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US (United States) Code. Titel 10. Subtitle A. Part IV. Chapter 137: Procurement generally

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-CITE-

10 USC CHAPTER 137 - PROCUREMENT GENERALLY 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle A - General Military Law

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 137 - PROCUREMENT GENERALLY

-HEAD-

CHAPTER 137 - PROCUREMENT GENERALLY

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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 Repealed.)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 Repealed.)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 Repealed.)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 Repealed.)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 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.

AMENDMENTS

2002 - Pub. L. 107-347, title II, Sec. 210(a)(2), Dec. 17, 2002,

116 Stat. 2934, added item 2332.

Pub. L. 107-314, div. A, title VIII, Sec. 801(a)(2), Dec. 2,

2002, 116 Stat. 2602, added item 2308.

2001 - Pub. L. 107-107, div. A, title VIII, Sec. 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, Sec. 1 ((div. A), title VIII, Sec.

802(a)(2)), Oct. 30, 2000, 114 Stat. 1654, 1654A-205, added item

2306c.

1998 - Pub. L. 105-261, div. A, title X, Sec. 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, Sec. 804(a)(2), title

X, Sec. 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, Sec. 805(b), Sept.

23, 1996, 110 Stat. 2606, added item 2302d.

Pub. L. 104-106, div. D, title XLI, Sec. 4105(a)(2), title

XLIII, Sec. 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, Sec. 1004(a)(2), 1022(a)(2),

1501(b), 1503(a)(2), (b)(2), 1506(b), title II, Sec. 2001(i),

2201(a)(2), title IV, Sec. 4002(b), 4203(a)(2), title VIII, Sec.

8104(b)(2), title IX, Sec. 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, Sec. 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, Sec. 801(a)(2),

(g)(2), title X, Sec. 1052(25)(B), div. D, title XLII, Sec.

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, Sec. 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, Sec. 801(a)(2),

Sept. 29, 1988, 102 Stat. 2007, added item 2330.

1987 - Pub. L. 100-180, div. A, title VIII, Sec. 810(a)(2), Dec.

4, 1987, 101 Stat. 1132, added item 2329.

Pub. L. 100-26, Sec. 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, Sec. 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, Sec. 1343(a)(12),

Nov. 14, 1986, 100 Stat. 3993, substituted ''competitors'' for

''competition'' in item 2319.

Pub. L. 99-500, Sec. 101(c) (title X, Sec. 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, Sec. 101(c) (title X, Sec.

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, Sec. 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, Sec. 3(5), Apr. 21, 1987, 101 Stat. 273; as amended by

Pub. L. 100-26, Sec. 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, Sec. 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, Sec. 302(c)(2), Oct. 30, 1984,

98 Stat. 3077, struck out item 2303a ''Publication of proposed

regulations''.

Pub. L. 98-525, title XII, Sec. 1217, Oct. 19, 1984, 98 Stat.

2599, added items 2303a and 2317 to 2323.

Pub. L. 98-369, div. B, title VII, Sec. 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, Sec. 1(26)(B), Oct. 12, 1982, 96 Stat.

1291, added item 2316.

1981 - Pub. L. 97-86, title IX, Sec. 908(a)(2), Dec. 1, 1981, 95

Stat. 1118, added item 2315.

1980 - Pub. L. 96-513, title V, Sec. 511(75), Dec. 12, 1980, 94

Stat. 2926, inserted ''formal'' before ''advertising'' in item

2304.

-SECREF-

CHAPTER REFERRED TO IN OTHER SECTIONS

This chapter is referred to in sections 167, 1060a, 2350b, 2350d,

2373, 2809, 2835, 2836, 2837 of this title; title 6 section 426;

title 15 sections 205l, 637; title 22 section 2761; title 40

section 113; title 41 section 421; title 42 sections 13556, 14713,

14715, 14732.

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10 USC Sec. 2301 01/06/03

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TITLE 10 - ARMED FORCES

Subtitle A - General Military Law

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 137 - PROCUREMENT GENERALLY

-HEAD-

(Sec. 2301. Repealed. Pub. L. 103-355, title I, Sec. 1501(a), Oct.

13, 1994, 108 Stat. 3296)

-MISC1-

Section, acts Aug. 10, 1956, ch. 1041, 70A Stat. 127; Dec. 1,

1981, Pub. L. 97-86, title IX, Sec. 909(a), 95 Stat. 1118; July 18,

1984, Pub. L. 98-369, div. B, title VII, Sec. 2721, 98 Stat. 1185;

Oct. 18, 1986, Pub. L. 99-500, Sec. 101(c) (title X, Sec. 925(a)),

100 Stat. 1783-82, 1783-153, and Oct. 30, 1986, Pub. L. 99-591,

Sec. 101(c) (title X, Sec. 925(a)), 100 Stat. 3341-82, 3341-153;

Nov. 14, 1986, Pub. L. 99-661, div. A, title IX, formerly title

IV, Sec. 925(a), 100 Stat. 3933, renumbered title IX, Apr. 21,

1987, Pub. L. 100-26, Sec. 3(5), 101 Stat. 273; Oct. 23, 1992, Pub.

L. 102-484, div. A, title VIII, Sec. 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.

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10 USC Sec. 2302 01/06/03

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TITLE 10 - ARMED FORCES

Subtitle A - General Military Law

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 137 - PROCUREMENT GENERALLY

-HEAD-

Sec. 2302. Definitions

-STATUTE-

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;

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''.

(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.

-SOURCE-

(Aug. 10, 1956, ch. 1041, 70A Stat. 127; Pub. L. 85-568, title III,

Sec. 301(b), July 29, 1958, 72 Stat. 432; Pub. L. 85-861, Sec.

1(43A), Sept. 2, 1958, 72 Stat. 1457; Pub. L. 96-513, title V, Sec.

511(74), Dec. 12, 1980, 94 Stat. 2926; Pub. L. 98-369, div. B,

title VII, Sec. 2722(a), July 18, 1984, 98 Stat. 1186; Pub. L.

98-525, title XII, Sec. 1211, Oct. 19, 1984, 98 Stat. 2589; Pub. L.

98-577, title V, Sec. 504(b)(3), Oct. 30, 1984, 98 Stat. 3087; Pub.

L. 99-661, div. A, title XIII, Sec. 1343(a)(13), Nov. 14, 1986,

100 Stat. 3993; Pub. L. 100-26, Sec. 7(k)(2), Apr. 21, 1987, 101

Stat. 284; Pub. L. 101-189, div. A, title VIII, Sec. 853(b)(1),

Nov. 29, 1989, 103 Stat. 1518; Pub. L. 102-25, title VII, Sec.

701(d)(1), Apr. 6, 1991, 105 Stat. 113; Pub. L. 102-190, div. A,

title VIII, Sec. 805, Dec. 5, 1991, 105 Stat. 1417; Pub. L.

103-355, title I, Sec. 1502, Oct. 13, 1994, 108 Stat. 3296; Pub. L.

104-106, div. D, title XLIII, Sec. 4321(b)(3), Feb. 10, 1996, 110

Stat. 672; Pub. L. 104-201, div. A, title VIII, Sec. 805(a)(1),

807(a), Sept. 23, 1996, 110 Stat. 2605, 2606; Pub. L. 105-85, div.

A, title VIII, Sec. 803(b), Nov. 18, 1997, 111 Stat. 1832; Pub. L.

107-217, Sec. 3(b)(2), Aug. 21, 2002, 116 Stat. 1295; Pub. L.

107-296, title XVII, Sec. 1704(b)(1), Nov. 25, 2002, 116 Stat.

2314.)

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Historical and Revision Notes

1956 Act

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Revised section Source (U.S. Code) Source (Statutes at

Large)

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2302 41:158 (less clause Feb. 19, 1948, ch.

(b)). 65, Sec. 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 section Source (U.S. Code) Source (Statutes at

Large)

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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, Sec. 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, Sec. 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, Sec. 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, Sec. 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, Sec. 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, Sec. 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, Sec. 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, Sec. 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'.''

ENCOURAGEMENT OF SMALL BUSINESSES AND NONTRADITIONAL DEFENSE

CONTRACTORS TO SUBMIT PROPOSALS POTENTIALLY BENEFICIAL FOR

COMBATING TERRORISM

Pub. L. 107-314, div. A, title II, Sec. 244, Dec. 2, 2002, 116

Stat. 2498, provided that:

''(a) Establishment of Outreach Program. - During fiscal years

2003, 2004, and 2005, the Secretary of Defense, acting through the

Under Secretary of Defense for Acquisition, Technology, and

Logistics, shall carry out a program of outreach to small

businesses and nontraditional defense contractors for the purpose

set forth in subsection (b).

''(b) Purpose. - The purpose of the outreach program is to

provide a process for reviewing and evaluating research activities

of, and new technologies being developed by, small businesses and

nontraditional defense contractors that have the potential for

meeting a defense requirement or technology development goal of the

Department of Defense that relates to the mission of the Department

of Defense to combat terrorism.

''(c) Goals. - The goals of the outreach program are as follows:

''(1) To increase efforts within the Department of Defense to

survey and identify research activities and new technologies

described in subsection (b).

''(2) To provide the Under Secretary of Defense for

Acquisition, Technology, and Logistics with a source of expert

advice on new technologies for combating terrorism.

''(3) To increase efforts to educate nontraditional defense

contractors on Department of Defense acquisition processes,

including regulations, procedures, funding opportunities,

military needs and requirements, and technology transfer so as to

encourage such contractors to submit proposals regarding research

activities and new technologies described in subsection (b).

''(4) To increase efforts to provide timely response by the

Department of Defense to acquisition proposals (including

unsolicited proposals) submitted to the Department by small

businesses and by nontraditional defense contractors regarding

research activities and new technologies described in subsection

(b), including through the use of electronic transactions to

facilitate the processing of such proposals.

''(d) Review Panel. - (1) The Secretary shall appoint, under the

outreach program, a panel for the review and evaluation of

acquisition proposals described in subsection (c)(4).

''(2) The panel shall be composed of qualified personnel from the

military departments, relevant Defense Agencies, industry,

academia, and other private sector organizations.

''(3) Under procedures prescribed by the Under Secretary of

Defense for Acquisition, Technology, and Logistics, a small

business or nontraditional defense contractor may submit

acquisition proposals for consideration under the program through

the unsolicited proposal process or in response to a broad agency

announcement. The Under Secretary shall issue on an annual basis

not less than one such broad agency announcement inviting parties

to submit proposals.

''(4) Under procedures prescribed by the Under Secretary, the

panel shall review and evaluate acquisition proposals selected by

the panel. An acquisition proposal shall be selected for review

and evaluation if the panel determines that the acquisition

proposal may present a unique and valuable approach for meeting a

defense requirement or technology development goal of the

Department of Defense that relates to the mission of the Department

of Defense to combat terrorism. In carrying out its duties under

this paragraph, the panel may act through representatives

designated by the panel.

''(5) The panel shall -

''(A) not later than 60 days after the date on which the panel

receives an acquisition proposal described in subsection (c)(4),

transmit to the small business or nontraditional defense

contractor that submitted the proposal a notification regarding

whether the acquisition proposal has been selected under

paragraph (4) for review and evaluation;

''(B) to the maximum extent practicable, complete the review

and evaluation of each selected acquisition proposal not later

than 120 days after the date on which such proposal is selected

under paragraph (4); and

''(C) after completing the review and evaluation of an

acquisition proposal, transmit the results of that review and

evaluation to the small business or nontraditional defense

contractor that submitted the proposal.

''(6) The Secretary shall ensure that the panel, in reviewing and

evaluating acquisition proposals under this subsection, has the

authority to obtain assistance, to a reasonable extent, from the

appropriate technical resources of the laboratories, research,

development, and engineering centers, test and evaluation

activities, and other elements of the Department of Defense.

''(7) If, after completing review and evaluation of an

acquisition proposal, the panel determines that such proposal

represents a unique and valuable approach for meeting a defense

requirement or technology development goal of the Department of

Defense that relates to the mission of the Department of Defense to

combat terrorism, the panel shall submit that determination to the

Under Secretary of Defense for Acquisition, Technology, and

Logistics, together with any recommendations that the panel

considers appropriate regarding such proposal.

''(8) The Under Secretary of Defense for Acquisition, Technology,

and Logistics may provide funding for acquisition proposals with

respect to which the panel has submitted a determination under

paragraph (7) through appropriate accounts of the military

departments, Defense Agencies, the Small Business Innovative

Research program, or any other acquisition program.

''(9) The Secretary of Defense shall ensure that a member of the

panel has no conflict of interest with respect to the review and

evaluation of an acquisition proposal by the panel.

''(e) Nontraditional Defense Contractor Defined. - In this

section, the term 'nontraditional defense contractor' means an

entity that has not, for at least one year prior to the date of the

enactment of this Act (Dec. 2, 2002), entered into, or performed

with respect to, any contract described in paragraph (1) or (2) of

section 845(e) of the National Defense Authorization Act for Fiscal

Year 1994 (10 U.S.C. 2371 note).''

PROCUREMENT OF ENVIRONMENTALLY PREFERABLE PROCUREMENT ITEMS

Pub. L. 107-314, div. A, title III, Sec. 314, Dec. 2, 2002, 116

Stat. 2508, 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

(40 U.S.C. 6901 et seq.) (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 (40 U.S.C. 6903) (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, Sec. 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, Sec. 365, Dec. 2, 2002, 116

Stat. 2520, 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, 2007.

''(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, Sec. 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, Sec. 806, Dec. 2, 2002, 116

Stat. 2607, 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) 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.

''(d) 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, Sec. 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, Sec. 836, Dec. 28, 2001,

115 Stat. 1192, provided that:

''(a) Increased Flexibility for Use of Streamlined Procedures. -

The following special authorities apply to procurements of property

and services by or for the Department of Defense for which funds

are obligated during fiscal year 2002 and 2003:

''(1) Micropurchase and simplified acquisition thresholds. -

For any procurement of property or services for use (as

determined by the Secretary of Defense) to facilitate the defense

against terrorism or biological or chemical attack against the

United States -

''(A) the amount specified in subsections (c), (d), and (f)

of section 32 of the Office of Federal Procurement Policy Act

(41 U.S.C. 428) shall be deemed to be $15,000 in the

administration of that section with respect to such

procurement; and

''(B) the term 'simplified acquisition threshold' means, in

the case of any contract to be awarded and performed, or

purchase to be made -

''(i) inside the United States in support of a contingency

operation, $250,000; or

''(ii) outside the United States in support of a

contingency operation, $500,000.

''(2) Commercial item treatment for procurements of

biotechnology. - For any procurement of biotechnology property or

biotechnology services for use (as determined by the Secretary of

Defense) to facilitate the defense against terrorism or

biological attack against the United States, the procurement

shall be treated as being a procurement of commercial items.

''(b) Recommendations for Additional Emergency Procurement

Authority To Support Anti-Terrorism Operations. - Not later than

March 1, 2002, the Secretary of Defense shall submit to the

Committees on Armed Services of the Senate and the House of

Representatives a report containing the Secretary's recommendations

for additional emergency procurement authority that the Secretary

(subject to the direction of the President) determines necessary to

support operations carried out to combat terrorism.

''(c) Termination of Authority. - No contract may be entered into

pursuant to the authority provided in subsection (a) after

September 30, 2003.''

IMPROVEMENTS IN PROCUREMENTS OF SERVICES

Pub. L. 106-398, Sec. 1 ((div. A), title VIII, Sec. 821), Oct.

30, 2000, 114 Stat. 1654, 1654A-217, 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) Incentive for Use of Performance-Based Service Contracts. -

(1) A Department of Defense performance-based service contract or

performance-based task order may be treated as a contract for the

procurement of commercial items if -

''(A) the contract or task order is valued at $5,000,000 or

less;

''(B) the contract or task order sets forth specifically each

task to be performed and, for each task -

''(i) defines the task in measurable, mission-related terms;

''(ii) identifies the specific end products or output to be

achieved; and

''(iii) contains a firm fixed price; and

''(C) the source of the services provides similar services

contemporaneously to the general public under terms and

conditions similar to those offered to the Federal Government.

''(2) The special simplified procedures provided in the Federal

Acquisition Regulation pursuant to section 2304(g)(1)(B) of title

10, United States Code, shall not apply to a performance-based

service contract or performance-based task order that is treated as

a contract for the procurement of commercial items under paragraph

(1).

''(3) Not later than 2 years after the date of the enactment of

this Act (Oct. 30, 2000), the Comptroller General shall submit a

report on the implementation of this subsection to the

congressional defense committees (Committees on Armed Services and

Appropriations of the Senate and the House of Representatives).

''(4) The authority under this subsection shall not apply to

contracts entered into or task orders issued more than 3 years

after the date of the enactment of this Act.

''(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, Sec. 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

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

Section 831 of Pub. L. 104-201 provided that:

''(a) Year 2000 Software Conversion. - The Secretary of Defense

shall ensure that, as soon as practicable, all information

technology acquired by the Department of Defense pursuant to

contracts entered into after September 30, 1996, has the

capabilities to process date and date-related data in 2000.

''(b) Assessment. - The Secretary, acting through the chief

information officers within the department (as designated pursuant

to section 3506 of title 44, United States Code), shall assess all

information technology within the Department of Defense to

determine the extent to which such technology has the capabilities

to operate effectively.

