(b), Nov. 24, 2003, 117 Stat. 1676; Pub. L. 108–375, div. A, title VIII, §817, Oct. 28, 2004, 118 Stat. 2015, provided that: “The authority to issue solicitations for purchases of commercial items in excess of the simplified acquisition threshold pursuant to the special simplified procedures authorized by section 2304(g)(1) of title 10, United States Code, section 303(g)(1) of the Federal Property and Administrative Services Act of 1949 [41 U.S.C. 253(g)(1)], and section 31(a) of the Office of Federal Procurement Policy Act [41 U.S.C. 427(a)], as amended by this section, shall expire January 1, 2008. Contracts may be awarded pursuant to solicitations that have been issued before such authority expires, notwithstanding the expiration of such authority.”

References in Other Laws to GS–16, 17, or 18 Pay Rates

References in laws to the rates of pay for GS–16, 17, or 18, or to maximum rates of pay under the General Schedule, to be considered references to rates payable under specified sections of Title 5, Government Organization and Employees, see section 529 [title I, §101(c)(1)] of Pub. L. 101–509, set out in a note under section 5376 of Title 5.

Authority of Base Commanders Over Contracting for Commercial Activities

Pub. L. 100–180, div. A, title XI, §1111, Dec. 4, 1987, 101 Stat. 1146, directed the Secretary of Defense to authorize the commander of each military installation to (1) prepare an inventory each fiscal year of commercial activities carried out by Government personnel on the military installation, (2) decide which commercial activities were to be reviewed pursuant to Office of Management and Budget Circular A–76 or any successor administrative regulation or policy, (3) conduct a solicitation for contracts for those commercial activities selected for conversion to contractor performance under the Circular A–76 process, and (4) assist in finding suitable employment for any employee of the Department of Defense who had been displaced because of a contract entered into with a contractor for performance of a commercial activity on the military installation; directed the Secretary to prescribe regulations required by the preceding authority no later than 60 days after Dec. 4, 1987; and provided for termination of the authority on Oct. 1, 1989.

Evaluation of Contracts for Professional and Technical Services

Section 804 of Pub. L. 100–456, as amended by Pub. L. 103–160, div. A, title IX, §904(f), Nov. 30, 1993, 107 Stat. 1729, directed Secretary of Defense, within 120 days after Sept. 29, 1988, to establish criteria to ensure that proposals for contracts for professional and technical services be evaluated on a basis which does not encourage contractors to propose mandatory uncompensated overtime for professional and technical employees and, within 30 days after Sept. 29, 1988, to establish an advisory committee to make recommendations on the criteria.

Regulations On Use of Fixed-Price Development Contracts

Pub. L. 100–456, div. A, title VIII, §807, Sept. 29, 1988, 102 Stat. 2011, as amended by Pub. L. 103–160, div. A, title IX, §904(f), Nov. 30, 1993, 107 Stat. 1729, which provided that not later than 120 days after Sept. 29, 1988, the Secretary of Defense was to make certain revisions to Department of Defense regulations that provide for the use of fixed-price type contracts in a development program, was repealed by Pub. L. 109–364, div. A, title VIII, §818(a), Oct. 17, 2006, 120 Stat. 2329.

Prohibition of Purchase of Angolan Petroleum Products From Companies Producing Oil in Angola

Section 842 of Pub. L. 102–484 provided that: “The prohibition in section 316 of the National Defense Authorization Act for Fiscal Year 1987 [Pub. L. 99–661] (100 Stat. 3855; 10 U.S.C. 2304 note) shall cease to be effective on the date on which the President certifies to Congress that free, fair, and democratic elections have taken place in Angola.”

Determination of President of the United States, No. 93–32, July 19, 1993, 58 F.R. 40309, provided:

Pursuant to the authority vested in me by Public Law 102–484, section 842 [set out as a note above], I hereby certify that free, fair, and democratic elections have taken place in Angola.

You are authorized and directed to report this determination to the Congress and publish it in the Federal Register.

William J. Clinton.      

Section 316 of Pub. L. 99–661 provided that:

“(a) General Rule.—The Secretary of Defense may not enter into a contract with a company for the purchase of petroleum products which originated in Angola if the company (or a subsidiary or partnership of the company) is engaged in the production of petroleum products in Angola.

“(b) Waiver Authority.—The Secretary of Defense may waive the limitation in subsection (a) if the Secretary determines that such action is in the best interest of the United States.

“(c) Petroleum Product Defined.—For purposes of this section, the term ‘petroleum product’ means—

“(1) natural or synthetic crude;

“(2) blends of natural or synthetic crude; and

“(3) products refined or derived from natural or synthetic crude or from such blends.

“(d) Effective Date.—This section shall take effect six months after the date of the enactment of this Act [Nov. 14, 1986].”

Deadline for Prescribing Regulations

Section 101(c) [title X, §927(b)] of Pub. L. 99–500 and Pub. L. 99–591, and section 927(b) of title IX, formerly title IV, of Pub. L. 99–661, renumbered title IX, Pub. L. 100–26, §3(5), Apr. 21, 1987, 101 Stat. 273, provided that: “The Secretary of Defense shall prescribe the regulations required by section 2304(i) of such title (as added by subsection (a)) not later than 180 days after the date of the enactment of this Act [Oct. 18, 1986].”

One-Year Security-Guard Prohibition

Section 1222(b) of Pub. L. 99–661 provided that:

“(1) Except as provided in paragraph (2), funds appropriated to the Department of Defense may not be obligated or expended before October 1, 1987, for the purpose of entering into a contract for the performance of security-guard functions at any military installation or facility.

“(2) The prohibition in paragraph (1) does not apply—

“(A) to a contract to be carried out at a location outside the United States (including its commonwealths, territories, and possessions) at which military personnel would have to be used for the performance of the function described in paragraph (1) at the expense of unit readiness;

“(B) to a contract to be carried out on a Government-owned but privately operated installation;

“(C) to a contract (or the renewal of a contract) for the performance of a function under contract on September 24, 1983; or

“(D) to a contract for the performance of security-guard functions if (i) the requirement for the functions arises after the date of the enactment of this Act [Nov. 14, 1986], and (ii) the Secretary of Defense determines the functions can be performed by contractor personnel without adversely affecting installation security, safety, or readiness.”

Contracting Out Performance of Department of Defense Supply and Service Functions

Section 1223 of Pub. L. 99–661, which required Secretary to contract for Department of Defense supplies and services from private sector after a cost comparison demonstrates lower cost than Department of Defense can provide, and to ensure that overhead costs considered are realistic and fair, was repealed and restated in section 2462 of this title by Pub. L. 100–370, §2(a)(1), (c)(3), July 19, 1988, 102 Stat. 853, 854.

Reports on Savings or Costs From Increased Use of Civilian Personnel

Section 1224 of Pub. L. 99–661, which required Secretary to maintain cost comparison data on performance of a commercial or industrial type activity taken over by Department of Defense comparing performance by employees of private contractor to that of civilian employees of Department of Defense, and to submit semi-annual report on savings or loss to United States, was repealed and restated in section 2463 of this title by Pub. L. 100–370, §2(a)(1), (c)(3), July 19, 1988, 102 Stat. 853, 854.

Limitations on Contracting Performed by Coast Guard

Pub. L. 101–225, title II, §205, Dec. 12, 1989, 103 Stat. 1912, provided that: “Notwithstanding any other provision of law, an officer or employee of the United States may not enter into a contract for procurement of performance of any function being performed by Coast Guard personnel as of January 1, 1989, before—

“(1) a study has been performed by the Secretary of Transportation under the Office of Management and Budget Circular A–76 with respect to that procurement;

“(2) the Secretary of Transportation has performed a study, in addition to the study required by paragraph (1) of this subsection, to determine the impact of that procurement on the multimission capabilities of the Coast Guard; and

“(3) copies of the studies required by paragraphs (1) and (2) of this subsection are submitted to the Committee on Merchant Marine and Fisheries [now Committee on Transportation and Infrastructure] of the House of Representatives and the Committee on Commerce, Science, and Transportation of the Senate.”

Pub. L. 100–448, §5, Sept. 28, 1988, 102 Stat. 1837, as amended by Pub. L. 104–66, title I, §1121(b), Dec. 21, 1995, 109 Stat. 724, provided that:

“(a) Maintenance of Logistics Capability.—

“(1) Statement of national interest.—It is in the national interest for the Coast Guard to maintain a logistics capability (including personnel, equipment, and facilities) to provide a ready and controlled source of technical competence and resources necessary to ensure the effective and timely performance of Coast Guard missions in behalf of the security, safety, and economic and environmental well-being of the United States.

“[(2) Repealed. Pub. L. 104–66, title I, §1121(b), Dec. 21, 1995, 109 Stat. 724.]

“[(b) Repealed. Pub. L. 104–66, title I, §1121(b), Dec. 21, 1995, 109 Stat. 724.]

“(c) Submisison [sic] of List of Activities Contracted for Performance.—At least 30 days before the beginning of each fiscal year, the Secretary shall submit to the Committee on Commerce, Science, and Transportation of the Senate and the Committee on Merchant Marine and Fisheries [now Committee on Transportation and Infrastructure] of the House of Representatives a list of activities that will be contracted for performance by non-Government personnel under the procedures of Office of Management and Budget Circular A–76 during that fiscal year.

“(d) Employment of Local Residents To Perform Contracts.—

“(1) In general.—Notwithstanding any other provision of law, each contract awarded by the Coast Guard in fiscal years 1988 and 1989 for construction or services to be performed in whole or in part in a State which has an unemployment rate in excess of the national average rate of unemployment (as determined by the Secretary of Labor) shall include a provision requiring the contractor to employ, for the purpose of performing that portion of the contract in that State, individuals who are local residents and who, in the case of any craft or trade, possess or would be able to acquire promptly the necessary skills. The Secretary of the department in which the Coast Guard is operating may waive this subsection in the interest of national security or economic efficiency.

“(2) Local resident defined.—As used in this subsection, the term ‘local resident’ means a resident of a State described in paragraph (1), and any individual who commutes daily to a State described in paragraph (1).”

[For transfer of authorities, functions, personnel, and assets of the Coast Guard, including the authorities and functions of the Secretary of Transportation relating thereto, to the Department of Homeland Security, and for treatment of related references, see sections 468(b), 551(d), 552(d), and 557 of Title 6, Domestic Security, and the Department of Homeland Security Reorganization Plan of November 25, 2002, as modified, set out as a note under section 542 of Title 6.]

Similar provisions were contained in the following prior authorization act:

Pub. L. 99–640, §5, Nov. 10, 1986, 100 Stat. 3546.

Contracted Advisory and Assistance Services

Section 918 of Pub. L. 99–145, which provided that Secretary of Defense require each military department to establish accounting procedure to aid in control of expenditures for contracted advisory and assistance services, prescribe regulations to identify such services and which services are in direct support of a weapons system, consider specific list of factors in prescribing regulations, and identify total amount requested and separate category amount requested in budget documents for Department of Defense presented to Congress, was repealed and restated in section 2212 of this title by Pub. L. 100–370, §1(d)(2), July 19, 1988, 102 Stat. 842.

Assignment of Principal Contracting Officers

Section 925 of Pub. L. 99–145 required Secretary of Defense to develop a policy regarding mobility and regular rotation of principal administrative and corporate administrative contracting officers in Department of Defense and to report to Committees on Armed Services of Senate and House of Representatives not later than January 1, 1986, on such policy, prior to repeal by Pub. L. 101–510, div. A, title XII, §1207(a), Nov. 5, 1990, 104 Stat. 1665.

Prohibition on Felons Convicted of Defense-Contract-Related Felonies and Penalty on Employment of Such Persons by Defense Contractors

Pub. L. 99–145, title IX, §932, Nov. 8, 1985, 99 Stat. 699, prohibited certain felons from working on defense contracts and penalized employment of such persons by defense contractors, prior to repeal by Pub. L. 99–500, §101(c) [title X, §941(b)], Oct. 18, 1986, 100 Stat. 1783–82, 1783–162, and Pub. L. 99–591, §101(c) [title X, §941(b)], Oct. 30, 1986, 100 Stat. 3341–82, 3341–162; Pub. L. 99–661, div. A, title IX, formerly title IV, §941(b), Nov. 14, 1986, 100 Stat. 3942, renumbered title IX, Pub. L. 100–26, §3(5), Apr. 21, 1987, 101 Stat. 273.

Reimbursement, Interest Charges, and Penalties for Overpayments Due to Cost and Pricing Data

Pub. L. 99–145, title IX, §934(a), Nov. 8, 1985, 99 Stat. 700, which provided for interest payments and penalties for overpayments due to faulty cost and pricing data, was repealed by Pub. L. 99–500, §101(c) [title X, §952(b)(2), (d)], Oct. 18, 1986, 100 Stat. 1783–82, 1783–169, and Pub. L. 99–591, §101(c) [title X, §952(b)(2), (d)], Oct. 30, 1986, 100 Stat. 3341–82, 3341–169; Pub. L. 99–661, div. A, title IX, formerly title IV, §952(b)(2), (d), Nov. 14, 1986, 100 Stat. 3949, renumbered title IX, Pub. L. 100–26, §3(5), Apr. 21, 1987, 101 Stat. 273, effective with respect to contracts or modifications on contracts entered into after the end of the 120-day period beginning on Oct. 18, 1986.

Personnel for Performance of Services and Activities

Pub. L. 99–145, title XII, §1233, Nov. 8, 1985, 99 Stat. 734, related to services and activities to be performed by non-Government personnel, prior to repeal by Pub. L. 99–661, div. A, title XII, §1222(c), Nov. 14, 1986, 100 Stat. 3977.

Limitation on Contracting-Out Core Logistics Functions

Section 1231(a)–(e) of Pub. L. 99–145 declared that certain specifically described functions of the Department of Defense shall be deemed logistics activities necessary to maintain the logistics capability described in section 307(a)(1) of Pub. L. 98–525, formerly set out below; contained a description of the functions, i.e., depot-level maintenance of mission-essential materiel at specifically located activities of the Army, the Navy, the Marine Corps, the Air Force, the Defense Logistics Agency, and the Defense Mapping Agency; included certain matters within the specified functions and excluded certain functions; and defined “mission-essential materiel” as related to such functions.

Section 307 of Pub. L. 98–525, as amended by Pub. L. 99–145, title XII, §1231(f), Nov. 8, 1985, 99 Stat. 733, which prohibited contracting to non-Government personnel of logistics activities necessary for effective response to national emergencies unless Secretary waives such prohibition after a determination that Government performance of such activity is no longer required for national defense reasons, and reports to Congress on waiver, was repealed and restated in section 2464 of this title by Pub. L. 100–370, §2(a)(1), (c)(2), July 19, 1988, 102 Stat. 853, 854.

Shipbuilding Claims for Contract Price Adjustments

Pub. L. 98–473, title I, §101(h) [title VIII, §8078], Oct. 12, 1984, 98 Stat. 1904, 1938, prohibited expenditure of funds to adjust any contract price in any shipbuilding claim, request for equitable adjustment, or demand for payment incurred due to the preparation, submission, or adjudication of any such shipbuilding claim, request, or demand under a contract entered into after Oct. 12, 1984, arising out of events occurring more than eighteen months prior to the submission of such shipbuilding claim, request, or demand, prior to repeal by Pub. L. 100–370, §1(p)(2), July 19, 1988, 102 Stat. 851.

Pub. L. 98–212, title VII, §787, Dec. 8, 1983, 97 Stat. 1453, which contained similar provisions relating to shipbuilding claims for contract price adjustments, was repealed and restated in section 2405 of this title by Pub. L. 98–525, title XII, §1234(a), (b)(2), Oct. 19, 1984, 98 Stat. 2604, effective Oct. 19, 1984.

Weapon System Guarantees; Government-as-Source Exception; Waiver

Pub. L. 98–212, title VII, §794, Dec. 8, 1983, 97 Stat. 1454, provided for weapon system guarantees, Government-as-Source exception, and waiver, prior to repeal by Pub. L. 98–525, title XII, §1234(b)(1), Oct. 19, 1984, 98 Stat. 2604, effective Jan. 1, 1985.

Fighter Aircraft Engine Warranty

Pub. L. 97–377, title I, §101(c) [title VII, §797], Dec. 21, 1982, 96 Stat. 1865, provided that: “None of the funds made available in the Act or any subsequent Act shall be available for the purchase of the alternate or new model fighter aircraft engine that does not have a written warranty or guarantee attesting that it will perform not less than 3,000 tactical cycles. The warranty will provide that the manufacturer must perform the necessary improvements or replace any parts to achieve the required performance at no cost to the Government.”

Insurance To Protect Government Contractors Against Cost of Correcting Contractor's Own Defects; Reimbursement Prohibited

Pub. L. 97–12, title I, §100, June 5, 1981, 95 Stat. 29, and Pub. L. 97–114, title VII, §770, Dec. 29, 1981, 95 Stat. 1590, which provided that no funds authorized for the Department of Defense in fiscal year 1981 and thereafter would be available to reimburse a contractor for the cost of commercial insurance, except for that normally maintained in the conduct of his business, that would protect against the cost for correction for the contractor's own defects in materials or workmanship such as were not a fortuitous casualty or loss, were repealed and restated in section 2399 of this title by Pub. L. 97–295, §§1(29)(A), 6(b), Oct. 12, 1982, 96 Stat. 1293, 1315.

Restrictions on Conversion of Performance of Commercial and Industrial Type Functions From Department of Defense Personnel to Private Contractors; Annual Report to Congress

Pub. L. 96–342, title V, §502, Sept. 8, 1980, 94 Stat. 1086, as amended by Pub. L. 97–252, title XI, §1112(a), Sept. 8, 1982, 96 Stat. 747; Pub. L. 99–145, title XII, §1234(a), Nov. 8, 1985, 99 Stat. 734; Pub. L. 99–661, div. A, title XII, §1221, Nov. 14, 1986, 100 Stat. 3976, which provided that no commercial or industrial type function of the Department of Defense that on October 1, 1980, was being performed by Department of Defense civilian employees could be converted to performance by a private contractor to circumvent any civilian personnel ceiling unless Secretary of Defense submitted favorable cost comparisons and certifications, and reported annually to Congress with regard to such conversions, was repealed and restated in section 2461 of this title by Pub. L. 100–370, §2(a)(1), (c)(1), July 19, 1988, 102 Stat. 851, 854.

Similar provisions for fiscal year 1980 were contained in Pub. L. 96–107, title VIII, §806, Nov. 9, 1979, 93 Stat. 813.

Contract Claims; Request for Equitable Adjustment; Request for Relief; Certification

Pub. L. 95–485, title VIII, §813, Oct. 20, 1978, 92 Stat. 1624, which prohibited payment of a contract claim, request for equitable adjustment, or request for relief which exceeded $100,000 unless a senior company official certified that request was made in good faith and that supporting data was accurate and complete, was repealed and restated in section 2410 of this title by Pub. L. 100–370, §1(h)(2), (p)(4), July 19, 1988, 102 Stat. 847, 851.

Report to Congress by Secretary of Defense; Changes in Policy or Regulations Concerning Use of Private Contractors for Commercial or Industrial Type Function at Department of Defense Installations; Restrictions

Pub. L. 95–485, title VIII, §814, Oct. 20, 1978, 92 Stat. 1625, directed the Secretary of Defense to report to the House and Senate Committees on Armed Services any proposed change in policy or regulations from those in effect before June 30, 1976, as to whether commercial or industrial functions at Defense Department installations in the United States, Puerto Rico, and Guam should be performed by Department of Defense personnel or by private contractors during the period Oct. 1, 1978 to Sept. 30, 1979; prohibited such functions to be performed privately unless such contractor performance began before Oct. 20, 1978 or performance would have been allowed by policy and regulations in effect before June 30, 1976; and provided that such prohibition would apply until the end of the 60 day period beginning on the date the report by the Secretary of Defense is received by the House and Senate Committees.

Reporting Requirements for Secretary of Defense and Prime Contractors Concerning Payments by Prime Contractors for Work Performed by Subcontractors

Pub. L. 95–111, title VIII, §836, Sept. 21, 1977, 91 Stat. 906, which directed the Secretary of Defense to require all prime contractors with more than $500,000 of defense contract awards to report in dollars at the end of each year the amount of work done in that year and the State where performed, and requiring the Secretary of Defense to report annually to Congress the amount of funds spent for such work in each State, was repealed and restated in subsec. (i) of this section by Pub. L. 97–295, §§1(24)(C), 6(b), Oct. 12, 1982, 96 Stat. 1291, 1315.

Performance Review of Department of Defense Commercial or Industrial Functions

Pub. L. 95–79, title VIII, §809, July 30, 1977, 91 Stat. 334, directed the Secretary of Defense and the Director of the Office of Management and Budget to review criteria used in determining whether commercial or industrial type functions at Department of Defense installations within the United States, Puerto Rico, and Guam should be performed by Department of Defense personnel or by private contractors and to report to the House and Senate Armed Services Committees before Jan. 1, 1978, the results of the review; prohibited commercial or industrial type functions being performed on July 30, 1977 by Department of Defense personnel from being converted to performance by private contractors before the earlier of Mar. 15, 1978 or the end of the 90-day period beginning on the date the report is received by the House and Senate Committees; exempted from such prohibition the conversion to performance by private contractors of industrial or commercial type functions if the conversion would have been made under policies and regulations in effect before June 30, 1976; and required the Secretary of Defense to report to the House and Senate Committees on Armed Services before Jan. 1, 1978, detailing the Department's rationale for establishing goals for the percentage of work at defense research installations to be performed by private contractors and for any direction in effect on July 30, 1977 establishing a minimum or maximum percentage for the allocation of work at any defense research installation to be performed by private contractors or directing a change in any such allocation in effect on July 30, 1977.

Discrimination in Petroleum Supplies to Armed Forces Prohibited; Enforcement Procedure; Penalties; Expiration

Pub. L. 94–106, title VIII, §816, Oct. 7, 1975, 89 Stat. 540, as amended by Pub. L. 98–620, title IV, §402(8), Nov. 8, 1984, 98 Stat. 3357, provided a remedy for discrimination by citizens of nationals of the United States or corporations organized or operating within the United States, and by organizations controlled by them, against the Department of Defense in the supply of petroleum products for two years after Oct. 7, 1975.

Announcements of Award of Contracts by Department of Defense; Disclosure of Identity of Contractor Prior to Announcement Prohibited

Pub. L. 91–441, title V, §507, Oct. 7, 1970, 84 Stat. 913, which had provided that the identity or location of a recipient of a contract from the Department of Defense may not be revealed prior to the public announcement of such identity by the Secretary of Defense, was repealed and restated in section 2316 of this title by Pub. L. 97–295, §§1(26)(A), 6(b), Oct. 12, 1982, 96 Stat. 1291, 1314.

Award of Contracts Through Formal Advertising and Competitive Bidding Where Practicable

Pub. L. 90–5, title III, §304, Mar. 16, 1967, 81 Stat. 6, which had provided that the Secretary of Defense was directed, insofar as practicable, that all contracts be formally advertised and awarded on a competitive bid basis to the lowest responsible bidder, was repealed and restated in subsec. (a) of this section by Pub. L. 97–295, §§1(24)(A), 6(b), Oct. 12, 1982, 96 Stat. 1290, 1314.

Non-Applicability of National Emergencies Act

Provisions of the National Emergencies Act not applicable to the powers and authorities conferred by subsec. (a)(1) of this section and actions taken hereunder, see section 1651(a)(5) of Title 50, War and National Defense.

§2304a. Task and delivery order contracts: general authority

(a) Authority To Award.—Subject to the requirements of this section, section 2304c of this title, and other applicable law, the head of an agency may enter into a task or delivery order contract (as defined in section 2304d of this title) for procurement of services or property.

(b) Solicitation.—The solicitation for a task or delivery order contract shall include the following:

(1) The period of the contract, including the number of options to extend the contract and the period for which the contract may be extended under each option, if any.

(2) The maximum quantity or dollar value of the services or property to be procured under the contract.

(3) A statement of work, specifications, or other description that reasonably describes the general scope, nature, complexity, and purposes of the services or property to be procured under the contract.


(c) Applicability of Restriction on Use of Noncompetitive Procedures.—The head of an agency may use procedures other than competitive procedures to enter into a task or delivery order contract under this section only if an exception in subsection (c) of section 2304 of this title applies to the contract and the use of such procedures is approved in accordance with subsection (f) of such section.

(d) Single and Multiple Contract Awards.—(1) The head of an agency may exercise the authority provided in this section—

(A) to award a single task or delivery order contract; or

(B) if the solicitation states that the head of the agency has the option to do so, to award separate task or delivery order contracts for the same or similar services or property to two or more sources.


(2) No determination under section 2304(b) of this title is required for award of multiple task or delivery order contracts under paragraph (1)(B).

