Collapse to view only § 2302. Definitions

[§ 2301.
Repealed. Pub. L. 103–355, title I, § 1501(a), Oct. 13, 1994, 108 Stat. 3296]
§ 2302.
Definitions
In this chapter:
(1) The term “head of an agency” means the Secretary of Defense, the Secretary of the Army, the Secretary of the Navy, the Secretary of the Air Force, the Secretary of Homeland Security, and the Administrator of the National Aeronautics and Space Administration.
(2)
The term “competitive procedures” means procedures under which the head of an agency enters into a contract pursuant to full and open competition. Such term also includes—
(A) procurement of architectural or engineering services conducted in accordance with chapter 11 of title 40;
(B) the competitive selection for award of science and technology proposals resulting from a general solicitation and the peer review or scientific review (as appropriate) of such proposals;
(C)
the procedures established by the Administrator of General Services for the multiple award schedule program of the General Services Administration if—
(i) participation in the program has been open to all responsible sources; and
(ii) orders and contracts under such program result in the lowest overall cost alternative to meet the needs of the United States;
(D) procurements conducted in furtherance of section 15 of the Small Business Act (15 U.S.C. 644) as long as all responsible business concerns that are entitled to submit offers for such procurements are permitted to compete; and
(E) a competitive selection of research proposals resulting from a general solicitation and peer review or scientific review (as appropriate) solicited pursuant to section 9 of the Small Business Act (15 U.S.C. 638).
(3)
The following terms have the meanings provided such terms in chapter 1 of title 41:
(A) The term “procurement”.
(B) The term “procurement system”.
(C) The term “standards”.
(D) The term “full and open competition”.
(E) The term “responsible source”.
(F) The term “item”.
(G) The term “item of supply”.
(H) The term “supplies”.
(I) The term “commercial product”.
(J) The term “commercial service”.
(K) The term “nondevelopmental item”.
(L) The term “commercial component”.
(M) 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 1303(a)(1) of title 41.
(7) The term “simplified acquisition threshold” has the meaning provided that term in section 134 of title 41, 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 such section.
(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.
(9) The term “nontraditional defense contractor”, with respect to a procurement or with respect to a transaction authorized under section 2371(a) or 2371b of this title, means an entity that is not currently performing and has not performed, for at least the one-year period preceding the solicitation of sources by the Department of Defense for the procurement or transaction, any contract or subcontract for the Department of Defense that is subject to full coverage under the cost accounting standards prescribed pursuant to section 1502 of title 41 and the regulations implementing such section.
(Aug. 10, 1956, ch. 1041, 70A Stat. 127; Pub. L. 85–568, title III, § 301(b), July 29, 1958, 72 Stat. 432; Pub. L. 85–861, § 1(43A), Sept. 2, 1958, 72 Stat. 1457; Pub. L. 96–513, title V, § 511(74), Dec. 12, 1980, 94 Stat. 2926; Pub. L. 98–369, div. B, title VII, § 2722(a), July 18, 1984, 98 Stat. 1186; Pub. L. 98–525, title XII, § 1211, Oct. 19, 1984, 98 Stat. 2589; Pub. L. 98–577, title V, § 504(b)(3), Oct. 30, 1984, 98 Stat. 3087; Pub. L. 99–661, div. A, title XIII, § 1343(a)(13), Nov. 14, 1986, 100 Stat. 3993; Pub. L. 100–26, § 7(k)(2), Apr. 21, 1987, 101 Stat. 284; Pub. L. 101–189, div. A, title VIII, § 853(b)(1), Nov. 29, 1989, 103 Stat. 1518; Pub. L. 102–25, title VII, § 701(d)(1), Apr. 6, 1991, 105 Stat. 113; Pub. L. 102–190, div. A, title VIII, § 805, Dec. 5, 1991, 105 Stat. 1417; Pub. L. 103–355, title I, § 1502, Oct. 13, 1994, 108 Stat. 3296; Pub. L. 104–106, div. D, title XLIII, § 4321(b)(3), Feb. 10, 1996, 110 Stat. 672; Pub. L. 104–201, div. A, title VIII, §§ 805(a)(1), 807(a), Sept. 23, 1996, 110 Stat. 2605, 2606; Pub. L. 105–85, div. A, title VIII, § 803(b), Nov. 18, 1997, 111 Stat. 1832; Pub. L. 107–217, § 3(b)(2), Aug. 21, 2002, 116 Stat. 1295; Pub. L. 107–296, title XVII, § 1704(b)(1), Nov. 25, 2002, 116 Stat. 2314; Pub. L. 111–350, § 5(b)(8), Jan. 4, 2011, 124 Stat. 3842; Pub. L. 111–383, div. A, title VIII, § 866(g)(1), Jan. 7, 2011, 124 Stat. 4298; Pub. L. 113–291, div. A, title X, § 1071(a)(2), Dec. 19, 2014, 128 Stat. 3504; Pub. L. 114–92, div. A, title VIII, § 815(b), Nov. 25, 2015, 129 Stat. 896; Pub. L. 115–91, div. A, title II, § 221, Dec. 12, 2017, 131 Stat. 1333; Pub. L. 115–232, div. A, title VIII, § 836(c)(1), Aug. 13, 2018, 132 Stat. 1864; Pub. L. 116–283, div. A, title XVIII, § 1806(a)(5), (6), (b)(2)–(6), (c)(2), Jan. 1, 2021, 134 Stat. 4152–4154.)
§ 2302a.
Simplified acquisition threshold
(a)
Simplified Acquisition Threshold.—
For purposes of acquisitions by agencies named in section 2303 of this title, the simplified acquisition threshold is as specified in section 134 of title 41.
(b)
Inapplicable Laws.—
No law properly listed in the Federal Acquisition Regulation pursuant to section 1905 of title 41 shall apply to or with respect to a contract or subcontract that is not greater than the simplified acquisition threshold.
(Added and amended Pub. L. 103–355, title IV, §§ 4002(a), 4102(a), Oct. 13, 1994, 108 Stat. 3338, 3340; Pub. L. 111–350, § 5(b)(9), Jan. 4, 2011, 124 Stat. 3843.)
§ 2302b.
Implementation of simplified acquisition procedures

The simplified acquisition procedures contained in the Federal Acquisition Regulation pursuant to section 1901 of title 41 shall apply as provided in such section to the agencies named in section 2303(a) of this title.

(Added Pub. L. 103–355, title IV, § 4203(a)(1), Oct. 13, 1994, 108 Stat. 3345; amended Pub. L. 111–350, § 5(b)(10), Jan. 4, 2011, 124 Stat. 3843.)
[§ 2302c.
Repealed. Pub. L. 114–328, div. A, title VIII, § 833(b)(5)(A)(i), Dec. 23, 2016, 130 Stat. 2285]
§ 2302d.
Major system: definitional threshold amounts
(a)
Department of Defense Systems.—
For purposes of section 2302(5) of this title, a system for which the Department of Defense is responsible shall be considered a major system if—
(1) the total expenditures for research, development, test, and evaluation for the system are estimated to be more than $115,000,000 (based on fiscal year 1990 constant dollars); or
(2) the eventual total expenditure for procurement for the system is estimated to be more than $540,000,000 (based on fiscal year 1990 constant dollars).