''(c) Plan. - Not later than January 1, 1997, the Secretary shall

submit to Congress a detailed plan for eliminating any deficiencies

identified pursuant to subsection (b). The plan shall include -

''(1) a list of affected major systems;

''(2) a description of how the deficiencies could affect the

national security of the United States; and

''(3) an estimate and prioritization of the resources that are

necessary to eliminate the deficiencies.''

DEFENSE FACILITY-WIDE PILOT PROGRAM

Section 822 of Pub. L. 104-106, as amended by Pub. L. 106-65,

div. A, title X, Sec. 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, Sec. 1502(c)(2)(A), 1504(c)(1), Feb. 10, 1996,

110 Stat. 506, 514; Pub. L. 106-65, div. A, title X, Sec. 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, Sec. 806, Dec. 5, 1991, 105

Stat. 1417, as amended by Pub. L. 102-484, div. A, title X, Sec.

1053(5), Oct. 23, 1992, 106 Stat. 2502; Pub. L. 103-355, title II,

Sec. 2091, title VIII, Sec. 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 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, Sec. 800, Nov. 5, 1990, 104

Stat. 1587, as amended by Pub. L. 103-160, div. A, title IX, Sec.

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, Sec. 811(d)(2), (3), Oct. 5,

1999, 113 Stat. 708, 709, as amended by Pub. L. 107-107, div. A,

title X, Sec. 1048(g)(5), Dec. 28, 2001, 115 Stat. 1228, provided

that:

''(2)(A) The Secretary of Defense shall conduct a review of the

Mentor-Protege Program established in section 831 of the National

Defense Authorization Act for Fiscal Year 1991 (Public Law 101-510;

10 U.S.C. 2302 note) to assess the feasibility of transitioning

such program to operation without a specific appropriation or

authority to provide reimbursement to a mentor firm as provided in

subsection (g) of such section (as amended by subsection (b)).

''(B) In conducting the review under subparagraph (A), the

Secretary shall assess possible additional incentives that may be

extended to mentor firms to ensure adequate support and

participation in the Mentor-Protege Program, including increasing

the level of credit in lieu of subcontract awards presently

extended to mentor firms for purposes of determining whether mentor

firms attain subcontracting participation goals applicable under

Department of Defense contracts.

''(C) Not later than September 30, 2000, the Secretary shall

submit to the Committees on Armed Services of the Senate and the

House of Representatives -

''(i) a report on the results of the review conducted under

this paragraph; and

''(ii) any recommendations of the Secretary for legislative

action.

''(3)(A) The Comptroller General shall conduct a study on the

implementation of the Mentor-Protege Program established in section

831 of the National Defense Authorization Act for Fiscal Year 1991

(Public Law 101-510; 10 U.S.C. 2302 note) and the extent to which

the program is achieving the purposes established in that section

in a cost-effective manner.

''(B) The study shall include the following:

''(i) A review of the manner in which funds for the

Mentor-Protege Program have been obligated.

''(ii) An identification and assessment of the average amount

spent by the Department of Defense on individual mentor-protege

agreements, and the correlation between levels of funding and

business development of protege firms.

''(iii) An evaluation of the effectiveness of the incentives

provided to mentor firms to participate in the Mentor-Protege

Program and whether reimbursements remain a cost-effective and

viable incentive.

''(iv) An assessment of the success of the Mentor-Protege

Program in enhancing the business competitiveness and financial

independence of protege firms.

''(v) A review of the relationship between the results of the

Mentor-Protege Program and the objectives established in section

2323 of title 10, United States Code.

''(C) Not later than January 1, 2002, the Comptroller General

shall submit to the Committees on Armed Services of the Senate and

House of Representatives a report on the results of the study.''

Section 807(a) of Pub. L. 102-484 provided that: ''Within 15 days

after the date of the enactment of this Act (Oct. 23, 1992), the

Secretary of Defense shall 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 existed on December 6, 1991. Proposed

modifications to that policy and any amendments of the matters

published pursuant to the preceding sentence that are proposed in

order to implement any of the amendments made by this section shall

be published for public comment within 60 days after the date of

the enactment of this Act and shall be published in final form

within 120 days after such date.''

Pub. L. 101-510, div. A, title VIII, Sec. 831, Nov. 5, 1990, 104

Stat. 1607, as amended by Pub. L. 102-25, title VII, Sec. 704(c),

Apr. 6, 1991, 105 Stat. 119; Pub. L. 102-172, title VIII, Sec.

8064A, Nov. 26, 1991, 105 Stat. 1186; Pub. L. 102-190, div. A,

title VIII, Sec. 814(b), Dec. 5, 1991, 105 Stat. 1425; Pub. L.

102-484, div. A, title VIII, Sec. 801(h)(4), 807(b)(1), title X,

Sec. 1054(d), Oct. 23, 1992, 106 Stat. 2445, 2448, 2503; Pub. L.

103-160, div. A, title VIII, Sec. 813(b)(1), (c), Nov. 30, 1993,

107 Stat. 1703; Pub. L. 104-106, div. A, title VIII, Sec. 824,

Feb. 10, 1996, 110 Stat. 399; Pub. L. 104-201, div. A, title VIII,

Sec. 802, Sept. 23, 1996, 110 Stat. 2604; Pub. L. 105-85, div. A,

title VIII, Sec. 821(a), title X, Sec. 1073(c)(6), Nov. 18, 1997,

111 Stat. 1840, 1904; Pub. L. 106-65, div. A, title VIII, Sec.

811(a)-(d)(1), (e), Oct. 5, 1999, 113 Stat. 706, 707, 709; Pub. L.

106-398, Sec. 1 ((div. A), title VIII, Sec. 807), Oct. 30, 2000,

114 Stat. 1654, 1654A-208; Pub. L. 107-107, div. A, title VIII,

Sec. 812, Dec. 28, 2001, 115 Stat. 1181, 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, 2005.

''(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, 2008.

''(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 2007, 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; or

''(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)).

''(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, Sec. 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, Sec. 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, Sec.

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, Sec. 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, Sec. 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, Sec. 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, Sec. 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 Section 101(c) of Division A of Public

Public Law 99-500 Public Law 99-591 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, Sec. 806(d), 101 Stat. 1127; Pub. L. 100-456,

div. A, title VIII, Sec. 844, Sept. 29, 1988, 102 Stat. 2027; Pub.

L. 101-189, div. A, title VIII, Sec. 831, Nov. 29, 1989, 103 Stat.

1507; Pub. L. 101-510, div. A, title VIII, Sec. 811, 832, title

XIII, Sec. 1302(d), 1312(b), Nov. 5, 1990, 104 Stat. 1596, 1612,

1669, 1670; Pub. L. 102-25, title VII, Sec. 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, Sec. 801(a)(1)(B), (h)(1).

MINIMUM PERCENTAGE OF COMPETITIVE PROCUREMENTS

Pub. L. 99-145, title IX, Sec. 913, Nov. 8, 1985, 99 Stat. 687,

as amended by Pub. L. 101-510, div. A, title XIII, Sec.

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,

Sec. 101(c) (title X, Sec. 953(c)), Oct. 18, 1986, 100 Stat.

1783-82, 1783-172, and Pub. L. 99-591, Sec. 101(c) (title X, Sec.

953(c)), Oct. 30, 1986, 100 Stat. 3341-82, 3341-172; Pub. L.

99-661, div. A, title IX, formerly title IV, Sec. 953(c), Nov. 14,

1986, 100 Stat. 3952, renumbered title IX, Pub. L. 100-26, Sec.

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, Sec. 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, Sec. 3(a), (c). Section 2501 of this title was renumbered

section 2506 by Pub. L. 100-456, Sec. 821(b)(1)(A). Section 2506 of

this title was renumbered section 2533 by Pub. L. 102-484, Sec.

4202(a).

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1737, 2218, 2302d, 2304,

2366, 2367, 2399, 2409, 2410n, 2646 of this title; title 6 section

423; title 50 App. section 2171.

-CITE-

10 USC Sec. 2302a 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle A - General Military Law

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 137 - PROCUREMENT GENERALLY

-HEAD-

Sec. 2302a. Simplified acquisition threshold

-STATUTE-

(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.

-SOURCE-

(Added and amended Pub. L. 103-355, title IV, Sec. 4002(a),

4102(a), Oct. 13, 1994, 108 Stat. 3338, 3340.)

-REFTEXT-

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.

-MISC2-

AMENDMENTS

1994 - Subsec. (b). Pub. L. 103-355, Sec. 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.

-CITE-

10 USC Sec. 2302b 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle A - General Military Law

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 137 - PROCUREMENT GENERALLY

-HEAD-

Sec. 2302b. Implementation of simplified acquisition procedures

-STATUTE-

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.

-SOURCE-

(Added Pub. L. 103-355, title IV, Sec. 4203(a)(1), Oct. 13, 1994,

108 Stat. 3345.)

-REFTEXT-

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.

-MISC2-

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.

-CITE-

10 USC Sec. 2302c 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle A - General Military Law

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 137 - PROCUREMENT GENERALLY

-HEAD-

Sec. 2302c. Implementation of electronic commerce capability

-STATUTE-

(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(3)

of the Office of Federal Procurement Policy Act (41 U.S.C. 414(3)).

-SOURCE-

(Added Pub. L. 103-355, title IX, Sec. 9002(a), Oct. 13, 1994, 108

Stat. 3402; amended Pub. L. 105-85, div. A, title VIII, Sec.

850(f)(3)(A), Nov. 18, 1997, 111 Stat. 1850; Pub. L. 105-129, Sec.

1(a)(1), Dec. 1, 1997, 111 Stat. 2551; Pub. L. 106-65, div. A,

title X, Sec. 1066(a)(18), Oct. 5, 1999, 113 Stat. 771; Pub. L.

107-107, div. A, title X, Sec. 1048(b)(2), Dec. 28, 2001, 115

Stat. 1225.)

-MISC1-

AMENDMENTS

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.''

-CITE-

10 USC Sec. 2302d 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle A - General Military Law

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 137 - PROCUREMENT GENERALLY

-HEAD-

Sec. 2302d. Major system: definitional threshold amounts

-STATUTE-

(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''.

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.

-SOURCE-

(Added Pub. L. 104-201, div. A, title VIII, Sec. 805(a)(2), Sept.

23, 1996, 110 Stat. 2605; amended Pub. L. 105-85, div. A, title X,

Sec. 1073(a)(41), Nov. 18, 1997, 111 Stat. 1902; Pub. L. 106-65,

div. A, title X, Sec. 1067(1), Oct. 5, 1999, 113 Stat. 774.)

-MISC1-

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''.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 2302 of this title.

-CITE-

10 USC Sec. 2303 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle A - General Military Law

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 137 - PROCUREMENT GENERALLY

-HEAD-

Sec. 2303. Applicability of chapter

-STATUTE-

(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.

-SOURCE-

(Aug. 10, 1956, ch. 1041, 70A Stat. 128; Pub. L. 85-568, title III,

Sec. 301(b), July 29, 1958, 72 Stat. 432; Pub. L. 98-369, div. B,

title VII, Sec. 2722(b), July 18, 1984, 98 Stat. 1187.)

-MISC1-

Historical and Revision Notes

---------------------------------------------------------------------

Revised section Source (U.S. Code) Source (Statutes at

Large)

---------------------------------------------------------------------

2303(a) 2303(b) 41:151(a). 41:158 Feb. 19, 1948, ch.

(clause (b), less 65, Sec. 2(a), 9

last 5 words). (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, Sec. 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, Sec. 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, Sec. 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.

-TRANS-

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.

-MISC5-

ACQUISITION, LEASE, OR RENTAL FOR USE BY THE ARMED FORCES OF MOTOR

BUSES MANUFACTURED OUTSIDE THE UNITED STATES

Pub. L. 90-500, title IV, Sec. 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, Sec. 1(29)(A), 6(b), Oct. 12,

1982, 96 Stat. 1294, 1314.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 2302a, 2302b, 2302c,

2304, 2305, 2307, 2309, 2311, 2314, 2318, 2320, 2374, 2384a, 2409,

2410 of this title.

-CITE-

10 USC Sec. 2303a 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle A - General Military Law

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 137 - PROCUREMENT GENERALLY

-HEAD-

(Sec. 2303a. Repealed. Pub. L. 98-577, title III, Sec. 302(c)(1),

Oct. 30, 1984, 98 Stat. 3077)

-MISC1-

Section, Pub. L. 98-525, title XII, Sec. 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.

-CITE-

10 USC Sec. 2304 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle A - General Military Law

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 137 - PROCUREMENT GENERALLY

-HEAD-

Sec. 2304. Contracts: competition requirements

-STATUTE-

(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;

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.

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 $50,000,000), by the

head of the procuring activity (or the head of the procuring

activity's delegate designated pursuant to paragraph (6)(A));

(iii) in the case of a contract for an amount exceeding

$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)) (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

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)(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;

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

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.

-SOURCE-

(Aug. 10, 1956, ch. 1041, 70A Stat. 128; Pub. L. 85-800, Sec. 8,

Aug. 28, 1958, 72 Stat. 967; Pub. L. 85-861, Sec. 33(a)(12), Sept.

2, 1958, 72 Stat. 1565; Pub. L. 87-653, Sec. 1(a)-(c), Sept. 10,

1962, 76 Stat. 528; Pub. L. 90-268, Sec. 5, Mar. 16, 1968, 82 Stat.

50; Pub. L. 90-500, title IV, Sec. 405, Sept. 20, 1968, 82 Stat.

851; Pub. L. 93-356, Sec. 4, July 25, 1974, 88 Stat. 390; Pub. L.

96-513, title V, Sec. 511(76), Dec. 12, 1980, 94 Stat. 2926; Pub.

L. 97-86, title IX, Sec. 907(a), Dec. 1, 1981, 95 Stat. 1117; Pub.

L. 97-295, Sec. 1(24), Oct. 12, 1982, 96 Stat. 1290; Pub. L.

97-375, title I, Sec. 114, Dec. 21, 1982, 96 Stat. 1821; Pub. L.

98-369, div. B, title VII, Sec. 2723(a), 2727(b), July 18, 1984,

98 Stat. 1187, 1194; Pub. L. 98-577, title V, Sec. 504(b)(1), (2),

Oct. 30, 1984, 98 Stat. 3086; Pub. L. 99-145, title IX, Sec.

961(a)(1), title XIII, Sec. 1303(a)(13), Nov. 8, 1985, 99 Stat.

703, 739; Pub. L. 99-500, Sec. 101(c) (title X, Sec. 923(a)-(c),

927(a)), Oct. 18, 1986, 100 Stat. 1783-82, 1783-152, 1783-155, and

Pub. L. 99-591, Sec. 101(c) (title X, Sec. 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, Sec. 923(a)-(c),

927(a), title XIII, Sec. 1343(a)(14), Nov. 14, 1986, 100 Stat.

3932, 3935, 3993, renumbered title IX, Pub. L. 100-26, Sec. 3(5),

Apr. 21, 1987, 101 Stat. 273; Pub. L. 100-26, Sec. 7(d)(3), Apr.

21, 1987, 101 Stat. 281; Pub. L. 100-456, div. A, title VIII, Sec.

803, Sept. 29, 1988, 102 Stat. 2008; Pub. L. 101-189, div. A,

title VIII, Sec. 812, 817, 818, 853(d), Nov. 29, 1989, 103 Stat.

1493, 1501, 1502, 1519; Pub. L. 101-510, div. A, title VIII, Sec.

806(b), Nov. 5, 1990, 104 Stat. 1592; Pub. L. 102-25, title VII,

Sec. 701(d)(2), Apr. 6, 1991, 105 Stat. 114; Pub. L. 102-484, div.

A, title VIII, Sec. 801(h)(2), 816, title X, Sec. 1052(23), Oct.

23, 1992, 106 Stat. 2445, 2454, 2500; Pub. L. 103-160, div. A,

title IX, Sec. 904(d)(1), Nov. 30, 1993, 107 Stat. 1728; Pub. L.

103-355, title I, Sec. 1001-1003, 1004(b), 1005, title IV, Sec.

4401(a), title VII, Sec. 7203(a)(1), Oct. 13, 1994, 108 Stat. 3249,

3253, 3254, 3347, 3379; Pub. L. 104-106, div. D, title XLI, Sec.

4101(a), 4102(a), title XLII, Sec. 4202(a)(1), title XLIII, Sec.

4321(b)(4), (5), Feb. 10, 1996, 110 Stat. 642, 643, 652, 672; Pub.

L. 104-320, Sec. 7(a)(1), 11(c)(1), Oct. 19, 1996, 110 Stat. 3871,

3873; Pub. L. 105-85, div. A, title VIII, Sec. 841(b),

850(f)(3)(B), title X, Sec. 1073(a)(42), (43), Nov. 18, 1997, 111

Stat. 1843, 1850, 1902; Pub. L. 107-107, div. A, title X, Sec.

1048(b)(2), Dec. 28, 2001, 115 Stat. 1225; Pub. L. 107-217, Sec.

3(b)(3), Aug. 21, 2002, 116 Stat. 1295.)