(3) The regulations implementing this subsection shall—

(A) establish a preference for awarding, to the maximum extent practicable, multiple task or delivery order contracts for the same or similar services or property under the authority of paragraph (1)(B); and

(B) establish criteria for determining when award of multiple task or delivery order contracts would not be in the best interest of the Federal Government.


(e) Contract Modifications.—A task or delivery order may not increase the scope, period, or maximum value of the task or delivery order contract under which the order is issued. The scope, period, or maximum value of the contract may be increased only by modification of the contract.

(f) Contract Period.—The head of an agency entering into a task or delivery order contract under this section may provide for the contract to cover any period up to five years and may extend the contract period for one or more successive periods pursuant to an option provided in the contract or a modification of the contract. The total contract period as extended may not exceed 10 years unless such head of an agency determines in writing that exceptional circumstances necessitate a longer contract period.

(g) Inapplicability to Contracts for Advisory and Assistance Services.—Except as otherwise specifically provided in section 2304b of this title, this section does not apply to a task or delivery order contract for the procurement of advisory and assistance services (as defined in section 1105(g) of title 31).

(h) Relationship to Other Contracting Authority.—Nothing in this section may be construed to limit or expand any authority of the head of an agency or the Administrator of General Services to enter into schedule, multiple award, or task or delivery order contracts under any other provision of law.

(Added Pub. L. 103–355, title I, §1004(a)(1), Oct. 13, 1994, 108 Stat. 3249; amended Pub. L. 108–136, div. A, title VIII, §843(b), Nov. 24, 2003, 117 Stat. 1553; Pub. L. 108–375, div. A, title VIII, §813(a), Oct. 28, 2004, 118 Stat. 2014.)

Codification

Another section 2304a was renumbered section 2304e of this title.

Amendments

2004—Subsec. (f). Pub. L. 108–375 substituted “any period up to five years and may extend the contract period for one or more successive periods pursuant to an option provided in the contract or a modification of the contract. The total contract period as extended may not exceed 10 years unless such head of an agency determines in writing that exceptional circumstances necessitate a longer contract period” for “a total period of not more than five years”.

2003—Subsecs. (f) to (h). Pub. L. 108–136 added subsec. (f) and redesignated former subsecs. (f) and (g) as (g) and (h), respectively.

Effective Date

For effective date and applicability of section, see section 10001 of Pub. L. 103–355, set out as an Effective Date of 1994 Amendment note under section 251 of Title 41, Public Contracts.

Provisions Not Affected by Pub. L. 103–355

Section 1004(d) of Pub. L. 103–355, as amended by Pub. L. 108–136, div. A, title X, §1045(f), Nov. 24, 2003, 117 Stat. 1613, provided that: “Nothing in section 2304a, 2304b, 2304c, or 2304d of title 10, United States Code, as added by subsection (a), and nothing in the amendments made by subsections (b) and (c) [amending sections 2304 and 2331 of this title], shall be construed as modifying or superseding, or as intended to impair or restrict, authorities or responsibilities under chapter 11 of title 40, United States Code.”

§2304b. Task order contracts: advisory and assistance services

(a) Authority To Award.—(1) Subject to the requirements of this section, section 2304c of this title, and other applicable law, the head of an agency may enter into a task order contract (as defined in section 2304d of this title) for procurement of advisory and assistance services.

(2) The head of an agency may enter into a task order contract for procurement of advisory and assistance services only under the authority of this section.

(b) Limitation on Contract Period.—The period of a task order contract entered into under this section, including all periods of extensions of the contract under options, modifications, or otherwise, may not exceed five years unless a longer period is specifically authorized in a law that is applicable to such contract.

(c) Content of Notice.—The notice required by section 18 of the Office of Federal Procurement Policy Act (41 U.S.C. 416) and section 8(e) of the Small Business Act (15 U.S.C. 637(e)) shall reasonably and fairly describe the general scope, magnitude, and duration of the proposed task order contract in a manner that would reasonably enable a potential offeror to decide whether to request the solicitation and consider submitting an offer.

(d) Required Content of Solicitation and Contract.—(1) The solicitation for the proposed task order contract shall include the information (regarding services) described in section 2304a(b) of this title.

(2) A task order contract entered into under this section shall contain the same information that is required by paragraph (1) to be included in the solicitation of offers for that contract.

(e) Multiple Awards.—(1) The head of an agency may, on the basis of one solicitation, award separate task order contracts under this section for the same or similar services to two or more sources if the solicitation states that the head of the agency has the option to do so.

(2) If, in the case of a task order contract for advisory and assistance services to be entered into under this section, the contract period is to exceed three years and the contract amount is estimated to exceed $10,000,000 (including all options), the solicitation shall—

(A) provide for a multiple award authorized under paragraph (1); and

(B) include a statement that the head of the agency may also elect to award only one task order contract if the head of the agency determines in writing that only one of the offerers is capable of providing the services required at the level of quality required.


(3) Paragraph (2) does not apply in the case of a solicitation for which the head of the agency concerned determines in writing that, because the services required under the task order contract are unique or highly specialized, it is not practicable to award more than one contract.

(f) Contract Modifications.—(1) A task order may not increase the scope, period, or maximum value of the task order contract under which the order is issued. The scope, period, or maximum value of the contract may be increased only by modification of the contract.

(2) Unless use of procedures other than competitive procedures is authorized by an exception in subsection (c) of section 2304 of this title and approved in accordance with subsection (f) of such section, competitive procedures shall be used for making such a modification.

(3) Notice regarding the modification shall be provided in accordance with section 18 of the Office of Federal Procurement Policy Act (41 U.S.C. 416) and section 8(e) of the Small Business Act (15 U.S.C. 637(e)).

(g) Contract Extensions.—(1) Notwithstanding the limitation on the contract period set forth in subsection (b) or in a solicitation or contract pursuant to subsection (e), a task order contract entered into by the head of an agency under this section may be extended on a sole-source basis for a period not exceeding six months if the head of such agency determines that—

(A) the award of a follow-on contract has been delayed by circumstances that were not reasonably foreseeable at the time the initial contract was entered into; and

(B) the extension is necessary in order to ensure continuity of the receipt of services pending the award of, and commencement of performance under, the follow-on contract.


(2) A task order contract may be extended under the authority of paragraph (1) only once and only in accordance with the limitations and requirements of this subsection.

(h) Inapplicability to Certain Contracts.—This section does not apply to a contract for the acquisition of property or services that includes acquisition of advisory and assistance services if the head of an agency entering into such contract determines that, under the contract, advisory and assistance services are necessarily incident to, and not a significant component of, the contract.

(i) Advisory and Assistance Services Defined.—In this section, the term “advisory and assistance services” has the meaning given such term in section 1105(g) of title 31.

(Added Pub. L. 103–355, title I, §1004(a)(1), Oct. 13, 1994, 108 Stat. 3251.)

Effective Date

For effective date and applicability of section, see section 10001 of Pub. L. 103–355, set out as an Effective Date of 1994 Amendment note under section 251 of Title 41, Public Contracts.

Provisions Not Affected by Pub. L. 103–355

This section not to be construed as modifying or superseding, or as intended to impair or restrict, authorities or responsibilities under former 40 U.S.C. 759 or chapter 11 of Title 40, Public Buildings, Property, and Works, see section 1004(d) of Pub. L. 103–355, set out as a note under section 2304a of this title.

Waivers To Extend Task Order Contracts for Advisory and Assistance Services

For authority of head of an agency to issue a waiver to extend a task order contract entered into under this section for a period not exceeding 10 years, through five one-year options, see section 834 of Pub. L. 109–364, set out as a note under section 253i of Title 41, Public Contracts.

§2304c. Task and delivery order contracts: orders

(a) Issuance of Orders.—The following actions are not required for issuance of a task or delivery order under a task or delivery order contract:

(1) A separate notice for such order under section 18 of the Office of Federal Procurement Policy Act (41 U.S.C. 416) or section 8(e) of the Small Business Act (15 U.S.C. 637(e)).

(2) Except as provided in subsection (b), a competition (or a waiver of competition approved in accordance with section 2304(f) of this title) that is separate from that used for entering into the contract.


(b) Multiple Award Contracts.—When multiple task or delivery order contracts are awarded under section 2304a(d)(1)(B) or 2304b(e) of this title, all contractors awarded such contracts shall be provided a fair opportunity to be considered, pursuant to procedures set forth in the contracts, for each task or delivery order in excess of $2,500 that is to be issued under any of the contracts unless—

(1) the agency's need for the services or property ordered is of such unusual urgency that providing such opportunity to all such contractors would result in unacceptable delays in fulfilling that need;

(2) only one such contractor is capable of providing the services or property required at the level of quality required because the services or property ordered are unique or highly specialized;

(3) the task or delivery order should be issued on a sole-source basis in the interest of economy and efficiency because it is a logical follow-on to a task or delivery order already issued on a competitive basis; or

(4) it is necessary to place the order with a particular contractor in order to satisfy a minimum guarantee.


(c) Statement of Work.—A task or delivery order shall include a statement of work that clearly specifies all tasks to be performed or property to be delivered under the order.

(d) Protests.—A protest is not authorized in connection with the issuance or proposed issuance of a task or delivery order except for a protest on the ground that the order increases the scope, period, or maximum value of the contract under which the order is issued.

(e) Task and Delivery Order Ombudsman.—Each head of an agency who awards multiple task or delivery order contracts pursuant to section 2304a(d)(1)(B) or 2304b(e) of this title shall appoint or designate a task and delivery order ombudsman who shall be responsible for reviewing complaints from the contractors on such contracts and ensuring that all of the contractors are afforded a fair opportunity to be considered for task or delivery orders when required under subsection (b). The task and delivery order ombudsman shall be a senior agency official who is independent of the contracting officer for the contracts and may be the agency's competition advocate.

(f) Applicability.—This section applies to task and delivery order contracts entered into under sections 2304a and 2304b of this title.

(Added Pub. L. 103–355, title I, §1004(a)(1), Oct. 13, 1994, 108 Stat. 3252.)

Effective Date

For effective date and applicability of section, see section 10001 of Pub. L. 103–355, set out as an Effective Date of 1994 Amendment note under section 251 of Title 41, Public Contracts.

Provisions Not Affected by Pub. L. 103–355

This section not to be construed as modifying or superseding, or as intended to impair or restrict, authorities or responsibilities under former 40 U.S.C. 759 or chapter 11 of Title 40, Public Buildings, Property, and Works, see section 1004(d) of Pub. L. 103–355, set out as a note under section 2304a of this title.

§2304d. Task and delivery order contracts: definitions

In sections 2304a, 2304b, and 2304c of this title:

(1) The term “task order contract” means a contract for services that does not procure or specify a firm quantity of services (other than a minimum or maximum quantity) and that provides for the issuance of orders for the performance of tasks during the period of the contract.

(2) The term “delivery order contract” means a contract for property that does not procure or specify a firm quantity of property (other than a minimum or maximum quantity) and that provides for the issuance of orders for the delivery of property during the period of the contract.

(Added Pub. L. 103–355, title I, §1004(a)(1), Oct. 13, 1994, 108 Stat. 3253.)

Effective Date

For effective date and applicability of section, see section 10001 of Pub. L. 103–355, set out as an Effective Date of 1994 Amendment note under section 251 of Title 41, Public Contracts.

Provisions Not Affected by Pub. L. 103–355

This section not to be construed as modifying or superseding, or as intended to impair or restrict, authorities or responsibilities under former 40 U.S.C. 759 or chapter 11 of Title 40, Public Buildings, Property, and Works, see section 1004(d) of Pub. L. 103–355, set out as a note under section 2304a of this title.

§2304e. Contracts: prohibition on competition between Department of Defense and small businesses and certain other entities

(a) Exclusion.—In any case in which the Secretary of Defense plans to use competitive procedures for a procurement, if the procurement is to be conducted as described in subsection (b), then the Secretary shall exclude the Department of Defense from competing in the procurement.

(b) Procurement Description.—The requirement to exclude the Department of Defense under subsection (a) applies in the case of a procurement to be conducted by excluding from competition entities in the private sector other than—

(1) small business concerns in furtherance of section 8 or 15 of the Small Business Act (15 U.S.C. 637 or 644); or

(2) entities described in subsection (a)(1) of section 2323 of this title in furtherance of the goal specified in that subsection.

(Added Pub. L. 103–160, div. A, title VIII, §848(a)(1), Nov. 30, 1993, 107 Stat. 1724, §2304a; renumbered §2304e, Pub. L. 104–106, div. D, title XLIII, §4321(b)(6)(A), Feb. 10, 1996, 110 Stat. 672.)

Amendments

1996—Pub. L. 104–106 renumbered section 2304a of this title as this section.

Effective Date

Section 848(b) of Pub. L. 103–160 provided that: “Section 2304a [now 2304e] of title 10, United States Code, as added by subsection (a), shall take effect on the date of the enactment of this Act [Nov. 30, 1993].”

§2305. Contracts: planning, solicitation, evaluation, and award procedures

(a)(1)(A) In preparing for the procurement of property or services, the head of an agency shall—

(i) specify the agency's needs and solicit bids or proposals in a manner designed to achieve full and open competition for the procurement;

(ii) use advance procurement planning and market research; and

(iii) develop specifications in such manner as is necessary to obtain full and open competition with due regard to the nature of the property or services to be acquired.


(B) Each solicitation under this chapter shall include specifications which—

(i) consistent with the provisions of this chapter, permit full and open competition; and

(ii) include restrictive provisions or conditions only to the extent necessary to satisfy the needs of the agency or as authorized by law.


(C) For the purposes of subparagraphs (A) and (B), the type of specification included in a solicitation shall depend on the nature of the needs of the agency and the market available to satisfy such needs. Subject to such needs, specifications may be stated in terms of—

(i) function, so that a variety of products or services may qualify;

(ii) performance, including specifications of the range of acceptable characteristics or of the minimum acceptable standards; or

(iii) design requirements.


(2) In addition to the specifications described in paragraph (1), a solicitation for sealed bids or competitive proposals (other than for a procurement for commercial items using special simplified procedures or a purchase for an amount not greater than the simplified acquisition threshold) shall at a minimum include—

(A) a statement of—

(i) all significant factors and significant subfactors which the head of the agency reasonably expects to consider in evaluating sealed bids (including price) or competitive proposals (including cost or price, cost-related or price-related factors and subfactors, and noncost-related or nonprice-related factors and subfactors); and

(ii) the relative importance assigned to each of those factors and subfactors; and


(B)(i) in the case of sealed bids—

(I) a statement that sealed bids will be evaluated without discussions with the bidders; and

(II) the time and place for the opening of the sealed bids; or


(ii) in the case of competitive proposals—

(I) either a statement that the proposals are intended to be evaluated with, and award made after, discussions with the offerors, or a statement that the proposals are intended to be evaluated, and award made, without discussions with the offerors (other than discussions conducted for the purpose of minor clarification) unless discussions are determined to be necessary; and

(II) the time and place for submission of proposals.


(3)(A) In prescribing the evaluation factors to be included in each solicitation for competitive proposals, the head of an agency—

(i) shall clearly establish the relative importance assigned to the evaluation factors and subfactors, including the quality of the product or services to be provided (including technical capability, management capability, prior experience, and past performance of the offeror);

(ii) shall include cost or price to the Federal Government as an evaluation factor that must be considered in the evaluation of proposals; and

(iii) shall disclose to offerors whether all evaluation factors other than cost or price, when combined, are—

(I) significantly more important than cost or price;

(II) approximately equal in importance to cost or price; or

(III) significantly less important than cost or price.


(B) The regulations implementing clause (iii) of subparagraph (A) may not define the terms “significantly more important” and “significantly less important” as specific numeric weights that would be applied uniformly to all solicitations or a class of solicitations.

(4) Nothing in this subsection prohibits an agency from—

(A) providing additional information in a solicitation, including numeric weights for all evaluation factors and subfactors on a case-by-case basis; or

(B) stating in a solicitation that award will be made to the offeror that meets the solicitation's mandatory requirements at the lowest cost or price.


(5) The head of an agency, in issuing a solicitation for a contract to be awarded using sealed bid procedures, may not include in such solicitation a clause providing for the evaluation of prices for options to purchase additional property or services under the contract unless the head of the agency has determined that there is a reasonable likelihood that the options will be exercised.

(b)(1) The head of an agency shall evaluate sealed bids and competitive proposals and make an award based solely on the factors specified in the solicitation.

(2) All sealed bids or competitive proposals received in response to a solicitation may be rejected if the head of the agency determines that such action is in the public interest.

(3) Sealed bids shall be opened publicly at the time and place stated in the solicitation. The head of the agency shall evaluate the bids in accordance with paragraph (1) without discussions with the bidders and, except as provided in paragraph (2), shall award a contract with reasonable promptness to the responsible bidder whose bid conforms to the solicitation and is most advantageous to the United States, considering only price and the other price-related factors included in the solicitation. The award of a contract shall be made by transmitting, in writing or by electronic means, notice of the award to the successful bidder. Within three days after the date of contract award, the head of the agency shall notify, in writing or by electronic means, each bidder not awarded the contract that the contract has been awarded.

(4)(A) The head of an agency shall evaluate competitive proposals in accordance with paragraph (1) and may award a contract—

(i) after discussions with the offerors, provided that written or oral discussions have been conducted with all responsible offerors who submit proposals within the competitive range; or

(ii) based on the proposals received, without discussions with the offerors (other than discussions conducted for the purpose of minor clarification) provided that the solicitation included a statement that proposals are intended to be evaluated, and award made, without discussions, unless discussions are determined to be necessary.


(B) If the contracting officer determines that the number of offerors that would otherwise be included in the competitive range under subparagraph (A)(i) exceeds the number at which an efficient competition can be conducted, the contracting officer may limit the number of proposals in the competitive range, in accordance with the criteria specified in the solicitation, to the greatest number that will permit an efficient competition among the offerors rated most highly in accordance with such criteria.

(C) Except as provided in paragraph (2), the head of the agency shall award a contract with reasonable promptness to the responsible source whose proposal is most advantageous to the United States, considering only cost or price and the other factors included in the solicitation. The head of the agency shall award the contract by transmitting, in writing or by electronic means, notice of the award to such source and, within three days after the date of contract award, shall notify, in writing or by electronic means, all other offerors of the rejection of their proposals. This subparagraph does not apply with respect to the award of a contract for the acquisition of perishable subsistence items.

(5)(A) When a contract is awarded by the head of an agency on the basis of competitive proposals, an unsuccessful offeror, upon written request received by the agency within 3 days after the date on which the unsuccessful offeror receives the notification of the contract award, shall be debriefed and furnished the basis for the selection decision and contract award. The head of the agency shall debrief the offeror within, to the maximum extent practicable, five days after receipt of the request by the agency.

(B) The debriefing shall include, at a minimum—

(i) the agency's evaluation of the significant weak or deficient factors in the offeror's offer;

(ii) the overall evaluated cost and technical rating of the offer of the contractor awarded the contract and the overall evaluated cost and technical rating of the offer of the debriefed offeror;

(iii) the overall ranking of all offers;

(iv) a summary of the rationale for the award;

(v) in the case of a proposal that includes a commercial item that is an end item under the contract, the make and model of the item being provided in accordance with the offer of the contractor awarded the contract; and

(vi) reasonable responses to relevant questions posed by the debriefed offeror as to whether source selection procedures set forth in the solicitation, applicable regulations, and other applicable authorities were followed by the agency.


(C) The debriefing may not include point-by-point comparisons of the debriefed offeror's offer with other offers and may not disclose any information that is exempt from disclosure under section 552(b) of title 5.

(D) Each solicitation for competitive proposals shall include a statement that information described in subparagraph (B) may be disclosed in post-award debriefings.

(E) If, within one year after the date of the contract award and as a result of a successful procurement protest, the agency seeks to fulfill the requirement under the protested contract either on the basis of a new solicitation of offers or on the basis of new best and final offers requested for that contract, the agency shall make available to all offerors—

(i) the information provided in debriefings under this paragraph regarding the offer of the contractor awarded the contract; and

(ii) the same information that would have been provided to the original offerors.


(6)(A) When the contracting officer excludes an offeror submitting a competitive proposal from the competitive range (or otherwise excludes such an offeror from further consideration prior to the final source selection decision), the excluded offeror may request in writing, within three days after the date on which the excluded offeror receives notice of its exclusion, a debriefing prior to award. The contracting officer shall make every effort to debrief the unsuccessful offeror as soon as practicable but may refuse the request for a debriefing if it is not in the best interests of the Government to conduct a debriefing at that time.

(B) The contracting officer is required to debrief an excluded offeror in accordance with paragraph (5) only if that offeror requested and was refused a preaward debriefing under subparagraph (A).

(C) The debriefing conducted under subparagraph (A) shall include—

(i) the executive agency's evaluation of the significant elements in the offeror's offer;

(ii) a summary of the rationale for the offeror's exclusion; and

(iii) reasonable responses to relevant questions posed by the debriefed offeror as to whether source selection procedures set forth in the solicitation, applicable regulations, and other applicable authorities were followed by the executive agency.


(D) The debriefing conducted under subparagraph (A) may not disclose the number or identity of other offerors and shall not disclose information about the content, ranking, or evaluation of other offerors’ proposals.

(7) The contracting officer shall include a summary of any debriefing conducted under paragraph (5) or (6) in the contract file.

(8) The Federal Acquisition Regulation shall include a provision encouraging the use of alternative dispute resolution techniques to provide informal, expeditious, and inexpensive procedures for an offeror to consider using before filing a protest, prior to the award of a contract, of the exclusion of the offeror from the competitive range (or otherwise from further consideration) for that contract.

(9) If the head of an agency considers that a bid or proposal evidences a violation of the antitrust laws, he shall refer the bid or proposal to the Attorney General for appropriate action.

(c) The Secretary of Defense shall ensure that before a contract for the delivery of supplies to the Department of Defense is entered into—

(1) when the appropriate officials of the Department are making an assessment of the most advantageous source for acquisition of the supplies (considering quality, price, delivery, and other factors), there is a review of the availability and cost of each item of supply—

(A) through the supply system of the Department of Defense; and

(B) under standard Government supply contracts, if the item is in a category of supplies defined under regulations of the Secretary of Defense as being potentially available under a standard Government supply contract; and


(2) there is a review of both the procurement history of the item and a description of the item, including, when necessary for an adequate description of the item, a picture, drawing, diagram, or other graphic representation of the item.


(d)(1)(A) The Secretary of Defense shall ensure that, in preparing a solicitation for the award of a development contract for a major system, the head of an agency consider requiring in the solicitation that an offeror include in its offer proposals described in subparagraph (B). In determining whether to require such proposals, the head of the agency shall give due consideration to the purposes for which the system is being procured and the technology necessary to meet the system's required capabilities. If such proposals are required, the head of the agency shall consider them in evaluating the offeror's price.

(B) Proposals referred to in the first sentence of subparagraph (A) are the following:

(i) Proposals to incorporate in the design of the major system items which are currently available within the supply system of the Federal agency responsible for the major system, available elsewhere in the national supply system, or commercially available from more than one source.

(ii) With respect to items that are likely to be required in substantial quantities during the system's service life, proposals to incorporate in the design of the major system items which the United States will be able to acquire competitively in the future.


(2)(A) The Secretary of Defense shall ensure that, in preparing a solicitation for the award of a production contract for a major system, the head of an agency consider requiring in the solicitation that an offeror include in its offer proposals described in subparagraph (B). In determining whether to require such proposals, the head of the agency shall give due consideration to the purposes for which the system is being procured and the technology necessary to meet the system's required capabilities. If such proposals are required, the head of the agency shall consider them in evaluating the offeror's price.

(B) Proposals referred to in the first sentence of subparagraph (A) are proposals identifying opportunities to ensure that the United States will be able to obtain on a competitive basis items procured in connection with the system that are likely to be reprocured in substantial quantities during the service life of the system. Proposals submitted in response to such requirement may include the following:

(i) Proposals to provide to the United States the right to use technical data to be provided under the contract for competitive reprocurement of the item, together with the cost to the United States, if any, of acquiring such technical data and the right to use such data.

(ii) Proposals for the qualification or development of multiple sources of supply for the item.


(3) If the head of an agency is making a noncompetitive award of a development contract or a production contract for a major system, the factors specified in paragraphs (1) and (2) to be considered in evaluating an offer for a contract may be considered as objectives in negotiating the contract to be awarded. Such objectives may not impair the rights of prospective contractors or subcontractors otherwise provided by law.

(4)(A) Whenever the head of an agency requires that proposals described in paragraph (1)(B) or (2)(B) be submitted by an offeror in its offer, the offeror shall not be required to provide a proposal that enables the United States to acquire competitively in the future an identical item if the item was developed exclusively at private expense unless the head of the agency determines that—

(i) the original supplier of such item will be unable to satisfy program schedule or delivery requirements; or

(ii) proposals by the original supplier of such item to meet the mobilization requirements are insufficient to meet the agency's mobilization needs.


