-CITE-

10 USC CHAPTER 433 - PROCUREMENT 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle B - Army

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 433 - PROCUREMENT

.

-HEAD-

CHAPTER 433 - PROCUREMENT

-MISC1-

Sec.

(4531. Repealed.)

4532. Factories and arsenals: manufacture at; abolition of.

(4533 to 4535. Repealed.)

4536. Equipment: post bakeries, schools, kitchens, and mess halls.

(4537 to 4539. Repealed.)

4540. Architectural and engineering services.

4541. Army arsenals: treatment of unutilized or underutilized

plant-capacity costs.

4542. Technical data packages for large-caliber cannon: prohibition

on transfers to foreign countries; exception.

4543. Army industrial facilities: sales of manufactured articles or

services outside Department of Defense.

AMENDMENTS

2000 - Pub. L. 106-398, Sec. 1 ((div. A), title III, Sec.

342(b)), Oct. 30, 2000, 114 Stat. 1654, 1654A-65, added item 4541.

1993 - Pub. L. 103-160, div. A, title I, Sec. 158(a)(2), title

VIII, Sec. 828(a)(5), Nov. 30, 1993, 107 Stat. 1582, 1713, struck

out items 4531 ''Authorization'', 4533 ''Army ration'', 4534

''Subsistence supplies: contract stipulations; place of delivery on

inspection'', 4535 ''Exceptional subsistence supplies: purchase

without advertising'', 4537 ''Military surveys and maps: assistance

of United States mapping agencies'', 4538 ''Unserviceable

ammunition: exchange and reclamation'', and 4541 ''Gratuitous

services of officers of the Army Reserve'' and added item 4543.

1986 - Pub. L. 99-500, Sec. 101(c) (title IX, Sec. 9036(b)(2)),

Oct. 18, 1986, 100 Stat. 1783-82, 1783-108, and Pub. L. 99-591,

Sec. 101(c) (title IX, Sec. 9036(b)(2)), Oct. 30, 1986, 100 Stat.

3341-82, 3341-108; Pub. L. 99-661, div. A, title XII, Sec.

1203(a)(2), Nov. 14, 1986, 100 Stat. 3969, amended analysis

identically adding item 4542.

1982 - Pub. L. 97-258, Sec. 2(b)(9)(A), Sept. 13, 1982, 96 Stat.

1056, added item 4541.

1970 - Pub. L. 91-482, Sec. 2A, Oct. 21, 1970, 84 Stat. 1082,

struck out item 4539 ''Horses and mules''.

-CITE-

10 USC Sec. 4531 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle B - Army

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 433 - PROCUREMENT

-HEAD-

(Sec. 4531. Repealed. Pub. L. 103-160, div. A, title VIII, Sec.

823(2), Nov. 30, 1993, 107 Stat. 1707)

-MISC1-

Section, act Aug. 10, 1956, ch. 1041, 70A Stat. 253, authorized

Secretary of the Army to procure materials and facilities necessary

to maintain and support the Army.

-CITE-

10 USC Sec. 4532 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle B - Army

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 433 - PROCUREMENT

-HEAD-

Sec. 4532. Factories and arsenals: manufacture at; abolition of

-STATUTE-

(a) The Secretary of the Army shall have supplies needed for the

Department of the Army made in factories or arsenals owned by the

United States, so far as those factories or arsenals can make those

supplies on an economical basis.

(b) The Secretary may abolish any United States arsenal that he

considers unnecessary.

-SOURCE-

(Aug. 10, 1956, ch. 1041, 70A Stat. 254.)

-MISC1-

Historical and Revision Notes

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

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

Large)

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

4532(a) 4532(b) 5:181-4(e). 50:55. June 28, 1950, ch.

383, Sec. 101(e),

64 Stat. 264. R.S.

1666.

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

The words ''Except as otherwise provided by law'', in 5:181-4(e),

are omitted, since there is no law within the scope of the

exception. The word ''made'' is substituted for the words

''manufactured or produced''. The words ''United States'' are

substituted for the word ''Government'', in 5:181-4(e). The words

''which he considers'' are substituted for the words ''as, in his

judgment'', in 50:55. The words ''useless or'', in 50:55, are

omitted as surplusage.

SALE OF ARSENAL

Act Mar. 3, 1875, ch. 174, 18 Stat. 510, authorized the sale of

the arsenal at Detroit, Michigan.