-MISC1-

Historical and Revision Notes

1956 Act

---------------------------------------------------------------------

Revised section Source (U.S. Code) Source (Statutes at

Large)

---------------------------------------------------------------------

2304(a) 2304(b) 41:151(c) (less Feb. 19, 1948, ch.

proviso of clause 65, Sec. 2(b) (less

(11) and proviso of 1st sentence), (c),

clause (16)). (e), 7(d), 8, 62

41:156(d). 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 section Source (U.S. Code) Source (Statutes at

Large)

---------------------------------------------------------------------

2304(a) (1st 10:2304 (note). Mar. 16, 1967, Pub.

sentence) L. 90-5, Sec. 304,

81 Stat. 6.

2304(f)(1) 10:2304(f)(1).

2304(i) 10:2304 (note). Sept. 21, 1977, Pub.

L. 95-111, Sec.

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.

-REFTEXT-

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 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.

-COD-

CODIFICATION

Pub. L. 99-591 is a corrected version of Pub. L. 99-500.

-MISC3-

AMENDMENTS

2002 - Subsec. (h). Pub. L. 107-217, Sec. 3(b)(3)(A), struck out

''laws'' after ''following'' in introductory provisions.

Subsec. (h)(2). Pub. L. 107-217, Sec. 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, Sec. 1073(a)(42),

substituted ''subsection (k)'' for ''subsection (j)''.

Subsec. (f)(1)(B)(iii). Pub. L. 105-85, Sec. 1073(a)(43)(A),

substituted ''(6)(B)'' for ''(6)(C)''.

Subsec. (f)(2)(E). Pub. L. 105-85, Sec. 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, Sec. 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, Sec. 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, Sec. 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, Sec. 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, Sec. 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, Sec. 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, Sec. 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, Sec. 4202(a)(1)(B), added par.

(4).

Subsec. (h)(1). Pub. L. 104-106, Sec. 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, Sec. 4101(a), added subsec.

(j) and redesignated former subsec. (j) as (k).

1994 - Subsec. (a)(1)(A). Pub. L. 103-355, Sec. 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, Sec. 1002(a), added

subpars. (D) to (F).

Subsec. (b)(4). Pub. L. 103-355, Sec. 1002(b), added par. (4).

Subsec. (c)(3)(C). Pub. L. 103-355, Sec. 1005, added subpar. (C).

Subsec. (c)(5). Pub. L. 103-355, Sec. 7203(a)(1)(A), inserted

''subject to subsection (j),'' after ''(5)''.

Subsec. (f)(1)(B)(i). Pub. L. 103-355, Sec. 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, Sec. 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, Sec. 4401(a)(4), substituted

''simplified acquisition threshold'' for ''small purchase

threshold'' and ''simplified procedures'' for ''small purchase

procedures''.

Pub. L. 103-355, Sec. 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, Sec. 4401(a)(5), substituted

''simplified procedures'' for ''small purchase procedures''.

Pub. L. 103-355, Sec. 4401(a)(3), redesignated par. (4) as (3).

Former par. (3) redesignated (2).

Subsec. (g)(4). Pub. L. 103-355, Sec. 4401(a)(3), redesignated

par. (4) as (3).

Subsec. (j). Pub. L. 103-355, Sec. 7203(a)(1)(B), added subsec.

(j).

Pub. L. 103-355, Sec. 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, Sec. 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, Sec. 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, Sec. 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, Sec. 701(d)(2)(A)(i),

substituted ''subsection'' for ''chapter''.

Subsec. (g)(5). Pub. L. 102-25, Sec. 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, Sec. 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, Sec. 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, Sec. 818(a)(1), (3),

added cl. (iii). Former cl. (iii) redesignated (iv).

Subsec. (f)(1)(B)(iv). Pub. L. 101-189, Sec. 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, Sec. 817(a), added subpar.

(E).

Subsec. (f)(4). Pub. L. 101-189, Sec. 817(b), inserted '', and

any document prepared pursuant to paragraph (2)(E),'' after ''any

related information''.

Subsec. (f)(6)(B). Pub. L. 101-189, Sec. 818(b)(2), added subpar.

(B). Former subpar. (B) redesignated (C).

Subsec. (f)(6)(C). Pub. L. 101-189, Sec. 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, Sec. 812, added subsec. (j).

1988 - Subsec. (f)(1)(B)(ii). Pub. L. 100-456, Sec. 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, Sec. 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, Sec. 803(3), added par. (6).

1987 - Subsec. (a)(1)(A). Pub. L. 100-26, Sec. 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, Sec. 7(d)(3)(B), inserted

''(41 U.S.C. 416)'' after ''Policy Act''.

Subsec. (g)(1). Pub. L. 100-26, Sec. 7(d)(3)(A), inserted ''(41

U.S.C. 403 note)'' after ''Act of 1984''.

1986 - Subsec. (b)(2). Pub. L. 99-661, Sec. 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, Sec. 101(c)

(Sec. 923(a)), Pub. L. 99-661, Sec. 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, Sec. 101(c)

(Sec. 923(b)), Pub. L. 99-661, Sec. 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, Sec. 101(c)

(Sec. 923(c)), Pub. L. 99-661, Sec. 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, Sec. 101(c) (Sec.

927(a)), Pub. L. 99-661, Sec. 927(a), amended section identically,

adding subsec. (i).

1985 - Subsec. (a)(1)(B). Pub. L. 99-145, Sec. 1303(a)(13),

substituted ''procedures'' for ''krocedures''.

Subsec. (f)(2). Pub. L. 99-145, Sec. 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, Sec. 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, Sec. 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, Sec. 504(b)(1), added par. (3).

Subsec. (f)(2). Pub. L. 98-577, Sec. 504(b)(2), designated

existing provisions as subpar. (A) and added subpar. (B).

Subsec. (h). Pub. L. 98-369, Sec. 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, Sec. 2723(a)(1)(B), redesignated subsec. (f) as

(h).

1982 - Subsec. (a). Pub. L. 97-295, Sec. 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, Sec. 1(24)(B), substituted

''Healey'' for ''Healy'' after ''Walsh-''.

Subsec. (i). Pub. L. 97-295, Sec. 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, Sec. 4(a), substituted

''$10,000'' for ''$2,500''.

Subsec. (g). Pub. L. 93-356, Sec. 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, Sec. 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, Sec. 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, Sec. 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, Sec. 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 (Sec. 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)).''

COMPETITION REQUIREMENT FOR PURCHASE OF SERVICES PURSUANT TO

MULTIPLE AWARD CONTRACTS

Pub. L. 107-107, div. A, title VIII, Sec. 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, Sec. 1 ((div. A), title VIII, Sec. 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, Sec. 806(b), Oct. 5, 1999,

113 Stat. 705, provided that: ''Not later than March 1, 2001, the

Comptroller General shall submit to Congress an evaluation of the

test program authorized by the provisions in section 4202 of the

Clinger-Cohen Act of 1996 (Pub. L. 104-106, amending this section,

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 considers 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, Sec. 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, Sec. 391, Nov. 18, 1997, 111

Stat. 1716, as amended by Pub. L. 106-65, div. A, title III, Sec.

382, Oct. 5, 1999, 113 Stat. 583; Pub. L. 107-107, div. A, title

III, Sec. 364, Dec. 28, 2001, 115 Stat. 1068; Pub. L. 107-314,

div. A, title III, Sec. 368, Dec. 2, 2002, 116 Stat. 2524,

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, 2004, and contracts entered into under

this section shall terminate not later than that date.''

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, Sec. 4202(e), Feb. 10,

1996, 110 Stat. 654, as amended by Pub. L. 106-65, div. A, title

VIII, Sec. 806(a), Oct. 5, 1999, 113 Stat. 705; Pub. L. 107-107,

div. A, title VIII, Sec. 823, Dec. 28, 2001, 115 Stat. 1183; Pub.

L. 107-314, div. A, title VIII, Sec. 812(a), Dec. 2, 2002, 116

Stat. 2609, 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, 2004. 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, Sec. 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, Sec. 1111, Dec. 4, 1987, 101

Stat. 1146, provided that:

''(a) Authority. - The Secretary of Defense shall direct that the

commander of each military installation (under regulations

prescribed by the Secretary of Defense and subject to the

authority, direction, and control of the Secretary) shall have the

authority and the responsibility to carry out the following:

''(1) Prepare an inventory each fiscal year of commercial

activities carried out by Government personnel on the military

installation.

''(2) Decide which commercial activities shall be reviewed

under the procedures and requirements of 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.

''(4) To the maximum extent practicable, assist in finding

suitable employment for any employee of the Department of Defense

who is displaced because of a contract entered into with a

contractor for performance of a commercial activity on the

military installation.

''(b) Deadline for Regulations. - The Secretary shall prescribe

the regulations required by subsection (a) no later than 60 days

after the date of the enactment of this Act (Dec. 4, 1987).

''(c) Definition. - In this section, the term 'military

installation' means a base, camp, post, station, yard, center, or

other activity under the jurisdiction of the Secretary of a

military department which is located within any of the several

States, the District of Columbia, the Commonwealth of Puerto Rico,

or Guam.

''(d) Termination of Authority. - The authority provided for

commanders of military installations by subsection (a) shall

terminate on October 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, Sec. 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, Sec. 807, Sept. 29, 1988,

102 Stat. 2011, as amended by Pub. L. 103-160, div. A, title IX,

Sec. 904(f), Nov. 30, 1993, 107 Stat. 1729, provided that not later

than 120 days after Sept. 29, 1988, the Secretary of Defense was to

make certain revisions to the Department of Defense regulations

that provide for the use of fixed-price type contracts in a

development program.

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, Sec. 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, Sec. 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;

''(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, Sec. 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, Sec. 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, Sec. 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, Sec. 5, Sept. 28, 1988, 102 Stat. 1837, as

amended by Pub. L. 104-66, title I, Sec. 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, Sec. 1121(b), Dec.

21, 1995, 109 Stat. 724.)

''((b) Repealed. Pub. L. 104-66, title I, Sec. 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, Sec. 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, Sec. 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, Sec. 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, Sec. 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, Sec. 101(c) (title X, Sec. 941(b)),

Oct. 18, 1986, 100 Stat. 1783-82, 1783-162, and Pub. L. 99-591,

Sec. 101(c) (title X, Sec. 941(b)), Oct. 30, 1986, 100 Stat.

3341-82, 3341-162; Pub. L. 99-661, div. A, title IX, formerly

title IV, Sec. 941(b), Nov. 14, 1986, 100 Stat. 3942, renumbered

title IX, Pub. L. 100-26, Sec. 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, Sec. 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, Sec. 101(c) (title X, Sec. 952(b)(2), (d)), Oct.

18, 1986, 100 Stat. 1783-82, 1783-169, and Pub. L. 99-591, Sec.

101(c) (title X, Sec. 952(b)(2), (d)), Oct. 30, 1986, 100 Stat.

3341-82, 3341-169; Pub. L. 99-661, div. A, title IX, formerly

title IV, Sec. 952(b)(2), (d), Nov. 14, 1986, 100 Stat. 3949,

renumbered title IX, Pub. L. 100-26, Sec. 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, Sec. 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, Sec. 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, Sec. 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, Sec. 2(a)(1), (c)(2), July 19, 1988, 102 Stat. 853, 854.

SHIPBUILDING CLAIMS FOR CONTRACT PRICE ADJUSTMENTS

Pub. L. 98-473, title I, Sec. 101(h) (title VIII, Sec. 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, Sec. 1(p)(2), July 19,

1988, 102 Stat. 851.

Pub. L. 98-212, title VII, Sec. 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, Sec.

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, Sec. 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, Sec. 1234(b)(1), Oct. 19, 1984, 98 Stat. 2604, effective Jan.

1, 1985.

FIGHTER AIRCRAFT ENGINE WARRANTY

Pub. L. 97-377, title I, Sec. 101(c) (title VII, Sec. 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, Sec. 100, June 5, 1981, 95 Stat. 29, and

Pub. L. 97-114, title VII, Sec. 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, Sec. 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, Sec. 502, Sept. 8, 1980, 94 Stat. 1086,

as amended by Pub. L. 97-252, title XI, Sec. 1112(a), Sept. 8,

1982, 96 Stat. 747; Pub. L. 99-145, title XII, Sec. 1234(a), Nov.

8, 1985, 99 Stat. 734; Pub. L. 99-661, div. A, title XII, Sec.

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, Sec. 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, Sec. 806, Nov. 9, 1979, 93 Stat. 813.

CONTRACT CLAIMS; REQUEST FOR EQUITABLE ADJUSTMENT; REQUEST FOR

RELIEF; CERTIFICATION

Pub. L. 95-485, title VIII, Sec. 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, Sec. 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, Sec. 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, Sec. 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, Sec. 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, Sec. 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, Sec. 816, Oct. 7, 1975, 89 Stat. 540,

as amended by Pub. L. 98-620, title IV, Sec. 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, Sec. 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, Sec. 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, Sec. 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, Sec. 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.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1091, 1724, 2304a, 2304b,

2304c, 2308, 2343, 2350b, 2361, 2486, 2533a, 2688, 4554 of this

title; title 6 sections 425, 426; title 15 section 637; title 41

sections 416, 417, 427; title 50 sections 403c, 1432, 1651; title

50 App. section 2077.

-CITE-

10 USC Sec. 2304a 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle A - General Military Law

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 137 - PROCUREMENT GENERALLY

-HEAD-

Sec. 2304a. Task and delivery order contracts: general authority

-STATUTE-

(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.

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) 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).

(g) 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.

-SOURCE-

(Added Pub. L. 103-355, title I, Sec. 1004(a)(1), Oct. 13, 1994,

108 Stat. 3249.)

-COD-

CODIFICATION

Another section 2304a was renumbered section 2304e of this title.

-MISC3-

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 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 -

''(1) the Brooks Automatic Data Processing Act (section 111 of

the Federal Property and Administrative Services Act of 1949

((former) 40 U.S.C. 759)); and

''(2) the Brooks Architect-Engineers Act (title IX of the

Federal Property and Administrative Services Act of 1949 (40

U.S.C. 541 et seq.)) (now chapter 11 of Title 40, Public

Buildings, Property, and Works).''

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 2304b, 2304c, 2304d,

2306c of this title.

-CITE-

10 USC Sec. 2304b 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle A - General Military Law

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 137 - PROCUREMENT GENERALLY

-HEAD-

Sec. 2304b. Task order contracts: advisory and assistance services

-STATUTE-

(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.

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.

-SOURCE-

(Added Pub. L. 103-355, title I, Sec. 1004(a)(1), Oct. 13, 1994,

108 Stat. 3251.)

-MISC1-

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.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 2304a, 2304c, 2304d,

2306c of this title.

-CITE-

10 USC Sec. 2304c 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle A - General Military Law

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 137 - PROCUREMENT GENERALLY

-HEAD-

Sec. 2304c. Task and delivery order contracts: orders

-STATUTE-

(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.

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.

-SOURCE-

(Added Pub. L. 103-355, title I, Sec. 1004(a)(1), Oct. 13, 1994,

108 Stat. 3252.)

-MISC1-

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.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 2304a, 2304b, 2304d,

2306c of this title; title 6 section 426.

-CITE-

10 USC Sec. 2304d 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle A - General Military Law

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 137 - PROCUREMENT GENERALLY

-HEAD-

Sec. 2304d. Task and delivery order contracts: definitions

-STATUTE-

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.

-SOURCE-

(Added Pub. L. 103-355, title I, Sec. 1004(a)(1), Oct. 13, 1994,

108 Stat. 3253.)

-MISC1-

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.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 2304a, 2304b of this

title.

-CITE-

10 USC Sec. 2304e 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle A - General Military Law

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 137 - PROCUREMENT GENERALLY

-HEAD-

Sec. 2304e. Contracts: prohibition on competition between

Department of Defense and small businesses and certain other

entities

-STATUTE-

(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.

-SOURCE-

(Added Pub. L. 103-160, div. A, title VIII, Sec. 848(a)(1), Nov.

30, 1993, 107 Stat. 1724, Sec. 2304a; renumbered Sec. 2304e, Pub.

L. 104-106, div. D, title XLIII, Sec. 4321(b)(6)(A), Feb. 10,

1996, 110 Stat. 672.)

-MISC1-

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).''

-CITE-

10 USC Sec. 2305 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle A - General Military Law

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 137 - PROCUREMENT GENERALLY

-HEAD-

Sec. 2305. Contracts: planning, solicitation, evaluation, and award

procedures

-STATUTE-

(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.

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;

(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.

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.

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).

(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.

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.

-SOURCE-

(Aug. 10, 1956, ch. 1041, 70A Stat. 130; Pub. L. 85-861, Sec.

1(44), Sept. 2, 1958, 72 Stat. 1457; Pub. L. 90-268, Sec. 3, Mar.

16, 1968, 82 Stat. 49; Pub. L. 98-369, div. B, title VII, Sec.

2723(b), July 18, 1984, 98 Stat. 1191; Pub. L. 98-525, title XII,

Sec. 1213(a), Oct. 19, 1984, 98 Stat. 2591; Pub. L. 99-145, title

XIII, Sec. 1303(a)(14), Nov. 8, 1985, 99 Stat. 739; Pub. L. 99-500,

Sec. 101(c) (title X, Sec. 924(a), (b)), Oct. 18, 1986, 100 Stat.

1783-82, 1783-153, and Pub. L. 99-591, Sec. 101(c) (title X, Sec.

924(a), (b)), Oct. 30, 1986, 100 Stat. 3341-82, 3341-153; Pub. L.