(B) In considering offers in response to a solicitation requiring proposals described in paragraph (1)(B) or (2)(B), the head of an agency shall base any evaluation of items developed exclusively at private expense on an analysis of the total value, in terms of innovative design, life-cycle costs, and other pertinent factors, of incorporating such items in the system.

(e) Protest File.—(1) If, in the case of a solicitation for a contract issued by, or an award or proposed award of a contract by, the head of an agency, a protest is filed pursuant to the procedures in subchapter V of chapter 35 of title 31 and an actual or prospective offeror so requests, a file of the protest shall be established by the procuring activity and reasonable access shall be provided to actual or prospective offerors.

(2) Information exempt from disclosure under section 552 of title 5 may be redacted in a file established pursuant to paragraph (1) unless an applicable protective order provides otherwise.

(f) Agency Actions on Protests.—If, in connection with a protest, the head of an agency determines that a solicitation, proposed award, or award does not comply with the requirements of law or regulation, the head of the agency—

(1) may take any action set out in subparagraphs (A) through (F) of subsection (b)(1) of section 3554 of title 31; and

(2) may pay costs described in paragraph (1) of section 3554(c) of title 31 within the limits referred to in paragraph (2) of such section.


(g) Prohibition on Release of Contractor Proposals.—(1) Except as provided in paragraph (2), a proposal in the possession or control of an agency named in section 2303 of this title may not be made available to any person under section 552 of title 5.

(2) Paragraph (1) does not apply to any proposal that is set forth or incorporated by reference in a contract entered into between the Department and the contractor that submitted the proposal.

(3) In this subsection, the term “proposal” means any proposal, including a technical, management, or cost proposal, submitted by a contractor in response to the requirements of a solicitation for a competitive proposal.

(Aug. 10, 1956, ch. 1041, 70A Stat. 130; Pub. L. 85–861, §1(44), Sept. 2, 1958, 72 Stat. 1457; Pub. L. 90–268, §3, Mar. 16, 1968, 82 Stat. 49; Pub. L. 98–369, div. B, title VII, §2723(b), July 18, 1984, 98 Stat. 1191; Pub. L. 98–525, title XII, §1213(a), Oct. 19, 1984, 98 Stat. 2591; Pub. L. 99–145, title XIII, §1303(a)(14), Nov. 8, 1985, 99 Stat. 739; Pub. L. 99–500, §101(c) [title X, §924(a), (b)], Oct. 18, 1986, 100 Stat. 1783–82, 1783–153, and Pub. L. 99–591, §101(c) [title X, §924(a), (b)], Oct. 30, 1986, 100 Stat. 3341–82, 3341–153; Pub. L. 99–661, div. A, title III, §313(b), title IX, formerly title IV, §924(a), (b), Nov. 14, 1986, 100 Stat. 3853, 3932, 3933, renumbered title IX, Pub. L. 100–26, §3(5), Apr. 21, 1987, 101 Stat. 273; Pub. L. 100–456, div. A, title VIII, §806, Sept. 29, 1988, 102 Stat. 2010; Pub. L. 101–189, div. A, title VIII, §853(f), Nov. 29, 1989, 103 Stat. 1519; Pub. L. 101–510, div. A, title VIII, §802(a)–(d), Nov. 5, 1990, 104 Stat. 1588, 1589; Pub. L. 103–160, div. A, title XI, §1182(a)(5), Nov. 30, 1993, 107 Stat. 1771; Pub. L. 103–355, title I, §§1011–1016, title IV, §4401(b), Oct. 13, 1994, 108 Stat. 3254–3257, 3347; Pub. L. 104–106, div. D, title XLI, §§4103(a), 4104(a), title XLII, §4202(a)(2), div. E, title LVI, §5601(a), Feb. 10, 1996, 110 Stat. 643, 644, 653, 699; Pub. L. 104–201, div. A, title VIII, §821(a), title X, §1074(a)(11), (b)(4)(A), Sept. 23, 1996, 110 Stat. 2609, 2659, 2660; Pub. L. 106–65, div. A, title VIII, §821, Oct. 5, 1999, 113 Stat. 714.)

Historical and Revision Notes
1956 Act
Revised sectionSource (U.S. Code)Source (Statutes at Large)
2305(a)

2305(b)

41:152 (less clause (b)).

41:152 (clause (b)).

Feb. 19, 1948, ch. 65, §§2(d), 3, 62 Stat. 22.
2305(c) 41:151(d).

In subsection (a), the word “needed” is substituted for the words “necessary to meet the requirements”.

In subsection (b), the words “United States” are substituted for the word “Government”.

1958 Act
Revised sectionSource (U.S. Code)Source (Statutes at Large)
2305 41:152(c). Aug. 9, 1955, ch. 628, §15, 69 Stat. 551.

Reference to bids is omitted as surplusage (see opinion of the Judge Advocate General of the Army (JAGT 1956/9122, 21 Dec. 1956)). The word “attachments” is substituted for the words “material required”. The words “the specifications in” are inserted in the second sentence for clarity. The word “available” is omitted as covered by the word “accessible.” The words “no award may be made” are substituted for the words “and any award or awards made to any bidder in such case shall be invalidated and rejected”.

Codification

Pub. L. 99–591 is a corrected version of Pub. L. 99–500.

Amendments

1999—Subsec. (g)(1). Pub. L. 106–65 substituted “an agency named in section 2303 of this title” for “the Department of Defense”.

1996—Subsec. (a)(2). Pub. L. 104–106, §4202(a)(2), inserted “a procurement for commercial items using special simplified procedures or” after “(other than for”.

Subsec. (b)(4)(B). Pub. L. 104–106, §4103(a)(3), added subpar. (B). Former subpar. (B) redesignated (C).

Pub. L. 104–106, §4103(a)(1), transferred text of subpar. (C) to end of subpar. (B) and substituted “This subparagraph” for “Subparagraph (B)” at beginning of that text.

Subsec. (b)(4)(C). Pub. L. 104–106, §4103(a)(2), redesignated subpar. (B) as (C).

Pub. L. 104–106, §4103(a)(1), struck out “(C)” before “Subparagraph (B)” and transferred text of subpar. (C) to end of subpar. (B).

Subsec. (b)(5)(F). Pub. L. 104–106, §4104(a)(1), struck out subpar. (F) which read as follows: “The contracting officer shall include a summary of the debriefing in the contract file.”

Subsec. (b)(6). Pub. L. 104–106, §4104(a)(3), added par. (6). Former par. (6) redesignated (9).

Subsec. (b)(6)(B). Pub. L. 104–201, §1074(a)(11)(A), struck out “of this section” after “paragraph (5)” and “of this paragraph” after “subparagraph (A)”.

Subsec. (b)(6)(C). Pub. L. 104–201, §1074(a)(11)(B), substituted “subparagraph (A)” for “this subsection” in introductory provisions.

Subsec. (b)(6)(D). Pub. L. 104–201, §1074(a)(11)(C), substituted “under subparagraph (A)” for “pursuant to this subsection”.

Subsec. (b)(7), (8). Pub. L. 104–106, §4104(a)(3), added pars. (7) and (8).

Subsec. (b)(9). Pub. L. 104–106, §4104(a)(2), redesignated par. (6) as (9).

Subsec. (e)(3). Pub. L. 104–106, §5601(a), as amended by Pub. L. 104–201, §1074(b)(4)(A), struck out par. (3) which read as follows: “Regulations implementing this subsection shall be consistent with the regulations regarding the preparation and submission of an agency's protest file (the so-called ‘rule 4 file’) for protests to the General Services Board of Contract Appeals under section 111 of the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 759).”

Subsec. (g). Pub. L. 104–201, §821(a), added subsec. (g).

1994—Subsec. (a)(2). Pub. L. 103–355, §4401(b), substituted “a purchase for an amount not greater than the simplified acquisition threshold)” for “small purchases)” in introductory provisions.

Subsec. (a)(2)(A)(i). Pub. L. 103–355, §1011(a)(1), substituted “and significant subfactors” for “(and significant subfactors)” and “cost-related or price-related factors and subfactors, and noncost-related or nonprice-related factors and subfactors” for “cost- or price-related factors, and noncost- or nonprice-related factors”.

Subsec. (a)(2)(A)(ii). Pub. L. 103–355, §1011(a)(2), substituted “and subfactors” for “(and subfactors)”.

Subsec. (a)(2)(B)(ii)(I). Pub. L. 103–355, §1011(a)(3), amended subcl. (I) generally. Prior to amendment, subcl. (I) read as follows: “a statement that the proposals are intended to be evaluated with, and award made after, discussions with the offerors, or a statement that the proposals are intended to be evaluated, and award made, without discussions with the offerors (other than discussions conducted for the purpose of minor clarification), unless discussions are determined to be necessary; and”.

Subsec. (a)(3). Pub. L. 103–355, §1011(b), added par. (3) and struck out former par. (3), which read as follows: “In prescribing the evaluation factors to be included in each solicitation for competitive proposals, the head of an agency shall clearly establish the relative importance assigned to the evaluation factors and subfactors, including the quality of the product or services to be provided (including technical capability, management capability, and prior experience of the offeror).”

Subsec. (a)(4). Pub. L. 103–355, §1011(b), added par. (4).

Subsec. (a)(5). Pub. L. 103–355, §1012, added par. (5).

Subsec. (b)(3). Pub. L. 103–355, §1013(a), substituted “transmitting, in writing or by electronic means, notice” for “transmitting written notice” and inserted at end “Within three days after the date of contract award, the head of the agency shall notify, in writing or by electronic means, each bidder not awarded the contract that the contract has been awarded.”

Subsec. (b)(4)(B). Pub. L. 103–355, §1013(b), substituted “transmitting, in writing or by electronic means, notice” for “transmitting written notice” and “, within three days after the date of contract award, shall notify, in writing or by electronic means,” for “shall promptly notify”.

Subsec. (b)(5), (6). Pub. L. 103–355, §1014, added par. (5) and redesignated former par. (5) as (6).

Subsec. (e). Pub. L. 103–355, §1015, added subsec. (e).

Subsec. (f). Pub. L. 103–355, §1016, added subsec. (f).

1993—Subsec. (b)(4)(A). Pub. L. 103–160 realigned margins of cls. (i) and (ii).

1990—Subsec. (a)(2)(A)(i). Pub. L. 101–510, §802(a)(1), inserted “(and significant subfactors)” after “significant factors” and substituted “(including cost or price, cost- or price-related factors, and noncost- or nonprice-related factors)” for “(including cost or price)”.

Subsec. (a)(2)(A)(ii). Pub. L. 101–510, §802(a)(2), inserted “(and subfactors)” after “those factors”.

Subsec. (a)(2(B)(ii)(I). Pub. L. 101–510, §802(b), amended subcl. (I) generally. Prior to amendment, subcl. (I) read as follows: “a statement that the proposals are intended to be evaluated with, and awards made after, discussions with the offerors, but might be evaluated and awarded without discussions with the offerors; and”.

Subsec. (a)(3). Pub. L. 101–510, §802(c), substituted “the evaluation factors and subfactors, including the quality of the product or services” for “the quality of the services”.

Subsec. (b)(1). Pub. L. 101–510, §802(d)(1), inserted “and make an award” after “competitive proposals”.

Subsec. (b)(3). Pub. L. 101–510, §802(d)(2), inserted “in accordance with paragraph (1)” after “shall evaluate the bids”.

Subsec. (b)(4)(A). Pub. L. 101–510, §802(d)(3)(A), substituted “competitive proposals in accordance with paragraph (1)” for “competitive proposals” in introductory provisions, added cls. (i) and (ii), and struck out former cls. (i) and (ii) which read as follows:

“(i) after discussions conducted with the offerors at any time after receipt of the proposals and before the award of the contract; or

“(ii) without discussions with the offerors (other than discussions conducted for the purpose of minor clarification) when it can be clearly demonstrated from the existence of full and open competition or accurate prior cost experience with the product or service that acceptance of an initial proposal without discussions would result in the lowest overall cost to the United States.”

Subsec. (b)(4)(B) to (E). Pub. L. 101–510, §802 (d)(3)(B)–(D), redesignated subpars. (D) and (E) as (B) and (C), respectively, substituted “Subparagraph (B)” for “Subparagraph (D)” in subpar. (C), and struck out former subpars. (B) and (C) which read as follows:

“(B) In the case of award of a contract under subparagraph (A)(i), the head of the agency shall conduct, before such award, written or oral discussions with all responsible sources who submit proposals within the competitive range, considering only cost or price and the other factors included in the solicitation.

“(C) In the case of award of a contract under subparagraph (A)(ii), the head of the agency shall award the contract based on the proposals received (and as clarified, if necessary, in discussions conducted for the purpose of minor clarification).”

1989—Subsec. (b)(4)(D). Pub. L. 101–189 inserted “cost or” after “considering only”.

1988—Subsec. (d)(1)(B). Pub. L. 100–456, §806(b), substituted “Proposals referred to in the first sentence of subparagraph (A) are” for “The proposals that the head of an agency is to consider requiring in a solicitation for the award of a development contract are”.

Subsec. (d)(2)(B). Pub. L. 100–456, §806(b), substituted “Proposals referred to in the first sentence of subparagraph (A) are” for “The proposals that the head of an agency is to consider requiring in a solicitation for the award of a production contract are”.

Subsec. (d)(3). Pub. L. 100–456, §806(a)(2), inserted provision that objectives may not impair the rights of prospective contractors or subcontractors otherwise provided by law.

Subsec. (d)(4). Pub. L. 100–456, §806(a)(1), added par. (4).

1986—Subsec. (a). Pub. L. 99–500 and Pub. L. 99–591, §101(c) [§924(a)], Pub. L. 99–661, §924(a), amended subsec. (a) identically, in par. (2)(A)(i) striking out “(including price)” after “factors” and inserting “(including price)” and “(including cost and price)” and adding par. (3).

Subsec. (b)(4)(B). Pub. L. 99–500 and Pub. L. 99–591, §101(c) [§924(b)], Pub. L. 99–661, §924(b), amended subpar. (B) identically, inserting “cost or”.

Subsec. (b)(4)(E). Pub. L. 99–661, §313(b), added subpar. (E).

1985—Subsec. (b)(5). Pub. L. 99–145 aligned the margin of par. (5).

1984—Subsecs. (c), (d). Pub. L. 98–525 added subsecs. (c) and (d).

Catchline, subsecs. (a) to (d). Pub. L. 98–369 substituted “Contracts: planning, solicitation, evaluation, and award procedures” for “Formal advertisements for bids; time; opening; award; rejection” and completely revised the text to substitute a program using solicitation requirements covering military procurement for former provisions which had used the approach of utilizing formal advertisements, struck out former provisions which had directed that, except in cases where the Secretary of Defense had determined that military requirements necessitated the specification of container size, no advertisement or invitation to bid for the carriage of government property in other than government-owned cargo containers could specify carriage of such property in cargo containers of any stated length, height, or width, and carried forward into new subsecs. (a)(1)(A)(iii), (B)(i), and (b)(2) and (5) the content of former section.

1968—Subsec. (a). Pub. L. 90–268 inserted provision that, except in cases where the Secretary of Defense determines that military requirements necessitate such specification, no advertisement or invitation to bid for the carriage of Government property in other than Government-owned cargo containers shall specify carriage of such property in cargo containers of any stated length, height, or width.

1958—Subsecs. (b) to (d). Pub. L. 85–861 added subsec. (b) and redesignated former subsecs. (b) and (c) as (c) and (d), respectively.

Effective Date of 1996 Amendment

For effective date and applicability of amendment by sections 4103(a), 4104(a), and 4202(a)(2) of Pub. L. 104–106, see section 4401 of Pub. L. 104–106, set out as a note under section 251 of Title 41, Public Contracts.

Amendment by section 5601(a) of Pub. L. 104–106 effective 180 days after Feb. 10, 1996, see section 5701 of Pub. L. 104–106, Feb. 10, 1996, 110 Stat. 702.

Effective Date of 1994 Amendment

For effective date and applicability of amendment by Pub. L. 103–355, see section 10001 of Pub. L. 103–355, set out as a note under section 251 of Title 41, Public Contracts.

Effective Date of 1990 Amendment

Section 802(e) of Pub. L. 101–510 provided that:

“(1) Except as provided in paragraph (2), the amendments made by this section [amending this section] shall apply with respect to solicitations for sealed bids or competitive proposals issued after the end of the 120-day period beginning on the date of the enactment of this Act [Nov. 5, 1990].

“(2) The Secretary of Defense may require the amendments made by this section to apply with respect to solicitations issued before the end of the period referred to in paragraph (1). The Secretary of Defense shall publish in the Federal Register notice of any such earlier effective date.”

Effective Date of 1986 Amendment

Section 101(c) [title X, §924(c)] of Pub. L. 99–500 and Pub. L. 99–591, and section 924(c) of title IX, formerly title IV, of Pub. L. 99–661, renumbered title IX, Pub. L. 100–26, §3(5), Apr. 21, 1987, 101 Stat. 273, provided that: “The amendments made by this section [amending this section] shall apply with respect to solicitations for sealed bids or competitive proposals issued after the end of the 180-day period beginning on the date of the enactment of this Act [Oct. 18, 1986].”

Effective Date of 1984 Amendments

Section 1213(b) of Pub. L. 98–525 provided that: “The amendment made by subsection (a) [amending this section] shall take effect at the end of the 180-day period beginning on the date of the enactment of this Act [Oct. 19, 1984].”

Amendment by Pub. L. 98–369 applicable with respect to any solicitation for bids or proposals issued after Mar. 31, 1985, see section 2751 of Pub. L. 98–369, set out as a note under section 251 of Title 41, Public Contracts.

Guidance on Use of Tiered Evaluations of Offers for Contracts and Task Orders Under Contracts

Pub. L. 109–163, div. A, title VIII, §816, Jan. 6, 2006, 119 Stat. 3382, provided that:

“(a) Guidance Required.—The Secretary of Defense shall prescribe guidance for the military departments and the Defense Agencies on the use of tiered evaluations of offers for contracts and for task or delivery orders under contracts.

“(b) Elements.—The guidance prescribed under subsection (a) shall include a prohibition on the initiation by a contracting officer of a tiered evaluation of an offer for a contract or for a task or delivery order under a contract unless the contracting officer—

“(1) has conducted market research in accordance with part 10 of the Federal Acquisition Regulation in order to determine whether or not a sufficient number of qualified small businesses are available to justify limiting competition for the award of such contract or task or delivery order under applicable law and regulations;

“(2) is unable, after conducting market research under paragraph (1), to make the determination described in that paragraph; and

“(3) includes in the contract file a written explanation of why such contracting officer was unable to make such determination.”

Authorization of Evaluation Factor for Defense Contractors Employing or Subcontracting With Members of the Selected Reserve of the Reserve Components of the Armed Forces

Pub. L. 109–163, div. A, title VIII, §819, Jan. 6, 2006, 119 Stat. 3385, provided that:

“(a) Defense Contracts.—In awarding any contract for the procurement of goods or services to an entity, the Secretary of Defense is authorized to use as an evaluation factor whether the entity intends to carry out the contract using employees or individual subcontractors who are members of the Selected Reserve of the reserve components of the Armed Forces.

“(b) Documentation of Selected Reserve-Related Evaluation Factor.—Any entity claiming intent to carry out a contract using employees or individual subcontractors who are members of the Selected Reserve of the reserve components of the Armed Forces shall submit proof of the use of such employees or subcontractors for the Department of Defense to consider in carrying out subsection (a) with respect to that contract.

“(c) Regulations.—The Federal Acquisition Regulation shall be revised as necessary to implement this section.”

Certificate of Competency Requirements

Pub. L. 102–484, div. A, title VIII, §804, Oct. 23, 1992, 106 Stat. 2447, provided that, in case of contract to be entered into pursuant to this chapter, other than pursuant to simplified procedures under section 2304(g) of this title, solicitation was to contain notice of right of bidding small business concern, in case of determination by contracting officer that concern was nonresponsible, to request Small Business Administration to make determination of responsibility under section 637(b)(7) of Title 15, Commerce and Trade, that if contracting officer determined that concern was nonresponsible, such officer was to notify concern in writing, of such determination, that concern had right to request Small Business Administration to make determination, and that, if concern desired to request such determination, concern was to inform officer in writing, within 14 days after receipt of notice, of such desire, and that, after being so informed, officer was to transmit request to Administration, or, if not so informed, officer was to proceed with award of contract, and contained provisions relating to effective and termination dates and report to be submitted to Congress, prior to repeal by Pub. L. 103–355, title VII, §7101(b), Oct. 13, 1994, 108 Stat. 3367.

Construction of 1984 Amendment

Amendment by Pub. L. 98–369 as not superseding or affecting the provisions of section 637(a) of Title 15, Commerce and Trade, see section 2723(c) of Pub. L. 98–369, set out as a note under section 2304 of this title.

§2305a. Design-build selection procedures

(a) Authorization.—Unless the traditional acquisition approach of design-bid-build established under chapter 11 of title 40 is used or another acquisition procedure authorized by law is used, the head of an agency shall use the two-phase selection procedures authorized in this section for entering into a contract for the design and construction of a public building, facility, or work when a determination is made under subsection (b) that the procedures are appropriate for use.

(b) Criteria for Use.—A contracting officer shall make a determination whether two-phase selection procedures are appropriate for use for entering into a contract for the design and construction of a public building, facility, or work when the contracting officer anticipates that three or more offers will be received for such contract, design work must be performed before an offeror can develop a price or cost proposal for such contract, the offeror will incur a substantial amount of expense in preparing the offer, and the contracting officer has considered information such as the following:

(1) The extent to which the project requirements have been adequately defined.

(2) The time constraints for delivery of the project.

(3) The capability and experience of potential contractors.

(4) The suitability of the project for use of the two-phase selection procedures.

(5) The capability of the agency to manage the two-phase selection process.

(6) Other criteria established by the agency.


(c) Procedures Described.—Two-phase selection procedures consist of the following:

(1) The agency develops, either in-house or by contract, a scope of work statement for inclusion in the solicitation that defines the project and provides prospective offerors with sufficient information regarding the Government's requirements (which may include criteria and preliminary design, budget parameters, and schedule or delivery requirements) to enable the offerors to submit proposals which meet the Government's needs. If the agency contracts for development of the scope of work statement, the agency shall contract for architectural and engineering services as defined by and in accordance with chapter 11 of title 40.

(2) The contracting officer solicits phase-one proposals that—

(A) include information on the offeror's—

(i) technical approach; and

(ii) technical qualifications; and


(B) do not include—

(i) detailed design information; or

(ii) cost or price information.


(3) The evaluation factors to be used in evaluating phase-one proposals are stated in the solicitation and include specialized experience and technical competence, capability to perform, past performance of the offeror's team (including the architect-engineer and construction members of the team) and other appropriate factors, except that cost-related or price-related evaluation factors are not permitted. Each solicitation establishes the relative importance assigned to the evaluation factors and subfactors that must be considered in the evaluation of phase-one proposals. The agency evaluates phase-one proposals on the basis of the phase-one evaluation factors set forth in the solicitation.

(4) The contracting officer selects as the most highly qualified the number of offerors specified in the solicitation to provide the property or services under the contract and requests the selected offerors to submit phase-two competitive proposals that include technical proposals and cost or price information. Each solicitation establishes with respect to phase two—

(A) the technical submission for the proposal, including design concepts or proposed solutions to requirements addressed within the scope of work (or both), and

(B) the evaluation factors and subfactors, including cost or price, that must be considered in the evaluations of proposals in accordance with paragraphs (2), (3), and (4) of section 2305(a) of this title.


The contracting officer separately evaluates the submissions described in subparagraphs (A) and (B).

(5) The agency awards the contract in accordance with section 2305(b)(4) of this title.


(d) Solicitation to State Number of Offerors To Be Selected for Phase Two Requests for Competitive Proposals.—A solicitation issued pursuant to the procedures described in subsection (c) shall state the maximum number of offerors that are to be selected to submit competitive proposals pursuant to subsection (c)(4). The maximum number specified in the solicitation shall not exceed 5 unless the agency determines with respect to an individual solicitation that a specified number greater than 5 is in the Government's interest and is consistent with the purposes and objectives of the two-phase selection process.

(e) Requirement for Guidance and Regulations.—The Federal Acquisition Regulation shall include guidance—

(1) regarding the factors that may be considered in determining whether the two-phase contracting procedures authorized by subsection (a) are appropriate for use in individual contracting situations;

(2) regarding the factors that may be used in selecting contractors; and

(3) providing for a uniform approach to be used Government-wide.