(b)
Civilian Agency Systems.—
For purposes of section 2302(5) of this title, a system for which a civilian agency is responsible shall be considered a major system if total expenditures for the system are estimated to exceed the greater of—
(1) $750,000 (based on fiscal year 1980 constant dollars); or
(2) the dollar threshold for a “major system” established by the agency pursuant to Office of Management and Budget (OMB) Circular A–109, entitled “Major Systems Acquisitions”.
(c)
Adjustment Authority.—
(1) The Secretary of Defense may adjust the amounts and the base fiscal year provided in subsection (a) on the basis of Department of Defense escalation rates.
(2) An amount, as adjusted under paragraph (1), that is not evenly divisible by $5,000,000 shall be rounded to the nearest multiple of $5,000,000. In the case of an amount that is evenly divisible by $2,500,000 but not evenly divisible by $5,000,000, the amount shall be rounded to the next higher multiple of $5,000,000.
(3) An adjustment under this subsection shall be effective after the Secretary transmits to the Committee on Armed Services of the Senate and the Committee on Armed Services of the House of Representatives a written notification of the adjustment.
(Added Pub. L. 104–201, div. A, title VIII, § 805(a)(2), Sept. 23, 1996, 110 Stat. 2605; amended Pub. L. 105–85, div. A, title X, § 1073(a)(41), Nov. 18, 1997, 111 Stat. 1902; Pub. L. 106–65, div. A, title X, § 1067(1), Oct. 5, 1999, 113 Stat. 774; Pub. L. 116–283, div. A, title XVIII, §§ 1806(c)(3), 1846(e)(1), Jan. 1, 2021, 134 Stat. 4155, 4249.)
§ 2302e.
Contract authority for development and demonstration of initial or additional prototype units
(a)
Authority.—
A contract initially awarded from the competitive selection of a proposal resulting from a general solicitation referred to in section 2302(2)(B) of this title may contain a contract line item or contract option for—
(1) the development and demonstration or initial production of technology developed under the contract; or
(2) the delivery of initial or additional items if the item or a prototype thereof is created as the result of work performed under the contract.
(b)
Limitations.—
(1)
Minimal amount.—
A contract line item or contract option described in subsection (a)(2) shall require the delivery of the minimal amount of initial or additional items to allow for the timely competitive solicitation and award of a follow-on development or production contract for those items.
(2)
Term.—
A contract line item or contract option described in subsection (a) shall be for a term of not more than 2 years.
(3)
Dollar value of work.—
The dollar value of the work to be performed pursuant to a contract line item or contract option described in subsection (a) may not exceed $100,000,000, in fiscal year 2017 constant dollars.
(4)
Applicability.—
The authority provided in subsection (a) applies only to the Secretary of Defense, the Secretary of the Army, the Secretary of the Navy, and the Secretary of the Air Force.
(c)
Procedures.—
The Secretary of Defense shall establish procedures to collect and analyze information on the use and benefits of the authority under this section and related impacts on performance, affordability, and capability delivery.
(Added Pub. L. 115–91, div. A, title VIII, § 861(a)(1), Dec. 12, 2017, 131 Stat. 1493; amended Pub. L. 116–283, div. A, title VIII, § 831(a), Jan. 1, 2021, 134 Stat. 3753.)
§ 2303.
Applicability of chapter
(a)
This chapter applies to the procurement by any of the following agencies, for its use or otherwise, of all property (other than land) and all services for which payment is to be made from appropriated funds:
(1) The Department of Defense.
(2) The Department of the Army.
(3) The Department of the Navy.
(4) The Department of the Air Force.
(5) The Coast Guard.
(6) The National Aeronautics and Space Administration.
(b) The provisions of this chapter that apply to the procurement of property apply also to contracts for its installation or alteration.
(Aug. 10, 1956, ch. 1041, 70A Stat. 128; Pub. L. 85–568, title III, § 301(b), July 29, 1958, 72 Stat. 432; Pub. L. 98–369, div. B, title VII, § 2722(b), July 18, 1984, 98 Stat. 1187; Pub. L. 116–283, div. A, title XVIII, § 1807(c)(2), (3), Jan. 1, 2021, 134 Stat. 4157.)
[§ 2303a.
Repealed. Pub. L. 98–577, title III, § 302(c)(1), Oct. 30, 1984, 98 Stat. 3077]
§ 2304.
Contracts: competition requirements
(a)
(1)
Except as provided in subsections (b), (c), and (g) and except in the case of procurement procedures otherwise expressly authorized by statute, the head of an agency in conducting a procurement for property or services—
(A) shall obtain full and open competition through the use of competitive procedures in accordance with the requirements of this chapter and the Federal Acquisition Regulation; and
(B) shall use the competitive procedure or combination of competitive procedures that is best suited under the circumstances of the procurement.
(2)
In determining the competitive procedure appropriate under the circumstances, the head of an agency—
(A)
shall solicit sealed bids if—
(i) time permits the solicitation, submission, and evaluation of sealed bids;
(ii) the award will be made on the basis of price and other price-related factors;
(iii) it is not necessary to conduct discussions with the responding sources about their bids; and
(iv) there is a reasonable expectation of receiving more than one sealed bid; and
(B) shall request competitive proposals if sealed bids are not appropriate under clause (A).
(b)
(1)
The head of an agency may provide for the procurement of property or services covered by this chapter using competitive procedures but excluding a particular source in order to establish or maintain an alternative source or sources of supply for that property or service if the head of the agency determines that to do so—
(A) would increase or maintain competition and would likely result in reduced overall costs for such procurement, or for any anticipated procurement, of property or services;
(B) would be in the interest of national defense in having a facility (or a producer, manufacturer, or other supplier) available for furnishing the property or service in case of a national emergency or industrial mobilization;
(C) would be in the interest of national defense in establishing or maintaining an essential engineering, research, or development capability to be provided by an educational or other nonprofit institution or a federally funded research and development center;
(D) would ensure the continuous availability of a reliable source of supply of such property or service;
(E) would satisfy projected needs for such property or service determined on the basis of a history of high demand for the property or service; or
(F) in the case of medical supplies, safety supplies, or emergency supplies, would satisfy a critical need for such supplies.
(2) The head of an agency may provide for the procurement of property or services covered by this section using competitive procedures, but excluding concerns other than small business concerns in furtherance of sections 9 and 15 of the Small Business Act (15 U.S.C. 638, 644).
(3) A contract awarded pursuant to the competitive procedures referred to in paragraphs (1) and (2) shall not be subject to the justification and approval required by subsection (f)(1).
(4) A determination under paragraph (1) may not be made for a class of purchases or contracts.