-CITE-

10 USC Sec. 4533 to 4535 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle B - Army

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 433 - PROCUREMENT

-HEAD-

(Sec. 4533 to 4535. Repealed. Pub. L. 103-160, div. A, title VIII,

Sec. 823(3)-(5), Nov. 30, 1993, 107 Stat. 1707)

-MISC1-

Section 4533, act Aug. 10, 1956, ch. 1041, 70A Stat. 254, related

to purchases of army rations.

Section 4534, act Aug. 10, 1956, ch. 1041, 70A Stat. 254, related

to subsistence supplies, contract stipulations, and place of

delivery on inspection.

Section 4535, act Aug. 10, 1956, ch. 1041, 70A Stat. 254,

provided that exceptional subsistence supplies could be purchased

without advertising.

-CITE-

10 USC Sec. 4536 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle B - Army

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 433 - PROCUREMENT

-HEAD-

Sec. 4536. Equipment: post bakeries, schools, kitchens, and mess

halls

-STATUTE-

Money necessary for the following items for the use of enlisted

members of the Army may be spent from appropriations for regular

supplies:

(1) Equipment for post bakeries.

(2) Furniture, textbooks, paper, and equipment for post

schools.

(3) Tableware and mess furniture for kitchens and mess halls.

-SOURCE-

(Aug. 10, 1956, ch. 1041, 70A Stat. 254.)

-MISC1-

Historical and Revision Notes

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

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

Large)

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

4536 10:1334. June 13, 1890, ch.

423 (1st proviso

under

''Quartermaster's

Department''), 26

Stat. 152.

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

The words ''Money necessary * * * may be spent'' are substituted

for the words ''There may be expended * * * the amounts

required''. The word ''bakeries'' is substituted for the words

''bake house to carry on post bakeries''. The words ''each and

all'' are omitted as surplusage.

-CITE-

10 USC Sec. 4537, 4538 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle B - Army

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 433 - PROCUREMENT

-HEAD-

(Sec. 4537, 4538. Repealed. Pub. L. 103-160, div. A, title VIII,

Sec. 823(6), (7), Nov. 30, 1993, 107 Stat. 1707)

-MISC1-

Section 4537, acts Aug. 10, 1956, ch. 1041, 70A Stat. 254; Nov.

2, 1966, Pub. L. 89-718, Sec. 8(a), 80 Stat. 1117; Dec. 12, 1980,

Pub. L. 96-513, title V, Sec. 512(14), 94 Stat. 2930, authorized

Secretary of the Army to obtain assistance of United States mapping

agencies in making and developing military surveys and maps.

Section 4538, acts Aug. 10, 1956, ch. 1041, 70A Stat. 255; Dec.

12, 1980, Pub. L. 96-513, title V, Sec. 512(15), 94 Stat. 2930,

related to exchange and reclamation of unserviceable ammunition.

-CITE-

10 USC Sec. 4539 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle B - Army

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 433 - PROCUREMENT

-HEAD-

(Sec. 4539. Repealed. Pub. L. 91-482, Sec. 1(a), Oct. 21, 1970, 84

Stat. 1082)

-MISC1-

Section, act Aug. 10, 1956, ch. 1041, 70A Stat. 255, provided for

purchase of horses and mules in open market at Army posts, within

maximum prices prescribed by Secretary of the Army.

-CITE-

10 USC Sec. 4540 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle B - Army

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 433 - PROCUREMENT

-HEAD-

Sec. 4540. Architectural and engineering services

-STATUTE-

(a) Whenever he considers that it is advantageous to the national

defense and that existing facilities of the Department of the Army

are inadequate, the Secretary of the Army may, by contract or

otherwise, employ the architectural or engineering services of any

person outside that Department for producing and delivering

designs, plans, drawings, and specifications needed for any public

works or utilities project of the Department.

(b) The fee for any service under this section may not be more

than 6 percent of the estimated cost, as determined by the

Secretary, of the project to which it applies.

(c) Sections 305, 3324, and 7204, chapter 51, and subchapters

III, IV, and VI of chapter 53 of title 5 do not apply to employment

under this section.

-SOURCE-

(Aug. 10, 1956, ch. 1041, 70A Stat. 255; Pub. L. 89-718, Sec. 28,

Nov. 2, 1966, 80 Stat. 1119; Pub. L. 95-454, title VII, Sec.