(f) Special Authority for Military Construction Projects.—(1) The Secretary of a military department may use funds available to the Secretary under section 2807(a) or 18233(e) of this title to accelerate the design effort in connection with a military construction project for which the two-phase selection procedures described in subsection (c) are used to select the contractor for both the design and construction portion of the project before the project is specifically authorized by law and before funds are appropriated for the construction portion of the project. Notwithstanding the limitations contained in such sections, use of such funds for the design portion of a military construction project may continue despite the subsequent authorization of the project. The advance notice requirement of section 2807(b) of this title shall continue to apply whenever the estimated cost of the design portion of the project exceeds the amount specified in such section.

(2) Any military construction contract that provides for an accelerated design effort, as authorized by paragraph (1), shall include as a condition of the contract that the liability of the United States in a termination for convenience before funds are first made available for construction may not exceed an amount attributable to the final design of the project.

(3) For each fiscal year during which the authority provided by this subsection is in effect, the Secretary of a military department may select not more than two military construction projects to include the accelerated design effort authorized by paragraph (1) for each armed force under the jurisdiction of the Secretary. To be eligible for selection under this subsection, a request for the authorization of the project, and for the authorization of appropriations for the project, must have been included in the annual budget of the President for a fiscal year submitted to Congress under section 1105(a) of title 31.

(4) Not later than March 1, 2008, the Secretary of Defense shall submit to the congressional defense committees a report evaluating the usefulness of the authority provided by this subsection in expediting the design and construction of military construction projects. The authority provided by this subsection expires September 30, 2008, except that, if the report required by this paragraph is not submitted by March 1, 2008, the authority shall expire on that date.

(Added Pub. L. 104–106, div. D, title XLI, §4105(a)(1), Feb. 10, 1996, 110 Stat. 645; amended Pub. L. 105–85, div. A, title X, §1073(a)(44), Nov. 18, 1997, 111 Stat. 1902; Pub. L. 107–217, §3(b)(4), Aug. 21, 2002, 116 Stat. 1295; Pub. L. 108–178, §4(b)(3), Dec. 15, 2003, 117 Stat. 2641; Pub. L. 108–375, div. B, title XXVIII, §2807, Oct. 28, 2004, 118 Stat. 2123; Pub. L. 109–163, div. B, title XXVIII, §2807, Jan. 6, 2006, 119 Stat. 3508.)

Prior Provisions

A prior section 2305a was renumbered section 2438 of this title.

Amendments

2006—Subsec. (f)(2). Pub. L. 109–163, §2807(a), amended par. (2) generally. Prior to amendment, par. (2) read as follows: “Any military construction contract that provides for an accelerated design effort, as authorized by paragraph (1), shall include as a condition of the contract that the liability of the United States in a termination for convenience may not exceed the actual costs incurred as of the termination date.”

Subsec. (f)(4). Pub. L. 109–163, §2807(b), substituted “2008” for “2007” wherever appearing.

2004—Subsec. (f). Pub. L. 108–375 added subsec. (f).

2003—Subsec. (c)(1). Pub. L. 108–178 substituted “chapter 11 of title 40” for “the Brooks Architect-Engineers Act (40 U.S.C. 541 et seq.)”.

2002—Subsec. (a). Pub. L. 107–217 substituted “chapter 11 of title 40” for “the Brooks Architect-Engineers Act (40 U.S.C. 541 et seq.)”.

1997—Subsec. (a). Pub. L. 105–85 substituted “(40 U.S.C.” for “(41 U.S.C.”.

Effective Date of 2003 Amendment

Amendment by Pub. L. 108–178 effective Aug. 21, 2002, see section 5 of Pub. L. 108–178, set out as a note under section 5334 of Title 5, Government Organization and Employees.

Effective Date

For effective date and applicability of section, see section 4401 of Pub. L. 104–106, set out as an Effective Date of 1996 Amendment note under section 251 of Title 41, Public Contracts.

§2306. Kinds of contracts

(a) The cost-plus-a-percentage-of-cost system of contracting may not be used. Subject to the limitation in the preceding sentence, the other provisions of this section, and other applicable provisions of law, the head of an agency, in awarding contracts under this chapter after using procedures other than sealed-bid procedures, may enter into any kind of contract that he considers will promote the best interests of the United States.

(b) Each contract awarded under this chapter after using procedures other than sealed-bid procedures shall contain a warranty, determined to be suitable by the head of the agency, that the contractor has employed or retained no person or selling agency to solicit or obtain the contract under an understanding or agreement for a commission, percentage, brokerage, or contingent fee, except a bona fide employee or established commercial or selling agency maintained by him to obtain business. If a contractor breaks such a warranty the United States may annul the contract without liability or may deduct the commission, percentage, brokerage, or contingent fee from the contract price or consideration. This subsection does not apply to a contract that is for an amount not greater than the simplified acquisition threshold or to a contract for the acquisition of commercial items.

[(c) Repealed. Pub. L. 103–355, title I, §1021, Oct. 13, 1994, 108 Stat. 3257.]

(d) The fee for performing a cost-plus-a-fixed-fee contract for experimental, developmental, or research work may not be more than 15 percent of the estimated cost of the contract, not including the fee. The fee for performing a cost-plus-a-fixed-fee contract for architectural or engineering services for a public work or utility plus the cost of those services to the contractor may not be more than 6 percent of the estimated cost of that work or project, not including fees. The fee for performing any other cost-plus-a-fixed-fee contract may not be more than 10 percent of the estimated cost of the contract, not including the fee. Determinations under this subsection of the estimated costs of a contract or project shall be made by the head of the agency at the time the contract is made.

(e)(1) Except as provided in paragraph (2), each cost contract and each cost-plus-a-fixed-fee contract shall provide for notice to the agency by the contractor before the making, under the prime contract, of—

(A) a cost-plus-a-fixed-fee subcontract; or

(B) a fixed-price subcontract or purchase order involving more than the greater of (i) the simplified acquisition threshold, or (ii) 5 percent of the estimated cost of the prime contract.


(2) Paragraph (1) shall not apply to a prime contract with a contractor that maintains a purchasing system approved by the contracting officer for the contract.

(f) So-called “truth-in-negotiations” provisions relating to cost or pricing data to be submitted by certain contractors and subcontractors are provided in section 2306a of this title.

(g) Multiyear contracting authority for the acquisition of services is provided in section 2306c of this title.

(h) Multiyear contracting authority for the purchase of property is provided in section 2306b of this title.

(Aug. 10, 1956, ch. 1041, 70A Stat. 130; Pub. L. 87–653, §1(d), (e), Sept. 10, 1962, 76 Stat. 528; Pub. L. 90–378, §1, July 5, 1968, 82 Stat. 289; Pub. L. 90–512, Sept. 25, 1968, 82 Stat. 863; Pub. L. 96–513, title V, §511(77), Dec. 12, 1980, 94 Stat. 2926; Pub. L. 97–86, title IX, §§907(b), 909(b), Dec. 1, 1981, 95 Stat. 1117, 1118; Pub. L. 98–369, div. B, title VII, §2724, July 18, 1984, 98 Stat. 1192; Pub. L. 99–145, title XIII, §1303(a)(15), Nov. 8, 1985, 99 Stat. 739; Pub. L. 99–500, §101(c) [title X, §952(b)(1), (c)(1)], Oct. 18, 1986, 100 Stat. 1783–82, 1783–169, and Pub. L. 99–591, §101(c) [title X, §952(b)(1), (c)(1)], Oct. 30, 1986, 100 Stat. 3341–82, 3341–169; Pub. L. 99–661, div. A, title IX, formerly title IV, §952(b)(1), (c)(1), Nov. 14, 1986, 100 Stat. 3949, renumbered title IX, Pub. L. 100–26, §3(5), Apr. 21, 1987, 101 Stat. 273; Pub. L. 101–189, div. A, title VIII, §805(a), Nov. 29, 1989, 103 Stat. 1488; Pub. L. 101–510, div. A, title VIII, §808, Nov. 5, 1990, 104 Stat. 1593; Pub. L. 102–25, title VII, §701(d)(3), Apr. 6, 1991, 105 Stat. 114; Pub. L. 103–355, title I, §§1021, 1022(b), title IV, §§4102(b), 4401(c), title VIII, §8105(a), Oct. 13, 1994, 108 Stat. 3257, 3260, 3340, 3348, 3392; Pub. L. 105–85, div. A, title X, §1073(a)(45), Nov. 18, 1997, 111 Stat. 1902; Pub. L. 106–398, §1 [[div. A], title VIII, §802(b)], Oct. 30, 2000, 114 Stat. 1654, 1654A–205; Pub. L. 108–136, div. A, title VIII, §842, Nov. 24, 2003, 117 Stat. 1552.)

Historical and Revision Notes
Revised sectionSource (U.S. Code)Source (Statutes at Large)
2306(a)

 

 

2306(b)

41:153(a) (1st sentence).

41:153(b) (1st 14 words of 1st sentence).

41:153(a) (less 1st sentence).

Feb. 19, 1948, ch. 65, §4 (less words after semicolon of last sentence of (b), and less (c)), 62 Stat. 23.
2306(c) 41:153(b) (2d sentence).
2306(d) 41:153(b) (1st sentence, less 1st 14 words).
2306(e) 41:153(b) (less 1st and 2d sentences; and less words after semicolon of last sentence).

In subsection (a), the words “subject to subsections (b)–(e)” are substituted for the words “Except as provided in subsection (b) of this section”. The words “United States” are substituted for the word “Government”.

In subsection (b), the words “under section 2304 of this title” are substituted for the words “pursuant to section 151(c) of this title”. The words “full amount of such” and “violation” are omitted as surplusage.

In subsection (c), the words “under section 2304 of this title” are inserted for clarity.

Codification

Pub. L. 99–591 is a corrected version of Pub. L. 99–500.

Prior Provisions

Provisions similar to those in subsec. (h)(11) of this section were contained in Pub. L. 100–526, title I, §104(a), Oct. 24, 1988, 102 Stat. 2624, which was set out below, prior to repeal by Pub. L. 101–189, §805(b).

Amendments

2003—Subsec. (e). Pub. L. 108–136 substituted “(1) Except as provided in paragraph (2), each” for “Each”, redesignated former pars. (1) and (2) as subpars. (A) and (B) of par. (1), respectively, redesignated cls. (A) and (B) of former par. (2) as cls. (i) and (ii) of subpar. (B) of par. (1), respectively, and added par. (2).

2000—Subsec. (g). Pub. L. 106–398 amended subsec. (g) generally. Prior to amendment, subsec. (g) consisted of pars. (1) to (3) authorizing the head of an agency to enter into contracts for periods of not more than five years for certain types of services.

1997—Subsec. (h). Pub. L. 105–85 inserted “for the purchase of property” after “Multiyear contracting authority”.

1994—Subsec. (b). Pub. L. 103–355, §§4102(b), 8105(a), inserted at end “This subsection does not apply to a contract that is for an amount not greater than the simplified acquisition threshold or to a contract for the acquisition of commercial items.”

Subsec. (c). Pub. L. 103–355, §1021, struck out subsec. (c) which read as follows: “No cost contract, cost-plus-a-fixed-fee contract, or incentive contract may be made under this chapter unless the head of the agency determines that such a contract is likely to be less costly to the United States than any other kind of contract or that it is impracticable to obtain property or services of the kind or quality required except under such a contract.”

Subsec. (e)(2)(A). Pub. L. 103–355, §4401(c), substituted “simplified acquisition threshold” for “small purchase threshold”.

Subsec. (h). Pub. L. 103–355, §1022(b), amended subsec. (h) generally. Prior to amendment, subsec. (h) related to requirements for multiyear contracts for purchase of property, including weapon systems and items and services associated with weapons systems.

1991—Subsec. (e)(2)(A). Pub. L. 102–25 substituted “the small purchase threshold” for “the small purchase amount under section 2304(g) of this title”.

1990—Subsec. (h)(1). Pub. L. 101–510, §808(a), struck out “(other than contracts described in paragraph (6))” after “multiyear contracts” in introductory provisions and substituted “substantial savings of the total anticipated costs of carrying out the program through annual contracts” for “reduced total costs under the contract” in subpar. (A).

Subsec. (h)(6). Pub. L. 101–510, §808(b), struck out “contracts for the construction, alteration, or major repair of improvements to real property or” after “not apply to”.

Subsec. (h)(9). Pub. L. 101–510, §808(c)(1), inserted “for a defense acquisition program that has been specifically authorized by law to be carried out using multiyear contract authority” after “under this subsection” in introductory provisions.

Subsec. (h)(9)(C). Pub. L. 101–510, §808(c)(2), struck out subpar. (C) which read as follows: “The proposed multiyear contract—

“(i) achieves a 10 percent savings as compared to the cost of current negotiated contracts, adjusted for changes in quantity and for inflation; or

“(ii) achieves a 10 percent savings as compared to annual contracts if no recent contract experience exists.”

1989—Subsec. (h)(9) to (11). Pub. L. 101–189 added pars. (9) to (11).

1986—Pub. L. 99–500 and Pub. L. 99–591, §101(c) [§952(c)(1)], Pub. L. 99–661, §952(c)(1), amended section identically, striking out “: cost or pricing data: truth in negotiation” after “contracts” in section catchline.

Subsec. (f). Pub. L. 99–500 and Pub. L. 99–591, §101(c) [§952(b)(1)], Pub. L. 99–661, §952(b)(1), amended generally subsec. (f) identically, substituting provision that “truth-in-negotiations” provisions relating to cost and pricing data for contractors and subcontractors are provided in section 2306a of this title for provision relating to certification by contractors and subcontractors on cost and pricing data, circumstances under which such certification will be required, circumstances under which such certification, although not required, may be requested, and evaluation of the accuracy of the data submitted.

1985—Subsec. (a). Pub. L. 99–145, §1303(a)(15)(A), inserted a period at end.

Subsec. (b). Pub. L. 99–145, §1303(a)(15)(B), struck out “of this title” before “shall contain”.

1984—Pub. L. 98–369, §2724(f), substituted “Kinds of contracts; cost or pricing data: truth in negotiation” for “Kinds of contracts” in section catchline.

Subsec. (a). Pub. L. 98–369, §2724(a), substituted “the limitation in the preceding sentence, the other provisions of this section, and other applicable provisions of law, the head of an agency, in awarding contracts under this chapter after using procedures other than sealed-bid procedures, may enter into” for “this limitation and subject to subsections (b)–(f), the head of any agency may, in negotiating contracts under section 2304 of this title, make”.

Subsec. (b). Pub. L. 98–369, §2724(b), substituted “awarded under this chapter after using procedures other than sealed-bid procedures” for “negotiated under section 2304”.

Subsec. (c). Pub. L. 98–369, §2724(c), substituted “this chapter” for “section 2304 of this title,”.

Subsec. (e)(2). Pub. L. 98–369, §2724(d), substituted “the greater of (A) the small purchase amount under section 2304(g) of this title, or (B)” for “$25,000 or”.

Subsec. (f)(1). Pub. L. 98–369, §2724(e)(A)(i), (ii), substituted “such contractor's or subcontractor's” for “his” and struck out “he” before “submitted was accurate” in provisions preceding subpar. (A).

Subsec. (f)(1)(A). Pub. L. 98–369, §2724(3)(A)(iii), (vi), (vii), substituted “prime contract under this chapter entered into after using procedures other than sealed-bid procedures, if” for “negotiated prime contract under this title where”, “$100,000” for “$500,000”, and “before” for “prior to”.

Subsec. (f)(1)(B). Pub. L. 98–369, §2724(e)(A)(iv), (vi), (vii), substituted “if” for “for which”, “$100,000” for “$500,000”, and “before” for “prior to”.

Subsec. (f)(1)(C). Pub. L. 98–369, §2724(e)(A)(v)–(vii), substituted “when” for “where”, “$100,000” for “$500,000”, and “before” for “prior to”.

Subsec. (f)(1)(D). Pub. L. 98–369, §2724(e)(A)(iv), (vi), (vii), substituted “if” for “for which”, “$100,000” for “$500,000”, and “before” for “prior to”.

Subsec. (f)(2). Pub. L. 98–369, §2724(e)(B), (D), (E), struck out “negotiated” before “price as is practicable” and before “is based on adequate price competition”, redesignated as par. (3) the proviso formerly set out in this par., and as part of the redesignation substituted a period for “: Provided, That” after “or noncurrent”.

Subsec. (f)(3). Pub. L. 98–369, §2724(e)(E), designated as par. (3) the proviso formerly set out in par. (2). Former par. (3) redesignated (5).

Subsec. (f)(4). Pub. L. 98–369, §2724(e)(F), added par. (4).

Subsec. (f)(5). Pub. L. 98–369, §2724(e)(C), redesignated former par. (3) as (5) and substituted “proposal for the contract, the discussions conducted on the proposal” for “negotiation”.

1981—Subsec. (f)(1). Pub. L. 97–86, §907(b), substituted “$500,000” for “$100,000” in subpars. (A) to (D).

Subsec. (g)(1). Pub. L 97–86, §909(b)(1), struck out “to be performed outside the forty-eight contiguous States and the District of Columbia” after “(and items of supply related to such services)” in provisions preceding subpar. (A).

Subsec. (h). Pub. L. 97–86, §909(b)(2), added subsec. (h).

1980—Subsec. (f). Pub. L. 96–513, §511(77)(A), designated existing provisions as pars. (1) to (3) and in par. (1), as so designated, substituted “(A)” to “(D)” for “(1)” to “(4)”, respectively, “prior” for “Prior” wherever appearing, and “clause (C)” for “(3) above”.

Subsec. (g). Pub. L. 96–513, §511(77)(B), in par. (1) substituted “that—” for “that:”, in par. (2) substituted “(A) The” for “(A) the”, “(B) Consideration” for “(B) consideration”, and “(C) Consideration” for “(C) consideration”, and in par. (3) substituted “from—” for “from:”.

1968—Subsec. (f). Pub. L. 90–512 inserted last par.

Subsec. (g). Pub. L. 90–378 added subsec. (g).

1962—Subsec. (a). Pub. L. 87–653, §1(d), substituted “subsections (b)–(f)” for “subsections (b)–(e)”.

Subsec. (f). Pub. L. 87–653, §1(e), added subsec. (f).

Effective Date of 1994 Amendment

For effective date and applicability of amendment by Pub. L. 103–355, see section 10001 of Pub. L. 103–355, set out as a note under section 251 of Title 41, Public Contracts.

Effective Date of 1986 Amendment

Amendment by section 101(c) [title X, §952(b)(1)] of Pub. L. 99–500 and Pub. L. 99–591, and section 952(b)(1) of Pub. L. 99–661 applicable with respect to contracts or modifications on contracts entered into after end of 120-day period beginning Oct. 18, 1986, see section 101(c) of Pub. L. 99–500 and Pub. L. 99–591, and section 952(d) of Pub. L. 99–661, set out as a note under section 2306a of this title.

Effective Date of 1984 Amendment

Amendment by Pub. L. 98–369 applicable with respect to any solicitation for bids or proposals issued after Mar. 31, 1985, see section 2751 of Pub. L. 98–369, set out as a note under section 251 of Title 41, Public Contracts.

Effective Date of 1980 Amendment

Amendment by Pub. L. 96–513 effective Dec. 12, 1980, see section 701(b)(3) of Pub. L. 96–513, set out as a note under section 101 of this title.

Effective Date of 1962 Amendment

For effective date of amendment by Pub. L. 87–653 see section 1(h) of Pub. L. 87–653, set out as a note under section 2304 of this title.

Transition Provision

Section 805(c) of Pub. L. 101–189 provided that: “Subparagraph (C) of paragraph (9) of section 2306(h) of title 10, United States Code, as added by subsection (a), does not apply to programs that are under a multiyear contract on the date of the enactment of this Act [Nov. 29, 1989].”

Determination of Contract Type for Development Programs

Pub. L. 109–364, div. A, title VIII, §818(b)–(e), Oct. 17, 2006, 120 Stat. 2329, 2330, provided that:

“(b) Modification of Regulations.—Not later than 120 days after the date of the enactment of this Act [Oct. 17, 2006], the Secretary of Defense shall modify the regulations of the Department of Defense regarding the determination of contract type for development programs.

“(c) Elements.—As modified under subsection (b), the regulations shall require the Milestone Decision Authority for a major defense acquisition program to select the contract type for a development program at the time of a decision on Milestone B approval (or Key Decision Point B approval in the case of a space program) that is consistent with the level of program risk for the program. The Milestone Decision Authority may select—

“(1) a fixed-price type contract (including a fixed price incentive contract); or

“(2) a cost type contract.

“(d) Conditions With Respect to Authorization of Cost Type Contract.—As modified under subsection (b), the regulations shall provide that the Milestone Decision Authority may authorize the use of a cost type contract under subsection (c) for a development program only upon a written determination that—

“(1) the program is so complex and technically challenging that it would not be practicable to reduce program risk to a level that would permit the use of a fixed-price type contract; and

“(2) the complexity and technical challenge of the program is not the result of a failure to meet the requirements established in section 2366a of title 10, United States Code.

“(e) Justification for Selection of Contract Type.—As modified under subsection (b), the regulations shall require the Milestone Decision Authority to document the basis for the contract type selected for a program. The documentation shall include an explanation of the level of program risk for the program and, if the Milestone Decision Authority determines that the level of program risk is high, the steps that have been taken to reduce program risk and reasons for proceeding with Milestone B approval despite the high level of program risk.”

Multiyear Procurement Authority; Requests for Relief

Pub. L. 100–526, title I, §104(a), Oct. 24, 1988, 102 Stat. 2624, which provided that if for any fiscal year a multiyear contract was to be entered into under 10 U.S.C. 2306(h) was authorized by law for a particular procurement program and that authorization was subject to certain conditions established by law (including a condition as to cost savings to be achieved under the multiyear contract in comparison to specified other contracts) and if it appeared (after negotiations with contractors) that such savings could not be achieved, but that substantial savings could nevertheless be achieved through the use of a multiyear contract rather than specified other contracts, the President was to submit to Congress a request for relief from the specified cost savings that was to be achieved through multiyear contracting for that program and that any such request by the President was to include details about the request for a multiyear contract, including details about the negotiated contract terms and conditions, was repealed and restated as subsec. (h)(11) of this section by Pub. L. 101–189, §805(b), (c).

Technical Data and Computer Software Packages; Procurement; Contracting Period; Deferred Ordering Clause; Exemptions; Report to Congressional Committees; Definitions

Pub. L. 94–361, title VIII, §805, July 14, 1976, 90 Stat. 932, required that military contracts entered into during Oct. 1, 1976 to Sept. 30, 1978 for development or procurement of a major system include a deferred ordering clause with an option to purchase from the contractor technical data and computer software packages relating to the system, directed that such clause require such packages to be sufficiently detailed so as to enable procurement of such system or subsystem from another contractor, authorized that a particular contract may be exempted from the deferred ordering clause if the procuring authority reports to the House and Senate Committees on Armed Services his intent to so contract with an explanation for the exemption, and set out definitions for “major system”, “deferred ordering”, and “technical data”.

§2306a. Cost or pricing data: truth in negotiations

(a) Required Cost or Pricing Data and Certification.—(1) The head of an agency shall require offerors, contractors, and subcontractors to make cost or pricing data available as follows:

(A) An offeror for a prime contract under this chapter to be entered into using procedures other than sealed-bid procedures shall be required to submit cost or pricing data before the award of a contract if—

(i) in the case of a prime contract entered into after December 5, 1990, the price of the contract to the United States is expected to exceed $500,000; and

(ii) in the case of a prime contract entered into on or before December 5, 1990, the price of the contract to the United States is expected to exceed $100,000.


(B) The contractor for a prime contract under this chapter shall be required to submit cost or pricing data before the pricing of a change or modification to the contract if—

(i) in the case of a change or modification made to a prime contract referred to in subparagraph (A)(i), the price adjustment is expected to exceed $500,000;

(ii) in the case of a change or modification made after December 5, 1991, to a prime contract that was entered into on or before December 5, 1990, and that has been modified pursuant to paragraph (6), the price adjustment is expected to exceed $500,000; and

(iii) in the case of a change or modification not covered by clause (i) or (ii), the price adjustment is expected to exceed $100,000.


(C) An offeror for a subcontract (at any tier) of a contract under this chapter shall be required to submit cost or pricing data before the award of the subcontract if the prime contractor and each higher-tier subcontractor have been required to make available cost or pricing data under this section and—

(i) in the case of a subcontract under a prime contract referred to in subparagraph (A)(i), the price of the subcontract is expected to exceed $500,000;

(ii) in the case of a subcontract entered into after December 5, 1991, under a prime contract that was entered into on or before December 5, 1990, and that has been modified pursuant to paragraph (6), the price of the subcontract is expected to exceed $500,000; and

(iii) in the case of a subcontract not covered by clause (i) or (ii), the price of the subcontract is expected to exceed $100,000.