(c)
The head of an agency may use procedures other than competitive procedures only when—
(1) the property or services needed by the agency are available from only one responsible source or only from a limited number of responsible sources and no other type of property or services will satisfy the needs of the agency;
(2) the agency’s need for the property or services is of such an unusual and compelling urgency that the United States would be seriously injured unless the agency is permitted to limit the number of sources from which it solicits bids or proposals;
(3) it is necessary to award the contract to a particular source or sources in order (A) to maintain a facility, producer, manufacturer, or other supplier available for furnishing property or services in case of a national emergency or to achieve industrial mobilization, (B) to establish or maintain an essential engineering, research, or development capability to be provided by an educational or other nonprofit institution or a federally funded research and development center, or (C) to procure the services of an expert for use, in any litigation or dispute (including any reasonably foreseeable litigation or dispute) involving the Federal Government, in any trial, hearing, or proceeding before any court, administrative tribunal, or agency, or to procure the services of an expert or neutral for use in any part of an alternative dispute resolution or negotiated rulemaking process, whether or not the expert is expected to testify;
(4) the terms of an international agreement or a treaty between the United States and a foreign government or international organization, or the written directions of a foreign government reimbursing the agency for the cost of the procurement of the property or services for such government, have the effect of requiring the use of procedures other than competitive procedures;
(5) subject to subsection (k), a statute expressly authorizes or requires that the procurement be made through another agency or from a specified source, or the agency’s need is for a brand-name commercial product 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.
(3)
(A)
The contract period of a contract described in subparagraph (B) that is entered into by an agency pursuant to the authority provided under subsection (c)(2)—
(i)
may not exceed the time necessary—
(I) to meet the unusual and compelling requirements of the work to be performed under the contract; and(II) for the agency to enter into another contract for the required goods or services through the use of competitive procedures; and
(ii) may not exceed one year unless the head of the agency entering into such contract determines that exceptional circumstances apply.
(B) This paragraph applies to any contract in an amount greater than the simplified acquisition threshold.
(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) and paragraph (6), the head of an agency may not award a contract using procedures other than competitive procedures unless—
(A) the contracting officer for the contract justifies the use of such procedures in writing and certifies the accuracy and completeness of the justification;
(B)
the justification is approved—
(i) in the case of a contract for an amount exceeding $500,000 (but equal to or less than $10,000,000), by the competition advocate for the procuring activity (without further delegation) or by an official referred to in clause (ii) or (iii);
(ii) in the case of a contract for an amount exceeding $10,000,000 (but equal to or less than $75,000,000), by the head of the procuring activity (or the head of the procuring activity’s delegate designated pursuant to paragraph (5)(A)); or
(iii) in the case of a contract for an amount exceeding $75,000,000, by the senior procurement executive of the agency designated pursuant to section 1702(c) of title 41 (without further delegation) or in the case of the Under Secretary of Defense for Acquisition and Sustainment, acting in his capacity as the senior procurement executive for the Department of Defense, the Under Secretary’s delegate designated pursuant to paragraph (5)(B); and
(C) any required notice has been published with respect to such contract pursuant to section 1708 of title 41 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 product for authorized resale;
(C) in the case of a procurement permitted by subsection (c)(7);
(D) in the case of a procurement conducted under (i) chapter 85 of title 41, or (ii) section 8(a) of the Small Business Act (15 U.S.C. 637(a)
(E) in the case of a procurement permitted by subsection (c)(4), but only if the head of the contracting activity prepares a document in connection with such procurement that describes the terms of an agreement or treaty, or the written directions, referred to in that subsection that have the effect of requiring the use of procedures other than competitive procedures.
(3)
The justification required by paragraph (1)(A) shall include—
(A) a description of the agency’s needs;
(B) an identification of the statutory exception from the requirement to use competitive procedures and a demonstration, based on the proposed contractor’s qualifications or the nature of the procurement, of the reasons for using that exception;
(C) a determination that the anticipated cost will be fair and reasonable;
(D) a description of the market survey conducted or a statement of the reasons a market survey was not conducted;
(E) a listing of the sources, if any, that expressed in writing an interest in the procurement; and
(F) a statement of the actions, if any, the agency may take to remove or overcome any barrier to competition before a subsequent procurement for such needs.
(4)
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.
(5)
(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 and Sustainment 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.
(6) The justification and approval required by paragraph (1) is not required in the case of a Phase III award made pursuant to section 9(r)(4) of the Small Business Act (15 U.S.C. 638(r)(4)).
(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 products or commercial services.
(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 1901(e) of title 41.
(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) Chapter 65 of title 41.
(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 products sold in substantial quantities to the general public.
(j) The Federal Acquisition Regulation shall ensure that the requirement to obtain full and open competition is implemented in a manner that is consistent with the need to efficiently fulfill the Government’s requirements.
(k)
(1) It is the policy of Congress that an agency named in section 2303(a) of this title should not be required by legislation to award a new contract to a specific non-Federal Government entity. It is further the policy of Congress that any program, project, or technology identified in legislation be procured through merit-based selection procedures.
(2)
A provision of law may not be construed as requiring a new contract to be awarded to a specified non-Federal Government entity unless that provision of law—
(A) specifically refers to this subsection;
(B) specifically identifies the particular non-Federal Government entity involved; and
(C) specifically states that the award to that entity is required by such provision of law in contravention of the policy set forth in paragraph (1).
(3) For purposes of this subsection, a contract is a new contract unless the work provided for in the contract is a continuation of the work performed by the specified entity under a preceding contract.
(4) This subsection shall not apply with respect to any contract that calls upon the National Academy of Sciences to investigate, examine, or experiment upon any subject of science or art of significance to an agency named in section 2303(a) of this title and to report on such matters to the Congress or any agency of the Federal Government.
(l)
(1)
(A) Except as provided in subparagraph (B), in the case of a procurement permitted by subsection (c), the head of an agency shall make publicly available, within 14 days after the award of the contract, the documents containing the justification and approval required by subsection (f)(1) with respect to the procurement.
(B) In the case of a procurement permitted by subsection (c)(2), subparagraph (A) shall be applied by substituting “30 days” for “14 days”.
(2) The documents shall be made available on the website of the agency and through a government-wide website selected by the Administrator for Federal Procurement Policy.
(3) This subsection does not require the public availability of information that is exempt from public disclosure under section 552(b) of title 5.