703(c)(3), title VIII, Sec. 801(a)(3)(I), Oct. 13, 1978, 92 Stat.

1217, 1222; Pub. L. 96-513, title V, Sec. 512(16), Dec. 12, 1980,

94 Stat. 2930.)

-MISC1-

Historical and Revision Notes

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

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

Large)

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

4540(a) 5:221 (1st sentence, Aug. 7, 1939, ch.

less last 15 511, Sec. 2, 53

words). Stat. 1240.

4540(b) 5:221 (less 1st

sentence).

4540(c) 5:221 (last 15 words

of 1st sentence).

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

In subsection (a), the words ''and providing that in the

opinion'' are omitted as covered by the words ''whenever he

considers''. The words ''needed for'' are substituted for the

words ''required for the accomplishment of''.

In subsection (c), reference is made in substance to the

Classification Act of 1949, instead of the Classification Act of

1923 referred to in the source statute, since section 1106(a) of

the Classification Act of 1949, 63 Stat. 972, provides that all

references in other acts to the Classification Act of 1923 should

be considered to refer to the Classification Act of 1949.

AMENDMENTS

1980 - Subsec. (c). Pub. L. 96-513 substituted ''and 7204,

chapter 51, and subchapters III, IV, and VI of chapter 53 of title

5'' for ''5101-5115, 5331-5338, 5341, 5342, and 7204 of title 5 and

subchapter VI of chapter 53 of title 5''.

1978 - Subsec. (c). Pub. L. 95-454, Sec. 801(a)(3)(I), inserted

reference to subchapter VI of chapter 53 of title 5.

Pub. L. 95-454, Sec. 703(c)(3), substituted ''7204'' for

''7154''.

1966 - Subsec. (c). Pub. L. 89-718 substituted ''Sections 305,

3324, 5101-5115, 5331-5338, 5341, 5342, and 7154 of title 5'' for

''Sections 1071-1153 of title 5''.

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 1978 AMENDMENT

Amendment by section 703(c)(3) of Pub. L. 95-454 effective 90

days after Oct. 13, 1978, see section 907 of Pub. L. 95-454, set

out as a note under section 1101 of Title 5, Government

Organization and Employees.

Amendment by section 801(a)(3)(I) of Pub. L. 95-454 effective on

first day of first applicable pay period beginning on or after 90th

day after Oct. 13, 1978, see section 801(a)(4) of Pub. L. 95-454,

set out as an Effective Date note under section 5361 of Title 5.

-CITE-

10 USC Sec. 4541 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle B - Army

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 433 - PROCUREMENT

-HEAD-

Sec. 4541. Army arsenals: treatment of unutilized or underutilized

plant-capacity costs

-STATUTE-

(a) Estimate of Costs. - The Secretary of the Army shall include

in the budget justification documents submitted to Congress in

support of the President's budget for a fiscal year submitted under

section 1105 of title 31 an estimate of the funds to be required in

that fiscal year to cover unutilized and underutilized

plant-capacity costs at Army arsenals.

(b) Use of Funds. - Funds appropriated to the Secretary of the

Army for a fiscal year to cover unutilized and underutilized

plant-capacity costs at Army arsenals shall be used in such fiscal

year only for such costs.

(c) Treatment of Costs. - (1) The Secretary of the Army shall not

include unutilized and underutilized plant-capacity costs when

evaluating the bid of an Army arsenal for purposes of the arsenal's

contracting to provide a good or service to a Government agency.

(2) When an Army arsenal is serving as a subcontractor to a

private-sector entity with respect to a good or service to be

provided to a Government agency, the cost charged by the arsenal

shall not include unutilized and underutilized plant-capacity costs

that are funded by a direct appropriation.

(d) Definitions. - In this section:

(1) The term ''Army arsenal'' means a Government-owned,

Government-operated defense plant of the Department of the Army

that manufactures weapons, weapon components, or both.

(2) The term ''unutilized and underutilized plant-capacity

costs'' means the costs associated with operating and maintaining

the facilities and equipment of an Army arsenal that the

Secretary of the Army determines are required to be kept for

mobilization needs, in those months in which the facilities and

equipment are not used or are used only 20 percent or less of

available work days.

-SOURCE-

(Added Pub. L. 106-398, Sec. 1 ((div. A), title III, Sec. 342(a)),

Oct. 30, 2000, 114 Stat. 1654, 1654A-64.)