(D) The subcontractor for a subcontract covered by subparagraph (C) shall be required to submit cost or pricing data before the pricing of a change or modification to the subcontract if—

(i) in the case of a change or modification to a subcontract referred to in subparagraph (C)(i) or (C)(ii), the price adjustment is expected to exceed $500,000; and

(ii) in the case of a change or modification to a subcontract referred to in subparagraph (C)(iii), the price adjustment is expected to exceed $100,000.


(2) A person required, as an offeror, contractor, or subcontractor, to submit cost or pricing data under paragraph (1) (or required by the head of the agency concerned to submit such data under subsection (c)) shall be required to certify that, to the best of the person's knowledge and belief, the cost or pricing data submitted are accurate, complete, and current.

(3) Cost or pricing data required to be submitted under paragraph (1) (or under subsection (c)), and a certification required to be submitted under paragraph (2), shall be submitted—

(A) in the case of a submission by a prime contractor (or an offeror for a prime contract), to the contracting officer for the contract (or to a designated representative of the contracting officer); or

(B) in the case of a submission by a subcontractor (or an offeror for a subcontract), to the prime contractor.


(4) Except as provided under subsection (b), this section applies to contracts entered into by the head of an agency on behalf of a foreign government.

(5) A waiver of requirements for submission of certified cost or pricing data that is granted under subsection (b)(1)(C) in the case of a contract or subcontract does not waive the requirement under paragraph (1)(C) for submission of cost or pricing data in the case of subcontracts under that contract or subcontract unless the head of the procuring activity granting the waiver determines that the requirement under that paragraph should be waived in the case of such subcontracts and justifies in writing the reasons for the determination.

(6) Upon the request of a contractor that was required to submit cost or pricing data under paragraph (1) in connection with a prime contract entered into on or before December 5, 1990, the head of the agency that entered into such contract shall modify the contract to reflect subparagraphs (B)(ii) and (C)(ii) of paragraph (1). All such modifications shall be made without requiring consideration.

(7) Effective on October 1 of each year that is divisible by 5, each amount set forth in paragraph (1) shall be adjusted to the amount that is equal to the fiscal year 1994 constant dollar value of the amount set forth. Any amount, as so adjusted, that is not evenly divisible by $50,000 shall be rounded to the nearest multiple of $50,000. In the case of an amount that is evenly divisible by $25,000 but not evenly divisible by $50,000, the amount shall be rounded to the next higher multiple of $50,000.

(b) Exceptions.—

(1) In general.—Submission of certified cost or pricing data shall not be required under subsection (a) in the case of a contract, a subcontract, or modification of a contract or subcontract—

(A) for which the price agreed upon is based on—

(i) adequate price competition; or

(ii) prices set by law or regulation;


(B) for the acquisition of a commercial item; or

(C) in an exceptional case when the head of the procuring activity, without delegation, determines that the requirements of this section may be waived and justifies in writing the reasons for such determination.


(2) Modifications of contracts and subcontracts for commercial items.—In the case of a modification of a contract or subcontract for a commercial item that is not covered by the exception to the submission of certified cost or pricing data in paragraph (1)(A) or (1)(B), submission of certified cost or pricing data shall not be required under subsection (a) if—

(A) the contract or subcontract being modified is a contract or subcontract for which submission of certified cost or pricing data may not be required by reason of paragraph (1)(A) or (1)(B); and

(B) the modification would not change the contract or subcontract, as the case may be, from a contract or subcontract for the acquisition of a commercial item to a contract or subcontract for the acquisition of an item other than a commercial item.


(3) Noncommercial modifications of commercial items.—(A) The exception in paragraph (1)(B) does not apply to cost or pricing data on noncommercial modifications of a commercial item that are expected to cost, in the aggregate, more than $500,000 or 5 percent of the total price of the contract, whichever is greater.

(B) In this paragraph, the term “noncommercial modification”, with respect to a commercial item, means a modification of such item that is not a modification described in section 4(12)(C)(i) of the Office of Federal Procurement Policy Act (41 U.S.C. 403 (12)(C)(i)).

(C) Nothing in subparagraph (A) shall be construed—

(i) to limit the applicability of the exception in subparagraph (A) or (C) of paragraph (1) to cost or pricing data on a noncommercial modification of a commercial item; or

(ii) to require the submission of cost or pricing data on any aspect of an acquisition of a commercial item other than the cost and pricing of noncommercial modifications of such item.


(c) Cost or Pricing Data on Below-Threshold Contracts.—

(1) Authority to require submission.—Subject to paragraph (2), when certified cost or pricing data are not required to be submitted by subsection (a) for a contract, subcontract, or modification of a contract or subcontract, such data may nevertheless be required to be submitted by the head of the procuring activity, but only if the head of the procuring activity determines that such data are necessary for the evaluation by the agency of the reasonableness of the price of the contract, subcontract, or modification of a contract or subcontract. In any case in which the head of the procuring activity requires such data to be submitted under this subsection, the head of the procuring activity shall justify in writing the reason for such requirement.

(2) Exception.—The head of the procuring activity may not require certified cost or pricing data to be submitted under this paragraph for any contract or subcontract, or modification of a contract or subcontract, covered by the exceptions in subparagraph (A) or (B) of subsection (b)(1).

(3) Delegation of authority prohibited.—The head of a procuring activity may not delegate functions under this paragraph.


(d) Submission of Other Information.—

(1) Authority to require submission.—When certified cost or pricing data are not required to be submitted under this section for a contract, subcontract, or modification of a contract or subcontract, the contracting officer shall require submission of data other than certified cost or pricing data to the extent necessary to determine the reasonableness of the price of the contract, subcontract, or modification of the contract or subcontract. Except in the case of a contract or subcontract covered by the exceptions in subsection (b)(1)(A), the contracting officer shall require that the data submitted include, at a minimum, appropriate information on the prices at which the same item or similar items have previously been sold that is adequate for evaluating the reasonableness of the price for the procurement.

(2) Limitations on authority.—The Federal Acquisition Regulation shall include the following provisions regarding the types of information that contracting officers may require under paragraph (1):

(A) Reasonable limitations on requests for sales data relating to commercial items.

(B) A requirement that a contracting officer limit, to the maximum extent practicable, the scope of any request for information relating to commercial items from an offeror to only that information that is in the form regularly maintained by the offeror in commercial operations.

(C) A statement that any information received relating to commercial items that is exempt from disclosure under section 552(b) of title 5 shall not be disclosed by the Federal Government.


(e) Price Reductions for Defective Cost or Pricing Data.—(1)(A) A prime contract (or change or modification to a prime contract) under which a certificate under subsection (a)(2) is required shall contain a provision that the price of the contract to the United States, including profit or fee, shall be adjusted to exclude any significant amount by which it may be determined by the head of the agency that such price was increased because the contractor (or any subcontractor required to make available such a certificate) submitted defective cost or pricing data.

(B) For the purposes of this section, defective cost or pricing data are cost or pricing data which, as of the date of agreement on the price of the contract (or another date agreed upon between the parties), were inaccurate, incomplete, or noncurrent. If for purposes of the preceding sentence the parties agree upon a date other than the date of agreement on the price of the contract, the date agreed upon by the parties shall be as close to the date of agreement on the price of the contract as is practicable.

(2) In determining for purposes of a contract price adjustment under a contract provision required by paragraph (1) whether, and to what extent, a contract price was increased because the contractor (or a subcontractor) submitted defective cost or pricing data, it shall be a defense that the United States did not rely on the defective data submitted by the contractor or subcontractor.

(3) It is not a defense to an adjustment of the price of a contract under a contract provision required by paragraph (1) that—

(A) the price of the contract would not have been modified even if accurate, complete, and current cost or pricing data had been submitted by the contractor or subcontractor because the contractor or subcontractor—

(i) was the sole source of the property or services procured; or

(ii) otherwise was in a superior bargaining position with respect to the property or services procured;


(B) the contracting officer should have known that the cost and pricing data in issue were defective even though the contractor or subcontractor took no affirmative action to bring the character of the data to the attention of the contracting officer;

(C) the contract was based on an agreement between the contractor and the United States about the total cost of the contract and there was no agreement about the cost of each item procured under such contract; or

(D) the prime contractor or subcontractor did not submit a certification of cost and pricing data relating to the contract as required under subsection (a)(2).


(4)(A) A contractor shall be allowed to offset an amount against the amount of a contract price adjustment under a contract provision required by paragraph (1) if—

(i) the contractor certifies to the contracting officer (or to a designated representative of the contracting officer) that, to the best of the contractor's knowledge and belief, the contractor is entitled to the offset; and

(ii) the contractor proves that the cost or pricing data were available before the date of agreement on the price of the contract (or price of the modification) or, if applicable consistent with paragraph (1)(B), another date agreed upon between the parties, and that the data were not submitted as specified in subsection (a)(3) before such date.


(B) A contractor shall not be allowed to offset an amount otherwise authorized to be offset under subparagraph (A) if—

(i) the certification under subsection (a)(2) with respect to the cost or pricing data involved was known to be false when signed; or

(ii) the United States proves that, had the cost or pricing data referred to in subparagraph (A)(ii) been submitted to the United States before the date of agreement on the price of the contract (or price of the modification) or, if applicable consistent with paragraph (1)(B), another date agreed upon between the parties, the submission of such cost or pricing data would not have resulted in an increase in that price in the amount to be offset.


(f) Interest and Penalties for Certain Overpayments.—(1) If the United States makes an overpayment to a contractor under a contract subject to this section and the overpayment was due to the submission by the contractor of defective cost or pricing data, the contractor shall be liable to the United States—

(A) for interest on the amount of such overpayment, to be computed—

(i) for the period beginning on the date the overpayment was made to the contractor and ending on the date the contractor repays the amount of such overpayment to the United States; and

(ii) at the current rate prescribed by the Secretary of the Treasury under section 6621 of the Internal Revenue Code of 1986; and


(B) if the submission of such defective data was a knowing submission, for an additional amount equal to the amount of the overpayment.


(2) Any liability under this subsection of a contractor that submits cost or pricing data but refuses to submit the certification required by subsection (a)(2) with respect to the cost or pricing data shall not be affected by the refusal to submit such certification.

(g) Right of United States To Examine Contractor Records.—For the purpose of evaluating the accuracy, completeness, and currency of cost or pricing data required to be submitted by this section, the head of an agency shall have the authority provided by section 2313(a)(2) of this title.

(h) Definitions.—In this section:

(1) Cost or pricing data.—The term “cost or pricing data” means all facts that, as of the date of agreement on the price of a contract (or the price of a contract modification), or, if applicable consistent with subsection (e)(1)(B), another date agreed upon between the parties, a prudent buyer or seller would reasonably expect to affect price negotiations significantly. Such term does not include information that is judgmental, but does include the factual information from which a judgment was derived.

(2) Subcontract.—The term “subcontract” includes a transfer of commercial items between divisions, subsidiaries, or affiliates of a contractor or a subcontractor.

(3) Commercial item.—The term “commercial item” has the meaning provided such term in section 4(12) of the Office of Federal Procurement Policy Act (41 U.S.C. 403(12)).

(Added Pub. L. 99–500, §101(c) [title X, §952(a)], Oct. 18, 1986, 100 Stat. 1783–82, 1783–166, and Pub. L. 99–591, §101(c) [title X, §952(a)], Oct. 30, 1986, 100 Stat. 3341–82, 3341–166; Pub. L. 99–661, div. A, title IX, formerly title IV, §952(a), Nov. 14, 1986, 100 Stat. 3945, renumbered title IX, Pub. L. 100–26, §3(5), Apr. 21, 1987, 101 Stat. 273; amended Pub. L. 100–180, div. A, title VIII, §804(a), (b), Dec. 4, 1987, 101 Stat. 1125; Pub. L. 101–510, div. A, title VIII, §803(a)(1), (d), Nov. 5, 1990, 104 Stat. 1589, 1590; Pub. L. 102–25, title VII, §701(b), (f)(8), Apr. 6, 1991, 105 Stat. 113, 115; Pub. L. 102–190, div. A, title VIII, §804(a)–(c)(1), title X, §1061(a)(9), Dec. 5, 1991, 105 Stat. 1415, 1416, 1472; Pub. L. 103–355, title I, §§1201–1209, Oct. 13, 1994, 108 Stat. 3273–3277; Pub. L. 104–106, div. D, title XLII, §4201(a), title XLIII, §4321(a)(2), (b)(7), Feb. 10, 1996, 110 Stat. 649, 671, 672; Pub. L. 104–201, div. A, title X, §1074(a)(12), Sept. 23, 1996, 110 Stat. 2659; Pub. L. 105–85, div. A, title X, §1073(a)(46), Nov. 18, 1997, 111 Stat. 1902; Pub. L. 105–261, div. A, title VIII, §§805(a), 808(a), Oct. 17, 1998, 112 Stat. 2083, 2085; Pub. L. 108–375, div. A, title VIII, §818(a), Oct. 28, 2004, 118 Stat. 2015.)

References in Text

Section 6621 of the Internal Revenue Code of 1986, referred to in subsec. (f)(1)(A)(ii), is classified to section 6621 of Title 26, Internal Revenue Code.

Codification

Pub. L. 99–591 is a corrected version of Pub. L. 99–500.

Pub. L. 99–500, Pub. L. 99–591, and Pub. L. 99–661 added identical sections.

Amendments

2004—Subsec. (b)(3). Pub. L. 108–375 added par. (3).

1998—Subsec. (a)(5). Pub. L. 105–261, §805(a), amended par. (5) generally. Prior to amendment, par. (5) read as follows: “For purposes of paragraph (1)(C), a contractor or subcontractor granted a waiver under subsection (b)(1)(C) shall be considered as having been required to make available cost or pricing data under this section.”

Subsec. (d)(1). Pub. L. 105–261, §808(a), substituted “the contracting officer shall require that the data submitted” for “the data submitted shall”.

1997—Subsec. (a)(5). Pub. L. 105–85 substituted “subsection (b)(1)(C)” for “subsection (b)(1)(B)”.

1996—Subsec. (b). Pub. L. 104–106, §4321(a)(2), made technical correction to directory language of Pub. L. 103–355, §1202(a). See 1994 Amendment note below.

Pub. L. 104–106, §4201(a)(1), amended subsec. (b) generally, revising and restating as pars. (1) and (2) the provisions of former pars. (1) and (2) and striking out par. (3).

Subsec. (c). Pub. L. 104–106, §4201(a)(1), amended subsec. (c) generally, revising and restating as subsec. (c) the provisions of former subsec. (c)(1).

Subsec. (d). Pub. L. 104–106, §4321(b)(7)(A), which directed amendment of subsec. (d)(2)(A)(ii), by inserting “to” after “The information referred”, could not be executed because subsec. (d)(2)(A) did not contain a cl. (ii) or the language “The information referred” subsequent to amendment by Pub. L. 104–106, §4201(a)(1). See below.

Pub. L. 104–106, §4201(a)(1), amended subsec. (d) generally, revising and restating as pars. (1) and (2) provisions of former subsecs. (c)(2) and (d)(2), (4) and striking out provisions of former subsec. (d)(1), (3) relating to procurements based on adequate price competition and authority to audit.

Subsec. (e)(4)(B)(ii). Pub. L. 104–106, §4321(b)(7)(B), struck out second comma after “parties”.

Subsec. (h). Pub. L. 104–106, §4201(a)(2), redesignated subsec. (i) as (h) and struck out former subsec. (h) which read as follows: “Required Regulations.—The Federal Acquisition Regulation shall contain provisions concerning the types of information that offerors must submit for a contracting officer to consider in determining whether the price of a procurement to the Government is fair and reasonable when certified cost or pricing data are not required to be submitted under this section because the price of the procurement to the United States is not expected to exceed the applicable threshold amount set forth in subsection (a) (as adjusted pursuant to paragraph (7) of such subsection). Such information, at a minimum, shall include appropriate information on the prices at which the same item or similar items have previously been sold that is adequate for evaluating the reasonableness of the price of the proposed contract or subcontract for the procurement.”

Subsec. (h)(3). Pub. L. 104–201 inserted “(41 U.S.C. 403(12))” before period at end.

Subsec. (i). Pub. L. 104–106, §4201(a)(2)(B), redesignated subsec. (i) as (h).

Subsec. (i)(3). Pub. L. 104–106, §4321(b)(7)(C), which directed amendment of subsec. (i)(3) by inserting “(41 U.S.C. 403(12))” before period at end, could not be executed because section did not contain a subsec. (i) subsequent to the amendment by Pub. L. 104–106, §4201(a)(2)(B), redesignating subsec. (i) as (h). See above.

1994—Subsec. (a)(1)(A)(i). Pub. L. 103–355, §1201(a)(1), struck out “and before January 1, 1996,” after “December 5, 1990,”.

Subsec. (a)(1)(A)(ii). Pub. L. 103–355, §1201(a)(2), struck out “or after December 31, 1995,” after “December 5, 1990,”.

Subsec. (a)(5). Pub. L. 103–355, §1202(b), substituted “subsection (b)(1)(B)” for “subsection (b)(2)”.

Subsec. (a)(6). Pub. L. 103–355, §1201(c), struck out subpar. (A) designation and subpar. (B) which read as follows: “The head of an agency is not required to modify a contract under subparagraph (A) if that head of an agency determines that the submission of cost or pricing data with respect to that contract should be required under subsection (c).”

Subsec. (a)(7). Pub. L. 103–355, §1201(b), added par. (7).

Subsec. (b). Pub. L. 103–355, §1202(a), as amended by Pub. L. 104–106, §4321(a)(2), amended heading and text of subsec. (b) generally. Prior to amendment, text read as follows: “This section need not be applied to a contract or subcontract—

“(1) for which the price agreed upon is based on—

“(A) adequate price competition;

“(B) established catalog or market prices of commercial items sold in substantial quantities to the general public; or

“(C) prices set by law or regulation; or

“(2) in an exceptional case when the head of the agency determines that the requirements of this section may be waived and states in writing his reasons for such determination.”

Subsec. (c). Pub. L. 103–355, §1203, amended heading and text of subsec. (c) generally. Prior to amendment, text read as follows: “When cost or pricing data are not required to be submitted by subsection (a), such data may nevertheless be required to be submitted by the head of the agency if the head of the agency determines that such data are necessary for the evaluation by the agency of the reasonableness of the price of the contract or subcontract. In any case in which the head of the agency requires such data to be submitted under this subsection, the head of the agency shall document in writing the reasons for such requirement.”

Subsec. (d). Pub. L. 103–355, §1204, added subsec. (d) and redesignated former subsec. (d) as (e).

Subsec. (e). Pub. L. 103–355, §1204(1), redesignated subsec. (d) as (e). Former subsec. (e) redesignated (f).

Subsec. (e)(4)(A)(ii), (B)(ii). Pub. L. 103–355, §1207, inserted “or, if applicable consistent with paragraph (1)(B), another date agreed upon between the parties,” after “(or price of the modification)”.

Subsec. (f). Pub. L. 103–355, §1204(1), redesignated subsec. (e) as (f). Former subsec. (f) redesignated (g).

Subsec. (f)(1). Pub. L. 103–355, §1209, struck out “with the Department of Defense” before “subject to this section” in introductory provisions.

Subsec. (g). Pub. L. 103–355, §1205, added subsec. (g) and struck out heading and text of former subsec. (g). Text read as follows:

“(1) For the purpose of evaluating the accuracy, completeness, and currency of cost or pricing data required to be submitted by this section with respect to a contract or subcontract, the head of the agency, acting through any authorized representative of the head of the agency who is an employee of the United States or a member of the armed forces, shall have the right to examine all records of the contractor or subcontractor related to—

“(A) the proposal for the contract or subcontract;

“(B) the discussions conducted on the proposal;

“(C) pricing of the contract or subcontract; or

“(D) performance of the contract or subcontract.

“(2) The right of the head of an agency under paragraph (1) shall expire three years after final payment under the contract or subcontract.

“(3) In this subsection, the term ‘records’ includes books, documents, and other data.”

Pub. L. 103–355, §1204(1), redesignated subsec. (f) as (g). Former subsec. (g) redesignated (i).

Subsec. (h). Pub. L. 103–355, §1206, added subsec. (h).

Subsec. (i). Pub. L. 103–355, §1208, amended heading and text of subsec. (i) generally. Prior to amendment, text read as follows: “In this section, the term ‘cost or pricing data’ means all facts that, as of the date of agreement on the price of a contract (or the price of a contract modification), a prudent buyer or seller would reasonably expect to affect price negotiations significantly. Such term does not include information that is judgmental, but does include the factual information from which a judgment was derived.”

Pub. L. 103–355, §1204(1), redesignated subsec. (g) as (i).

1991—Subsec. (a)(1)(A). Pub. L. 102–190, §804(a), amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “An offeror for a prime contract under this chapter to be entered into using procedures other than sealed-bid procedures shall be required to submit cost or pricing data before the award of the contract if the price of the contract to the United States is expected to exceed $500,000 or, in the case of a contract to be awarded after December 31, 1995, $100,000.”

Subsec. (a)(1)(B). Pub. L. 102–190, §804(a), amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “The contractor for a contract under this chapter shall be required to submit cost or pricing data before the pricing of a change or modification to the contract if the price adjustment is expected to exceed the dollar amount applicable under subparagraph (A) to that contract (or such lesser amount as may be prescribed by the head of the agency).”

Pub. L. 102–25, §701(b)(1), substituted “the dollar amount applicable under subparagraph (A) to that contract” for “$500,000 (or such lesser amount as may be prescribed by the head of the agency) or, in the case of a change or modification to a contract to be made after December 31, 1995, $100,000”.

Subsec. (a)(1)(C). Pub. L. 102–190, §804(a), amended subpar. (C) generally. Prior to amendment, subpar. (C) read as follows: “An offeror for a subcontract (at any tier) of a contract under this chapter shall be required to submit cost or pricing data before the award of the subcontract if—

“(i) the price of the subcontract is expected to exceed the dollar amount applicable under subparagraph (A) to the prime contract of that subcontract; and

“(ii) the prime contractor and each higher-tier subcontractor have been required to make available cost or pricing data under this section.”

Subsec. (a)(1)(C)(i). Pub. L. 102–25, §701(b)(2), substituted “the dollar amount applicable under subparagraph (A) to the prime contract of that subcontract” for “$500,000 or, in the case of a subcontract to be awarded after December 31, 1995, $100,000”.

Subsec. (a)(1)(D). Pub. L. 102–190, §804(a), amended subpar. (D) generally. Prior to amendment, subpar. (D) read as follows: “The subcontractor for a subcontract covered by subparagraph (C) shall be required to submit cost or pricing data before the pricing of a change or modification to the subcontract if the price adjustment is expected to exceed the dollar amount applicable under subparagraph (A) to the prime contract of that subcontract (or such lesser amount as may be prescribed by the head of the agency).”

Pub. L. 102–25, §701(b)(3), substituted “the dollar amount applicable under subparagraph (A) to the prime contract of that subcontract” for “$500,000 (or such lesser amount as may be prescribed by the head of the agency) or, in the case of a change or modification to be made after December 31, 1995, $100,000”.

Subsec. (a)(5). Pub. L. 102–190, §804(c)(1), substituted “paragraph (1)(C)” for “paragraph (1)(C)(ii)”.

Subsec. (a)(6). Pub. L. 102–190, §804(b), added par. (6).

Subsec. (e)(1)(A)(i). Pub. L. 102–25, §701(f)(8), which directed the substitution of “Internal Revenue Code of 1986” for “Internal Revenue Code of 1954”, could not be executed because “Internal Revenue Code of 1954” does not appear.

Subsec. (e)(1)(A)(ii). Pub. L. 102–190, §1061(a)(9), substituted “Internal Revenue Code of 1986” for “Internal Revenue Code of 1954”.

1990—Subsec. (a)(1)(A). Pub. L. 101–510, §803(a)(1)(A), substituted “$500,000 or, in the case of a contract to be awarded after December 31, 1995, $100,000” for “$100,000”.

Subsec. (a)(1)(B). Pub. L. 101–510, §803(a)(1)(B), substituted “$500,000 (or such lesser amount as may be prescribed by the head of the agency) or, in the case of a change or modification to a contract to be made after December 31, 1995, $100,000” for “$100,000”.

Subsec. (a)(1)(C)(i). Pub. L. 101–510, §803(a)(1)(C), substituted “$500,000 or, in the case of a subcontract to be awarded after December 31, 1995, $100,000” for “$100,000”.

Subsec. (a)(1)(D). Pub. L. 101–510, §803(a)(1)(D), substituted “$500,000 (or such lesser amount as may be prescribed by the head of the agency) or, in the case of a change or modification to be made after December 31, 1995, $100,000” for “$100,000”.

Subsec. (c). Pub. L. 101–510, §803(d), inserted at end “In any case in which the head of the agency requires such data to be submitted under this subsection, the head of the agency shall document in writing the reasons for such requirement.”