99-661, div. A, title III, Sec. 313(b), title IX, formerly title

IV, Sec. 924(a), (b), Nov. 14, 1986, 100 Stat. 3853, 3932, 3933,

renumbered title IX, Pub. L. 100-26, Sec. 3(5), Apr. 21, 1987, 101

Stat. 273; Pub. L. 100-456, div. A, title VIII, Sec. 806, Sept.

29, 1988, 102 Stat. 2010; Pub. L. 101-189, div. A, title VIII,

Sec. 853(f), Nov. 29, 1989, 103 Stat. 1519; Pub. L. 101-510, div.

A, title VIII, Sec. 802(a)-(d), Nov. 5, 1990, 104 Stat. 1588, 1589;

Pub. L. 103-160, div. A, title XI, Sec. 1182(a)(5), Nov. 30, 1993,

107 Stat. 1771; Pub. L. 103-355, title I, Sec. 1011-1016, title IV,

Sec. 4401(b), Oct. 13, 1994, 108 Stat. 3254-3257, 3347; Pub. L.

104-106, div. D, title XLI, Sec. 4103(a), 4104(a), title XLII,

Sec. 4202(a)(2), div. E, title LVI, Sec. 5601(a), Feb. 10, 1996,

110 Stat. 643, 644, 653, 699; Pub. L. 104-201, div. A, title VIII,

Sec. 821(a), title X, Sec. 1074(a)(11), (b)(4)(A), Sept. 23, 1996,

110 Stat. 2609, 2659, 2660; Pub. L. 106-65, div. A, title VIII,

Sec. 821, Oct. 5, 1999, 113 Stat. 714.)

-MISC1-

Historical and Revision Notes

1956 Act

---------------------------------------------------------------------

Revised section Source (U.S. Code) Source (Statutes at

Large)

---------------------------------------------------------------------

2305(a) 2305(b) 41:152 (less clause Feb. 19, 1948, ch.

(b)). 41:152 65, Sec. 2(d), 3,

(clause (b)). 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 section Source (U.S. Code) Source (Statutes at

Large)

---------------------------------------------------------------------

2305 41:152(c). Aug. 9, 1955, ch.

628, Sec. 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''.

-COD-

CODIFICATION

Pub. L. 99-591 is a corrected version of Pub. L. 99-500.

-MISC3-

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, Sec. 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, Sec. 4103(a)(3), added

subpar. (B). Former subpar. (B) redesignated (C).

Pub. L. 104-106, Sec. 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, Sec. 4103(a)(2), redesignated

subpar. (B) as (C).

Pub. L. 104-106, Sec. 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, Sec. 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, Sec. 4104(a)(3), added par. (6).

Former par. (6) redesignated (9).

Subsec. (b)(6)(B). Pub. L. 104-201, Sec. 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, Sec. 1074(a)(11)(B),

substituted ''subparagraph (A)'' for ''this subsection'' in

introductory provisions.

Subsec. (b)(6)(D). Pub. L. 104-201, Sec. 1074(a)(11)(C),

substituted ''under subparagraph (A)'' for ''pursuant to this

subsection''.

Subsec. (b)(7), (8). Pub. L. 104-106, Sec. 4104(a)(3), added

pars. (7) and (8).

Subsec. (b)(9). Pub. L. 104-106, Sec. 4104(a)(2), redesignated

par. (6) as (9).

Subsec. (e)(3). Pub. L. 104-106, Sec. 5601(a), as amended by Pub.

L. 104-201, Sec. 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, Sec. 821(a), added subsec. (g).

1994 - Subsec. (a)(2). Pub. L. 103-355, Sec. 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, Sec. 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, Sec. 1011(a)(2),

substituted ''and subfactors'' for ''(and subfactors)''.

Subsec. (a)(2)(B)(ii)(I). Pub. L. 103-355, Sec. 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, Sec. 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, Sec. 1011(b), added par. (4).

Subsec. (a)(5). Pub. L. 103-355, Sec. 1012, added par. (5).

Subsec. (b)(3). Pub. L. 103-355, Sec. 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, Sec. 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, Sec. 1014, added par. (5)

and redesignated former par. (5) as (6).

Subsec. (e). Pub. L. 103-355, Sec. 1015, added subsec. (e).

Subsec. (f). Pub. L. 103-355, Sec. 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, Sec. 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, Sec. 802(a)(2), inserted

''(and subfactors)'' after ''those factors''.

Subsec. (a)(2(B)(ii)(I). Pub. L. 101-510, Sec. 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, Sec. 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, Sec. 802(d)(1), inserted ''and

make an award'' after ''competitive proposals''.

Subsec. (b)(3). Pub. L. 101-510, Sec. 802(d)(2), inserted ''in

accordance with paragraph (1)'' after ''shall evaluate the bids''.

Subsec. (b)(4)(A). Pub. L. 101-510, Sec. 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, Sec. 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, Sec. 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, Sec. 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, Sec. 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, Sec. 806(a)(1), added par. (4).

1986 - Subsec. (a). Pub. L. 99-500 and Pub. L. 99-591, Sec.

101(c) (Sec. 924(a)), Pub. L. 99-661, Sec. 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, Sec. 101(c)

(Sec. 924(b)), Pub. L. 99-661, Sec. 924(b), amended subpar. (B)

identically, inserting ''cost or''.

Subsec. (b)(4)(E). Pub. L. 99-661, Sec. 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, Sec. 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, Sec. 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.

CERTIFICATE OF COMPETENCY REQUIREMENTS

Pub. L. 102-484, div. A, title VIII, Sec. 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 note 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, Sec. 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.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 2305a, 2320 of this

title; title 41 section 431; title 42 section 1594; title 50

section 403c.

-CITE-

10 USC Sec. 2305a 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle A - General Military Law

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 137 - PROCUREMENT GENERALLY

-HEAD-

Sec. 2305a. Design-build selection procedures

-STATUTE-

(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.

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 the

Brooks Architect-Engineers Act (FOOTNOTE 1) (40 U.S.C. 541 et

seq.).

(FOOTNOTE 1) See References in Text note below.

(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.

-SOURCE-

(Added Pub. L. 104-106, div. D, title XLI, Sec. 4105(a)(1), Feb.

10, 1996, 110 Stat. 645; amended Pub. L. 105-85, div. A, title X,

Sec. 1073(a)(44), Nov. 18, 1997, 111 Stat. 1902; Pub. L. 107-217,

Sec. 3(b)(4), Aug. 21, 2002, 116 Stat. 1295.)

-REFTEXT-

REFERENCES IN TEXT

The Brooks Architect-Engineers Act, referred to in subsec.

(c)(1), is title IX of act June 30, 1949, ch. 288, as added by act

Oct. 27, 1972, Pub. L. 92-582, 86 Stat. 1278, as amended, which was

classified generally to subchapter VI (Sec. 541 et seq.) of chapter

10 of former Title 40, Public Buildings, Property, and Works, and

was repealed and reenacted by Pub. L. 107-217, Sec. 1, 6(b), Aug.

21, 2002, 116 Stat. 1062, 1304, as chapter 11 of Title 40, Public

Buildings, Property, and Works.

-MISC2-

PRIOR PROVISIONS

A prior section 2305a was renumbered section 2438 of this title.

AMENDMENTS

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

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.

-CITE-

10 USC Sec. 2306 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle A - General Military Law

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 137 - PROCUREMENT GENERALLY

-HEAD-

Sec. 2306. Kinds of contracts

-STATUTE-

(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, Sec. 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) 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 -

(1) a cost-plus-a-fixed-fee subcontract; or

(2) a fixed-price subcontract or purchase order involving more

than the greater of (A) the simplified acquisition threshold, or

(B) 5 percent of the estimated cost of the prime 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.

-SOURCE-

(Aug. 10, 1956, ch. 1041, 70A Stat. 130; Pub. L. 87-653, Sec. 1(d),

(e), Sept. 10, 1962, 76 Stat. 528; Pub. L. 90-378, Sec. 1, July 5,

1968, 82 Stat. 289; Pub. L. 90-512, Sept. 25, 1968, 82 Stat. 863;

Pub. L. 96-513, title V, Sec. 511(77), Dec. 12, 1980, 94 Stat.

2926; Pub. L. 97-86, title IX, Sec. 907(b), 909(b), Dec. 1, 1981,

95 Stat. 1117, 1118; Pub. L. 98-369, div. B, title VII, Sec. 2724,

July 18, 1984, 98 Stat. 1192; Pub. L. 99-145, title XIII, Sec.

1303(a)(15), Nov. 8, 1985, 99 Stat. 739; Pub. L. 99-500, Sec.

101(c) (title X, Sec. 952(b)(1), (c)(1)), Oct. 18, 1986, 100 Stat.

1783-82, 1783-169, and Pub. L. 99-591, Sec. 101(c) (title X, Sec.

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, Sec.

952(b)(1), (c)(1), Nov. 14, 1986, 100 Stat. 3949, renumbered title

IX, Pub. L. 100-26, Sec. 3(5), Apr. 21, 1987, 101 Stat. 273; Pub.

L. 101-189, div. A, title VIII, Sec. 805(a), Nov. 29, 1989, 103

Stat. 1488; Pub. L. 101-510, div. A, title VIII, Sec. 808, Nov. 5,

1990, 104 Stat. 1593; Pub. L. 102-25, title VII, Sec. 701(d)(3),

Apr. 6, 1991, 105 Stat. 114; Pub. L. 103-355, title I, Sec. 1021,

1022(b), title IV, Sec. 4102(b), 4401(c), title VIII, Sec. 8105(a),

Oct. 13, 1994, 108 Stat. 3257, 3260, 3340, 3348, 3392; Pub. L.

105-85, div. A, title X, Sec. 1073(a)(45), Nov. 18, 1997, 111

Stat. 1902; Pub. L. 106-398, Sec. 1 ((div. A), title VIII, Sec.

802(b)), Oct. 30, 2000, 114 Stat. 1654, 1654A-205.)

-MISC1-

Historical and Revision Notes

---------------------------------------------------------------------

Revised section Source (U.S. Code) Source (Statutes at

Large)

---------------------------------------------------------------------

2306(a) 2306(b) 41:153(a) (1st Feb. 19, 1948, ch.

sentence). 65, Sec. 4 (less

41:153(b) (1st 14 words after

words of 1st semicolon of last

sentence). sentence of (b),

41:153(a) (less 1st and less (c)), 62

sentence). 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.

-COD-

CODIFICATION

Pub. L. 99-591 is a corrected version of Pub. L. 99-500.

-MISC3-

PRIOR PROVISIONS

Provisions similar to those in subsec. (h)(11) of this section

were contained in Pub. L. 100-526, title I, Sec. 104(a), Oct. 24,

1988, 102 Stat. 2624, which was set out below, prior to repeal by

Pub. L. 101-189, Sec. 805(b).

AMENDMENTS

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, Sec. 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, Sec. 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, Sec. 4401(c), substituted

''simplified acquisition threshold'' for ''small purchase

threshold''.

Subsec. (h). Pub. L. 103-355, Sec. 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, Sec. 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, Sec. 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, Sec. 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, Sec. 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, Sec. 101(c) (Sec.

952(c)(1)), Pub. L. 99-661, Sec. 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, Sec. 101(c) (Sec.

952(b)(1)), Pub. L. 99-661, Sec. 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, Sec. 1303(a)(15)(A), inserted

a period at end.

Subsec. (b). Pub. L. 99-145, Sec. 1303(a)(15)(B), struck out ''of

this title'' before ''shall contain''.

1984 - Pub. L. 98-369, Sec. 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, Sec. 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, Sec. 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, Sec. 2724(c), substituted ''this

chapter'' for ''section 2304 of this title,''.

Subsec. (e)(2). Pub. L. 98-369, Sec. 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, Sec. 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, Sec. 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, Sec. 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, Sec. 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, Sec. 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, Sec. 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, Sec. 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, Sec. 2724(e)(F), added par. (4).

Subsec. (f)(5). Pub. L. 98-369, Sec. 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, Sec. 907(b), substituted

''$500,000'' for ''$100,000'' in subpars. (A) to (D).

Subsec. (g)(1). Pub. L 97-86, Sec. 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, Sec. 909(b)(2), added subsec. (h).

1980 - Subsec. (f). Pub. L. 96-513, Sec. 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, Sec. 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, Sec. 1(d), substituted

''subsections (b)-(f)'' for ''subsections (b)-(e)''.

Subsec. (f). Pub. L. 87-653, Sec. 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, Sec. 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

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).''

MULTIYEAR PROCUREMENT AUTHORITY; REQUESTS FOR RELIEF

Pub. L. 100-526, title I, Sec. 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, Sec. 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, Sec. 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''.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 2310, 2343 of this title;

title 50 section 403c.

-CITE-

10 USC Sec. 2306a 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle A - General Military Law

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 137 - PROCUREMENT GENERALLY

-HEAD-

Sec. 2306a. Cost or pricing data: truth in negotiations

-STATUTE-

(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.

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

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

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.

(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.

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;

(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;

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)).

-SOURCE-

(Added Pub. L. 99-500, Sec. 101(c) (title X, Sec. 952(a)), Oct. 18,

1986, 100 Stat. 1783-82, 1783-166, and Pub. L. 99-591, Sec. 101(c)

(title X, Sec. 952(a)), Oct. 30, 1986, 100 Stat. 3341-82, 3341-166;

Pub. L. 99-661, div. A, title IX, formerly title IV, Sec. 952(a),

Nov. 14, 1986, 100 Stat. 3945, renumbered title IX, Pub. L. 100-26,

Sec. 3(5), Apr. 21, 1987, 101 Stat. 273; amended Pub. L. 100-180,

div. A, title VIII, Sec. 804(a), (b), Dec. 4, 1987, 101 Stat.

1125; Pub. L. 101-510, div. A, title VIII, Sec. 803(a)(1), (d),

Nov. 5, 1990, 104 Stat. 1589, 1590; Pub. L. 102-25, title VII, Sec.

701(b), (f)(8), Apr. 6, 1991, 105 Stat. 113, 115; Pub. L. 102-190,

div. A, title VIII, Sec. 804(a)-(c)(1), title X, Sec. 1061(a)(9),

Dec. 5, 1991, 105 Stat. 1415, 1416, 1472; Pub. L. 103-355, title I,

Sec. 1201-1209, Oct. 13, 1994, 108 Stat. 3273-3277; Pub. L.

104-106, div. D, title XLII, Sec. 4201(a), title XLIII, Sec.

4321(a)(2), (b)(7), Feb. 10, 1996, 110 Stat. 649, 671, 672; Pub. L.

104-201, div. A, title X, Sec. 1074(a)(12), Sept. 23, 1996, 110

Stat. 2659; Pub. L. 105-85, div. A, title X, Sec. 1073(a)(46),

Nov. 18, 1997, 111 Stat. 1902; Pub. L. 105-261, div. A, title

VIII, Sec. 805(a), 808(a), Oct. 17, 1998, 112 Stat. 2083, 2085.)

-REFTEXT-

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.

-COD-

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.

-MISC3-

AMENDMENTS

1998 - Subsec. (a)(5). Pub. L. 105-261, Sec. 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, Sec. 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, Sec. 4321(a)(2), made

technical correction to directory language of Pub. L. 103-355, Sec.

1202(a). See 1994 Amendment note below.

Pub. L. 104-106, Sec. 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, Sec. 4201(a)(1), amended subsec.

of former subsec. (c)(1).

Subsec. (d). Pub. L. 104-106, Sec. 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,

Sec. 4201(a)(1). See below.

Pub. L. 104-106, Sec. 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, Sec. 4321(b)(7)(B),

struck out second comma after ''parties''.

Subsec. (h). Pub. L. 104-106, Sec. 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, Sec. 4201(a)(2)(B), redesignated

subsec. (i) as (h).

Subsec. (i)(3). Pub. L. 104-106, Sec. 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, Sec. 4201(a)(2)(B), redesignating subsec. (i)

as (h). See above.

1994 - Subsec. (a)(1)(A)(i). Pub. L. 103-355, Sec. 1201(a)(1),

struck out ''and before January 1, 1996,'' after ''December 5,

1990,''.

Subsec. (a)(1)(A)(ii). Pub. L. 103-355, Sec. 1201(a)(2), struck

out ''or after December 31, 1995,'' after ''December 5, 1990,''.

Subsec. (a)(5). Pub. L. 103-355, Sec. 1202(b), substituted

''subsection (b)(1)(B)'' for ''subsection (b)(2)''.

Subsec. (a)(6). Pub. L. 103-355, Sec. 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, Sec. 1201(b), added par. (7).

Subsec. (b). Pub. L. 103-355, Sec. 1202(a), as amended by Pub. L.

104-106, Sec. 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, Sec. 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, Sec. 1204, added subsec. (d) and

redesignated former subsec. (d) as (e).

Subsec. (e). Pub. L. 103-355, Sec. 1204(1), redesignated subsec.

(d) as (e). Former subsec. (e) redesignated (f).

Subsec. (e)(4)(A)(ii), (B)(ii). Pub. L. 103-355, Sec. 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, Sec. 1204(1), redesignated subsec.

(e) as (f). Former subsec. (f) redesignated (g).

Subsec. (f)(1). Pub. L. 103-355, Sec. 1209, struck out ''with the

Department of Defense'' before ''subject to this section'' in

introductory provisions.