(Aug. 10, 1956, ch. 1041, 70A Stat. 128; Pub. L. 85–800, § 8, Aug. 28, 1958, 72 Stat. 967; Pub. L. 85–861, § 33(a)(12), Sept. 2, 1958, 72 Stat. 1565; Pub. L. 87–653, § 1(a)–(c), Sept. 10, 1962, 76 Stat. 528; Pub. L. 90–268, § 5, Mar. 16, 1968, 82 Stat. 50; Pub. L. 90–500, title IV, § 405, Sept. 20, 1968, 82 Stat. 851; Pub. L. 93–356, § 4, July 25, 1974, 88 Stat. 390; Pub. L. 96–513, title V, § 511(76), Dec. 12, 1980, 94 Stat. 2926; Pub. L. 97–86, title IX, § 907(a), Dec. 1, 1981, 95 Stat. 1117; Pub. L. 97–295, § 1(24), Oct. 12, 1982, 96 Stat. 1290; Pub. L. 97–375, title I, § 114, Dec. 21, 1982, 96 Stat. 1821; Pub. L. 98–369, div. B, title VII, §§ 2723(a), 2727(b), July 18, 1984, 98 Stat. 1187, 1194; Pub. L. 98–577, title V, § 504(b)(1), (2), Oct. 30, 1984, 98 Stat. 3086; Pub. L. 99–145, title IX, § 961(a)(1), title XIII, § 1303(a)(13), Nov. 8, 1985, 99 Stat. 703, 739; Pub. L. 99–500, § 101(c) [title X, §§ 923(a)–(c), 927(a)], Oct. 18, 1986, 100 Stat. 1783–82, 1783–152, 1783–155, and Pub. L. 99–591, § 101(c) [title X, §§ 923(a)–(c), 927(a)], Oct. 30, 1986, 100 Stat. 3341–82, 3341–152, 3341–155; Pub. L. 99–661, div. A, title IX, formerly title IV, §§ 923(a)–(c), 927(a), title XIII, § 1343(a)(14), Nov. 14, 1986, 100 Stat. 3932, 3935, 3993, renumbered title IX, Pub. L. 100–26, § 3(5), Apr. 21, 1987, 101 Stat. 273; Pub. L. 100–26, § 7(d)(3), Apr. 21, 1987, 101 Stat. 281; Pub. L. 100–456, div. A, title VIII, § 803, Sept. 29, 1988, 102 Stat. 2008; Pub. L. 101–189, div. A, title VIII, §§ 812, 817, 818, 853(d), Nov. 29, 1989, 103 Stat. 1493, 1501, 1502, 1519; Pub. L. 101–510, div. A, title VIII, § 806(b), Nov. 5, 1990, 104 Stat. 1592; Pub. L. 102–25, title VII, § 701(d)(2), Apr. 6, 1991, 105 Stat. 114; Pub. L. 102–484, div. A, title VIII, §§ 801(h)(2), 816, title X, § 1052(23), Oct. 23, 1992, 106 Stat. 2445, 2454, 2500; Pub. L. 103–160, div. A, title IX, § 904(d)(1), Nov. 30, 1993, 107 Stat. 1728; Pub. L. 103–355, title I, §§ 1001–1003, 1004(b), 1005, title IV, § 4401(a), title VII, § 7203(a)(1), Oct. 13, 1994, 108 Stat. 3249, 3253, 3254, 3347, 3379; Pub. L. 104–106, div. D, title XLI, §§ 4101(a), 4102(a), title XLII, § 4202(a)(1), title XLIII, § 4321(b)(4), (5), Feb. 10, 1996, 110 Stat. 642, 643, 652, 672; Pub. L. 104–320, §§ 7(a)(1), 11(c)(1), Oct. 19, 1996, 110 Stat. 3871, 3873; Pub. L. 105–85, div. A, title VIII, §§ 841(b), 850(f)(3)(B), title X, § 1073(a)(42), (43), Nov. 18, 1997, 111 Stat. 1843, 1850, 1902; Pub. L. 107–107, div. A, title X, § 1048(b)(2), Dec. 28, 2001, 115 Stat. 1225; Pub. L. 107–217, § 3(b)(3), Aug. 21, 2002, 116 Stat. 1295; Pub. L. 108–375, div. A, title VIII, § 815, Oct. 28, 2004, 118 Stat. 2015; Pub. L. 109–364, div. A, title X, § 1071(a)(2), Oct. 17, 2006, 120 Stat. 2398; Pub. L. 110–181, div. A, title VIII, § 844(b), Jan. 28, 2008, 122 Stat. 239; Pub. L. 110–417, [div. A], title VIII, § 862(b), Oct. 14, 2008, 122 Stat. 4546; Pub. L. 111–350, § 5(b)(12), Jan. 4, 2011, 124 Stat. 3843; Pub. L. 115–91, div. A, title XVII, § 1709(b)(2), Dec. 12, 2017, 131 Stat. 1809; Pub. L. 115–232, div. A, title VIII, §§ 812(a)(2)(C)(v), 836(c)(2), Aug. 13, 2018, 132 Stat. 1847, 1864; Pub. L. 116–92, div. A, title IX, § 902(39), title XVII, § 1731(a)(37), Dec. 20, 2019, 133 Stat. 1547, 1814; Pub. L. 116–283, div. A, title XVIII, § 1811(c)(2)–(5), (d)(2)–(9), Jan. 1, 2021, 134 Stat. 4165–4170.)
§ 2304a.
Task and delivery order contracts: general authority
(a)
Authority To Award.—
Subject to the requirements of this section, section 2304c of this title, and other applicable law, the head of an agency may enter into a task or delivery order contract (as defined in section 2304d of this title) for procurement of services or property.
(b)
Solicitation.—
The solicitation for a task or delivery order contract shall include the following:
(1) The period of the contract, including the number of options to extend the contract and the period for which the contract may be extended under each option, if any.
(2) The maximum quantity or dollar value of the services or property to be procured under the contract.
(3) A statement of work, specifications, or other description that reasonably describes the general scope, nature, complexity, and purposes of the services or property to be procured under the contract.
(c)
Applicability of Restriction on Use of Noncompetitive Procedures.—
The head of an agency may use procedures other than competitive procedures to enter into a task or delivery order contract under this section only if an exception in subsection (c) of section 2304 of this title applies to the contract and the use of such procedures is approved in accordance with subsection (f) of such section.
(d)
Single and Multiple Contract Awards.—
(1)
The head of an agency may exercise the authority provided in this section—
(A) to award a single task or delivery order contract; or
(B) if the solicitation states that the head of the agency has the option to do so, to award separate task or delivery order contracts for the same or similar services or property to two or more sources.
(2) No determination under section 2304(b) of this title is required for award of multiple task or delivery order contracts under paragraph (1)(B).
(3)
(A)
Except as provided under subparagraph (B), no task or delivery order contract in an amount estimated to exceed $100,000,000 (including all options) may be awarded to a single source unless the head of the agency determines in writing that—
(i) the task or delivery orders expected under the contract are so integrally related that only a single source can efficiently perform the work;
(ii)
the contract provides only for firm, fixed price task orders or delivery orders for—
(I) products for which unit prices are established in the contract; or(II) services for which prices are established in the contract for the specific tasks to be performed;
(iii) only one source is qualified and capable of performing the work at a reasonable price to the government; or
(iv) because of exceptional circumstances, it is necessary in the public interest to award the contract to a single source.
(B) A task or delivery order contract in an amount estimated to exceed $100,000,000 (including all options) may be awarded to a single source without the written determination otherwise required under subparagraph (A) if the head of the agency has made a written determination pursuant to section 2304(c) of this title that procedures other than competitive procedures may be used for the awarding of such contract.
(4)
The regulations implementing this subsection shall—
(A) establish a preference for awarding, to the maximum extent practicable, multiple task or delivery order contracts for the same or similar services or property under the authority of paragraph (1)(B); and
(B) establish criteria for determining when award of multiple task or delivery order contracts would not be in the best interest of the Federal Government.