-MISC1-

PRIOR PROVISIONS

A prior section 4541, added Pub. L. 97-258, Sec. 2(b)(9)(B),

Sept. 13, 1982, 96 Stat. 1056, authorized Secretary of the Army to

accept gratuitous services of officers of the Army Reserve, prior

to repeal by Pub. L. 103-160, div. A, title VIII, Sec. 822(d)(2),

Nov. 30, 1993, 107 Stat. 1707. See section 10212 of this title.

-CITE-

10 USC Sec. 4542 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle B - Army

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 433 - PROCUREMENT

-HEAD-

Sec. 4542. Technical data packages for large-caliber cannon:

prohibition on transfers to foreign countries; exception

-STATUTE-

(a) General Rule. - Funds appropriated to the Department of

Defense may not be used -

(1) to transfer to a foreign country a technical data package

for a defense item being manufactured or developed in an arsenal;

or

(2) to assist a foreign country in producing such a defense

item.

(b) Exception. - The Secretary of the Army may use funds

appropriated to the Department of Defense to transfer a technical

data package, or to provide assistance, described in subsection (a)

if -

(1) the transfer or provision of assistance is to a friendly

foreign country (as determined by the Secretary of Defense in

consultation with the Secretary of State);

(2) the Secretary of the Army determines that such action -

(A) would have a clear benefit to the preservation of the

production base for the production of cannon at the arsenal

concerned; and

(B) would not transfer technology (including production

techniques) considered unique to the arsenal concerned, except

as provided in subsection (e); and

(3) the Secretary of Defense enters into an agreement with the

country concerned described in subsection (c) or (d).

(c) Coproduction Agreements. - An agreement under this subsection

shall be in the form of a Government-to-Government Memorandum of

Understanding and shall include provisions that -

(1) prescribe the content of the technical data package or

assistance to be transferred to the foreign country participating

in the agreement;

(2) require that production by the participating foreign

country of the defense item to which the technical data package

or assistance relates be shared with the arsenal concerned;

(3) subject to such exceptions as may be approved under

subsection (f), prohibit transfer by the participating foreign

country to a third party or country of -

(A) any defense article, technical data package, technology,

or assistance provided by the United States under the

agreement; and

(B) any defense article produced by the participating foreign

country under the agreement; and

(4) require the Secretary of Defense to monitor compliance with

the agreement and the participating foreign country to report

periodically to the Secretary of Defense concerning the

agreement.

(d) Cooperative Project Agreements. - An agreement under this

subsection is a cooperative project agreement under section 27 of

the Arms Export Control Act (22 U.S.C. 2767) which includes

provisions that -

(1) for development phases describe the technical data to be

transferred and for the production phase prescribe the content of

the technical data package or assistance to be transferred to the

foreign country participating in the agreement;

(2) require that at least the United States production of the

defense item to which the technical data package or assistance

relates be carried out by the arsenal concerned; and

(3) require the Secretary of Defense to monitor compliance with

the agreement.

(e) Licensing Fees and Royalties. - The limitation in subsection

(b)(2)(B) shall not apply if the technology (or production

technique) transferred is subject to nonexclusive license and

payment of any negotiated licensing fee or royalty that reflects

the cost of development, implementation, and prove-out of the

technology or production technique. Any negotiated license fee or

royalty shall be placed in the operating fund of the arsenal

concerned for the purpose of capital investment and technology

development at that arsenal.

(f) Transfers to Third Parties. - A transfer described in

subsection (c)(3) may be made if -

(1) the defense article, technical data package, or technology

to be transferred is a product of a cooperative research and

development program or a cooperative project in which the United

States and the participating foreign country were partners; or

(2) the President -

(A) complies with all requirements of section 3(d) of the

Arms Export Control Act (22 U.S.C. 2753(d)) with respect to

such transfer; and

(B) certifies to Congress, before the transfer, that the

transfer would provide a clear benefit to the production base

of the United States for large-caliber cannon.

(g) Notice and Reports to Congress. - (1) The Secretary of the

Army shall submit to Congress a notice of each agreement entered

into under this section.

(2) The Secretary shall submit to Congress a semi-annual report

on the operation of this section and of agreements entered into

under this section.

(h) Arsenal Defined. - In this section, the term ''arsenal''

means a Government-owned, Government-operated defense plant that

manufactures large-caliber cannon.