Subsec. (g). Pub. L. 103-355, Sec. 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, Sec. 1204(1), redesignated subsec. (f) as (g).

Former subsec. (g) redesignated (i).

Subsec. (h). Pub. L. 103-355, Sec. 1206, added subsec. (h).

Subsec. (i). Pub. L. 103-355, Sec. 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, Sec. 1204(1), redesignated subsec. (g) as (i).

1991 - Subsec. (a)(1)(A). Pub. L. 102-190, Sec. 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, Sec. 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, Sec. 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, Sec. 804(a), amended subpar.

''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, Sec. 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, Sec. 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, Sec. 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, Sec. 804(c)(1), substituted

''paragraph (1)(C)'' for ''paragraph (1)(C)(ii)''.

Subsec. (a)(6). Pub. L. 102-190, Sec. 804(b), added par. (6).

Subsec. (e)(1)(A)(i). Pub. L. 102-25, Sec. 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, Sec. 1061(a)(9),

substituted ''Internal Revenue Code of 1986'' for ''Internal

Revenue Code of 1954''.

1990 - Subsec. (a)(1)(A). Pub. L. 101-510, Sec. 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, Sec. 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, Sec. 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, Sec. 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, Sec. 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, Sec. 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, Sec. 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, Sec. 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 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, Sec. 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, Sec. 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, Sec. 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, Sec. 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, Sec. 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, Sec. 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, Sec. 803, Oct. 17, 1998,

112 Stat. 2081, as amended by Pub. L. 106-65, div. A, title X,

Sec. 1067(3), Oct. 5, 1999, 113 Stat. 774; Pub. L. 107-314, div.

A, title VIII, Sec. 823, Dec. 2, 2002, 116 Stat. 2615, 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

2006, 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, Sec. 1210, Oct. 13, 1994, 108

Stat. 3277.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 2306, 2313, 2343, 2375,

2473 of this title; title 15 section 4602; title 41 section 423.

-CITE-

10 USC Sec. 2306b 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle A - General Military Law

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 137 - PROCUREMENT GENERALLY

-HEAD-

Sec. 2306b. Multiyear contracts: acquisition of property

-STATUTE-

(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.

Administration shall prescribe the regulations applicable to the

National Aeronautics and Space Administration.

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. -

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 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, and such contract

may not then be awarded until the end of a period of 30 days

beginning on the date of such notification.

(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.

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, 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.

(10) 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.

-SOURCE-

(Added Pub. L. 103-355, title I, Sec. 1022(a)(1), Oct. 13, 1994,

108 Stat. 3257; amended Pub. L. 104-106, div. A, title XV, Sec.

1502(a)(10), div. E, title LVI, Sec. 5601(b), Feb. 10, 1996, 110

Stat. 503, 699; Pub. L. 105-85, div. A, title VIII, Sec.

806(a)(1), (b)(1), (c), title X, Sec. 1073(a)(47), (48)(A), Nov.

18, 1997, 111 Stat. 1834, 1835, 1903; Pub. L. 106-65, div. A,

title VIII, Sec. 809, title X, Sec. 1067(1), Oct. 5, 1999, 113

Stat. 705, 774; Pub. L. 106-398, Sec. 1 ((div. A), title VIII, Sec.

802(c), 806), Oct. 30, 2000, 114 Stat. 1654, 1654A-205, 1654A-207;

Pub. L. 107-296, title XVII, Sec. 1704(b)(1), Nov. 25, 2002, 116

Stat. 2314; Pub. L. 107-314, div. A, title VIII, Sec. 820(a), Dec.

2, 2002, 116 Stat. 2613.)

-MISC1-

AMENDMENTS

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, Sec. 1 ((div. A), title

VIII, Sec. 802(c)), struck out ''or services'' after ''purchase of

property''.

Subsec. (l)(4). Pub. L. 106-398, Sec. 1 ((div. A), title VIII,

Sec. 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, Sec. 1 ((div. A), title VIII,

Sec. 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, Sec. 1 ((div. A), title

VIII, Sec. 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, Sec. 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, Sec. 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, Sec. 809(1), redesignated par.

(7) as (8).

Subsec. (l)(8)(B). Pub. L. 106-65, Sec. 1067(1), substituted

''Committee on Armed Services'' for ''Committee on National

Security''.

Subsec. (l)(9). Pub. L. 106-65, Sec. 809(3), added par. (9).

1997 - Pub. L. 105-85, Sec. 1073(a)(48)(A), inserted '':

acquisition of property'' in section catchline.

Subsec. (a). Pub. L. 105-85, Sec. 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, Sec. 806(c)(2), substituted

''subsection (a)'' for ''paragraph (1)''.

Subsec. (i)(1)(A). Pub. L. 105-85, Sec. 806(c)(3), substituted

''future-years'' for ''five-year''.

Subsec. (i)(3). Pub. L. 105-85, Sec. 806(a)(1), added par. (3).

Subsec. (k). Pub. L. 105-85, Sec. 1073(a)(47), substituted ''this

section'' for ''this subsection''.

Subsec. (l). Pub. L. 105-85, Sec. 806(b)(1), added subsec. (l).

1996 - Subsec. (g). Pub. L. 104-106, Sec. 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, Sec. 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, Sec. 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, Sec. 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 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 (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):

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. 107-248, title VIII, Sec. 8008, Oct. 23, 2002, 116 Stat.

1537.

Pub. L. 107-117, div. A, title VIII, Sec. 8008, Jan. 10, 2002,

115 Stat. 2248.

Pub. L. 106-259, title VIII, Sec. 8008, Aug. 9, 2000, 114 Stat.

675.

Pub. L. 106-79, title VIII, Sec. 8008, Oct. 25, 1999, 113 Stat.

1232.

Pub. L. 105-262, title VIII, Sec. 8008, Oct. 17, 1998, 112 Stat.

2298.

Pub. L. 104-208, div. A, title I, Sec. 101(b) (title VIII, Sec.

8009), Sept. 30, 1996, 110 Stat. 3009-71, 3009-89.

Pub. L. 104-61, title VIII, Sec. 8010, Dec. 1, 1995, 109 Stat.

653.

Pub. L. 103-335, title VIII, Sec. 8010, Sept. 30, 1994, 108 Stat.

2618.

Pub. L. 103-139, title VIII, Sec. 8011, Nov. 11, 1993, 107 Stat.

1439.

Pub. L. 102-396, title IX, Sec. 9013, Oct. 6, 1992, 106 Stat.

1903.

Pub. L. 102-172, title VIII, Sec. 8013, Nov. 26, 1991, 105 Stat.

1173.

Pub. L. 101-511, title VIII, Sec. 8014, Nov. 5, 1990, 104 Stat.

1877.

Pub. L. 101-165, title IX, Sec. 9021, Nov. 21, 1989, 103 Stat.

1133.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 2306 of this title.

-CITE-

10 USC Sec. 2306c 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle A - General Military Law

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 137 - PROCUREMENT GENERALLY

-HEAD-

Sec. 2306c. Multiyear contracts: acquisition of services

-STATUTE-

(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

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 committees of Congress named in paragraph

(5) 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

committees of Congress named in paragraph (5).

(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 committees

of Congress named in paragraph (5), 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) 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.

(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) Limitation Period for Task and Delivery Order Contracts. -

(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.

(h) 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 ''military installation'' has the meaning given

such term in section 2801(c)(2) of this title.

-SOURCE-

(Added Pub. L. 106-398, Sec. 1 ((div. A), title VIII, Sec.

802(a)(1)), Oct. 30, 2000, 114 Stat. 1654, 1654A-203; amended Pub.

L. 107-314, div. A, title VIII, Sec. 811(a), 827, Dec. 2, 2002,

116 Stat. 2608, 2617.)

-MISC1-

AMENDMENTS

2002 - Subsec. (b)(5). Pub. L. 107-314, Sec. 827(a), added par.

(5).

Subsec. (g). Pub. L. 107-314, Sec. 811(a), added subsec. (g).

Subsec. (h). Pub. L. 107-314, Sec. 827(b), added subsec. (h).

EFFECTIVE DATE OF 2002 AMENDMENT

Pub. L. 107-314, div. A, title VIII, Sec. 811(b), Dec. 2, 2002,

116 Stat. 2608, 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 the date of the enactment of this Act (Dec. 2, 2002).''

EFFECTIVE DATE

Pub. L. 106-398, Sec. 1 ((div. A), title VIII, Sec. 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).''

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 2306 of this title.

-CITE-

10 USC Sec. 2307 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle A - General Military Law

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 137 - PROCUREMENT GENERALLY

-HEAD-

Sec. 2307. Contract financing

-STATUTE-

(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.

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.

-SOURCE-

(Aug. 10, 1956, ch. 1041, 70A Stat. 131; Pub. L. 85-800, Sec. 9,

Aug. 28, 1958, 72 Stat. 967; Pub. L. 93-155, title VIII, Sec.

807(c), Nov. 16, 1973, 87 Stat. 616; Pub. L. 100-370, Sec.

1(f)(1)(A), July 19, 1988, 102 Stat. 846; Pub. L. 101-510, div. A,

title VIII, Sec. 836(a), (b), title XIII, Sec. 1322(a)(4), Nov. 5,

1990, 104 Stat. 1615, 1616, 1671; Pub. L. 102-25, title VII, Sec.

701(d)(4), (j)(2)(A), Apr. 6, 1991, 105 Stat. 114, 116; Pub. L.

102-190, div. A, title X, Sec. 1061(a)(10), Dec. 5, 1991, 105

Stat. 1472; Pub. L. 102-484, div. A, title X, Sec. 1052(24), Oct.

23, 1992, 106 Stat. 2500; Pub. L. 103-355, title II, Sec.

2001(a)-(g), Oct. 13, 1994, 108 Stat. 3301, 3302; Pub. L. 105-85,

div. A, title VIII, Sec. 802, Nov. 18, 1997, 111 Stat. 1831; Pub.

L. 106-391, title III, Sec. 306, Oct. 30, 2000, 114 Stat. 1592.)

-MISC1-

Historical and Revision Notes

1956 Act

---------------------------------------------------------------------

Revised section Source (U.S. Code) Source (Statutes at

Large)

---------------------------------------------------------------------

2307(a) 2307(b) 41:154(a). 41:154 Feb. 19, 1948, ch.

(less (a)). 65, Sec. 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, Sec. 916,

Nov. 8, 1985, 99 Stat. 688.

-REFTEXT-

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.

-MISC2-

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, Sec. 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, Sec. 2001(a)(1), substituted ''Contract

financing'' for ''Advance payments'' in section catchline.

Subsec. (a). Pub. L. 103-355, Sec. 2001(a)(2), inserted heading.

Subsec. (a)(2). Pub. L. 103-355, Sec. 2001(c), struck out ''bid''

before ''solicitations''.

Subsec. (b). Pub. L. 103-355, Sec. 2001(a)(7), (b), added subsec.

(b) and redesignated former subsec. (b) as (c).

Pub. L. 103-355, Sec. 2001(a)(3), inserted heading.

Subsec. (c). Pub. L. 103-355, Sec. 2001(a)(7), redesignated

subsec. (b) as (c). Former subsec. (c) redesignated (d).

Pub. L. 103-355, Sec. 2001(a)(4), inserted heading.

Subsec. (d). Pub. L. 103-355, Sec. 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, Sec. 2001(a)(7), redesignated former subsec. (c)

as (d). Former subsec. (d) redesignated (e).

Pub. L. 103-355, Sec. 2001(a)(5), inserted heading.

Subsec. (e). Pub. L. 103-355, Sec. 2001(a)(7), redesignated

subsec. (d) as (e). Former subsec. (e) redesignated (h).

Pub. L. 103-355, Sec. 2001(a)(6), inserted heading.

Subsec. (e)(1). Pub. L. 103-355, Sec. 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, Sec. 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, Sec. 2001(f), (g), added

subsecs. (f) and (g).

Subsec. (h). Pub. L. 103-355, Sec. 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, Sec. 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, Sec. 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, Sec. 701(j)(2)(A), redesignated subsec. (f) as

(e).

1990 - Subsec. (d). Pub. L. 101-510, Sec. 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, Sec. 1322(a)(4)(B), redesignated

subsec. (e) as (d).

Pub. L. 101-510, Sec. 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, Sec. 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, Sec. 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, Sec. 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, Sec. 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).''

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 2310, 2323, 7362 of this

title; title 50 section 403c.

-CITE-

10 USC Sec. 2308 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle A - General Military Law

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 137 - PROCUREMENT GENERALLY

-HEAD-

Sec. 2308. Buy-to-budget acquisition: end items

-STATUTE-

(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.

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 ''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.

(B) The term ''end item'' means a production product assembled,

completed, and ready for issue or deployment.

Defense, the Secretary of the Army, the Secretary of the Navy,

and the Secretary of the Air Force.

-SOURCE-

(Added Pub. L. 107-314, div. A, title VIII, Sec. 801(a)(1), Dec.

2, 2002, 116 Stat. 2600.)

-MISC1-

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, Sec.

820(a), 106 Stat. 2458; May 31, 1993, Pub. L. 103-35, title II,

Sec. 201(e)(2), 107 Stat. 99; Nov. 30, 1993, Pub. L. 103-160, div.

A, title IX, Sec. 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, Sec. 1503(b)(1), title X,

Sec. 10001, Oct. 13, 1994, 108 Stat. 3297, 3404, effective Oct. 13,

1994, except as otherwise provided.

TIME FOR ISSUANCE OF FINAL REGULATIONS

Pub. L. 107-314, div. A, title VIII, Sec. 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).''

-CITE-

10 USC Sec. 2309 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle A - General Military Law

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 137 - PROCUREMENT GENERALLY

-HEAD-

Sec. 2309. Allocation of appropriations

-STATUTE-

(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.

-SOURCE-

(Aug. 10, 1956, ch. 1041, 70A Stat. 132; Pub. L. 97-258, Sec.

2(b)(1)(B), Sept. 13, 1982, 96 Stat. 1052.)

-MISC1-

Historical and Revision Notes

---------------------------------------------------------------------

Revised section Source (U.S. Code) Source (Statutes at

Large)

---------------------------------------------------------------------

2309(a) 2309(b) 41:159 (2d Feb. 19, 1948, ch.

sentence). 41:159 65, Sec. 10 (less

(less 1st and 2d 1st sentence), 62

sentences). 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''.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in title 50 section 403c.

-CITE-

10 USC Sec. 2310 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle A - General Military Law

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 137 - PROCUREMENT GENERALLY

-HEAD-

Sec. 2310. Determinations and decisions

-STATUTE-

(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.

-SOURCE-

(Aug. 10, 1956, ch. 1041, 70A Stat. 132; Pub. L. 85-800, Sec. 10,

Aug. 28, 1958, 72 Stat. 967; Pub. L. 87-653, Sec. 1(f), Sept. 10,

1962, 76 Stat. 529; Pub. L. 89-607, Sec. 1(1), Sept. 27, 1966, 80

Stat. 850; Pub. L. 90-378, Sec. 2, July 5, 1968, 82 Stat. 290; Pub.

L. 98-369, div. B, title VII, Sec. 2725, July 18, 1984, 98 Stat.

1193; Pub. L. 99-145, title XIII, Sec. 1303(a)(16), Nov. 8, 1985,

99 Stat. 739; Pub. L. 103-355, title I, Sec. 1504, Oct. 13, 1994,

108 Stat. 3297.)

-MISC1-

Historical and Revision Notes

---------------------------------------------------------------------

Revised section Source (U.S. Code) Source (Statutes at

Large)

---------------------------------------------------------------------

2310(a) 2310(b) 41:156(a) (1st Feb. 19, 1948, ch.

sentence). 65, Sec. 7(a) (1st

41:156(c). 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, Sec. 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, Sec. 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.

-CITE-

10 USC Sec. 2311 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle A - General Military Law

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 137 - PROCUREMENT GENERALLY

-HEAD-

Sec. 2311. Assignment and delegation of procurement functions and

responsibilities

-STATUTE-

(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.

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.

-SOURCE-

(Aug. 10, 1956, ch. 1041, 70A Stat. 132; Pub. L. 85-800, Sec. 11,

Aug. 28, 1958, 72 Stat. 967; Pub. L. 87-653, Sec. 1(g), Sept. 10,

1962, 76 Stat. 529; Pub. L. 90-378, Sec. 3, July 5, 1968, 82 Stat.

290; Pub. L. 97-86, title IX, Sec. 907(c), 909(f), Dec. 1, 1981, 95

Stat. 1117, 1120; Pub. L. 98-369, div. B, title VII, Sec. 2726,

July 18, 1984, 98 Stat. 1194; Pub. L. 98-525, title XII, Sec. 1214,

Oct. 19, 1984, 98 Stat. 2592; Pub. L. 98-577, title V, Sec. 505,

Oct. 30, 1984, 98 Stat. 3087; Pub. L. 103-355, title I, Sec.

1503(a)(1), Oct. 13, 1994, 108 Stat. 3296; Pub. L. 107-107, div.

A, title X, Sec. 1048(b)(2), Dec. 28, 2001, 115 Stat. 1225.)

-MISC1-

Historical and Revision Notes

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Revised section Source (U.S. Code) Source (Statutes at

Large)

---------------------------------------------------------------------

2311 41:156(a) (less 1st Feb. 19, 1948, ch.

sentence). 65, Sec. 7(a) (less

41:156(b). 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, Sec.