(e)
Contract Modifications.—
A task or delivery order may not increase the scope, period, or maximum value of the task or delivery order contract under which the order is issued. The scope, period, or maximum value of the contract may be increased only by modification of the contract.
(f)
Contract Period.—
The head of an agency entering into a task or delivery order contract under this section may provide for the contract to cover any period up to five years and may extend the contract period for one or more successive periods pursuant to an option provided in the contract or a modification of the contract. The total contract period as extended may not exceed 10 years unless such head of an agency determines in writing that exceptional circumstances necessitate a longer contract period.
(g)
Inapplicability to Contracts for Advisory and Assistance Services.—
Except as otherwise specifically provided in section 2304b of this title, this section does not apply to a task or delivery order contract for the procurement of advisory and assistance services (as defined in section 1105(g) of title 31).
(h)
Relationship to Other Contracting Authority.—
Nothing in this section may be construed to limit or expand any authority of the head of an agency or the Administrator of General Services to enter into schedule, multiple award, or task or delivery order contracts under any other provision of law.
(Added Pub. L. 103–355, title I, § 1004(a)(1), Oct. 13, 1994, 108 Stat. 3249; amended Pub. L. 108–136, div. A, title VIII, § 843(b), Nov. 24, 2003, 117 Stat. 1553; Pub. L. 108–375, div. A, title VIII, § 813(a), Oct. 28, 2004, 118 Stat. 2014; Pub. L. 110–181, div. A, title VIII, § 843(a)(1), Jan. 28, 2008, 122 Stat. 236; Pub. L. 111–84, div. A, title VIII, § 814(a), Oct. 28, 2009, 123 Stat. 2407; Pub. L. 112–81, div. A, title VIII, § 809(b), Dec. 31, 2011, 125 Stat. 1490; Pub. L. 115–232, div. A, title VIII, § 816, Aug. 13, 2018, 132 Stat. 1852; Pub. L. 116–92, div. A, title VIII, § 816, Dec. 20, 2019, 133 Stat. 1487.)
§ 2304b.
Task order contracts: advisory and assistance services
(a)
Authority To Award.—
(1) Subject to the requirements of this section, section 2304c of this title, and other applicable law, the head of an agency may enter into a task order contract (as defined in section 2304d of this title) for procurement of advisory and assistance services.
(2) The head of an agency may enter into a task order contract for procurement of advisory and assistance services only under the authority of this section.
(b)
Limitation on Contract Period.—
The period of a task order contract entered into under this section, including all periods of extensions of the contract under options, modifications, or otherwise, may not exceed five years unless a longer period is specifically authorized in a law that is applicable to such contract.
(c)
Content of Notice.—
The notice required by section 1708 of title 41 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 1708 of title 41 and section 8(e) of the Small Business Act (15 U.S.C. 637(e)).
(g)
Contract Extensions.—
(1)
Notwithstanding the limitation on the contract period set forth in subsection (b) or in a solicitation or contract pursuant to subsection (e), a task order contract entered into by the head of an agency under this section may be extended on a sole-source basis for a period not exceeding six months if the head of such agency determines that—
(A) the award of a follow-on contract has been delayed by circumstances that were not reasonably foreseeable at the time the initial contract was entered into; and
(B) the extension is necessary in order to ensure continuity of the receipt of services pending the award of, and commencement of performance under, the follow-on contract.
(2) A task order contract may be extended under the authority of paragraph (1) only once and only in accordance with the limitations and requirements of this subsection.
(h)
Inapplicability to Certain Contracts.—
This section does not apply to a contract for the acquisition of property or services that includes acquisition of advisory and assistance services if the head of an agency entering into such contract determines that, under the contract, advisory and assistance services are necessarily incident to, and not a significant component of, the contract.
(i)
Advisory and Assistance Services Defined.—
In this section, the term “advisory and assistance services” has the meaning given such term in section 1105(g) of title 31.
(Added Pub. L. 103–355, title I, § 1004(a)(1), Oct. 13, 1994, 108 Stat. 3251; amended Pub. L. 111–350, § 5(b)(13), Jan. 4, 2011, 124 Stat. 3843.)
§ 2304c.
Task and delivery order contracts: orders
(a)
Issuance of Orders.—
The following actions are not required for issuance of a task or delivery order under a task or delivery order contract:
(1) A separate notice for such order under section 1708 of title 41 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;
(4) it is necessary to place the order with a particular contractor in order to satisfy a minimum guarantee; or
(5) the task or delivery order satisfies one of the exceptions in section 2304(c) of this title to the requirement to use competitive procedures.
(c)
Statement of Work.—
A task or delivery order shall include a statement of work that clearly specifies all tasks to be performed or property to be delivered under the order.
(d)
Enhanced Competition for Orders in Excess of $5,000,000.—
In the case of a task or delivery order in excess of $5,000,000, the requirement to provide all contractors a fair opportunity to be considered under subsection (b) is not met unless all such contractors are provided, at a minimum—
(1) a notice of the task or delivery order that includes a clear statement of the agency’s requirements;
(2) a reasonable period of time to provide a proposal in response to the notice;
(3) disclosure of the significant factors and subfactors, including cost or price, that the agency expects to consider in evaluating such proposals, and their relative importance;
(4) in the case of an award that is to be made on a best value basis, a written statement documenting the basis for the award and the relative importance of quality and price or cost factors; and
(5) an opportunity for a post-award debriefing consistent with the requirements of section 2305(b)(5) of this title.
(e)
Protests.—
(1)
A protest is not authorized in connection with the issuance or proposed issuance of a task or delivery order except for—
(A) a protest on the ground that the order increases the scope, period, or maximum value of the contract under which the order is issued; or
(B) a protest of an order valued in excess of $25,000,000.
(2) Notwithstanding section 3556 of title 31
(f)
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.
(g)
Applicability.—
This section applies to task and delivery order contracts entered into under sections 2304a and 2304b of this title.
(Added Pub. L. 103–355, title I, § 1004(a)(1), Oct. 13, 1994, 108 Stat. 3252; amended Pub. L. 110–181, div. A, title VIII, § 843(a)(2), Jan. 28, 2008, 122 Stat. 237; Pub. L. 111–350, § 5(b)(14), Jan. 4, 2011, 124 Stat. 3843; Pub. L. 111–383, div. A, title VIII, § 825, title X, § 1075(f)(5)(A), Jan. 7, 2011, 124 Stat. 4270, 4376; Pub. L. 112–239, div. A, title VIII, § 830, Jan. 2, 2013, 126 Stat. 1842; Pub. L. 114–328, div. A, title VIII, §§ 825(b), 835(a), Dec. 23, 2016, 130 Stat. 2280, 2285.)
§ 2304d.
Task and delivery order contracts: definitions
In sections 2304a, 2304b, and 2304c of this title:
(1) The term “task order contract” means a contract for services that does not procure or specify a firm quantity of services (other than a minimum or maximum quantity) and that provides for the issuance of orders for the performance of tasks during the period of the contract.
(2) The term “delivery order contract” means a contract for property that does not procure or specify a firm quantity of property (other than a minimum or maximum quantity) and that provides for the issuance of orders for the delivery of property during the period of the contract.