-SOURCE-

(Added Pub. L. 99-500, Sec. 101(c) (title IX, Sec. 9036(b)(1)),

Oct. 18, 1986, 100 Stat. 1783-82, 1783-107, and Pub. L. 99-591,

Sec. 101(c) (title IX, Sec. 9036(b)(1)), Oct. 30, 1986, 100 Stat.

3341-82, 3341-107; Pub. L. 99-661, div. A, title XII, Sec.

1203(a)(1), Nov. 14, 1986, 100 Stat. 3968; amended Pub. L. 101-189,

div. A, title VIII, Sec. 806, Nov. 29, 1989, 103 Stat. 1489; Pub.

L. 102-190, div. A, title X, Sec. 1061(a)(24), 1086, Dec. 5, 1991,

105 Stat. 1473, 1483.)

-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

1991 - Subsec. (b)(1). Pub. L. 102-190, Sec. 1086(a), substituted

''friendly foreign country'' for ''member nation of the North

Atlantic Treaty Organization or a country designated as a major

non-NATO ally''.

Subsec. (c)(3). Pub. L. 102-190, Sec. 1061(a)(24)(A), 1086(b)(1),

amended par. (3) identically, substituting ''subsection (f)'' for

''subsection (d)'' in introductory provisions.

Subsec. (f). Pub. L. 102-190, Sec. 1061(a)(24)(B), 1086(b)(2),

amended subsec. identically, substituting ''subsection (c)(3)'' for

''subsection (b)(3)'' in introductory provisions.

1989 - Subsec. (b)(1). Pub. L. 101-189, Sec. 806(a)(1),

substituted ''a member nation of the North Atlantic Treaty

Organization or a country designated as a major non-NATO ally'' for

''a friendly foreign country''.

Subsec. (b)(2)(B). Pub. L. 101-189, Sec. 806(a)(2), inserted '',

except as provided in subsection (e)'' after ''arsenal concerned''.

Subsec. (b)(3). Pub. L. 101-189, Sec. 806(a)(3), inserted ''or

(d)'' after ''subsection (c)''.

Subsecs. (d), (e). Pub. L. 101-189, Sec. 806(b)(2), added

subsecs. (d) and (e). Former subsecs. (d) and (e) redesignated (f)

and (g), respectively.

Subsec. (f). Pub. L. 101-189, Sec. 806(b)(1), redesignated

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

Subsec. (f)(1). Pub. L. 101-189, Sec. 806(c), inserted ''or a

cooperative project'' after ''cooperative research and development

program''.

Subsecs. (g), (h). Pub. L. 101-189, Sec. 806(b)(1), redesignated

subsecs. (e) and (f) as (g) and (h), respectively.

EFFECTIVE DATE

Section 101(c) (title IX, Sec. 9036(c)) of Pub. L. 99-500 and

Pub. L. 99-591, and section 1203(b) of Pub. L. 99-661 provided

that: ''Section 4542 of title 10, United States Code, as added by

subsection (a), shall apply with respect to funds appropriated for

fiscal years after fiscal year 1986.''

RULE OF CONSTRUCTION FOR DUPLICATE AUTHORIZATION AND APPROPRIATION

PROVISIONS OF PUBLIC LAWS 99-500, 99-591, AND 99-661

For rule of construction for certain duplicate provisions of

Public Laws 99-500, 99-591, and 99-661, see Pub. L. 100-26, Sec. 6,

Apr. 21, 1987, 101 Stat. 274, set out as a note under section 2302

of this title.

-CITE-

10 USC Sec. 4543 01/06/03

-EXPCITE-

TITLE 10 - ARMED FORCES

Subtitle B - Army

PART IV - SERVICE, SUPPLY, AND PROCUREMENT

CHAPTER 433 - PROCUREMENT

-HEAD-

Sec. 4543. Army industrial facilities: sales of manufactured

articles or services outside Department of Defense

-STATUTE-

(a) Authority To Sell Outside DOD. - Regulations under section

2208(h) of this title shall authorize a working-capital funded Army

industrial facility (including a Department of the Army arsenal)

that manufactures large caliber cannons, gun mounts, recoil

mechanisms, ammunition, munitions, or components thereof to sell

manufactured articles or services to a person outside the

Department of Defense if -

(1) in the case of an article, the article is sold to a United

States manufacturer, assembler, developer, or other concern -

(A) for use in developing new products;