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.

-CITE-

10 USC Sec. 2312 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle A - General Military Law

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 137 - PROCUREMENT GENERALLY

-HEAD-

Sec. 2312. Remission of liquidated damages

-STATUTE-

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.

-SOURCE-

(Aug. 10, 1956, ch. 1041, 70A Stat. 132; Pub. L. 104-316, title II,

Sec. 202(c), Oct. 19, 1996, 110 Stat. 3842.)

-MISC1-

Historical and Revision Notes

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Revised section Source (U.S. Code) Source (Statutes at

Large)

---------------------------------------------------------------------

2312 41:155. Feb. 19, 1948, ch.

65, Sec. 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''.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in title 50 section 403c.

-CITE-

10 USC Sec. 2313 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle A - General Military Law

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 137 - PROCUREMENT GENERALLY

-HEAD-

Sec. 2313. Examination of records of contractor

-STATUTE-

(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 subcontract 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;

(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 case of contumacy or refusal to

obey, shall be enforceable by order of an appropriate United States

district court.

(3) The authority provided by paragraph (1) may not be

redelegated.

paragraph (2), each contract awarded after using procedures other

than sealed bid procedures shall provide that the Comptroller

General and his representatives are authorized to examine any

records of the contractor, or any of its subcontractors, that

directly pertain to, and involve transactions relating to, the

contract or subcontract.

(2) Paragraph (1) does not apply to a contract or subcontract

with a foreign contractor or foreign subcontractor if the head of

the agency concerned determines, with the concurrence of the

Comptroller General or his designee, that the application of that

paragraph to the contract or subcontract would not be in the public

interest. However, the concurrence of the Comptroller General or

his designee is not required -

(A) where the contractor or subcontractor is a foreign

government or agency thereof or is precluded by the laws of the

country involved from making its records available for

examination; and

(B) where the head of the agency determines, after taking into

account the price and availability of the property and services

from United States sources, that the public interest would be

best served by not applying paragraph (1).

(3) Paragraph (1) may not be construed to require a contractor or

subcontractor to create or maintain any record that the contractor

or subcontractor does not maintain in the ordinary course of

business or pursuant to another provision of law.

(d) Limitation on Audits Relating to Indirect Costs. - The head

of an agency may not perform an audit of indirect costs under a

contract, subcontract, or modification before or after entering

into the contract, subcontract, or modification in any case in

which the contracting officer determines that the objectives of the

audit can reasonably be met by accepting the results of an audit

that was conducted by any other department or agency of the Federal

Government within one year preceding the date of the contracting

officer's determination.

(e) Limitation. - The authority of the head of an agency under

subsection (a), and the authority of the Comptroller General under

subsection (c), with respect to a contract or subcontract shall

expire three years after final payment under such contract or

subcontract.

(f) Inapplicability to Certain Contracts. - This section does not

apply to the following contracts:

(1) Contracts for utility services at rates not exceeding those

established to apply uniformly to the public, plus any applicable

reasonable connection charge.

(2) A contract or subcontract that is for an amount not greater

than the simplified acquisition threshold.

(g) Forms of Original Record Storage. - Nothing in this section

shall be construed to preclude a contractor from duplicating or

storing original records in electronic form.

(h) Use of Images of Original Records. - The head of an agency

shall not require a contractor or subcontractor to provide original

records in an audit carried out pursuant to this section if the

contractor or subcontractor provides photographic or electronic

images of the original records and meets the following

requirements:

(1) The contractor or subcontractor has established procedures

to ensure that the imaging process preserves the integrity,

reliability, and security of the original records.

(2) The contractor or subcontractor maintains an effective

indexing system to permit timely and convenient access to the

imaged records.

(3) The contractor or subcontractor retains the original

records for a minimum of one year after imaging to permit

periodic validation of the imaging systems.

(i) Records Defined. - In this section, the term ''records''

includes books, documents, accounting procedures and practices, and

other data, regardless of type and regardless of whether such items

are in written form, in the form of computer data, or in any other

form.

-SOURCE-

(Aug. 10, 1956, ch. 1041, 70A Stat. 132; Pub. L. 89-607, Sec. 1(2),

Sept. 27, 1966, 80 Stat. 850; Pub. L. 98-369, div. B, title VII,

Sec. 2727(c), July 18, 1984, 98 Stat. 1195; Pub. L. 99-145, title

IX, Sec. 935, Nov. 8, 1985, 99 Stat. 700; Pub. L. 100-26, Sec.

7(g)(1), Apr. 21, 1987, 101 Stat. 282; Pub. L. 101-510, div. A,

title XIII, Sec. 1301(9), Nov. 5, 1990, 104 Stat. 1668; Pub. L.

103-355, title II, Sec. 2201(a)(1), title IV, Sec. 4102(c), Oct.

13, 1994, 108 Stat. 3316, 3340; Pub. L. 104-106, div. A, title XV,

Sec. 1502(a)(1), Feb. 10, 1996, 110 Stat. 502; Pub. L. 104-201,

div. A, title VIII, Sec. 808(a), Sept. 23, 1996, 110 Stat. 2607;

Pub. L. 106-65, div. A, title X, Sec. 1032(a)(2), Oct. 5, 1999,

113 Stat. 751.)

-MISC1-

Historical and Revision Notes

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Revised section Source (U.S. Code) Source (Statutes at

Large)

---------------------------------------------------------------------

2313(a) 41:153(b) (words Feb. 19, 1948, ch.

after semicolon of 65, Sec. 4(b)

last sentence). (words after

semicolon of last

sentence), 62 Stat.

23.

2313(b) 41:153(c). Feb. 19, 1948, ch.

65, Sec. 4(c);

added Oct. 31,

1951, ch. 652 (as

applicable to Sec.

4(c); of the Act of

Feb. 19, 1948, ch.

65), 65 Stat. 700.

-------------------------------

In subsection (a), the words ''An agency named in section 2303 of

this title'' are substituted for the words ''a procuring agency''.

The words ''made by that agency under this chapter'' are inserted

for clarity.

In subsection (b), the word ''under'' is substituted for the

words ''pursuant to authority contained in''. The word ''provide''

is substituted for the words ''include a clause to the effect''.

The words ''are entitled'' are substituted for the words ''shall *

* * have * * * the right''. The words ''of the United States'',

''duly authorized'', ''have access to and'', and ''engaged in the

performance of'' are omitted as surplusage.

AMENDMENTS

1999 - Subsec. (b)(4). Pub. L. 106-65 struck out par. (4) which

read as follows: ''The Director (or any successor official) shall

submit an annual report to the Secretary of Defense on the exercise

of such authority during the preceding year and the reasons why

such authority was exercised in any instance. The Secretary shall

forward a copy of each such report to the Committee on Armed

Services of the Senate and the Committee on National Security of

the House of Representatives.''

1996 - Subsec. (b)(4). Pub. L. 104-106 substituted ''Committee on

Armed Services of the Senate and the Committee on National Security

of the House of Representatives'' for ''Committees on Armed

Services of the Senate and House of Representatives''.

Subsec. (d). Pub. L. 104-201 amended subsec. (d) generally.

Prior to amendment, subsec. (d) read as follows: ''Limitation on

Preaward Audits Relating to Indirect Costs. - The head of an agency

may not perform a preaward audit to evaluate proposed indirect

costs under any contract, subcontract, or modification to be

entered into in accordance with this chapter in any case in which

the contracting officer determines that the objectives of the audit

can reasonably be met by accepting the results of an audit

conducted by any other department or agency of the Federal

Government within one year preceding the date of the contracting

officer's determination.''

1994 - Pub. L. 103-355, Sec. 2201(a)(1), amended section

generally, striking out ''of books'' before ''and records'' in

section catchline, and substituting subsecs. (a) to (i) for former

subsecs. (a) to (d).

Subsec. (f)(2). Pub. L. 103-355, Sec. 4102(c), added par. (2).

1990 - Subsec. (c). Pub. L. 101-510 struck out after cl. (2) ''If

subsection (b) is not applied to a contract or subcontract based on

a determination under clause (2), a written report shall be

furnished to the Congress.''

1987 - Subsec. (d)(1). Pub. L. 100-26 substituted ''section

2306a'' for ''section 2306(f)''.

1985 - Subsec. (d). Pub. L. 99-145 added subsec. (d).

1984 - Subsec. (b). Pub. L. 98-369 substituted ''awarded after

using procedures other than sealed bid procedures'' for

''negotiated under this chapter''.

1966 - Subsec. (b). Pub. L. 89-607, Sec. 1(2)(A), substituted

''Except as provided in subsection (c), each'' for ''Each''.

Subsec. (c). Pub. L. 89-607, Sec. 1(2)(B), added subsec. (c).

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.

EXEMPTION OF FUNCTIONS

Functions with respect to purchases authorized to be made outside

limits of United States or District of Columbia under Foreign

Assistance Act of 1961, as amended, as exempt, see Ex. Ord. No.

11223, May 12, 1965, 30 F.R. 6635, set out as a note under section

2393 of Title 22, Foreign Relations and Intercourse.

FOREIGN CONTRACTORS

Secretaries of Defense, Army, Navy, or Air Force, or their

designees, to determine, prior to exercising authority provided in

amendment of this section by Pub. L. 89-607 to exempt certain

contracts with foreign contractors from requirement of an

examination-of-records clause, that all reasonable efforts have

been made to include such examination-of-records clause, as

required by par. (11) of Part I of Ex. Ord. No. 10789, and that

alternate sources of supply are not reasonably available, see par.

(11) of Part I of Ex. Ord. No. 10789, Nov. 14, 1958, 23 F.R. 8897,

as amended, set out as a note under section 1431 of Title 50, War

and National Defense.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 2306a, 2310, 2343 of this

title; title 50 section 403c.

-CITE-

10 USC Sec. 2314 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle A - General Military Law

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 137 - PROCUREMENT GENERALLY

-HEAD-

Sec. 2314. Laws inapplicable to agencies named in section 2303 of

this title

-STATUTE-

Sections 3709 and 3735 of the Revised Statutes (41 U.S.C. 5 and

13) do not apply to the procurement or sale of property or services

by the agencies named in section 2303 of this title.

-SOURCE-

(Aug. 10, 1956, ch. 1041, 70A Stat. 133; Pub. L. 96-513, title V,

Sec. 511(78), Dec. 12, 1980, 94 Stat. 2927; Pub. L. 103-160, div.

A, title VIII, Sec. 822(b)(2), Nov. 30, 1993, 107 Stat. 1706.)

-MISC1-

Historical and Revision Notes

---------------------------------------------------------------------

Revised section Source (U.S. Code) Source (Statutes at

Large)

---------------------------------------------------------------------

2314 41:160. Feb. 19, 1948, ch.

65, Sec. 11(b), 62

Stat. 25.

-------------------------------

AMENDMENTS

1993 - Pub. L. 103-160 inserted ''or sale'' after

''procurement''.

1980 - Pub. L. 96-513 substituted ''Sections 3709 and 3735 of the

Revised Statutes (41 U.S.C. 5 and 13)'' for ''Sections 5, 6, 6a,

and 13 of title 41''.

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.

-CITE-

10 USC Sec. 2315 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle A - General Military Law

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 137 - PROCUREMENT GENERALLY

-HEAD-

Sec. 2315. Law inapplicable to the procurement of automatic data

processing equipment and services for certain defense purposes

-STATUTE-

(a) For the purposes of subtitle III of title 40, the term

''national security systems'' means those telecommunications and

information systems operated by the Department of Defense, the

functions, operation or use of which -

(1) involves intelligence activities;

(2) involves cryptologic activities related to national

security;

(3) involves the command and control of military forces;

(4) involves equipment that is an integral part of a weapon or

weapons system; or

(5) subject to subsection (b), is critical to the direct

fulfillment of military or intelligence missions.

(b) Subsection (a)(5) does not include procurement of automatic

data processing equipment or services to be used for routine

administrative and business applications (including payroll,

finance, logistics, and personnel management applications).

-SOURCE-

(Added Pub. L. 97-86, title IX, Sec. 908(a)(1), Dec. 1, 1981, 95

Stat. 1117; amended Pub. L. 97-295, Sec. 1(25), Oct. 12, 1982, 96

Stat. 1291; Pub. L. 104-106, div. E, title LVI, Sec. 5601(c), Feb.

10, 1996, 110 Stat. 699; Pub. L. 104-201, div. A, title X, Sec.

1074(b)(4)(B), Sept. 23, 1996, 110 Stat. 2660; Pub. L. 105-85,

div. A, title X, Sec. 1073(a)(49), Nov. 18, 1997, 111 Stat. 1903;

Pub. L. 107-217, Sec. 3(b)(5), Aug. 21, 2002, 116 Stat. 1295.)

-MISC1-

AMENDMENTS

2002 - Subsec. (a). Pub. L. 107-217 substituted ''subtitle III of

title 40'' for ''division E of the Clinger-Cohen Act of 1996 (40

U.S.C. 1401 et seq.)'' in introductory provisions.

1997 - Subsec. (a). Pub. L. 105-85 substituted ''division E of

the Clinger-Cohen Act of 1996 (40 U.S.C. 1401 et seq.)'' for ''the

Information Technology Management Reform Act of 1996''.

1996 - Subsec. (a). Pub. L. 104-106, as amended by Pub. L.

104-201, substituted ''For the purposes of the Information

Technology Management Reform Act of 1996, the term 'national

security systems' means those telecommunications and information

systems operated by the Department of Defense, the functions,

operation or use of which'' for ''Section 111 of the Federal

Property and Administrative Services Act of 1949 (40 U.S.C. 759) is

not applicable to the procurement by the Department of Defense of

automatic data processing equipment or services if the function,

operation, or use of the equipment or services''.

1982 - Subsec. (a). Pub. L. 97-295 substituted ''(40 U.S.C.

759)'' for ''(40 U.S.C. 795)''.

EFFECTIVE DATE OF 1996 AMENDMENT

Amendment by 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

Section 908(b) of Pub. L. 97-86 provided that: ''Section 2315 of

title 10, United States Code, as added by subsection (a), does not

apply to a contract made before the date of the enactment of this

Act (Dec. 1, 1981).''

LIMITATION REGARDING TELECOMMUNICATIONS REQUIREMENTS

Pub. L. 103-337, div. A, title X, Sec. 1075, Oct. 5, 1994, 108

Stat. 2861, provided that:

''(a) Limitation. - No funds available to the Department of

Defense or any other Executive agency may be expended to provide

for meeting Department of Defense telecommunications requirements

through the telecommunications procurement known as 'FTS-2000' or

through any other Government-wide telecommunications procurement

until -

''(1) the Secretary of Defense submits to the Congress a report

containing -

''(A) a certification by the Secretary that the FTS-2000

procurement or the other telecommunications procurement will

provide assured, secure telecommunications support (including

associated telecommunications services) for Department of

Defense activities; and

''(B) a description of how the procurement will be

implemented and managed to meet defense information

infrastructure requirements, including requirements to support

deployed forces and intelligence activities; and

''(2) 30 days elapse after the date on which such report is

received by the committees.

''(b) Definitions. - In this section:

''(1) The term 'defense telecommunications requirements' means

requirements for telecommunications equipment and services that,

if procured by the Department of Defense, would be exempt from

the requirements of section 111 of the Federal Property and

Administrative Services Act of 1949 ((former) 40 U.S.C. 759)

pursuant to section 2315 of title 10, United States Code.

''(2) The term 'Executive agency' has the meaning given such

term in section 105 of title 5, United States Code.

''(3) The term 'procurement' has the meaning given such term in

section 4 of the Office of Federal Procurement Policy Act (41

U.S.C. 403).

''(c) Effect on Other Law. - Nothing in this section may be

construed as modifying or superseding, or as intended to impair or

restrict authorities or responsibilities under -

''(1) section 111 of the Federal Property and Administrative

Services Act of 1949 ((former) 40 U.S.C. 759); or

''(2) section 620 of Public Law 103-123 (107 Stat. 1264).''

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in title 15 section 5527.

-CITE-

10 USC Sec. 2316 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle A - General Military Law

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 137 - PROCUREMENT GENERALLY

-HEAD-

Sec. 2316. Disclosure of identity of contractor

-STATUTE-

The Secretary of Defense may disclose the identity or location of

a person awarded a contract by the Department of Defense to any

individual, including a Member of Congress, only after the

Secretary makes a public announcement identifying the contractor.

When the identity of a contractor is to be made public, the

Secretary shall announce publicly that the contract has been

awarded and the identity of the contractor.

-SOURCE-

(Added Pub. L. 97-295, Sec. 1(26)(A), Oct. 12, 1982, 96 Stat.

1291.)

-MISC1-

Historical and Revision Notes

---------------------------------------------------------------------

Revised section Source (U.S. Code) Source (Statutes at

Large)

---------------------------------------------------------------------

2316 10:2304 (note). Oct. 7, 1970, Pub.

L. 91-441, Sec.

507, 84 Stat. 913.

-------------------------------

The words ''company, or corporation'' are omitted as included in

''person'' because of section 1:1. The words ''On and after the

date of enactment of this Act'' are omitted as executed. The word

''contractor'' is substituted for ''person, company, or corporation

to whom such contract has been awarded'' and ''person, company, or

corporation to whom any defense contract has been awarded'' to

eliminate unnecessary words. The words ''and the identity of the

contractor'' are substituted for ''and to whom it was awarded'' for

clarity.