1987—Subsec. (a)(5). Pub. L. 100–180, §804(b)(1), substituted “a waiver under subsection (b)(2)” for “such a waiver”, and struck out first sentence authorizing head of an agency to waive requirement under this subsection for contractor, subcontractor, or offeror to submit cost or pricing data.

Subsec. (e)(2). Pub. L. 100–180, §804(b)(2), amended par. (2) generally. Prior to amendment, par. (2) read as follows: “Except as provided under subsection (d), the liability of a contractor under this subsection shall not be affected by the contractor's refusal to submit a certification under subsection (a)(2) with respect to the cost or pricing data involved.”

Subsec. (g). Pub. L. 100–180, §804(a), amended subsec. (g) generally. Prior to amendment, subsec. (g) read as follows: “In this section, the term ‘cost or pricing data’ means all information that is verifiable and that, as of the date of agreement on the price of a contract (or the price of a contract modification), a prudent buyer or seller would reasonably expect to affect price negotiations significantly. Such term does not include information that is judgmental, but does include the factual information from which a judgment was derived.”

Effective Date of 2004 Amendment

Pub. L. 108–375, div. A, title VIII, §818(b), Oct. 28, 2004, 118 Stat. 2016, as amended by Pub. L. 109–364, div. A, title X, §1071(g)(11), Oct. 17, 2006, 120 Stat. 2403, provided that: “Paragraph (3) of subsection (b) of section 2306a of title 10, United States Code (as added by subsection (a)), shall take effect on June 1, 2005, and shall apply with respect to offers submitted, and to modifications of contracts or subcontracts made, on or after that date.”

Effective Date of 1996 Amendment

For effective date and applicability of amendment by sections 4201(a) and 4321(b)(7) of Pub. L. 104–106, see section 4401 of Pub. L. 104–106, set out as a note under section 251 of Title 41, Public Contracts.

Section 4321(a) of Pub. L. 104–106 provided that the amendment made by that section is effective as of Oct. 13, 1994, and as if included in Pub. L. 103–355 as enacted.

Effective Date of 1994 Amendment

For effective date and applicability of amendment by Pub. L. 103–355, see section 10001 of Pub. L. 103–355, set out as a note under section 251 of Title 41, Public Contracts.

Effective Date of 1990 Amendment

Section 803(a)(2) of Pub. L. 101–510, as amended by Pub. L. 102–25, title VII, §704(a)(4), Apr. 6, 1991, 105 Stat. 118, provided that the amendments to this section by Pub. L. 101–510 would apply to contracts entered into after Dec. 5, 1990, subcontracts under such contracts, and modifications or changes to such contracts and subcontracts, prior to repeal by Pub. L. 102–190, div. A, title VIII, §804(c)(2), Dec. 5, 1991, 105 Stat. 1416.

Effective Date of 1987 Amendment

Section 804(c) of Pub. L. 100–180 provided that:

“(1) Subsection (a) [amending this section] shall apply to any contract, or modification of a contract, entered into after the end of the 30-day period beginning on the date of the enactment of this Act [Dec. 4, 1987].

“(2) The amendments made by subsection (b) [amending this section] shall apply with respect to contracts, or modifications of contracts, entered into after the end of the 120-day period beginning on October 18, 1986.”

Effective Date of 1986 Amendment

Section 101(c) [title X, §952(d)] of Pub. L. 99–500 and Pub. L. 99–591, and section 952(d) of title IX, formerly title IV, of Pub. L. 99–661, renumbered title IX, Pub. L. 100–26, §3(5), Apr. 21, 1987, 101 Stat. 273, provided that:

“(1) Except as provided in paragraph (2), section 2306a of title 10, United States Code (as added by subsection (a)), and the amendment and repeal made by subsection (b) [amending section 2306 of this title and repealing a provision set out as a note under section 2304 of this title], shall apply with respect to contracts or modifications on contracts entered into after the end of the 120-day period beginning on the date of the enactment of this Act [Oct. 18, 1986].

“(2) Subsection (e) of such section shall apply with respect to contracts or modifications on contracts entered into after November 7, 1985.”

Regulations

Section 803(c) of Pub. L. 101–510, directed Secretary of Defense to prescribe regulations identifying type of procurements for which contracting officers should consider requiring submission of certified cost or pricing data under subsec. (c) of this section, and also directed Secretary to prescribe regulations concerning types of information that offerors had to submit for contracting officer to consider in determining whether price of procurement to Government was fair and reasonable when certified cost or pricing data were not required to be submitted under this section because price of procurement to the United States was not expected to exceed $500,000, such information, at minimum, to include appropriate information on prices at which such offeror had previously sold same or similar products, with such regulations to be prescribed not later than six months after Nov. 5, 1990, prior to repeal by Pub. L. 103–355, title I, §1210, Oct. 13, 1994, 108 Stat. 3277.

Grants of Exceptions to Cost or Pricing Data Certification Requirements and Waivers of Cost Accounting Standards

Pub. L. 107–314, div. A, title VIII, §817, Dec. 2, 2002, 116 Stat. 2610, provided that:

“(a) Guidance for Exceptions in Exceptional Circumstances.—Not later than 60 days after the date of the enactment of this Act [Dec. 2, 2002], the Secretary of Defense shall issue guidance on the circumstances under which it is appropriate to grant an exceptional case exception or waiver with respect to certified cost and pricing data and cost accounting standards.

“(b) Determination Required for Exceptional Case Exception or Waiver.—The guidance shall, at a minimum, include a limitation that a grant of an exceptional case exception or waiver is appropriate with respect to a contract, subcontract, or (in the case of submission of certified cost and pricing data) modification only upon a determination that—

“(1) the property or services cannot reasonably be obtained under the contract, subcontract, or modification, as the case may be, without the grant of the exception or waiver;

“(2) the price can be determined to be fair and reasonable without the submission of certified cost and pricing data or the application of cost accounting standards, as the case may be; and

“(3) there are demonstrated benefits to granting the exception or waiver.

“(c) Applicability of New Guidance.—The guidance issued under subsection (a) shall apply to each exceptional case exception or waiver that is granted on or after the date on which the guidance is issued.

“(d) Annual Report on Both Commercial Item and Exceptional Case Exceptions and Waivers With Price or Value Greater Than $15,000,000.—(1) The Secretary of Defense shall transmit to the congressional defense committees [Committees on Armed Services and Appropriations of the Senate and the House of Representatives] promptly after the end of each fiscal year a report on commercial item exceptions, and exceptional case exceptions and waivers, described in paragraph (2) that were granted during that fiscal year.

“(2) The report for a fiscal year shall include—

“(A) with respect to any commercial item exception granted in the case of a contract, subcontract, or contract or subcontract modification that is expected to have a price of $15,000,000 or more, an explanation of the basis for the determination that the products or services to be purchased are commercial items, including an identification of the specific steps taken to ensure price reasonableness; and

“(B) with respect to any exceptional case exception or waiver granted in the case of a contract or subcontract that is expected to have a value of $15,000,000 or more, an explanation of the basis for the determination described in subsection (b), including an identification of the specific steps taken to ensure that the price was fair and reasonable.

“(e) Definitions.—In this section:

“(1) The term ‘exceptional case exception or waiver’ means either of the following:

“(A) An exception pursuant to section 2306a (b)(1)(C) of title 10, United States Code, relating to submission of certified cost and pricing data.

“(B) A waiver pursuant to section 26(f)(5)(B) of the Office of Federal Procurement Policy Act (41 U.S.C. 422(f)(5)(B)), relating to the applicability of cost accounting standards to contracts and subcontracts.

“(2) The term ‘commercial item exception’ means an exception pursuant to section 2306a(b)(1)(B) of title 10, United States Code, relating to submission of certified cost and pricing data.”

Defense Commercial Pricing Management Improvement

Pub. L. 105–261, div. A, title VIII, §803, Oct. 17, 1998, 112 Stat. 2081, as amended by Pub. L. 106–65, div. A, title X, §1067(3), Oct. 5, 1999, 113 Stat. 774; Pub. L. 107–314, div. A, title VIII, §823, Dec. 2, 2002, 116 Stat. 2615; Pub. L. 109–364, div. A, title VIII, §819, Oct. 17, 2006, 120 Stat. 2330, provided that:

“(a) Modification of Pricing Regulations for Certain Commercial Items Exempt From Cost or Pricing Data Certification Requirements.—(1) The Federal Acquisition Regulation issued in accordance with sections 6 and 25 of the Office of Federal Procurement Policy Act (41 U.S.C. 405, 421) shall be revised to clarify the procedures and methods to be used for determining the reasonableness of prices of exempt commercial items (as defined in subsection (d)).

“(2) The regulations shall, at a minimum, provide specific guidance on—

“(A) the appropriate application and precedence of such price analysis tools as catalog-based pricing, market-based pricing, historical pricing, parametric pricing, and value analysis;

“(B) the circumstances under which contracting officers should require offerors of exempt commercial items to provide—

“(i) information on prices at which the offeror has previously sold the same or similar items; or

“(ii) other information other than certified cost or pricing data;

“(C) the role and responsibility of Department of Defense support organizations in procedures for determining price reasonableness; and

“(D) the meaning and appropriate application of the term ‘purposes other than governmental purposes’ in section 4(12) of the Office of Federal Procurement Policy Act (41 U.S.C. 403(12)).

“(3) This subsection shall cease to be effective 1 year after the date on which final regulations prescribed pursuant to paragraph (1) take effect.

“(b) Unified Management of Procurement of Exempt Commercial Items.—The Secretary of Defense shall develop and implement procedures to ensure that, whenever appropriate, a single item manager or contracting officer is responsible for negotiating and entering into all contracts from a single contractor for the procurement of exempt commercial items or for the procurement of items in a category of exempt commercial items.

“(c) Commercial Price Trend Analysis.—(1) The Secretary of Defense shall develop and implement procedures that, to the maximum extent that is practicable and consistent with the efficient operation of the Department of Defense, provide for the collection and analysis of information on price trends for categories of exempt commercial items described in paragraph (2).

“(2) A category of exempt commercial items referred to in paragraph (1) consists of exempt commercial items—

“(A) that are in a single Federal Supply Group or Federal Supply Class, are provided by a single contractor, or are otherwise logically grouped for the purpose of analyzing information on price trends; and

“(B) for which there is a potential for the price paid to be significantly higher (on a percentage basis) than the prices previously paid in procurements of the same or similar items for the Department of Defense, as determined by the head of the procuring Department of Defense agency or the Secretary of the procuring military department on the basis of criteria prescribed by the Secretary of Defense.

“(3) The head of a Department of Defense agency or the Secretary of a military department shall take appropriate action to address any unreasonable escalation in prices being paid for items procured by that agency or military department as identified in an analysis conducted pursuant to paragraph (1).

“(4) Not later than April 1 of each of fiscal years 2000 through 2009, the Secretary of Defense shall submit to the Committee on Armed Services of the Senate and the Committee on Armed Services of the House of Representatives a report on the analyses of price trends that were conducted by the Secretary of each military department and the Director of the Defense Logistics Agency for categories of exempt commercial items during the preceding fiscal year under the procedures prescribed pursuant to paragraph (1). The report shall include a description of the actions taken by each Secretary and the Director to identify and address any unreasonable price escalation for the categories of items.

“(d) Exempt Commercial Items Defined.—For the purposes of this section, the term ‘exempt commercial item’ means a commercial item that is exempt under subsection (b)(1)(B) of section 2306a of title 10, United States Code, or subsection (b)(1)(B) of section 304A of the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 254b), from the requirements for submission of certified cost or pricing data under that section.”

Review by Inspector General

Section 803(b) of Pub. L. 101–510 provided that (1) after increase in threshold for submission of cost or pricing data under subsec. (a) of this section, as amended by section 803(a) of Pub. L. 101–510, had been in effect for three years, Inspector General of Department of Defense was to conduct review of effects of increase in threshold, (2) that such review was to address whether increasing threshold improved acquisition process in terms of reduced paperwork, financial or other savings to government, an increase in number of contractors participating in defense contracting process, and adequacy of information available to contracting officers in cases in which certified cost or pricing data were not required under this section, (3) that Inspector General was to submit to Secretary of Defense a report on review conducted under paragraph (1), with Secretary of Defense required to submit such report to Congress, along with appropriate comments, upon completion of report (and comments) but not later than date on which President submitted budget to Congress pursuant to section 1105 of Title 31, Money and Finance, for fiscal year 1996, prior to repeal by Pub. L. 103–355, title I, §1210, Oct. 13, 1994, 108 Stat. 3277.

§2306b. Multiyear contracts: acquisition of property

(a) In General.—To the extent that funds are otherwise available for obligation, the head of an agency may enter into multiyear contracts for the purchase of property whenever the head of that agency finds each of the following:

(1) That the use of such a contract will result in substantial savings of the total anticipated costs of carrying out the program through annual contracts.

(2) That the minimum need for the property to be purchased is expected to remain substantially unchanged during the contemplated contract period in terms of production rate, procurement rate, and total quantities.

(3) That there is a reasonable expectation that throughout the contemplated contract period the head of the agency will request funding for the contract at the level required to avoid contract cancellation.

(4) That there is a stable design for the property to be acquired and that the technical risks associated with such property are not excessive.

(5) That the estimates of both the cost of the contract and the anticipated cost avoidance through the use of a multiyear contract are realistic.

(6) In the case of a purchase by the Department of Defense, that the use of such a contract will promote the national security of the United States.


(b) Regulations.—(1) Each official named in paragraph (2) shall prescribe acquisition regulations for the agency or agencies under the jurisdiction of such official to promote the use of multiyear contracting as authorized by subsection (a) in a manner that will allow the most efficient use of multiyear contracting.

(2)(A) The Secretary of Defense shall prescribe the regulations applicable to the Department of Defense.

(B) The Secretary of Homeland Security shall prescribe the regulations applicable to the Coast Guard, except that the regulations prescribed by the Secretary of Defense shall apply to the Coast Guard when it is operating as a service in the Navy.

(C) The Administrator of the National Aeronautics and Space Administration shall prescribe the regulations applicable to the National Aeronautics and Space Administration.

(c) Contract Cancellations.—The regulations may provide for cancellation provisions in multiyear contracts to the extent that such provisions are necessary and in the best interests of the United States. The cancellation provisions may include consideration of both recurring and nonrecurring costs of the contractor associated with the production of the items to be delivered under the contract.

(d) Participation by Subcontractors, Vendors, and Suppliers.—In order to broaden the defense industrial base, the regulations shall provide that, to the extent practicable—

(1) multiyear contracting under subsection (a) shall be used in such a manner as to seek, retain, and promote the use under such contracts of companies that are subcontractors, vendors, or suppliers; and

(2) upon accrual of any payment or other benefit under such a multiyear contract to any subcontractor, vendor, or supplier company participating in such contract, such payment or benefit shall be delivered to such company in the most expeditious manner practicable.


(e) Protection of Existing Authority.—The regulations shall provide that, to the extent practicable, the administration of this section, and of the regulations prescribed under this section, shall not be carried out in a manner to preclude or curtail the existing ability of an agency—

(1) to provide for competition in the production of items to be delivered under such a contract; or

(2) to provide for termination of a prime contract the performance of which is deficient with respect to cost, quality, or schedule.


(f) Cancellation or Termination for Insufficient Funding.—In the event funds are not made available for the continuation of a contract made under this section into a subsequent fiscal year, the contract shall be canceled or terminated. The costs of cancellation or termination may be paid from—

(1) appropriations originally available for the performance of the contract concerned;

(2) appropriations currently available for procurement of the type of property concerned, and not otherwise obligated; or

(3) funds appropriated for those payments.


(g) Contract Cancellation Ceilings Exceeding $100,000,000.—(1) Before any contract described in subsection (a) that contains a clause setting forth a cancellation ceiling in excess of $100,000,000 may be awarded, the head of the agency concerned shall give written notification of the proposed contract and of the proposed cancellation ceiling for that contract to the congressional defense committees, and such contract may not then be awarded until the end of a period of 30 days beginning on the date of such notification.

(2) In the case of a contract described in subsection (a) with a cancellation ceiling described in paragraph (1), if the budget for the contract does not include proposed funding for the costs of contract cancellation up to the cancellation ceiling established in the contract, the head of the agency concerned shall, as part of the certification required by subsection (i)(1)(A), give written notification to the congressional defense committees of—

(A) the cancellation ceiling amounts planned for each program year in the proposed multiyear procurement contract, together with the reasons for the amounts planned;

(B) the extent to which costs of contract cancellation are not included in the budget for the contract; and

(C) a financial risk assessment of not including budgeting for costs of contract cancellation.


(h) Defense Acquisitions of Weapon Systems.—In the case of the Department of Defense, the authority under subsection (a) includes authority to enter into the following multiyear contracts in accordance with this section:

(1) A multiyear contract for the purchase of a weapon system, items and services associated with a weapon system, and logistics support for a weapon system.

(2) A multiyear contract for advance procurement of components, parts, and materials necessary to the manufacture of a weapon system, including a multiyear contract for such advance procurement that is entered into in order to achieve economic-lot purchases and more efficient production rates.


(i) Defense Acquisitions Specifically Authorized by Law.—(1) A multiyear contract may not be entered into for any fiscal year under this section for a defense acquisition program that has been specifically authorized by law to be carried out using multiyear contract authority unless each of the following conditions is satisfied:

(A) The Secretary of Defense certifies to Congress that the current future-years defense program fully funds the support costs associated with the multiyear program.

(B) The proposed multiyear contract provides for production at not less than minimum economic rates given the existing tooling and facilities.


(2) If for any fiscal year a multiyear contract to be entered into under this section is authorized by law for a particular procurement program and that authorization is subject to certain conditions established by law (including a condition as to cost savings to be achieved under the multiyear contract in comparison to specified other contracts) and if it appears (after negotiations with contractors) that such savings cannot be achieved, but that substantial savings could nevertheless be achieved through the use of a multiyear contract rather than specified other contracts, the President may submit to Congress a request for relief from the specified cost savings that must be achieved through multiyear contracting for that program. Any such request by the President shall include details about the request for a multiyear contract, including details about the negotiated contract terms and conditions.

(3) In the case of the Department of Defense, a multiyear contract in an amount equal to or greater than $500,000,000 may not be entered into for any fiscal year under this section unless the contract is specifically authorized by law in an Act other than an appropriations Act.

(4)(A) The Secretary of Defense may obligate funds for procurement of an end item under a multiyear contract for the purchase of property only for procurement of a complete and usable end item.

(B) The Secretary of Defense may obligate funds appropriated for any fiscal year for advance procurement under a contract for the purchase of property only for the procurement of those long-lead items necessary in order to meet a planned delivery schedule for complete major end items that are programmed under the contract to be acquired with funds appropriated for a subsequent fiscal year (including an economic order quantity of such long-lead items when authorized by law).

(j) Defense Contract Options for Varying Quantities.—The Secretary of Defense may instruct the Secretary of the military department concerned to incorporate into a proposed multiyear contract negotiated priced options for varying the quantities of end items to be procured over the period of the contract.

(k) Multiyear Contract Defined.—For the purposes of this section, a multiyear contract is a contract for the purchase of property for more than one, but not more than five, program years. Such a contract may provide that performance under the contract during the second and subsequent years of the contract is contingent upon the appropriation of funds and (if it does so provide) may provide for a cancellation payment to be made to the contractor if such appropriations are not made.

(l) Various Additional Requirements With Respect to Multiyear Defense Contracts.—(1)(A) The head of an agency may not initiate a contract described in subparagraph (B) unless the congressional defense committees are notified of the proposed contract at least 30 days in advance of the award of the proposed contract.

(B) Subparagraph (A) applies to the following contracts:

(i) A multiyear contract—

(I) that employs economic order quantity procurement in excess of $20,000,000 in any one year of the contract; or

(II) that includes an unfunded contingent liability in excess of $20,000,000.


(ii) Any contract for advance procurement leading to a multiyear contract that employs economic order quantity procurement in excess of $20,000,000 in any one year.


(2) The head of an agency may not initiate a multiyear contract for which the economic order quantity advance procurement is not funded at least to the limits of the Government's liability.

(3) The head of an agency may not initiate a multiyear procurement contract for any system (or component thereof) if the value of the multiyear contract would exceed $500,000,000 unless authority for the contract is specifically provided in an appropriations Act.

(4) Not later than the date of the submission of the President's budget request under section 1105 of title 31, the Secretary of Defense shall submit a report to the congressional defense committees each year, providing the following information with respect to each multiyear contract (and each extension of an existing multiyear contract) entered into, or planned to be entered into, by the head of an agency during the current or preceding year, shown for each year in the current future-years defense program and in the aggregate over the period of the current future-years defense program:

(A) The amount of total obligational authority under the contract (or contract extension) and the percentage that such amount represents of—

(i) the applicable procurement account; and

(ii) the agency procurement total.


(B) The amount of total obligational authority under all multiyear procurements of the agency concerned (determined without regard to the amount of the multiyear contract (or contract extension)) under multiyear contracts in effect at the time the report is submitted and the percentage that such amount represents of—

(i) the applicable procurement account; and

(ii) the agency procurement total.


(C) The amount equal to the sum of the amounts under subparagraphs (A) and (B), and the percentage that such amount represents of—

(i) the applicable procurement account; and

(ii) the agency procurement total.


(D) The amount of total obligational authority under all Department of Defense multiyear procurements (determined without regard to the amount of the multiyear contract (or contract extension)), including any multiyear contract (or contract extension) that has been authorized by the Congress but not yet entered into, and the percentage that such amount represents of the procurement accounts of the Department of Defense treated in the aggregate.


(5) The head of an agency may not enter into a multiyear contract (or extend an existing multiyear contract), the value of which would exceed $500,000,000 (when entered into or when extended, as the case may be), until the Secretary of Defense submits to the congressional defense committees a report containing the information described in paragraph (4) with respect to the contract (or contract extension).

(6) The head of an agency may not terminate a multiyear procurement contract until 10 days after the date on which notice of the proposed termination is provided to the congressional defense committees.

(7) The execution of multiyear contracting authority shall require the use of a present value analysis to determine lowest cost compared to an annual procurement.

(8) This subsection does not apply to the National Aeronautics and Space Administration or to the Coast Guard.

(9) In this subsection:

(A) The term “applicable procurement account” means, with respect to a multiyear procurement contract (or contract extension), the appropriation account from which payments to execute the contract will be made.

(B) The term “agency procurement total” means the procurement accounts of the agency entering into a multiyear procurement contract (or contract extension) treated in the aggregate.

(Added Pub. L. 103–355, title I, §1022(a)(1), Oct. 13, 1994, 108 Stat. 3257; amended Pub. L. 104–106, div. A, title XV, §1502(a)(10), div. E, title LVI, §5601(b), Feb. 10, 1996, 110 Stat. 503, 699; Pub. L. 105–85, div. A, title VIII, §806(a)(1), (b)(1), (c), title X, §1073(a)(47), (48)(A), Nov. 18, 1997, 111 Stat. 1834, 1835, 1903; Pub. L. 106–65, div. A, title VIII, §809, title X, §1067(1), Oct. 5, 1999, 113 Stat. 705, 774; Pub. L. 106–398, §1 [[div. A], title VIII, §§802(c), 806], Oct. 30, 2000, 114 Stat. 1654, 1654A–205, 1654A–207; Pub. L. 107–296, title XVII, §1704(b)(1), Nov. 25, 2002, 116 Stat. 2314; Pub. L. 107–314, div. A, title VIII, §820(a), Dec. 2, 2002, 116 Stat. 2613; Pub. L. 108–136, div. A, title X, §1043(b)(10), Nov. 24, 2003, 117 Stat. 1611; Pub. L. 108–375, div. A, title VIII, §814(a), title X, §1084(b)(2), Oct. 28, 2004, 118 Stat. 2014, 2060.)

Amendments

2004—Subsec. (g). Pub. L. 108–375, §814(a)(1), designated existing provisions as par. (1).

Subsec. (g)(1). Pub. L. 108–375, §§814(a)(2), 1084(b)(2), amended par. (1) identically, substituting “congressional defense committees” for “Committee on Armed Services and the Committee on Appropriations of the Senate and the Committee on Armed Services and the Committee on Appropriations of the House of Representatives”.

Subsec. (g)(2). Pub. L. 108–375, §814(a)(3), added par. (2).

2003—Subsec. (l)(9), (10). Pub. L. 108–136 redesignated par. (10) as (9) and struck out former par. (9) which read as follows: “In this subsection, the term ‘congressional defense committees’ means the following:

“(A) The Committee on Armed Services of the Senate and the Subcommittee on Defense of the Committee on Appropriations of the Senate.

“(B) The Committee on Armed Services of the House of Representatives and the Subcommittee on National Security of the Committee on Appropriations of the House of Representatives.”

2002—Subsec. (b)(2)(B). Pub. L. 107–296 substituted “of Homeland Security” for “of Transportation”.