(B) for incorporation into items to be sold to, or to be used

in a contract with, an agency of the United States;

(C) for incorporation into items to be sold to, or to be used

in a contract with, or to be used for purposes of soliciting a

contract with, a friendly foreign government; or

(D) for use in commercial products;

(2) in the case of an article, the purchaser is determined by

the Department of Defense to be qualified to carry out the

proposed work involving the article to be purchased;

(3) the sale is to be made on a basis that does not interfere

with performance of work by the facility for the Department of

Defense or for a contractor of the Department of Defense;

(4) in the case of services, the services are related to an

article authorized to be sold under this section and are to be

performed in the United States for the purchaser;

(5) the Secretary of the Army determines that the articles or

services are not available from a commercial source located in

the United States;

(6) the purchaser of an article or service agrees to hold

harmless and indemnify the United States, except in a case of

willful misconduct or gross negligence, from any claim for

damages or injury to any person or property arising out of the

article or service;

(7) the article to be sold can be manufactured, or the service

to be sold can be substantially performed, by the industrial

facility with only incidental subcontracting;

(8) it is in the public interest to manufacture such article or

perform such service; and

(9) the sale will not interfere with performance of the

military mission of the industrial facility.

(b) Additional Requirements. - The regulations shall also -

(1) require that the authority to sell articles or services

under the regulations be exercised at the level of the commander

of the major subordinate command of the Army with responsibility

over the facility concerned;

(2) authorize a purchaser of articles or services to use

advance incremental funding to pay for the articles or services;

and

(3) in the case of a sale of commercial articles or commercial

services in accordance with subsection (a) by a facility that

manufactures large caliber cannons, gun mounts, or recoil

mechanisms, or components thereof, authorize such facility -

(A) to charge the buyer, at a minimum, the variable costs

that are associated with the commercial articles or commercial

services sold;

(B) to enter into a firm, fixed-price contract or, if agreed

by the buyer, a cost reimbursement contract for the sale; and

(C) to develop and maintain (from sources other than

appropriated funds) working capital to be available for paying

design costs, planning costs, procurement costs, and other

costs associated with the commercial articles or commercial

services sold.

(c) Relationship to Arms Export Control Act. - Nothing in this

section shall be construed to affect the application of the export

controls provided for in section 38 of the Arms Export Control Act

(22 U.S.C. 2778) to items which incorporate or are produced through

the use of an article sold under this section.

(d) Definitions. - In this section:

(1) The term ''commercial article'' means an article that is

usable for a nondefense purpose.

(2) The term ''commercial service'' means a service that is

usable for a nondefense purpose.

(3) The term ''advance incremental funding'', with respect to a

sale of articles or services, means a series of partial payments

for the articles or services that includes -

(A) one or more partial payments before the commencement of

work or the incurring of costs in connection with the

production of the articles or the performance of the services,

as the case may be; and

(B) subsequent progress payments that result in full payment

being completed as the required work is being completed.

(4) The term ''variable costs'', with respect to sales of

articles or services, means the costs that are expected to

fluctuate directly with the volume of sales and -

(A) in the case of articles, the volume of production

necessary to satisfy the sales orders; or

(B) in the case of services, the extent of the services sold.

-SOURCE-

(Added Pub. L. 103-160, div. A, title I, Sec. 158(a)(1), Nov. 30,

1993, 107 Stat. 1581; amended Pub. L. 103-337, div. A, title I,

Sec. 141, Oct. 5, 1994, 108 Stat. 2688.)

-MISC1-

AMENDMENTS

1994 - Subsec. (a). Pub. L. 103-337 struck out

''nondefense-related commercial'' after ''sell manufactured'' in

introductory provisions and added pars. (5) to (9).

REGULATIONS

Section 158(c) of Pub. L. 103-160 provided that: ''Regulations

under subsection (b) of section 4543 of title 10, United States

Code, as added by subsection (a), shall be prescribed not later

than 30 days after the date of the enactment of this Act (Nov. 30,

1993).''

PILOT PROGRAM ON SALES OF MANUFACTURED ARTICLES AND SERVICES OF

CERTAIN ARMY INDUSTRIAL FACILITIES WITHOUT REGARD TO AVAILABILITY

FROM DOMESTIC SOURCES

Pub. L. 107-314, div. A, title I, Sec. 111(c), Dec. 2, 2002, 116

Stat. 2473, provided that: ''The Inspector General of the

Department of Defense shall review the experience under the pilot

program carried out under such section 141 (section 141 of Pub. L.