(Added Pub. L. 103–355, title I, § 1004(a)(1), Oct. 13, 1994, 108 Stat. 3253.)
§ 2304e.
Contracts: prohibition on competition between Department of Defense and small businesses
(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 small business concerns in furtherance of section 8 or 15 of the Small Business Act (15 U.S.C. 637 or 644).
(Added Pub. L. 103–160, div. A, title VIII, § 848(a)(1), Nov. 30, 1993, 107 Stat. 1724, § 2304a; renumbered § 2304e, Pub. L. 104–106, div. D, title XLIII, § 4321(b)(6)(A), Feb. 10, 1996, 110 Stat. 672; amended Pub. L. 115–232, div. A, title VIII, § 812(a)(2)(C)(vi), Aug. 13, 2018, 132 Stat. 1847; Pub. L. 116–92, div. A, title XVII, § 1731(a)(39)(A), Dec. 20, 2019, 133 Stat. 1814.)
§ 2305.
Contracts: planning, solicitation, evaluation, and award procedures
(a)
(1)
(A)
In preparing for the procurement of property or services, the head of an agency shall—
(i) specify the agency’s needs and solicit bids or proposals in a manner designed to achieve full and open competition for the procurement;
(ii) use advance procurement planning and market research; and
(iii) develop specifications in such manner as is necessary to obtain full and open competition with due regard to the nature of the property or services to be acquired.
(B)
Each solicitation under this chapter shall include specifications which—
(i) consistent with the provisions of this chapter, permit full and open competition; and
(ii) include restrictive provisions or conditions only to the extent necessary to satisfy the needs of the agency or as authorized by law.
(C)
For the purposes of subparagraphs (A) and (B), the type of specification included in a solicitation shall depend on the nature of the needs of the agency and the market available to satisfy such needs. Subject to such needs, specifications may be stated in terms of—
(i) function, so that a variety of products or services may qualify;
(ii) performance, including specifications of the range of acceptable characteristics or of the minimum acceptable standards; or
(iii) design requirements.
(2)
In addition to the specifications described in paragraph (1), a solicitation for sealed bids or competitive proposals (other than for a procurement for commercial products or commercial services using special simplified procedures or a purchase for an amount not greater than the simplified acquisition threshold) shall at a minimum include—
(A)
a statement of—
(i) all significant factors and significant subfactors which the head of the agency reasonably expects to consider in evaluating sealed bids (including price) or competitive proposals (including cost or price, cost-related or price-related factors and subfactors, and noncost-related or nonprice-related factors and subfactors); and
(ii) the relative importance assigned to each of those factors and subfactors; and
(B)
(i)
in the case of sealed bids—
(I) a statement that sealed bids will be evaluated without discussions with the bidders; and(II) the time and place for the opening of the sealed bids; or
(ii)
in the case of competitive proposals—
(I) either a statement that the proposals are intended to be evaluated with, and award made after, discussions with the offerors, or a statement that the proposals are intended to be evaluated, and award made, without discussions with the offerors (other than discussions conducted for the purpose of minor clarification) unless discussions are determined to be necessary; and(II) the time and place for submission of proposals.
(3)
(A)
In prescribing the evaluation factors to be included in each solicitation for competitive proposals, the head of an agency—
(i) shall (except as provided in subparagraph (C)) 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 (except as provided in subparagraph (C)) 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.
(C)
If the head of an agency issues a solicitation for multiple task or delivery order contracts under section 2304a(d)(1)(B) of this title for the same or similar services and intends to make a contract award to each qualifying offeror—
(i) cost or price to the Federal Government need not, at the Government’s discretion, be considered under clause (ii) of subparagraph (A) as an evaluation factor for the contract award; and
(ii)
if, pursuant to clause (i), cost or price to the Federal Government is not considered as an evaluation factor for the contract award—
(I) the disclosure requirement of clause (iii) of subparagraph (A) shall not apply; and(II) cost or price to the Federal Government shall be considered in conjunction with the issuance pursuant to section 2304c(b) of this title of a task or delivery order under any contract resulting from the solicitation.
(D)
In subparagraph (C), the term “qualifying offeror” means an offeror that—
(i) is determined to be a responsible source;
(ii) submits a proposal that conforms to the requirements of the solicitation; and
(iii) the contracting officer has no reason to believe would likely offer other than fair and reasonable pricing.
(E) Subparagraph (C) shall not apply to multiple task or delivery order contracts if the solicitation provides for sole source task or delivery order contracts pursuant to section 8(a) of the Small Business Act (15 U.S.C. 637(a)).
(4)
Nothing in this subsection prohibits an agency from—
(A) providing additional information in a solicitation, including numeric weights for all evaluation factors and subfactors on a case-by-case basis; or
(B) stating in a solicitation that award will be made to the offeror that meets the solicitation’s mandatory requirements at the lowest cost or price.
(5) The head of an agency, in issuing a solicitation for a contract to be awarded using sealed bid procedures, may not include in such solicitation a clause providing for the evaluation of prices for options to purchase additional property or services under the contract unless the head of the agency has determined that there is a reasonable likelihood that the options will be exercised.
(b)
(1) The head of an agency shall evaluate sealed bids and competitive proposals and make an award based solely on the factors specified in the solicitation.
(2) All sealed bids or competitive proposals received in response to a solicitation may be rejected if the head of the agency determines that such action is in the public interest.
(3) Sealed bids shall be opened publicly at the time and place stated in the solicitation. The head of the agency shall evaluate the bids in accordance with paragraph (1) without discussions with the bidders and, except as provided in paragraph (2), shall award a contract with reasonable promptness to the responsible bidder whose bid conforms to the solicitation and is most advantageous to the United States, considering only price and the other price-related factors included in the solicitation. The award of a contract shall be made by transmitting, in writing or by electronic means, notice of the award to the successful bidder. Within three days after the date of contract award, the head of the agency shall notify, in writing or by electronic means, each bidder not awarded the contract that the contract has been awarded.
(4)
(A)
The head of an agency shall evaluate competitive proposals in accordance with paragraph (1) and may award a contract—
(i) after discussions with the offerors, provided that written or oral discussions have been conducted with all responsible offerors who submit proposals within the competitive range; or
(ii) based on the proposals received, without discussions with the offerors (other than discussions conducted for the purpose of minor clarification) provided that the solicitation included a statement that proposals are intended to be evaluated, and award made, without discussions, unless discussions are determined to be necessary.
(B) If the contracting officer determines that the number of offerors that would otherwise be included in the competitive range under subparagraph (A)(i) exceeds the number at which an efficient competition can be conducted, the contracting officer may limit the number of proposals in the competitive range, in accordance with the criteria specified in the solicitation, to the greatest number that will permit an efficient competition among the offerors rated most highly in accordance with such criteria.
(C) Except as provided in paragraph (2), the head of the agency shall award a contract with reasonable promptness to the responsible source whose proposal is most advantageous to the United States, considering only cost or price and the other factors included in the solicitation. The head of the agency shall award the contract by transmitting, in writing or by electronic means, notice of the award to such source and, within three days after the date of contract award, shall notify, in writing or by electronic means, all other offerors of the rejection of their proposals. This subparagraph does not apply with respect to the award of a contract for the acquisition of perishable subsistence items.