Subsec. (i)(4). Pub. L. 107–314 added par. (4).

2000—Subsec. (k). Pub. L. 106–398, §1 [[div. A], title VIII, §802(c)], struck out “or services” after “purchase of property”.

Subsec. (l)(4). Pub. L. 106–398, §1 [[div. A], title VIII, §806(1)(A)], in introductory provisions, substituted “Not later than the date of the submission of the President's budget request under section 1105 of title 31, the Secretary of Defense shall submit a report to the congressional defense committees each year, providing the following information with respect to each multiyear contract (and each extension of an existing multiyear contract) entered into, or planned to be entered into, by the head of an agency during the current or preceding year” for “The head of an agency may not enter into a multiyear contract (or extend an existing multiyear contract) until the Secretary of Defense submits to the congressional defense committees a report with respect to that contract (or contract extension) that provides the following information”.

Subsec. (l)(4)(B). Pub. L. 106–398, §1 [[div. A], title VIII, §806(1)(B)], substituted “in effect at the time the report is submitted” for “in effect immediately before the contract (or contract extension) is entered into” in introductory provisions.

Subsec. (l)(5) to (10). Pub. L. 106–398, §1 [[div. A], title VIII, §806(2), (3)], added par. (5) and redesignated former pars. (5) to (9) as (6) to (10), respectively.

1999—Subsec. (g). Pub. L. 106–65, §1067(1), substituted “and the Committee on Armed Services” for “and the Committee on National Security”.

Subsec. (l)(4) to (7). Pub. L. 106–65, §809(1), (2), added par. (4) and redesignated former pars. (4) to (6) as (5) to (7), respectively. Former par. (7) redesignated (8).

Subsec. (l)(8). Pub. L. 106–65, §809(1), redesignated par. (7) as (8).

Subsec. (l)(8)(B). Pub. L. 106–65, §1067(1), substituted “Committee on Armed Services” for “Committee on National Security”.

Subsec. (l)(9). Pub. L. 106–65, §809(3), added par. (9).

1997—Pub. L. 105–85, §1073(a)(48)(A), inserted “: acquisition of property” in section catchline.

Subsec. (a). Pub. L. 105–85, §806(c)(1), substituted “finds each of the following:” for “finds—” in introductory provisions, capitalized first letter of first word in pars. (1) to (6), and substituted a period for semicolon at end of pars. (1) to (4) and for “; and” at end of par. (5).

Subsec. (d)(1). Pub. L. 105–85, §806(c)(2), substituted “subsection (a)” for “paragraph (1)”.

Subsec. (i)(1)(A). Pub. L. 105–85, §806(c)(3), substituted “future-years” for “five-year”.

Subsec. (i)(3). Pub. L. 105–85, §806(a)(1), added par. (3).

Subsec. (k). Pub. L. 105–85, §1073(a)(47), substituted “this section” for “this subsection”.

Subsec. (l). Pub. L. 105–85, §806(b)(1), added subsec. (l).

1996—Subsec. (g). Pub. L. 104–106, §1502(a)(10), substituted “the Committee on Armed Services and the Committee on Appropriations of the Senate and the Committee on National Security and the Committee on Appropriations of the” for “the Committees on Armed Services and on Appropriations of the Senate and”.

Subsecs. (k), (l). Pub. L. 104–106, §5601(b), redesignated subsec. (l) as (k) and struck out former subsec. (k) which read as follows: “Inapplicability to Automatic Data Processing Contracts.—This section does not apply to contracts for the purchase of property to which section 111 of the Federal Property and Administrative Services Act of 1949 (40 U.S.C. 759) applies.”

Effective Date of 2002 Amendments

Pub. L. 107–314, div. A, title VIII, §820(b), Dec. 2, 2002, 116 Stat. 2614, provided that:

“(1) Paragraph (4) of section 2306b(i) of title 10, United States Code, as added by subsection (a), shall not apply with respect to any contract awarded before the date of the enactment of this Act [Dec. 2, 2002].

“(2) Nothing in this section [amending this section] shall be construed to authorize the expenditure of funds under any contract awarded before the date of the enactment of this Act for any purpose other than the purpose for which such funds have been authorized and appropriated.”

Amendment by Pub. L. 107–296 effective on the date of transfer of the Coast Guard to the Department of Homeland Security, see section 1704(g) of Pub. L. 107–296, set out as a note under section 101 of this title.

Effective Date of 1997 Amendment

Section 806(a)(2) of Pub. L. 105–85 provided that: “Paragraph (3) of section 2306b(i) of title 10, United States Code, as added by paragraph (1), shall not apply with respect to a contract authorized by law before the date of the enactment of this Act [Nov. 18, 1997].”

Section 806(b)(2) of Pub. L. 105–85 provided that: “The amendment made by paragraph (1) [amending this section] shall take effect on October 1, 1998.”

Effective Date of 1996 Amendment

Amendment by section 5601(b) of Pub. L. 104–106 effective 180 days after Feb. 10, 1996, see section 5701 of Pub. L. 104–106, Feb. 10, 1996, 110 Stat. 702.

Effective Date

For effective date and applicability of section, see section 10001 of Pub. L. 103–355, set out as an Effective Date of 1994 Amendment note under section 251 of Title 41, Public Contracts.

Multiyear Procurement Contracts

Pub. L. 105–56, title VIII, §8008, Oct. 8, 1997, 111 Stat. 1221, provided that:

“(a) None of the funds provided in this Act [see Tables for classification] shall be available to initiate: (1) a multiyear contract that employs economic order quantity procurement in excess of $20,000,000 in any one year of the contract or that includes an unfunded contingent liability in excess of $20,000,000; or (2) a contract for advance procurement leading to a multiyear contract that employs economic order quantity procurement in excess of $20,000,000 in any one year, unless the congressional defense committees [Committee on Armed Services and Subcommittee on National Security of the Committee on Appropriations of the House of Representatives and Committee on Armed Services and Subcommittee on Defense of the Committee on Appropriations of the Senate] have been notified at least 30 days in advance of the proposed contract award: Provided, That no part of any appropriation contained in this Act shall be available to initiate a multiyear contract for which the economic order quantity advance procurement is not funded at least to the limits of the Government's liability: Provided further, That no part of any appropriation contained in this Act shall be available to initiate multiyear procurement contracts for any systems or component thereof if the value of the multiyear contract would exceed $500,000,000 unless specifically provided in this Act: Provided further, That no multiyear procurement contract can be terminated without 10-day prior notification to the congressional defense committees: Provided further, That the execution of multiyear authority shall require the use of a present value analysis to determine lowest cost compared to an annual procurement.

“Funds appropriated in title III of this Act [111 Stat. 1211] may be used for multiyear procurement contracts as follows:

“Apache Longbow radar;

“AV–8B aircraft; and

“Family of Medium Tactical Vehicles.

“(b) None of the funds provided in this Act and hereafter may be used to submit to Congress (or to any committee of Congress) a request for authority to enter into a contract covered by those provisions of subsection (a) that precede the first proviso of that subsection unless—

“(1) such request is made as part of the submission of the President's Budget for the United States Government for any fiscal year and is set forth in the Appendix to that budget as part of proposed legislative language for appropriations bills for the next fiscal year; or

“(2) such request is formally submitted by the President as a budget amendment; or

“(3) the Secretary of Defense makes such request in writing to the congressional defense committees.”

Similar provisions were contained in the following appropriation acts:

Pub. L. 109–289, div. A, title VIII, §8008, Sept. 29, 2006, 120 Stat. 1273.

Pub. L. 109–148, div. A, title VIII, §8008, Dec. 30, 2005, 119 Stat. 2698.

Pub. L. 108–287, title VIII, §8008, Aug. 5, 2004, 118 Stat. 970.

Pub. L. 108–87, title VIII, §8008, Sept. 30, 2003, 117 Stat. 1072.

Pub. L. 107–248, title VIII, §8008, Oct. 23, 2002, 116 Stat. 1537.

Pub. L. 107–117, div. A, title VIII, §8008, Jan. 10, 2002, 115 Stat. 2248.

Pub. L. 106–259, title VIII, §8008, Aug. 9, 2000, 114 Stat. 675.

Pub. L. 106–79, title VIII, §8008, Oct. 25, 1999, 113 Stat. 1232.

Pub. L. 105–262, title VIII, §8008, Oct. 17, 1998, 112 Stat. 2298.

Pub. L. 104–208, div. A, title I, §101(b) [title VIII, §8009], Sept. 30, 1996, 110 Stat. 3009–71, 3009–89.

Pub. L. 104–61, title VIII, §8010, Dec. 1, 1995, 109 Stat. 653.

Pub. L. 103–335, title VIII, §8010, Sept. 30, 1994, 108 Stat. 2618.

Pub. L. 103–139, title VIII, §8011, Nov. 11, 1993, 107 Stat. 1439.

Pub. L. 102–396, title IX, §9013, Oct. 6, 1992, 106 Stat. 1903.

Pub. L. 102–172, title VIII, §8013, Nov. 26, 1991, 105 Stat. 1173.

Pub. L. 101–511, title VIII, §8014, Nov. 5, 1990, 104 Stat. 1877.

Pub. L. 101–165, title IX, §9021, Nov. 21, 1989, 103 Stat. 1133.

§2306c. Multiyear contracts: acquisition of services

(a) Authority.—Subject to subsections (d) and (e), the head of an agency may enter into contracts for periods of not more than five years for services described in subsection (b), and for items of supply related to such services, for which funds would otherwise be available for obligation only within the fiscal year for which appropriated whenever the head of the agency finds that—

(1) there will be a continuing requirement for the services consonant with current plans for the proposed contract period;

(2) the furnishing of such services will require a substantial initial investment in plant or equipment, or the incurrence of substantial contingent liabilities for the assembly, training, or transportation of a specialized work force; and

(3) the use of such a contract will promote the best interests of the United States by encouraging effective competition and promoting economies in operation.


(b) Covered Services.—The authority under subsection (a) applies to the following types of services:

(1) Operation, maintenance, and support of facilities and installations.

(2) Maintenance or modification of aircraft, ships, vehicles, and other highly complex military equipment.

(3) Specialized training necessitating high quality instructor skills (for example, pilot and air crew members; foreign language training).

(4) Base services (for example, ground maintenance; in-plane refueling; bus transportation; refuse collection and disposal).

(5) Environmental remediation services for—

(A) an active military installation;

(B) a military installation being closed or realigned under a base closure law; or

(C) a site formerly used by the Department of Defense.


(c) Applicable Principles.—In entering into multiyear contracts for services under the authority of this section, the head of the agency shall be guided by the following principles:

(1) The portion of the cost of any plant or equipment amortized as a cost of contract performance should not exceed the ratio between the period of contract performance and the anticipated useful commercial life of such plant or equipment. Useful commercial life, for this purpose, means the commercial utility of the facilities rather than the physical life thereof, with due consideration given to such factors as location of facilities, specialized nature thereof, and obsolescence.

(2) Consideration shall be given to the desirability of obtaining an option to renew the contract for a reasonable period not to exceed three years, at prices not to include charges for plant, equipment and other nonrecurring costs, already amortized.

(3) Consideration shall be given to the desirability of reserving in the agency the right, upon payment of the unamortized portion of the cost of the plant or equipment, to take title thereto under appropriate circumstances.


(d) Restrictions Applicable Generally.—(1) The head of an agency may not initiate under this section a contract for services that includes an unfunded contingent liability in excess of $20,000,000 unless the congressional defense committees are notified of the proposed contract at least 30 days in advance of the award of the proposed contract.

(2) The head of an agency may not initiate a multiyear contract for services under this section if the value of the multiyear contract would exceed $500,000,000 unless authority for the contract is specifically provided by law.

(3) The head of an agency may not terminate a multiyear procurement contract for services until 10 days after the date on which notice of the proposed termination is provided to the congressional defense committees.

(4) Before any contract described in subsection (a) that contains a clause setting forth a cancellation ceiling in excess of $100,000,000 may be awarded, the head of the agency concerned shall give written notification of the proposed contract and of the proposed cancellation ceiling for that contract to the congressional defense committees, and such contract may not then be awarded until the end of a period of 30 days beginning on the date of such notification.

(5) In the case of a contract described in subsection (a) with a cancellation ceiling described in paragraph (4), if the budget for the contract does not include proposed funding for the costs of contract cancellation up to the cancellation ceiling established in the contract, the head of the agency concerned shall give written notification to the congressional defense committees of—

(A) the cancellation ceiling amounts planned for each program year in the proposed multiyear procurement contract, together with the reasons for the amounts planned;

(B) the extent to which costs of contract cancellation are not included in the budget for the contract; and

(C) a financial risk assessment of not including budgeting for costs of contract cancellation.


(e) Cancellation or Termination for Insufficient Funding After First Year.—In the event that funds are not made available for the continuation of a multiyear contract for services into a subsequent fiscal year, the contract shall be canceled or terminated, and the costs of cancellation or termination may be paid from—

(1) appropriations originally available for the performance of the contract concerned;

(2) appropriations currently available for procurement of the type of services concerned, and not otherwise obligated; or

(3) funds appropriated for those payments.


(f) Multiyear Contract Defined.—For the purposes of this section, a multiyear contract is a contract for the purchase of services for more than one, but not more than five, program years. Such a contract may provide that performance under the contract during the second and subsequent years of the contract is contingent upon the appropriation of funds and (if it does so provide) may provide for a cancellation payment to be made to the contractor if such appropriations are not made.

[(g) Repealed. Pub. L. 108–136, div. A, title VIII, §843(a), Nov. 24, 2003, 117 Stat. 1553.]

(h) Military Installation Defined.—In this section, the term “military installation” has the meaning given such term in section 2801(c)(2) of this title.

(Added Pub. L. 106–398, §1 [[div. A], title VIII, §802(a)(1)], Oct. 30, 2000, 114 Stat. 1654, 1654A–203; amended Pub. L. 107–314, div. A, title VIII, §§811(a), 827, Dec. 2, 2002, 116 Stat. 2608, 2617; Pub. L. 108–136, div. A, title VIII, §843(a), title X, §1043(c)(1), Nov. 24, 2003, 117 Stat. 1553, 1611; Pub. L. 108–375, div. A, title VIII, §814(b), Oct. 28, 2004, 118 Stat. 2014.)

Amendments

2004—Subsec. (d)(1), (3), (4). Pub. L. 108–375, §814(b)(1), substituted “congressional defense committees” for “committees of Congress named in paragraph (5)”.

Subsec. (d)(5). Pub. L. 108–375, §814(b)(2), amended par. (5) generally. Prior to amendment, par. (5) read as follows: “The committees of Congress referred to in paragraphs (1), (3), and (4) are as follows:

“(A) The Committee on Armed Services and the Committee on Appropriations of the Senate.

“(B) The Committee on Armed Services and the Committee on Appropriations of the House of Representatives.”

2003—Subsec. (g). Pub. L. 108–136, §843(a), struck out heading and text of subsec. (g). Text read as follows:

“(1) The authority and restrictions of this section, including the authority to enter into contracts for periods of not more than five years, shall apply with respect to task order and delivery order contracts entered into under the authority of section 2304a, 2304b, or 2304c of this title.

“(2) The regulations implementing this subsection shall establish a preference that, to the maximum extent practicable, multi-year requirements for task order and delivery order contracts be met with separate awards to two or more sources under the authority of section 2304a(d)(1)(B) of this title.”

Subsec. (h). Pub. L. 108–136, §1043(c)(1), substituted “Military Installation Defined.—In this section, the term” for “Additional Definitions.—In this section:

“(1) The term ‘base closure law’ has the meaning given such term in section 2667(h)(2) of this title.

“(2) The term”.

2002—Subsec. (b)(5). Pub. L. 107–314, §827(a), added par. (5).

Subsec. (g). Pub. L. 107–314, §811(a), added subsec. (g).

Subsec. (h). Pub. L. 107–314, §827(b), added subsec. (h).

Effective Date of 2002 Amendment

Pub. L. 107–314, div. A, title VIII, §811(b), Dec. 2, 2002, 116 Stat. 2608, as amended by Pub. L. 108–11, title I, §1315, Apr. 16, 2003, 117 Stat. 570, provided that: “Subsection (g) of section 2306c of title 10, United States Code, as added by subsection (a), shall apply to all task order and delivery order contracts entered into on or after January 1, 2004.”

Effective Date

Pub. L. 106–398, §1 [[div. A], title VIII, §802(d)], Oct. 30, 2000, 114 Stat. 1654, 1654A–205, provided that: “Section 2306c of title 10, United States Code (as added by subsection (a)), shall apply with respect to contracts for which solicitations of offers are issued after the date of the enactment of this Act [Oct. 30, 2000].”

§2307. Contract financing

(a) Payment Authority.—The head of any agency may—

(1) make advance, partial, progress, or other payments under contracts for property or services made by the agency; and

(2) insert in solicitations for procurement of property or services a provision limiting to small business concerns advance or progress payments.


(b) Performance-Based Payments.—Whenever practicable, payments under subsection (a) shall be made on any of the following bases:

(1) Performance measured by objective, quantifiable methods such as delivery of acceptable items, work measurement, or statistical process controls.

(2) Accomplishment of events defined in the program management plan.

(3) Other quantifiable measures of results.


(c) Payment Amount.—Payments made under subsection (a) may not exceed the unpaid contract price.

(d) Security for Advance Payments.—Advance payments made under subsection (a) may be made only if the contractor gives adequate security and after a determination by the head of the agency that to do so would be in the public interest. Such security may be in the form of a lien in favor of the United States on the property contracted for, on the balance in an account in which such payments are deposited, and on such of the property acquired for performance of the contract as the parties may agree. This lien is paramount to any other liens and is effective immediately upon the first advancement of funds without filing, notice, or any other action by the United States.

(e) Conditions for Progress Payments.—(1) The Secretary of Defense shall ensure that any payment for work in progress (including materials, labor, and other items) under a defense contract that provides for such payments is commensurate with the work accomplished that meets standards established under the contract. The contractor shall provide such information and evidence as the Secretary of Defense determines necessary to permit the Secretary to carry out the preceding sentence.

(2) The Secretary shall ensure that progress payments referred to in paragraph (1) are not made for more than 80 percent of the work accomplished under a defense contract so long as the Secretary has not made the contractual terms, specifications, and price definite.

(3) This subsection applies to any contract in an amount greater than $25,000.

(f) Conditions for Payments for Commercial Items.—(1) Payments under subsection (a) for commercial items may be made under such terms and conditions as the head of the agency determines are appropriate or customary in the commercial marketplace and are in the best interests of the United States. The head of the agency shall obtain adequate security for such payments. If the security is in the form of a lien in favor of the United States, such lien is paramount to all other liens and is effective immediately upon the first payment, without filing, notice, or other action by the United States.

(2) Advance payments made under subsection (a) for commercial items may include payments, in a total amount of not more than 15 percent of the contract price, in advance of any performance of work under the contract.

(3) The conditions of subsections (d) and (e) need not be applied if they would be inconsistent, as determined by the head of the agency, with commercial terms and conditions pursuant to paragraphs (1) and (2).

(g) Certain Navy Contracts.—(1) The Secretary of the Navy shall provide that the rate for progress payments on any contract awarded by the Secretary for repair, maintenance, or overhaul of a naval vessel shall be not less than—

(A) 95 percent, in the case of a firm considered to be a small business; and

(B) 90 percent, in the case of any other firm.


(2) The Secretary of the Navy may advance to private salvage companies such funds as the Secretary considers necessary to provide for the immediate financing of salvage operations. Advances under this paragraph shall be made on terms that the Secretary considers adequate for the protection of the United States.

(3) The Secretary of the Navy shall provide, in each contract for construction or conversion of a naval vessel, that, when partial, progress, or other payments are made under such contract, the United States is secured by a lien upon work in progress and on property acquired for performance of the contract on account of all payments so made. The lien is paramount to all other liens.

(h) Vesting of Title in the United States.—If a contract paid by a method authorized under subsection (a)(1) provides for title to property to vest in the United States, the title to the property shall vest in accordance with the terms of the contract, regardless of any security interest in the property that is asserted before or after the contract is entered into.

(i) Action in Case of Fraud.—(1) In any case in which the remedy coordination official of an agency finds that there is substantial evidence that the request of a contractor for advance, partial, or progress payment under a contract awarded by that agency is based on fraud, the remedy coordination official shall recommend that the head of the agency reduce or suspend further payments to such contractor.

(2) The head of an agency receiving a recommendation under paragraph (1) in the case of a contractor's request for payment under a contract shall determine whether there is substantial evidence that the request is based on fraud. Upon making such a determination, the agency head may reduce or suspend further payments to the contractor under such contract.

(3) The extent of any reduction or suspension of payments by the head of an agency under paragraph (2) on the basis of fraud shall be reasonably commensurate with the anticipated loss to the United States resulting from the fraud.

(4) A written justification for each decision of the head of an agency whether to reduce or suspend payments under paragraph (2) and for each recommendation received by such agency head in connection with such decision shall be prepared and be retained in the files of such agency.

(5) The head of an agency shall prescribe procedures to ensure that, before such agency head decides to reduce or suspend payments in the case of a contractor under paragraph (2), the contractor is afforded notice of the proposed reduction or suspension and an opportunity to submit matters to the head of the agency in response to such proposed reduction or suspension.

(6) Not later than 180 days after the date on which the head of an agency reduces or suspends payments to a contractor under paragraph (2), the remedy coordination official of such agency shall—

(A) review the determination of fraud on which the reduction or suspension is based; and

(B) transmit a recommendation to the head of such agency whether the suspension or reduction should continue.


(7) The head of an agency shall prepare for each year a report containing the recommendations made by the remedy coordination official of that agency to reduce or suspend payments under paragraph (2), the actions taken on the recommendations and the reasons for such actions, and an assessment of the effects of such actions on the Federal Government. The Secretary of each military department shall transmit the annual report of such department to the Secretary of Defense. Each such report shall be available to any member of Congress upon request.

(8) This subsection applies to the agencies named in paragraphs (1), (2), (3), (4), and (6) of section 2303(a) of this title.

(9) The head of an agency may not delegate responsibilities under this subsection to any person in a position below level IV of the Executive Schedule.

(10) In this subsection, the term “remedy coordination official”, with respect to an agency, means the person or entity in that agency who coordinates within that agency the administration of criminal, civil, administrative, and contractual remedies resulting from investigations of fraud or corruption related to procurement activities.

(Aug. 10, 1956, ch. 1041, 70A Stat. 131; Pub. L. 85–800, §9, Aug. 28, 1958, 72 Stat. 967; Pub. L. 93–155, title VIII, §807(c), Nov. 16, 1973, 87 Stat. 616; Pub. L. 100–370, §1(f)(1)(A), July 19, 1988, 102 Stat. 846; Pub. L. 101–510, div. A, title VIII, §836(a), (b), title XIII, §1322(a)(4), Nov. 5, 1990, 104 Stat. 1615, 1616, 1671; Pub. L. 102–25, title VII, §701(d)(4), (j)(2)(A), Apr. 6, 1991, 105 Stat. 114, 116; Pub. L. 102–190, div. A, title X, §1061(a)(10), Dec. 5, 1991, 105 Stat. 1472; Pub. L. 102–484, div. A, title X, §1052(24), Oct. 23, 1992, 106 Stat. 2500; Pub. L. 103–355, title II, §2001(a)–(g), Oct. 13, 1994, 108 Stat. 3301, 3302; Pub. L. 105–85, div. A, title VIII, §802, Nov. 18, 1997, 111 Stat. 1831; Pub. L. 106–391, title III, §306, Oct. 30, 2000, 114 Stat. 1592.)

Historical and Revision Notes
1956 Act
Revised sectionSource (U.S. Code)Source (Statutes at Large)
2307(a)

2307(b)

41:154(a).

41:154 (less (a)).

Feb. 19, 1948, ch. 65, §5, 62 Stat. 23.

In subsection (a), the words “and appropriate” are omitted as surplusage. The words “whether or not the contract previously provided for such payments” are substituted for the words “heretofore or hereafter executed”.

In subsection (b), the words “under subsection (a)” are inserted for clarity. The words “provide for” are substituted for the words “include as security provision for”. The words “United States” are substituted for the word “Government”.

1988 Act

Subsection (e) is based on Pub. L. 99–145, title IX, §916, Nov. 8, 1985, 99 Stat. 688.

References in Text

Level IV of the Executive Schedule, referred to in subsec. (i)(9), is set out in section 5315 of Title 5, Government Organization and Employees.

Prior Provisions

Provisions similar to those in subsec. (g) of this section were contained in sections 7312, 7364, and 7521 of this title prior to repeal by Pub. L. 103–355, §2001(j)(1).

Amendments

2000—Subsec. (i)(8). Pub. L. 106–391 substituted “(4), and (6)” for “and (4)”.