-CITE-

10 USC Sec. 2317 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle A - General Military Law

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 137 - PROCUREMENT GENERALLY

-HEAD-

(Sec. 2317. Repealed. Pub. L. 103-160, div. A, title VIII, Sec.

821(a)(2), Nov. 30, 1993, 107 Stat. 1704)

-MISC1-

Section, added Pub. L. 98-525, title XII, Sec. 1215, Oct. 19,

1984, 98 Stat. 2592, related to encouragement of competition and

cost savings.

-CITE-

10 USC Sec. 2318 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle A - General Military Law

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 137 - PROCUREMENT GENERALLY

-HEAD-

Sec. 2318. Advocates for competition

-STATUTE-

(a)(1) In addition to the advocates for competition established

or designated pursuant to section 20(a) of the Office of Federal

Procurement Policy Act (41 U.S.C. 418(a)), the Secretary of Defense

shall designate an officer or employee of the Defense Logistics

Agency to serve as the advocate for competition of the agency.

(2) The advocate for competition of the Defense Logistics Agency

shall carry out the responsibilities and functions provided for in

sections 20(b) and 20(c) of the Office of Federal Procurement

Policy Act (41 U.S.C. 418(b), (c)).

(b) Each advocate for competition of an agency named in section

2303(a) of this title shall be a general or flag officer if a

member of the armed forces or a grade GS-16 or above under the

General Schedule (or in a comparable or higher position under

another schedule), if a civilian employee and shall be designated

to serve for a minimum of two years.

-SOURCE-

(Added Pub. L. 98-525, title XII, Sec. 1216(a), Oct. 19, 1984, 98

Stat. 2593; amended Pub. L. 100-26, Sec. 7(d)(4), Apr. 21, 1987,

101 Stat. 281; Pub. L. 102-25, title VII, Sec. 701(f)(1), Apr. 6,

1991, 105 Stat. 115; Pub. L. 103-355, title I, Sec. 1031, Oct. 13,

1994, 108 Stat. 3260.)

-MISC1-

AMENDMENTS

1994 - Subsec. (c). Pub. L. 103-355 struck out subsec. (c) which

read as follows: ''Each advocate for competition of an agency of

the Department of Defense shall transmit to the Secretary of

Defense a report describing his activities during the preceding

year. The report of each advocate for competition shall be

included in the annual report of the Secretary of Defense required

by section 23 of the Office of Federal Procurement Policy Act (41

U.S.C. 419), in the form in which it was submitted to the

Secretary.''

1991 - Subsec. (c). Pub. L. 102-25 substituted ''section 23'' for

''section 21''.

1987 - Subsec. (a)(1). Pub. L. 100-26, Sec. 7(d)(4)(A), inserted

''(41 U.S.C. 418(a))'' after ''Policy Act''.

Subsec. (a)(2). Pub. L. 100-26, Sec. 7(d)(4)(B), inserted ''(41

U.S.C. 418(b), (c))'' after ''Policy Act''.

Subsec. (c). Pub. L. 100-26, Sec. 7(d)(4)(C), inserted ''(41

U.S.C. 419)'' after ''Policy Act''.

EFFECTIVE DATE

Section 1216(c)(1) of Pub. L. 98-525 provided that: ''Section

2318 of title 10, United States Code (as added by subsection (a)),

shall take effect on April 1, 1985.''

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, Sec. 101(c)(1)) of Pub. L. 101-509, set out in a note

under section 5376 of Title 5.

-CITE-

10 USC Sec. 2319 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle A - General Military Law

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 137 - PROCUREMENT GENERALLY

-HEAD-

Sec. 2319. Encouragement of new competitors

-STATUTE-

(a) In this section, the term ''qualification requirement'' means

a requirement for testing or other quality assurance demonstration

that must be completed by an offeror before award of a contract.

(b) Except as provided in subsection (c), the head of the agency

shall, before establishing a qualification requirement -

(1) prepare a written justification stating the necessity for

establishing the qualification requirement and specify why the

qualification requirement must be demonstrated before contract

award;

(2) specify in writing and make available to a potential

offeror upon request all requirements which a prospective

offeror, or its product, must satisfy in order to become

qualified, such requirements to be limited to those least

restrictive to meet the purposes necessitating the establishment

of the qualification requirement;

(3) specify an estimate of the costs of testing and evaluation

likely to be incurred by a potential offeror in order to become

qualified;

(4) ensure that a potential offeror is provided, upon request

and on a reimbursable basis, a prompt opportunity to demonstrate

its ability to meet the standards specified for qualification

using qualified personnel and facilities of the agency concerned

or of another agency obtained through interagency agreement, or

under contract, or other methods approved by the agency

(including use of approved testing and evaluation services not

provided under contract to the agency);

(5) if testing and evaluation services are provided under

contract to the agency for the purposes of clause (4), provide to

the extent possible that such services be provided by a

contractor who is not expected to benefit from an absence of

additional qualified sources and who shall be required in such

contract to adhere to any restriction on technical data asserted

by the potential offeror seeking qualification; and

(6) ensure that a potential offeror seeking qualification is

promptly informed as to whether qualification is attained and, in

the event qualification is not attained, is promptly furnished

specific information why qualification was not attained.

(c)(1) Subsection (b) of this section does not apply with respect

to a qualification requirement established by statute or

administrative action before October 19, 1984, unless such

requirement is a qualified products list.

(2)(A) Except as provided in subparagraph (B), if it is

unreasonable to specify the standards for qualification which a

prospective offeror or its product must satisfy, a determination to

that effect shall be submitted to the advocate for competition of

the procuring activity responsible for the purchase of the item

subject to the qualification requirement. After considering any

comments of the advocate for competition reviewing such

determination, the head of the purchasing office may waive the

requirements of clauses (2) through (6) of subsection (b) for up to

two years with respect to the item subject to the qualification

requirement.

(B) The waiver authority provided in this paragraph does not

apply with respect to a qualified products list.

(3) A potential offeror may not be denied the opportunity to

submit and have considered an offer for a contract solely because

the potential offeror (A) is not on a qualified bidders list,

qualified manufacturers list, or qualified products list, or (B)

has not been identified as meeting a qualification requirement

established after October 19, 1984, if the potential offeror can

demonstrate to the satisfaction of the contracting officer that the

potential offeror or its product meets the standards established

for qualification or can meet such standards before the date

specified for award of the contract.

(4) Nothing contained in this subsection requires the referral of

an offer to the Small Business Administration pursuant to section

8(b)(7) of the Small Business Act (15 U.S.C. 637(b)(7)) if the

basis for the referral is a challenge by the offeror to either the

validity of the qualification requirement or the offeror's

compliance with such requirement.

(5) The head of an agency need not delay a proposed procurement

in order to comply with subsection (b) or in order to provide a

potential offeror with an opportunity to demonstrate its ability to

meet the standards specified for qualification.

(6) The requirements of subsection (b) also apply before

enforcement of any qualified products list, qualified manufacturers

list, or qualified bidders list.

(d)(1) If the number of qualified sources or qualified products

available to compete actively for an anticipated future requirement

is fewer than two actual manufacturers or the products of two

actual manufacturers, respectively, the head of the agency

concerned shall -

(A) periodically publish notice in the Commerce Business Daily

soliciting additional sources or products to seek qualification,

unless the contracting officer determines that such publication

would compromise national security; and

(B) bear the cost of conducting the specified testing and

evaluation (excluding the costs associated with producing the

item or establishing the production, quality control, or other

system to be tested and evaluated) for a small business concern

or a product manufactured by a small business concern which has

met the standards specified for qualification and which could

reasonably be expected to compete for a contract for that

requirement, but such costs may be borne only if the head of the

agency determines that such additional qualified sources or

products are likely to result in cost savings from increased

competition for future requirements sufficient to amortize the

costs incurred by the agency within a reasonable period of time

considering the duration and dollar value of anticipated future

requirements.

(2) The head of an agency shall require a prospective contractor

requesting the United States to bear testing and evaluation costs

under paragraph (1)(B) to certify as to its status as a small

business concern under section 3 of the Small Business Act (15

U.S.C. 632).

(e) Within seven years after the establishment of a qualification

requirement under subsection (b) or within seven years following an

agency's enforcement of a qualified products list, qualified

manufacturers list, or qualified bidders list, any such

qualification requirement shall be examined and revalidated in

accordance with the requirements of subsection (b). The preceding

sentence does not apply in the case of a qualification requirement

for which a waiver is in effect under subsection (c)(2).

(f) Except in an emergency as determined by the head of the

agency, whenever the head of the agency determines not to enforce a

qualification requirement for a solicitation, the agency may not

thereafter enforce that qualification requirement unless the agency

complies with the requirements of subsection (b).

-SOURCE-

(Added Pub. L. 98-525, title XII, Sec. 1216(a), Oct. 19, 1984, 98

Stat. 2593; amended Pub. L. 100-26, Sec. 7(d)(5), (i)(4), (k)(3),

Apr. 21, 1987, 101 Stat. 281, 282, 284.)

-MISC1-

AMENDMENTS

1987 - Subsec. (a). Pub. L. 100-26, Sec. 7(k)(3), inserted ''the

term'' after ''In this section,''.

Subsec. (c)(1), (3). Pub. L. 100-26, Sec. 7(i)(4), substituted

''October 19, 1984,'' for ''the date of the enactment of the

Defense Procurement Reform Act of 1984''.

Subsec. (c)(4). Pub. L. 100-26, Sec. 7(d)(5)(A), inserted ''(15

U.S.C. 637(b)(7))'' after ''Small Business Act''.

Subsec. (d)(2). Pub. L. 100-26, Sec. 7(d)(5)(B), inserted ''(15

U.S.C. 632)'' after ''Small Business Act''.

EFFECTIVE DATE

Section 1216(c)(2) of Pub. L. 98-525 provided that: ''Sections

2319, 2320, and 2321 of title 10, United States Code (as added by

subsection (a)), shall apply with respect to solicitations issued

after the end of the one-year period beginning on the date of the

enactment of this Act (Oct. 19, 1984).''

-CITE-

10 USC Sec. 2320 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle A - General Military Law

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 137 - PROCUREMENT GENERALLY

-HEAD-

Sec. 2320. Rights in technical data

-STATUTE-

(a)(1) The Secretary of Defense shall prescribe regulations to

define the legitimate interest of the United States and of a

contractor or subcontractor in technical data pertaining to an item

or process. Such regulations shall be included in regulations of

the Department of Defense prescribed as part of the Federal

Acquisition Regulation. Such regulations may not impair any right

of the United States or of any contractor or subcontractor with

respect to patents or copyrights or any other right in technical

data otherwise established by law. Such regulations also may not

impair the right of a contractor or subcontractor to receive from a

third party a fee or royalty for the use of technical data

pertaining to an item or process developed exclusively at private

expense by the contractor or subcontractor, except as otherwise

specifically provided by law.

(2) Such regulations shall include the following provisions:

(A) In the case of an item or process that is developed by a

contractor or subcontractor exclusively with Federal funds (other

than an item or process developed under a contract or subcontract

to which regulations under section 9(j)(2) of the Small Business

Act (15 U.S.C. 638(j)(2)) apply), the United States shall have

the unlimited right to -

(i) use technical data pertaining to the item or process; or

(ii) release or disclose the technical data to persons

outside the government or permit the use of the technical data

by such persons.

(B) Except as provided in subparagraphs (C) and (D), in the

case of an item or process that is developed by a contractor or

subcontractor exclusively at private expense, the contractor or

subcontractor may restrict the right of the United States to

release or disclose technical data pertaining to the item or

process to persons outside the government or permit the use of

the technical data by such persons.

(i) constitutes a correction or change to data furnished by

the United States;

(ii) relates to form, fit, or function;

(iii) is necessary for operation, maintenance, installation,

or training (other than detailed manufacturing or process

data); or

(iv) is otherwise publicly available or has been released or

disclosed by the contractor or subcontractor without

restriction on further release or disclosure.

(D) Notwithstanding subparagraph (B), the United States may

release or disclose technical data to persons outside the

Government, or permit the use of technical data by such persons,

if -

(i) such release, disclosure, or use -

(I) is necessary for emergency repair and overhaul; or

(II) is a release or disclosure of technical data (other

than detailed manufacturing or process data) to, or use of

such data by, a foreign government that is in the interest of

the United States and is required for evaluational or

informational purposes;

(ii) such release, disclosure, or use is made subject to a

prohibition that the person to whom the data is released or

disclosed may not further release, disclose, or use such data;

and

(iii) the contractor or subcontractor asserting the

restriction is notified of such release, disclosure, or use.

(E) In the case of an item or process that is developed in part

with Federal funds and in part at private expense, the respective

rights of the United States and of the contractor or

subcontractor in technical data pertaining to such item or

process shall be established as early in the acquisition process

as practicable (preferably during contract negotiations) and

shall be based upon negotiations between the United States and

the contractor, except in any case in which the Secretary of

Defense determines, on the basis of criteria established in the

regulations, that negotiations would not be practicable. The

establishment of such rights shall be based upon consideration of

all of the following factors:

(i) The statement of congressional policy and objectives in

section 200 of title 35, the statement of purposes in section

2(b) of the Small Business Innovation Development Act of 1982

(15 U.S.C. 638 note), and the declaration of policy in section

2 of the Small Business Act (15 U.S.C. 631).

(ii) The interest of the United States in increasing

competition and lowering costs by developing and locating

alternative sources of supply and manufacture.

(iii) The interest of the United States in encouraging

contractors to develop at private expense items for use by the

Government.

(iv) Such other factors as the Secretary of Defense may

prescribe.

(F) A contractor or subcontractor (or a prospective contractor

or subcontractor) may not be required, as a condition of being

responsive to a solicitation or as a condition for the award of a

contract -

(i) to sell or otherwise relinquish to the United States any

rights in technical data except -

(I) rights in technical data described in subparagraph (C);

(II) under the conditions described in subparagraph (D); or

(ii) to refrain from offering to use, or from using, an item

or process to which the contractor is entitled to restrict

rights in data under subparagraph (B).

(G) The Secretary of Defense may -

(i) negotiate and enter into a contract with a contractor or

subcontractor for the acquisition of rights in technical data

not otherwise provided under subparagraph (C) or (D), if

necessary to develop alternative sources of supply and

manufacture;

(ii) agree to restrict rights in technical data otherwise

accorded to the United States under this section if the United

States receives a royalty-free license to use, release, or

disclose the data for purposes of the United States (including

purposes of competitive procurement); or

(iii) permit a contractor or subcontractor to license

directly to a third party the use of technical data which the

contractor is otherwise allowed to restrict, if necessary to

develop alternative sources of supply and manufacture.

(3) The Secretary of Defense shall define the terms

''developed'', ''exclusively with Federal funds'', and

''exclusively at private expense'' in regulations prescribed under

paragraph (1). In defining such terms, the Secretary shall specify

the manner in which indirect costs shall be treated and shall

specify that amounts spent for independent research and development

and bid and proposal costs shall not be considered to be Federal

funds for the purposes of definitions under this paragraph.

(b) Regulations prescribed under subsection (a) shall require

that, whenever practicable, a contract for supplies or services

entered into by an agency named in section 2303 of this title

contain appropriate provisions relating to technical data,

including provisions -

(1) defining the respective rights of the United States and the

contractor or subcontractor (at any tier) regarding any technical

data to be delivered under the contract and providing that, in

the case of a contract for a commercial item, the item shall be

presumed to be developed at private expense unless shown

otherwise in accordance with section 2321(f);

(2) specifying the technical data, if any, to be delivered

under the contract and delivery schedules for such delivery;

(3) establishing or referencing procedures for determining the

acceptability of technical data to be delivered under the

contract;

(4) establishing separate contract line items for the technical

data, if any, to be delivered under the contract;

(5) to the maximum practicable extent, identifying, in advance

of delivery, technical data which is to be delivered with

restrictions on the right of the United States to use such data;

(6) requiring the contractor to revise any technical data

delivered under the contract to reflect engineering design

changes made during the performance of the contract and affecting

the form, fit, and function of the items specified in the

contract and to deliver such revised technical data to an agency

within a time specified in the contract;

(7) requiring the contractor to furnish written assurance at

the time the technical data is delivered or is made available

that the technical data is complete and accurate and satisfies

the requirements of the contract concerning technical data;

(8) establishing remedies to be available to the United States

when technical data required to be delivered or made available

under the contract is found to be incomplete or inadequate or to

not satisfy the requirements of the contract concerning technical

data; and

(9) authorizing the head of the agency to withhold payments

under the contract (or exercise such other remedies as the head

of the agency considers appropriate) during any period if the

contractor does not meet the requirements of the contract

pertaining to the delivery of technical data.

prohibits the Secretary of Defense from -

(1) prescribing standards for determining whether a contract

entered into by the Department of Defense shall provide for a

time to be specified in the contract after which the United

States shall have the right to use (or have used) for any purpose

of the United States all technical data required to be delivered

to the United States under the contract or providing for such a

period of time (not to exceed 7 years) as a negotiation

objective; or

(2) prescribing reasonable and flexible guidelines, including

negotiation objectives, for the conduct of negotiations regarding

the respective rights in technical data of the United States and

the contractor.