(5)
(A) When a contract is awarded by the head of an agency on the basis of competitive proposals, an unsuccessful offeror, upon written request received by the agency within 3 days after the date on which the unsuccessful offeror receives the notification of the contract award, shall be debriefed and furnished the basis for the selection decision and contract award. The head of the agency shall debrief the offeror within, to the maximum extent practicable, five days after receipt of the request by the agency.
(B)
The debriefing shall include, at a minimum—
(i) the agency’s evaluation of the significant weak or deficient factors in the offeror’s offer;
(ii) the overall evaluated cost and technical rating of the offer of the contractor awarded the contract and the overall evaluated cost and technical rating of the offer of the debriefed offeror;
(iii) the overall ranking of all offers;
(iv) a summary of the rationale for the award;
(v) in the case of a proposal that includes a commercial product 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;
(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; and
(vii) an opportunity for a disappointed offeror to submit, within two business days after receiving a post-award debriefing, additional questions related to the debriefing.
(C) The agency shall respond in writing to any additional question submitted under subparagraph (B)(vii) within five business days after receipt of the question. The agency shall not consider the debriefing to be concluded until the agency delivers its written responses to the disappointed offeror.
(D) The debriefing may not include point-by-point comparisons of the debriefed offeror’s offer with other offers and may not disclose any information that is exempt from disclosure under section 552(b) of title 5.
(E) Each solicitation for competitive proposals shall include a statement that information described in subparagraph (B) may be disclosed in post-award debriefings.
(F)
If, within one year after the date of the contract award and as a result of a successful procurement protest, the agency seeks to fulfill the requirement under the protested contract either on the basis of a new solicitation of offers or on the basis of new best and final offers requested for that contract, the agency shall make available to all offerors—
(i) the information provided in debriefings under this paragraph regarding the offer of the contractor awarded the contract; and
(ii) the same information that would have been provided to the original offerors.
(6)
(A) When the contracting officer excludes an offeror submitting a competitive proposal from the competitive range (or otherwise excludes such an offeror from further consideration prior to the final source selection decision), the excluded offeror may request in writing, within three days after the date on which the excluded offeror receives notice of its exclusion, a debriefing prior to award. The contracting officer shall make every effort to debrief the unsuccessful offeror as soon as practicable but may refuse the request for a debriefing if it is not in the best interests of the Government to conduct a debriefing at that time.
(B) The contracting officer is required to debrief an excluded offeror in accordance with paragraph (5) only if that offeror requested and was refused a preaward debriefing under subparagraph (A).
(C)
The debriefing conducted under subparagraph (A) shall include—
(i) the executive agency’s evaluation of the significant elements in the offeror’s offer;
(ii) a summary of the rationale for the offeror’s exclusion; and
(iii) reasonable responses to relevant questions posed by the debriefed offeror as to whether source selection procedures set forth in the solicitation, applicable regulations, and other applicable authorities were followed by the executive agency.
(D) The debriefing conducted under subparagraph (A) may not disclose the number or identity of other offerors and shall not disclose information about the content, ranking, or evaluation of other offerors’ proposals.
(7) The contracting officer shall include a summary of any debriefing conducted under paragraph (5) or (6) in the contract file.
(8) The Federal Acquisition Regulation shall include a provision encouraging the use of alternative dispute resolution techniques to provide informal, expeditious, and inexpensive procedures for an offeror to consider using before filing a protest, prior to the award of a contract, of the exclusion of the offeror from the competitive range (or otherwise from further consideration) for that contract.
(9) If the head of an agency considers that a bid or proposal evidences a violation of the antitrust laws, he shall refer the bid or proposal to the Attorney General for appropriate action.
(c)
The Secretary of Defense shall ensure that before a contract for the delivery of supplies to the Department of Defense is entered into—
(1)
when the appropriate officials of the Department are making an assessment of the most advantageous source for acquisition of the supplies (considering quality, price, delivery, and other factors), there is a review of the availability and cost of each item of supply—
(A) through the supply system of the Department of Defense; and
(B) under standard Government supply contracts, if the item is in a category of supplies defined under regulations of the Secretary of Defense as being potentially available under a standard Government supply contract; and
(2) there is a review of both the procurement history of the item and a description of the item, including, when necessary for an adequate description of the item, a picture, drawing, diagram, or other graphic representation of the item.
(d)
(1)
(A) The Secretary of Defense shall ensure that, in preparing a solicitation for the award of a development contract for a major system, the head of an agency consider requiring in the solicitation that an offeror include in its offer proposals described in subparagraph (B). In determining whether to require such proposals, the head of the agency shall give due consideration to the purposes for which the system is being procured and the technology necessary to meet the system’s required capabilities. If such proposals are required, the head of the agency shall consider them in evaluating the offeror’s price.
(B)
Proposals referred to in the first sentence of subparagraph (A) are the following:
(i) Proposals to incorporate in the design of the major system items which are currently available within the supply system of the Federal agency responsible for the major system, available elsewhere in the national supply system, or commercially available from more than one source.
(ii) With respect to items that are likely to be required in substantial quantities during the system’s service life, proposals to incorporate in the design of the major system items which the United States will be able to acquire competitively in the future.
(2)
(A) The Secretary of Defense shall ensure that, in preparing a solicitation for the award of a production contract for a major system, the head of an agency consider requiring in the solicitation that an offeror include in its offer proposals described in subparagraph (B). In determining whether to require such proposals, the head of the agency shall give due consideration to the purposes for which the system is being procured and the technology necessary to meet the system’s required capabilities. If such proposals are required, the head of the agency shall consider them in evaluating the offeror’s price.
(B)
Proposals referred to in the first sentence of subparagraph (A) are proposals identifying opportunities to ensure that the United States will be able to obtain on a competitive basis items procured in connection with the system that are likely to be reprocured in substantial quantities during the service life of the system. Proposals submitted in response to such requirement may include the following:
(i) Proposals to provide to the United States the right to use technical data to be provided under the contract for competitive reprocurement of the item, together with the cost to the United States, if any, of acquiring such technical data and the right to use such data.
(ii) Proposals for the qualification or development of multiple sources of supply for the item.
(3) If the head of an agency is making a noncompetitive award of a development contract or a production contract for a major system, the factors specified in paragraphs (1) and (2) to be considered in evaluating an offer for a contract may be considered as objectives in negotiating the contract to be awarded. Such objectives may not impair the rights of prospective contractors or subcontractors otherwise provided by law.
(4)
(A)
Whenever the head of an agency requires that proposals described in paragraph (1)(B) or (2)(B) be submitted by an offeror in its offer, the offeror shall not be required to provide a proposal that enables the United States to acquire competitively in the future an identical item if the item was developed exclusively at private expense unless the head of the agency determines that—
(i) the original supplier of such item will be unable to satisfy program schedule or delivery requirements; or
(ii) proposals by the original supplier of such item to meet the mobilization requirements are insufficient to meet the agency’s mobilization needs.