1997—Subsecs. (h), (i). Pub. L. 105–85 added subsec. (h) and redesignated former subsec. (h) as (i).

1994—Pub. L. 103–355, §2001(a)(1), substituted “Contract financing” for “Advance payments” in section catchline.

Subsec. (a). Pub. L. 103–355, §2001(a)(2), inserted heading.

Subsec. (a)(2). Pub. L. 103–355, §2001(c), struck out “bid” before “solicitations”.

Subsec. (b). Pub. L. 103–355, §2001(a)(7), (b), added subsec. (b) and redesignated former subsec. (b) as (c).

Pub. L. 103–355, §2001(a)(3), inserted heading.

Subsec. (c). Pub. L. 103–355, §2001(a)(7), redesignated subsec. (b) as (c). Former subsec. (c) redesignated (d).

Pub. L. 103–355, §2001(a)(4), inserted heading.

Subsec. (d). Pub. L. 103–355, §2001(d), inserted before period at end “and is effective immediately upon the first advancement of funds without filing, notice, or any other action by the United States”.

Pub. L. 103–355, §2001(a)(7), redesignated former subsec. (c) as (d). Former subsec. (d) redesignated (e).

Pub. L. 103–355, §2001(a)(5), inserted heading.

Subsec. (e). Pub. L. 103–355, §2001(a)(7), redesignated subsec. (d) as (e). Former subsec. (e) redesignated (h).

Pub. L. 103–355, §2001(a)(6), inserted heading.

Subsec. (e)(1). Pub. L. 103–355, §2001(e)(1), substituted “work accomplished that meets standards established under the contract” for “work, which meets standards of quality established under the contract, that has been accomplished”.

Subsec. (e)(3). Pub. L. 103–355, §2001(e)(2), amended par. (3) generally. Prior to amendment, par. (3) read as follows: “This subsection does not apply to any contract for an amount not in excess of the amount of the small purchase threshold.”

Subsecs. (f), (g). Pub. L. 103–355, §2001(f), (g), added subsecs. (f) and (g).

Subsec. (h). Pub. L. 103–355, §2001(a)(7), redesignated subsec. (e) as (h).

1992—Subsec. (e)(1). Pub. L. 102–484 substituted “(1)” for “(l)” as par. designation after “(e)”.

1991—Subsec. (d)(3). Pub. L. 102–25, §701(d)(4), substituted “any contract for an amount not in excess of the amount of the small purchase threshold” for “contracts for amounts less than the maximum amount for small purchases specified in section 2304(g)(2) of this title”.

Subsec. (e). Pub. L. 102–25, §701(j)(2)(A), redesignated subsec. (f) as (e).

Subsec. (f). Pub. L. 102–190, which directed the substitution of “(1)” for “(l)” as par. designation after “(f)”, could not be executed because “(l)” did not appear after “(f)”.

Pub. L. 102–25, §701(j)(2)(A), redesignated subsec. (f) as (e).

1990—Subsec. (d). Pub. L. 101–510, §1322(a)(4), redesignated subsec. (e) as (d) and struck out former subsec. (d) which read as follows: “Payments under subsection (a) in the case of any contract, other than partial, progress, or other payments specifically provided for in such contract at the time such contract was initially entered into, may not exceed $25,000,000 unless the Committees on Armed Services of the Senate and the House of Representatives have been notified in writing of such proposed payments and 60 days of continuous session of Congress have expired following the date on which such notice was transmitted to such Committees and neither House of Congress has adopted, within such 60-day period, a resolution disapproving such payments. For purposes of this section, the continuity of a session of Congress is broken only by an adjournment of the Congress sine die, and the days on which either House is not in session because of an adjournment of more than 3 days to a day certain are excluded in the computation of such 60-day period.”

Subsec. (e). Pub. L. 101–510, §1322(a)(4)(B), redesignated subsec. (e) as (d).

Pub. L. 101–510, §836(b), inserted at end of par. (1) “The contractor shall provide such information and evidence as the Secretary of Defense determines necessary to permit the Secretary to carry out the preceding sentence.”

Subsec. (f). Pub. L. 101–510, §836(a), added subsec. (f).

1988—Subsec. (e). Pub. L. 100–370 added subsec. (e).

1973—Subsec. (d). Pub. L. 93–155 added subsec. (d).

1958—Pub. L. 85–800 authorized advance or other payments under contracts for property or services by agency, authorized insertion in bid solicitations of provision limiting advance or progress payments to small business concerns, restricted payments under subsec. (a) to unpaid contract price, and reworded generally conditions for making advance payments.

Effective Date of 1994 Amendment

For effective date and applicability of amendment by Pub. L. 103–355, see section 10001 of Pub. L. 103–355, set out as a note under section 251 of Title 41, Public Contracts.

Effective Date of 1990 Amendment

Section 836(c) of Pub. L. 101–510, as amended by Pub. L. 102–25, title VII, §701(j)(2)(B), Apr. 6, 1991, 105 Stat. 116, provided that: “The provisions of section 2307 of title 10, United States Code, that are added by the amendments made by subsections (a) and (b) shall apply with respect to contracts entered into on or after May 6, 1991.”

Relationship of 1994 Amendment to Prompt Payment Requirements

Section 2001(h) of Pub. L. 103–355 provided that: “The amendments made by this section [amending this section and section 7522 of this title and repealing sections 7312, 7364, and 7521 of this title] are not intended to impair or modify procedures required by the provisions of chapter 39 of title 31, United States Code, and the regulations issued pursuant to such provisions of law (as such procedures are in effect on the date of the enactment of this Act [Oct. 13, 1994]), except that the Government may accept payment terms offered by a contractor offering a commercial item.”

Limitations on Progress Payments

Pub. L. 99–145, title IX, §916, Nov. 8, 1985, 99 Stat. 688, which required Secretary of Defense to ensure that any progress payment under a defense contract be commensurate with work accomplished at standard of quality in contract, that such payments be limited to 80 percent of work accomplished so long as contract terms are indefinite, that this provision be waived for small purchases, and that this provision apply only to contracts for which solicitations were issued on or after 150 days after Nov. 8, 1985, was repealed and restated in subsec. (e) of this section by Pub. L. 100–370, §1(f)(1), July 19, 1988, 102 Stat. 846.

Obligations Entered Into Before November 16, 1973

Section 807(e) of Pub. L. 93–155 provided that: “The amendments made by this section [amending this section, section 1431 of Title 50, War and National Defense, and sections 468 and 2092 of Appendix to Title 50] shall not affect the carrying out of any contract, loan, guarantee, commitment, or other obligation entered into prior to the date of enactment of this section [Nov. 16, 1973].”

§2308. Buy-to-budget acquisition: end items

(a) Authority To Acquire Additional End Items.—Using funds available to the Department of Defense for the acquisition of an end item, the head of an agency making the acquisition may acquire a higher quantity of the end item than the quantity specified for the end item in a law providing for the funding of that acquisition if that head of an agency makes each of the following findings:

(1) The agency has an established requirement for the end item that is expected to remain substantially unchanged throughout the period of the acquisition.

(2) It is possible to acquire the higher quantity of the end item without additional funding because of production efficiencies or other cost reductions.

(3) The amount of the funds used for the acquisition of the higher quantity of the end item will not exceed the amount provided under that law for the acquisition of the end item.

(4) The amount so provided is sufficient to ensure that each unit of the end item acquired within the higher quantity is fully funded as a complete end item.


(b) Regulations.—The Secretary of Defense shall prescribe regulations for the administration of this section. The regulations shall include, at a minimum, the following:

(1) The level of approval within the Department of Defense that is required for a decision to acquire a higher quantity of an end item under subsection (a).

(2) Authority (subject to subsection (a)) to acquire up to 10 percent more than the quantity of an end item approved in a justification and approval of the use of procedures other than competitive procedures for the acquisition of the end item under section 2304 of this title.


(c) Notification of Congress.—The head of an agency is not required to notify Congress in advance regarding a decision under the authority of this section to acquire a higher quantity of an end item than is specified in a law described in subsection (a), but shall notify the congressional defense committees of the decision not later than 30 days after the date of the decision.

(d) Waiver by Other Law.—A provision of law may not be construed as prohibiting the acquisition of a higher quantity of an end item under this section unless that provision of law—

(1) specifically refers to this section; and

(2) specifically states that the acquisition of the higher quantity of the end item is prohibited notwithstanding the authority provided in this section.


(e) Definitions.—(1) For the purposes of this section, a quantity of an end item shall be considered specified in a law if the quantity is specified either in a provision of that law or in any related representation that is set forth separately in a table, chart, or explanatory text included in a joint explanatory statement or governing committee report accompanying the law.

(2) In this section:

(A) The term “end item” means a production product assembled, completed, and ready for issue or deployment.

(B) The term “head of an agency” means the Secretary of Defense, the Secretary of the Army, the Secretary of the Navy, and the Secretary of the Air Force.

(Added Pub. L. 107–314, div. A, title VIII, §801(a)(1), Dec. 2, 2002, 116 Stat. 2600; amended Pub. L. 108–136, div. A, title X, §1043(b)(11), Nov. 24, 2003, 117 Stat. 1611.)

Prior Provisions

A prior section 2308, acts Aug. 10, 1956, ch. 1041, 70A Stat. 131; Oct. 23, 1992, Pub. L. 102–484, div. A, title VIII, §820(a), 106 Stat. 2458; May 31, 1993, Pub. L. 103–35, title II, §201(e)(2), 107 Stat. 99; Nov. 30, 1993, Pub. L. 103–160, div. A, title IX, §904(d)(1), 107 Stat. 1728, related to assignment and delegation of procurement functions and responsibilities, prior to repeal by Pub. L. 103–355, title I, §1503(b)(1), title X, §10001, Oct. 13, 1994, 108 Stat. 3297, 3404, effective Oct. 13, 1994, except as otherwise provided.

Amendments

2003—Subsec. (e)(2). Pub. L. 108–136 redesignated subpars. (B) and (C) as (A) and (B), respectively, and struck out former subpar. (A) which read as follows: “The term ‘congressional defense committees’ means—

“(i) the Committee on Armed Services and the Committee on Appropriations of the Senate; and

“(ii) the Committee on Armed Services and the Committee on Appropriations of the House of Representatives.”

Time for Issuance of Final Regulations

Pub. L. 107–314, div. A, title VIII, §801(b), Dec. 2, 2002, 116 Stat. 2602, provided that: “The Secretary of Defense shall issue the final regulations under section 2308(b) of title 10, United States Code (as added by subsection (a)), not later than 120 days after the date of the enactment of this Act [Dec. 2, 2002].”

§2309. Allocation of appropriations

(a) Appropriations available for procurement by an agency named in section 2303 of this title may, through administrative allotment, be made available for obligation for procurement by any other agency in amounts authorized by the head of the allotting agency and without transfer of funds on the books of the Department of the Treasury.

(b) A disbursing official of the allotting agency may make any disbursement chargeable to an allotment under subsection (a) upon a voucher certified by an officer or civilian employee of the procuring agency.

(Aug. 10, 1956, ch. 1041, 70A Stat. 132; Pub. L. 97–258, §2(b)(1)(B), Sept. 13, 1982, 96 Stat. 1052.)

Historical and Revision Notes
Revised sectionSource (U.S. Code)Source (Statutes at Large)
2309(a)

2309(b)

41:159 (2d sentence).

41:159 (less 1st and 2d sentences).

Feb. 19, 1948, ch. 65, §10 (less 1st sentence), 62 Stat. 25.

In subsection (a), the words “an agency named in section 2303 of this title” are substituted for the words “any such agency”.

In subsection (b), the words “an allotment under subsection (a)” are substituted for the words “such allotments”.

Amendments

1982—Subsec. (b). Pub. L. 97–258 substituted “disbursing official” for “disbursing officer”.

§2310. Determinations and decisions

(a) Individual or Class Determinations and Decisions Authorized.—Determinations and decisions required to be made under this chapter by the head of an agency may be made for an individual purchase or contract or, except to the extent expressly prohibited by another provision of law, for a class of purchases or contracts. Such determinations and decisions are final.

(b) Written Findings Required.—(1) Each determination or decision under section 2306(g)(1), 2307(d), or 2313(c)(2)(B) of this title shall be based on a written finding by the person making the determination or decision. The finding shall set out facts and circumstances that support the determination or decision.

(2) Each finding referred to in paragraph (1) is final. The head of the agency making such finding shall maintain a copy of the finding for not less than 6 years after the date of the determination or decision.

(Aug. 10, 1956, ch. 1041, 70A Stat. 132; Pub. L. 85–800, §10, Aug. 28, 1958, 72 Stat. 967; Pub. L. 87–653, §1(f), Sept. 10, 1962, 76 Stat. 529; Pub. L. 89–607, §1(1), Sept. 27, 1966, 80 Stat. 850; Pub. L. 90–378, §2, July 5, 1968, 82 Stat. 290; Pub. L. 98–369, div. B, title VII, §2725, July 18, 1984, 98 Stat. 1193; Pub. L. 99–145, title XIII, §1303(a)(16), Nov. 8, 1985, 99 Stat. 739; Pub. L. 103–355, title I, §1504, Oct. 13, 1994, 108 Stat. 3297.)

Historical and Revision Notes
Revised sectionSource (U.S. Code)Source (Statutes at Large)
2310(a)

2310(b)

41:156(a) (1st sentence).

41:156(c).

Feb. 19, 1948, ch. 65, §7(a) (1st sentence), (c), 62 Stat. 24.

In subsection (a), the words “required * * * under” are substituted for the words “provided in”.

In subsection (b), the word “person” is substituted for the word “official”. The words “to which it applies” are inserted for clarity.

Amendments

1994—Pub. L. 103–355 amended section generally. Prior to amendment, section read as follows:

“(a) Determinations and decisions required to be made under this chapter by the head of an agency may be made for an individual purchase or contract or, except for determinations and decisions under section 2304 or 2305 of this title, for a class of purchases or contracts. Such a determination or decision, including a determination or decision under section 2304 or 2305 of this title, is final.

“(b) Each determination or decision under section 2306(c), 2306(g)(1), 2307(c), or 2313(c) of this title shall be based on a written finding by the person making the determination or decision, which finding shall set out facts and circumstances that—

“(1) clearly indicate why the type of contract selected under section 2306(c) of this title is likely to be less costly than any other type or that it is impracticable to obtain property or services of the kind or quality required except under such a contract;

“(2) support the findings required by section 2306(g)(1) of this title;

“(3) clearly indicate why advance payments under section 2307(c) of this title would be in the public interest; or

“(4) clearly indicate why the application of section 2313(b) of this title to a contract or subcontract with a foreign contractor or foreign subcontractor would not be in the public interest.

Such a finding is final and shall be kept available in the agency for at least six years after the date of the determination or decision. A copy of the finding shall be submitted to the General Accounting Office with each contract to which it applies.”

1985—Subsec. (a). Pub. L. 99–145 inserted “this” after “2305 of”.

1984—Subsec. (a). Pub. L. 98–369, §2725(1), inserted “, except for determinations and decisions under section 2304 or 2305 of title,” and “, including a determination or decision under section 2304 or 2305 of this title,”.

Subsec. (b). Pub. L. 98–369, §2725(2), amended subsec. (b) generally, striking out requirement that determinations to negotiate contracts be based on written findings by the contracting officers making the determinations.

1968—Subsec. (b). Pub. L. 90–378 inserted “section 2306 (g)(1),” after “clauses (11)–(16) of section 2304(a), section 2306(c),”, and “(3) support the findings required by section 2306(g)(1),” after “kind or quality required except under such a contract,”, and redesignated former cls. (3) to (5) as (4) to (6), respectively.

1966—Subsec. (b). Pub. L. 89–607 inserted reference to section 2313(c), added cl. (4), and redesignated former cl. (4) as (5).

1962—Subsec. (b). Pub. L. 87–653 substituted “section 2306(c)” for “section 2306”, required decisions to negotiate contracts under section 2304(a)(2), (7), (8), (10) to (12) of this title to be based on a written finding by the person making the decision, which findings shall set out facts and circumstances illustrative of conditions described in section 2304(a)(11) to (16), indicate why the type of contract selected under section 2306(c) is likely to be less costly than any other or that its impracticable to obtain the required property or services except under such contract, indicate why advance payments under section 2307(c) would be in the public interest, or establish with respect to section 2304(a), (2), (7), (8), (10) to (12) that formal advertising would not have been feasible and practicable.

1958—Subsec. (b). Pub. L. 85–800 substituted “2307(c)” for “2307(a)”.

Effective Date of 1994 Amendment

For effective date and applicability of amendment by Pub. L. 103–355, see section 10001 of Pub. L. 103–355, set out as a note under section 251 of Title 41, Public Contracts.

Effective Date of 1984 Amendment

Amendment by Pub. L. 98–369 applicable with respect to any solicitation for bids or proposals issued after Mar. 31, 1985, see section 2751 of Pub. L. 98–369, set out as a note under section 251 of Title 41, Public Contracts.

Effective Date of 1962 Amendment

For effective date of amendment by Pub. L. 87–653, see section 1(h) of Pub. L. 87–653, set out as a note under section 2304 of this title.

§2311. Assignment and delegation of procurement functions and responsibilities

(a) In General.—Except to the extent expressly prohibited by another provision of law, the head of an agency may delegate, subject to his direction, to any other officer or official of that agency, any power under this chapter.

(b) Procurements For or With Other Agencies.—Subject to subsection (a), to facilitate the procurement of property and services covered by this chapter by each agency named in section 2303 of this title for any other agency, and to facilitate joint procurement by those agencies—

(1) the head of an agency may delegate functions and assign responsibilities relating to procurement to any officer or employee within such agency;

(2) the heads of two or more agencies may by agreement delegate procurement functions and assign procurement responsibilities from one agency to another of those agencies or to an officer or civilian employee of another of those agencies; and

(3) the heads of two or more agencies may create joint or combined offices to exercise procurement functions and responsibilities.


(c) Approval of Terminations and Reductions of Joint Acquisition Programs.—(1) The Secretary of Defense shall prescribe regulations that prohibit each military department participating in a joint acquisition program approved by the Under Secretary of Defense for Acquisition, Technology, and Logistics from terminating or substantially reducing its participation in such program without the approval of the Under Secretary.

(2) The regulations shall include the following provisions:

(A) A requirement that, before any such termination or substantial reduction in participation is approved, the proposed termination or reduction be reviewed by the Joint Requirements Oversight Council of the Department of Defense.

(B) A provision that authorizes the Under Secretary of Defense for Acquisition, Technology, and Logistics to require a military department whose participation in a joint acquisition program has been approved for termination or substantial reduction to continue to provide some or all of the funding necessary for the acquisition program to be continued in an efficient manner.

(Aug. 10, 1956, ch. 1041, 70A Stat. 132; Pub. L. 85–800, §11, Aug. 28, 1958, 72 Stat. 967; Pub. L. 87–653, §1(g), Sept. 10, 1962, 76 Stat. 529; Pub. L. 90–378, §3, July 5, 1968, 82 Stat. 290; Pub. L. 97–86, title IX, §§907(c), 909(f), Dec. 1, 1981, 95 Stat. 1117, 1120; Pub. L. 98–369, div. B, title VII, §2726, July 18, 1984, 98 Stat. 1194; Pub. L. 98–525, title XII, §1214, Oct. 19, 1984, 98 Stat. 2592; Pub. L. 98–577, title V, §505, Oct. 30, 1984, 98 Stat. 3087; Pub. L. 103–355, title I, §1503(a)(1), Oct. 13, 1994, 108 Stat. 3296; Pub. L. 107–107, div. A, title X, §1048(b)(2), Dec. 28, 2001, 115 Stat. 1225.)

Historical and Revision Notes
Revised sectionSource (U.S. Code)Source (Statutes at Large)
2311 41:156(a) (less 1st sentence).

41:156(b).

Feb. 19, 1948, ch. 65, §7(a) (less 1st sentence), (b), 62 Stat. 24.

The words “in his discretion and” and “including the making of such determinations and decisions” are omitted as surplusage. The words “except the power to make determinations and decisions” are substituted for the words “Except as provided in subsection (b) of this section” and “The power of the agency head to make the determinations or decisions specified in paragraphs (12)–(16) of section 151(c) of this title and in section 154(a) of this title shall not be delegable”.

Prior Provisions

Provisions similar to those in this section were contained in section 2308 of this title prior to repeal by Pub. L. 103–355, §1503(b)(1).

Amendments

2001—Subsec. (c)(1), (2)(B). Pub. L. 107–107 substituted “Under Secretary of Defense for Acquisition, Technology, and Logistics” for “Under Secretary of Defense for Acquisition and Technology”.

1994—Pub. L. 103–355 substituted “Assignment and delegation of procurement functions and responsibilities” for “Delegation” as section catchline and amended text generally. Prior to amendment, text read as follows: “Except as provided in section 2304(d)(2) of this title, the head of an agency may delegate, subject to his direction, to any other officer or official of that agency, any power under this chapter.”

1984—Pub. L. 98–577 struck out “(a)” before “Except as provided in” and struck out subsec. (b) which related to delegation of authority by heads of procuring activities of agencies of certain functions.

Pub. L. 98–525 designated existing provisions as subsec. (a) and added subsec. (b).

Pub. L. 98–369 inserted provision relating to the exception provided in section 2304(d)(2) of this title and struck out provision that the power to make determinations and decisions under cls. (11)–(16) of section 2304(a) of this title could not be delegated, but that the power to make a determination or decision under section 2304(a)(11) of this title could be delegated to any other officer of official of that agency who was responsible for procurement, and only for contracts requiring the expenditure of not more than $5,000,000.

1981—Pub. L. 97–86 struck out in first sentence cl. (1) designation and cl. (2) relating to authorizing of contracts in excess of three years under section 2306(g) of this title, and in second sentence substituted “$5,000,000” for “$100,000”.

1968—Pub. L. 90–378 designated provisions after “the power to make determinations and decisions” as cl. (1) and added cl. (2).

1962—Pub. L. 87–653 substituted “delegated to any other officer” for “delegated only to a chief officer” and “$100,000” for “$25,000”.

1958—Pub. L. 85–800 struck out “, or section 2307(a)” after “of section 2304(a)” in first sentence.

Effective Date of 1994 Amendment

For effective date and applicability of amendment by Pub. L. 103–355, see section 10001 of Pub. L. 103–355, set out as a note under section 251 of Title 41, Public Contracts.

Effective Date of 1984 Amendment

Amendment by Pub. L. 98–369 applicable with respect to any solicitation for bids or proposals issued after Mar. 31, 1985, see section 2751 of Pub. L. 98–369, set out as a note under section 251 of Title 41, Public Contracts.

Effective Date of 1962 Amendment

For effective date of amendment by Pub. L. 87–653, see section 1(h) of Pub. L. 87–653, set out as a note under section 2304 of this title.

§2312. Remission of liquidated damages

Upon the recommendation of the head of an agency, the Secretary of the Treasury may remit all or part, as he considers just and equitable, of any liquidated damages assessed for delay in performing a contract, made by that agency, that provides for such damages.

(Aug. 10, 1956, ch. 1041, 70A Stat. 132; Pub. L. 104–316, title II, §202(c), Oct. 19, 1996, 110 Stat. 3842.)

Historical and Revision Notes
Revised sectionSource (U.S. Code)Source (Statutes at Large)
2312 41:155. Feb. 19, 1948, ch. 65, §6, 62 Stat. 24.

The words “a contract, made by that agency, that provides for” are substituted for the words “any contract made on behalf of the Government by the agency head or by officers authorized by him so to do includes a provision”.

Amendments

1996—Pub. L. 104–316 substituted “Secretary of the Treasury” for “Comptroller General”.

§2313. Examination of records of contractor

(a) Agency Authority.—(1) The head of an agency, acting through an authorized representative, is authorized to inspect the plant and audit the records of—

(A) a contractor performing a cost-reimbursement, incentive, time-and-materials, labor-hour, or price-redeterminable contract, or any combination of such contracts, made by that agency under this chapter; and

(B) a subcontractor performing any cost-reimbursement, incentive, time-and-materials, labor-hour, or price-redeterminable subcon- tract or any combination of such subcontracts under a contract referred to in subparagraph (A).


(2) The head of an agency, acting through an authorized representative, is authorized, for the purpose of evaluating the accuracy, completeness, and currency of certified cost or pricing data required to be submitted pursuant to section 2306a of this title with respect to a contract or subcontract, to examine all records of the contractor or subcontractor related to—

(A) the proposal for the contract or subcontract;

(B) the discussions conducted on the proposal;

(C) pricing of the contract or subcontract; or

(D) performance of the contract or subcontract.


(b) DCAA Subpoena Authority.—(1) The Director of the Defense Contract Audit Agency (or any successor agency) may require by subpoena the production of any records of a contractor that the Secretary of Defense is authorized to audit or examine under subsection (a).

(2) Any such subpoena, in the