105-85, set out as a note below) and, not later than July 1, 2003,

submit to Congress a report on the results of the review. The

report shall contain the views, information, and recommendations

called for under subsection (d) of such section (as redesignated by

subsection (b)(2)). In carrying out the review and preparing the

report, the Inspector General shall take into consideration the

report submitted to Congress under such subsection (as so

redesignated).''

Pub. L. 105-85, div. A, title I, Sec. 141, Nov. 18, 1997, 111

Stat. 1652, as amended by Pub. L. 106-65, div. A, title I, Sec.

115, Oct. 5, 1999, 113 Stat. 533; Pub. L. 107-107, div. A, title

I, Sec. 112, Dec. 28, 2001, 115 Stat. 1029; Pub. L. 107-314, div.

A, title I, Sec. 111(a), (b), Dec. 2, 2002, 116 Stat. 2473,

provided that:

''(a) Pilot Program Required. - During fiscal years 1998 through

2004, the Secretary of the Army shall carry out a pilot program to

test the efficacy and appropriateness of selling manufactured

articles and services of Army industrial facilities under section

4543 of title 10, United States Code, without regard to the

availability of the articles and services from United States

commercial sources. In carrying out the pilot program, the

Secretary may use articles manufactured at, and services provided

by, not more than three Army industrial facilities, except that

during fiscal year 2002 the Secretary may only use articles

manufactured at, and services provided by, not more than one Army

industrial facility.

''(b) Temporary Waiver of Requirement for Determination of

Unavailability From Domestic Source. - Under the pilot program, the

Secretary of the Army is not required under section 4543(a)(5) of

title 10, United States Code, to determine whether an article or

service is available from a commercial source located in the United

States in the case of any of the following sales for which a

solicitation of offers is issued during the period during which the

pilot program is being conducted:

''(1) A sale of articles to be incorporated into a weapon

system being procured by the Department of Defense.

''(2) A sale of services to be used in the manufacture of a

weapon system being procured by the Department of Defense.

''(c) Transfer of Certain Sums. - For each Army industrial

facility participating in the pilot program that sells manufactured

articles and services in a total amount in excess of $20,000,000 in

any fiscal year, the amount equal to one-half of one percent of

such total amount shall be transferred from the sums in the Army

Working Capital Fund for unutilized plant capacity to

appropriations available for the following fiscal year for the

demilitarization of conventional ammunition by the Army.

''(d) Review by Inspector General. - The Inspector General of the

Department of Defense shall review the experience under the pilot

program under this section and, not later than July 1, 1999, submit

to Congress a report on the results of the review. The report

shall contain the following:

''(1) The Inspector General's views regarding the extent to

which the waiver under subsection (b) enhances the opportunity

for United States manufacturers, assemblers, developers, and

other concerns to enter into or participate in contracts and

teaming arrangements with Army industrial facilities under weapon

system programs of the Department of Defense.

''(2) The Inspector General's views regarding the extent to

which the waiver under subsection (b) enhances the opportunity

for Army industrial facilities referred to in section 4543(a) of

title 10, United States Code, to enter into or participate in

contracts and teaming arrangements with United States

manufacturers, assemblers, developers, and other concerns under

weapon system programs of the Department of Defense.

''(3) The Inspector General's views regarding the effect of the

waiver under subsection (b) on the ability of small businesses to

compete for the sale of manufactured articles or services in the

United States in competitions to enter into or participate in

contracts and teaming arrangements under weapon system programs

of the Department of Defense.

''(4) Specific examples under the pilot program that support

the Inspector General's views.

''(5) Any other information that the Inspector General

considers pertinent regarding the effects of the waiver of

section 4543(a)(5) of title 10, United States Code, under the

pilot program on opportunities for United States manufacturers,

assemblers, developers, or other concerns, and for Army

industrial facilities, to enter into or participate in contracts

and teaming arrangements under weapon system programs of the

Department of Defense.

''(6) Any recommendations that the Inspector General considers

appropriate regarding continuation or modification of the policy

set forth in section 4543(a)(5) of title 10, United States

Code.''

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 2208, 2563 of this title.

-CITE-