(d) The Secretary of Defense shall by regulation establish

programs which provide domestic business concerns an opportunity to

purchase or borrow replenishment parts from the United States for

the purpose of design replication or modification, to be used by

such concerns in the submission of subsequent offers to sell the

same or like parts to the United States. Nothing in this subsection

limits the authority of the head of an agency to impose

restrictions on such a program related to national security

considerations, inventory needs of the United States, the

improbability of future purchases of the same or like parts, or any

additional restriction otherwise required by law.

-SOURCE-

(Added Pub. L. 98-525, title XII, Sec. 1216(a), Oct. 19, 1984, 98

Stat. 2595; amended Pub. L. 98-577, title III, Sec. 301(b), Oct.

30, 1984, 98 Stat. 3076; Pub. L. 99-145, title IX, Sec. 961(d)(1),

Nov. 8, 1985, 99 Stat. 703; Pub. L. 99-500, Sec. 101(c) (title X,

Sec. 953(a)), Oct. 18, 1986, 100 Stat. 1783-82, 1783-169, and Pub.

L. 99-591, Sec. 101(c) (title X, Sec. 953(a)), Oct. 30, 1986, 100

Stat. 3341-82, 3341-169; Pub. L. 99-661, div. A, title IX,

formerly title IV, Sec. 953(a), Nov. 14, 1986, 100 Stat. 3949,

renumbered title IX, Pub. L. 100-26, Sec. 3(5), Apr. 21, 1987, 101

Stat. 273; Pub. L. 100-26, Sec. 7(a)(4), Apr. 21, 1987, 101 Stat.

275; Pub. L. 100-180, div. A, title VIII, Sec. 808(a), (b), Dec.

4, 1987, 101 Stat. 1128, 1130; Pub. L. 101-189, div. A, title

VIII, Sec. 853(b)(2), Nov. 29, 1989, 103 Stat. 1518; Pub. L.

103-355, title VIII, Sec. 8106(a), Oct. 13, 1994, 108 Stat. 3393.)

-COD-

CODIFICATION

Pub. L. 99-591 is a corrected version of Pub. L. 99-500.

-MISC3-

AMENDMENTS

1994 - Subsec. (b)(1). Pub. L. 103-355 inserted before semicolon

at end ''and providing that, in the case of a contract for a

commercial item, the item shall be presumed to be developed at

private expense unless shown otherwise in accordance with section

2321(f)''.

1989 - Subsec. (a)(4). Pub. L. 101-189 struck out par. (4) which

provided that for purposes of this subsection, the term ''Federal

Acquisition Regulation'' means the single system of Government-wide

procurement regulations as defined in section 4(4) of the Office of

Federal Procurement Policy Act (41 U.S.C. 403(4)).

1987 - Subsec. (a)(1). Pub. L. 100-180, Sec. 808(a)(1), inserted

at end ''Such regulations also may not impair the right of a

contractor or subcontractor to receive from a third party a fee or

royalty for the use of technical data pertaining to an item or

process developed exclusively at private expense by the contractor

or subcontractor, except as otherwise specifically provided by

law.''

Subsec. (a)(2)(A). Pub. L. 100-26, Sec. 7(a)(4)(A), inserted

''(other than an item or process developed under a contract or

subcontract to which regulations under section 9(j)(2) of the Small

Business Act (15 U.S.C. 638(j)(2)) apply)'' after ''Federal

funds''.

Subsec. (a)(2)(E). Pub. L. 100-180, Sec. 808(a)(2), in

introductory provisions, substituted ''established'' for ''agreed

upon'', struck out comma after ''negotiations)'' and inserted in

lieu ''and shall be based upon negotiations between the United

States and the contractor, except in any case in which the

Secretary of Defense determines, on the basis of criteria

established in the regulations, that negotiations would not be

practicable. The establishment of such rights shall be'', and

added cl. (iv).

Subsec. (a)(2)(F). Pub. L. 100-180, Sec. 808(a)(3), amended

subpar. (F) generally. Prior to amendment, subpar. (F) read as

follows: ''A contractor or subcontractor (or a prospective

contractor or subcontractor) may not be required, as a condition of

being responsive to a solicitation or as a condition for the award

of a contract, to sell or otherwise relinquish to the United States

any rights in technical data except -

''(i) rights in technical data described in subparagraph (C);

''(ii) under the conditions described in subparagraph (D).''

Subsec. (a)(2)(G)(i). Pub. L. 100-180, Sec. 808(a)(4)(A),

substituted ''not otherwise provided under subparagraph (C) or

(D),'' for ''pertaining to an item or process developed by such

contractor or subcontractor exclusively at private expense'' and

struck out ''or'' at end.

Subsec. (a)(2)(G)(ii). Pub. L. 100-180, Sec. 808(a)(4)(B),

substituted ''this section'' for ''such regulations'' and ''; or''

for period at end.

Pub. L. 100-26, Sec. 7(a)(4)(B), substituted ''in technical data

otherwise accorded to the United States under such regulations''

for ''of the United States in technical data pertaining to an item

or process developed entirely or in part with Federal funds''.

Subsec. (a)(2)(G)(iii). Pub. L. 100-180, Sec. 808(a)(4)(C), added

cl. (iii).

Subsec. (a)(3). Pub. L. 100-180, Sec. 808(a)(5), substituted '',

'exclusively with Federal funds', and 'exclusively at private

expense' '' for ''and 'private expense' '' and inserted at end ''In

defining such terms, the Secretary shall specify the manner in

which indirect costs shall be treated and shall specify that

amounts spent for independent research and development and bid and

proposal costs shall not be considered to be Federal funds for the

purposes of definitions under this paragraph.''

Subsec. (c). Pub. L. 100-180, Sec. 808(b), substituted ''from -

'' for ''from'', designated existing provisions beginning with

''prescribing standards'' as par. (1), and added par. (2).

1986 - Subsec. (a). Pub. L. 99-500, Pub. L. 99-591, and Pub. L.

99-661 amended generally subsec. (a) identically, substituting

provision that regulations to define the legitimate interest of the

United States and of a contractor or subcontractor in technical

data be included in regulations of the Department of Defense

prescribed as part of the Federal Acquisition Regulation for

provision that such regulations define the legitimate proprietary

interest of the United States and a contractor and be part of the

single system of Government-wide procurement regulations, detailed

what such regulations must contain if the item or process is

developed exclusively with Federal funds, exclusively with private

funds, or partly with Federal funds and partly with private funds,

inserted provision relating to relinquishment of rights in data to

the United States, directed the Secretary of Defense to define

''developed'' and ''private expense'', and defined ''Federal

Acquisition Regulation''.

1985 - Subsec. (a)(1). Pub. L. 99-145 substituted ''the item or

process to which the technical data pertains'' for ''the technical

data''.

1984 - Subsec. (a). Pub. L. 98-577 substituted ''in regulations

of the Department of Defense prescribed as part'' for ''in

regulations prescribed as part'' in text preceding par. (1).

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 1987 AMENDMENT

Section 808(c) of Pub. L. 100-180 provided that: ''The amendments

made by this section (amending this section) shall take effect on

the earlier of -

''(1) the last day of the 120-day period beginning on the date

of the enactment of this Act (Dec. 4, 1987); or

''(2) the date on which regulations are prescribed and made

effective to implement such amendments.''

EFFECTIVE DATE OF 1986 AMENDMENT

Section 101(c) (title X, Sec. 953(e)) of Pub. L. 99-500 and Pub.

L. 99-591, and section 953(e) of title IX, formerly title IV, of

Pub. L. 99-661, renumbered title IX, Pub. L. 100-26, Sec. 3(5),

Apr. 21, 1987, 101 Stat. 273, provided that: ''The amendments made

by subsections (a) and (b) (amending this section and section 2321

of this title) shall apply to contracts for which solicitations are

issued after the end of the 210-day period beginning on the date of

the enactment of this Act (Oct. 18, 1986).''

EFFECTIVE DATE

Section applicable with respect to solicitations issued after the

end of the one-year period beginning Oct. 19, 1984, see section

1216(c)(2) of Pub. L. 98-525, set out as a note under section 2319

of this title.

GOVERNMENT-INDUSTRY COMMITTEE ON RIGHTS IN TECHNICAL DATA

Pub. L. 102-190, div. A, title VIII, Sec. 807, Dec. 5, 1991, 105

Stat. 1421, as amended by Pub. L. 102-484, div. A, title VIII,

Sec. 814, Oct. 23, 1992, 106 Stat. 2454; Pub. L. 105-85, div. A,

title X, Sec. 1073(d)(3), Nov. 18, 1997, 111 Stat. 1905, provided

that not later than Sept. 15, 1992, the Secretary of Defense was to

prescribe final regulations required by subsec. (a) of this section

that supersede the interim regulations prescribed before Dec. 5,

1991, for the purposes of this section and contained various

provisions relating to a government-industry advisory committee,

reports to Congress, publication of the regulations, and

application of the regulations.

CONTROL OF GOVERNMENT PERSONNEL WORK PRODUCT

Pub. L. 102-190, div. A, title VIII, Sec. 808, Dec. 5, 1991, 105

Stat. 1423, required Secretary of Defense to prescribe regulations

ensuring that any Department of Defense employee or member of the

armed forces with an appropriate security clearance who is engaged

in oversight of an acquisition program maintains control of the

employee's or member's work product, provided that procedures for

protecting unauthorized disclosure of classified information by

contractors do not require such an employee or member to relinquish

control of his or her work product to any such contractor, required

implementing regulations not later than 120 days after Dec. 5,

1991, and provided that this section would cease to be effective on

Sept. 30, 1992.

DEADLINE FOR REVISION OF REGULATIONS

Section 101(c) (title X, Sec. 953(d)) of Pub. L. 99-500 and Pub.

L. 99-591, and section 953(d) of title IX, formerly title IV, of

Pub. L. 99-661, renumbered title IX, Pub. L. 100-26, Sec. 3(5),

Apr. 21, 1987, 101 Stat. 273, required that proposed regulations

under subsec. (a)(1) of this section be published in Federal

and that proposed final regulations be published in Federal

-CITE-

10 USC Sec. 2321 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle A - General Military Law

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 137 - PROCUREMENT GENERALLY

-HEAD-

Sec. 2321. Validation of proprietary data restrictions

-STATUTE-

(a) Contracts Covered by Section. - This section applies to any

contract for supplies or services entered into by the Department of

Defense that includes provisions for the delivery of technical

data.

(b) Contractor Justification for Restrictions. - A contract

subject to this section shall provide that a contractor under the

contract and any subcontractor under the contract at any tier shall

be prepared to furnish to the contracting officer a written

justification for any use or release restriction (as defined in

subsection (i)) asserted by the contractor or subcontractor.

ensure that there is a thorough review of the appropriateness of

any use or release restriction asserted with respect to technical

data by a contractor or subcontractor at any tier under a contract

subject to this section.

(2) The review of an asserted use or release restriction under

paragraph (1) shall be conducted before the end of the three-year

period beginning on the later of -

(A) the date on which final payment is made on the contract

under which the technical data is required to be delivered; or

(B) the date on which the technical data is delivered under the

contract.

(d) Challenges to Restrictions. - (1) The Secretary of Defense

may challenge a use or release restriction asserted with respect to

technical data by a contractor or subcontractor at any tier under a

contract subject to this section if the Secretary finds that -

(A) reasonable grounds exist to question the current validity

of the asserted restriction; and

(B) the continued adherence by the United States to the

asserted restriction would make it impracticable to procure the

item to which the technical data pertain competitively at a later

time.

(2)(A) A challenge to an asserted use or release restriction may

not be made under paragraph (1) after the end of the three-year

period described in subparagraph (B) unless the technical data

involved -

(i) are publicly available;

(ii) have been furnished to the United States without

restriction; or

(iii) have been otherwise made available without restriction.

(B) The three-year period referred to in subparagraph (A) is the

three-year period beginning on the later of -

(i) the date on which final payment is made on the contract

under which the technical data are required to be delivered; or

(ii) the date on which the technical data are delivered under

the contract.

(3) If the Secretary challenges an asserted use or release

restriction under paragraph (1), the Secretary shall provide

written notice of the challenge to the contractor or subcontractor

asserting the restriction. Any such notice shall -

(A) state the specific grounds for challenging the asserted

restriction;

(B) require a response within 60 days justifying the current

validity of the asserted restriction; and

paragraph (4) may be submitted.

(4) It is a justification of an asserted use or release

restriction challenged under paragraph (1) that, within the

three-year period preceding the challenge to the restriction, the

Department of Defense validated a restriction identical to the

asserted restriction if -

(A) such validation occurred after a challenge to the validated

restriction under this subsection; and

(B) the validated restriction was asserted by the same

contractor or subcontractor (or a licensee of such contractor or

subcontractor).

(e) Time for Contractors to Submit Justifications. - If a

contractor or subcontractor asserting a use or release restriction

submits to the contracting officer a written request, showing the

need for additional time to comply with the requirement to justify

the current validity of the asserted restriction, additional time

to adequately permit the submission of such justification shall be

provided by the contracting officer as appropriate. If a party

asserting a restriction receives notices of challenges to

restrictions on technical data from more than one contracting

officer, and notifies each contracting officer of the existence of

more than one challenge, the contracting officer initiating the

first in time challenge, after consultation with the party

asserting the restriction and the other contracting officers, shall

formulate a schedule of responses to each of the challenges that

will afford the party asserting the restriction with an equitable

opportunity to respond to each such challenge.

(f) Presumption of Development Exclusively at Private Expense for

Commercial Items Contracts. - In the case of a challenge to a use

or release restriction that is asserted with respect to technical

data of a contractor or subcontractor under a contract for

commercial items, the contracting officer shall presume that the

contractor or subcontractor has justified the restriction on the

basis that the item was developed exclusively at private expense,

whether or not the contractor or subcontractor submits a

justification in response to the notice provided pursuant to

subsection (d)(3). In such a case, the challenge to the use or

release restriction may be sustained only if information provided

by the Department of Defense demonstrates that the item was not

developed exclusively at private expense.

(g) Decision by Contracting Officer. - (1) Upon a failure by the

contractor or subcontractor to submit any response under subsection

(d)(3), the contracting officer shall issue a decision pertaining

to the validity of the asserted restriction.

(2) After review of any justification submitted in response to

the notice provided pursuant to subsection (d)(3), the contracting

officer shall, within 60 days of receipt of any justification

submitted, issue a decision or notify the party asserting the

restriction of the time within which a decision will be issued.

(h) Claims. - If a claim pertaining to the validity of the

asserted restriction is submitted in writing to a contracting

officer by a contractor or subcontractor at any tier, such claim

shall be considered a claim within the meaning of the Contract

Disputes Act of 1978 (41 U.S.C. 601 et seq.).

(i) Rights and Liability Upon Final Disposition. - (1) If, upon

final disposition, the contracting officer's challenge to the use

or release restriction is sustained -

(A) the restriction shall be cancelled; and

(B) if the asserted restriction is found not to be

substantially justified, the contractor or subcontractor

asserting the restriction shall be liable to the United States

for payment of the cost to the United States of reviewing the

asserted restriction and the fees and other expenses (as defined

in section 2412(d)(2)(A) of title 28) incurred by the United

States in challenging the asserted restriction, unless special

circumstances would make such payment unjust.

(2) If, upon final disposition, the contracting officer's

challenge to the use or release restriction is not sustained -

(A) the United States shall continue to be bound by the

restriction; and

(B) the United States shall be liable for payment to the party

asserting the restriction for fees and other expenses (as defined

in section 2412(d)(2)(A) of title 28) incurred by the party

asserting the restriction in defending the asserted restriction

if the challenge by the United States is found not to be made in

good faith.

(j) Use or Release Restriction Defined. - In this section, the

term ''use or release restriction'', with respect to technical data

delivered to the United States under a contract subject to this

section, means a restriction by the contractor or subcontractor on

the right of the United States -

(1) to use such technical data; or

(2) to release or disclose such technical data to persons

outside the Government or permit the use of such technical data

by persons outside the Government.

-SOURCE-

(Added Pub. L. 98-525, title XII, Sec. 1216(a), Oct. 19, 1984, 98

Stat. 2597; amended Pub. L. 99-500 Sec. 101(c) (title X, Sec.

953(b)), Oct. 18, 1986, 100 Stat. 1783-82, 1783-171, and Pub. L.

99-591, Sec. 101(c) (title X, Sec. 953(b)), Oct. 30, 1986, 100

Stat. 3341-82, 3341-171; Pub. L. 99-661, div. A, title IX,

formerly title IV, Sec. 953(b), Nov. 14, 1986, 100 Stat. 3951,

renumbered title IX, Pub. L. 100-26, Sec. 3(5), Apr. 21, 1987, 101

Stat. 273, Pub. L. 100-26, Sec. 7(a)(5), Apr. 21, 1987, 101 Stat.

276; Pub. L. 100-180, div. A, title XII, Sec. 1231(6), Dec. 4,

1987, 101 Stat. 1160; Pub. L. 103-35, title II, Sec. 201(g)(4), May

31, 1993, 107 Stat. 100; Pub. L. 103-355, title VIII, Sec. 8106(b),

Oct. 13, 1994, 108 Stat. 3393.)

-REFTEXT-

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Enviado por:	El remitente no desea revelar su nombre
Idioma:	inglés
País:	Estados Unidos

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Codificación normativa de EEUU (Estados Unidos)Legislación federal estadounidense # Armed Forces

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