(B) In considering offers in response to a solicitation requiring proposals described in paragraph (1)(B) or (2)(B), the head of an agency shall base any evaluation of items developed exclusively at private expense on an analysis of the total value, in terms of innovative design, life-cycle costs, and other pertinent factors, of incorporating such items in the system.
(e)
Protest File.—
(1) If, in the case of a solicitation for a contract issued by, or an award or proposed award of a contract by, the head of an agency, a protest is filed pursuant to the procedures in subchapter V of chapter 35 of title 31 and an actual or prospective offeror so requests, a file of the protest shall be established by the procuring activity and reasonable access shall be provided to actual or prospective offerors.
(2) Information exempt from disclosure under section 552 of title 5 may be redacted in a file established pursuant to paragraph (1) unless an applicable protective order provides otherwise.
(f)
Agency Actions on Protests.—
If, in connection with a protest, the head of an agency determines that a solicitation, proposed award, or award does not comply with the requirements of law or regulation, the head of the agency—
(1) may take any action set out in subparagraphs (A) through (F) of subsection (b)(1) of section 3554 of title 31; and
(2) may pay costs described in paragraph (1) of section 3554(c) of title 31 within the limits referred to in paragraph (2) of such section.
(g)
Prohibition on Release of Contractor Proposals.—
(1) Except as provided in paragraph (2), a proposal in the possession or control of an agency named in section 2303 of this title may not be made available to any person under section 552 of title 5.
(2) Paragraph (1) does not apply to any proposal that is set forth or incorporated by reference in a contract entered into between the Department and the contractor that submitted the proposal.
(3) In this subsection, the term “proposal” means any proposal, including a technical, management, or cost proposal, submitted by a contractor in response to the requirements of a solicitation for a competitive proposal.
(Aug. 10, 1956, ch. 1041, 70A Stat. 130; Pub. L. 85–861, § 1(44), Sept. 2, 1958, 72 Stat. 1457; Pub. L. 90–268, § 3, Mar. 16, 1968, 82 Stat. 49; Pub. L. 98–369, div. B, title VII, § 2723(b), July 18, 1984, 98 Stat. 1191; Pub. L. 98–525, title XII, § 1213(a), Oct. 19, 1984, 98 Stat. 2591; Pub. L. 99–145, title XIII, § 1303(a)(14), Nov. 8, 1985, 99 Stat. 739; Pub. L. 99–500, § 101(c) [title X, § 924(a), (b)], Oct. 18, 1986, 100 Stat. 1783–82, 1783–153, and Pub. L. 99–591, § 101(c) [title X, § 924(a), (b)], Oct. 30, 1986, 100 Stat. 3341–82, 3341–153; Pub. L. 99–661, div. A, title III, § 313(b), title IX, formerly title IV, § 924(a), (b), Nov. 14, 1986, 100 Stat. 3853, 3932, 3933, renumbered title IX, Pub. L. 100–26, § 3(5), Apr. 21, 1987, 101 Stat. 273; Pub. L. 100–456, div. A, title VIII, § 806, Sept. 29, 1988, 102 Stat. 2010; Pub. L. 101–189, div. A, title VIII, § 853(f), Nov. 29, 1989, 103 Stat. 1519; Pub. L. 101–510, div. A, title VIII, § 802(a)–(d), Nov. 5, 1990, 104 Stat. 1588, 1589; Pub. L. 103–160, div. A, title XI, § 1182(a)(5), Nov. 30, 1993, 107 Stat. 1771; Pub. L. 103–355, title I, §§ 1011–1016, title IV, § 4401(b), Oct. 13, 1994, 108 Stat. 3254–3257, 3347; Pub. L. 104–106, div. D, title XLI, §§ 4103(a), 4104(a), title XLII, § 4202(a)(2), div. E, title LVI, § 5601(a), Feb. 10, 1996, 110 Stat. 643, 644, 653, 699; Pub. L. 104–201, div. A, title VIII, § 821(a), title X, § 1074(a)(11), (b)(4)(A), Sept. 23, 1996, 110 Stat. 2609, 2659, 2660; Pub. L. 106–65, div. A, title VIII, § 821, Oct. 5, 1999,
§ 2305a.
Design-build selection procedures
(a)
Authorization.—
Unless the traditional acquisition approach of design-bid-build established under chapter 11 of title 40 is used or another acquisition procedure authorized by law is used, the head of an agency shall use the two-phase selection procedures authorized in this section for entering into a contract for the design and construction of a public building, facility, or work when a determination is made under subsection (b) that the procedures are appropriate for use.
(b)
Criteria for Use.—
A contracting officer shall make a determination whether two-phase selection procedures are appropriate for use for entering into a contract for the design and construction of a public building, facility, or work when the contracting officer anticipates that three or more offers will be received for such contract, design work must be performed before an offeror can develop a price or cost proposal for such contract, the offeror will incur a substantial amount of expense in preparing the offer, and the contracting officer has considered information such as the following:
(1) The extent to which the project requirements have been adequately defined.
(2) The time constraints for delivery of the project.
(3) The capability and experience of potential contractors.
(4) The suitability of the project for use of the two-phase selection procedures.
(5) The capability of the agency to manage the two-phase selection process.
(6) Other criteria established by the agency.
(c)
Procedures Described.—
Two-phase selection procedures consist of the following:
(1) The agency develops, either in-house or by contract, a scope of work statement for inclusion in the solicitation that defines the project and provides prospective offerors with sufficient information regarding the Government’s requirements (which may include criteria and preliminary design, budget parameters, and schedule or delivery requirements) to enable the offerors to submit proposals which meet the Government’s needs. If the agency contracts for development of the scope of work statement, the agency shall contract for architectural and engineering services as defined by and in accordance with chapter 11 of title 40.
(2)
The contracting officer solicits phase-one proposals that—
(A)
include information on the offeror’s—
(i) technical approach; and
(ii) technical qualifications; and
(B)
do not include—
(i) detailed design information; or
(ii) cost or price information.
(3) The evaluation factors to be used in evaluating phase-one proposals are stated in the solicitation and include specialized experience and technical competence, capability to perform, past performance of the offeror’s team (including the architect-engineer and construction members of the team) and other appropriate factors, except that cost-related or price-related evaluation factors are not permitted. Each solicitation establishes the relative importance assigned to the evaluation factors and subfactors that must be considered in the evaluation of phase-one proposals. The agency evaluates phase-one proposals on the basis of the phase-one evaluation factors set forth in the solicitation.
(4)
The contracting officer selects as the most highly qualified the number of offerors specified in the solicitation to provide the property or services under the contract and requests the selected offerors to submit phase-two competitive proposals that include technical proposals and cost or price information. Each solicitation establishes with respect to phase two—
(A) the technical submission for the proposal, including design concepts or proposed solutions to requirements addressed within the scope of work (or both), and
(B) the evaluation factors and subfactors, including cost or price, that must be considered in the evaluations of proposals in accordance with paragraphs (2), (3), and (4) of section 2305(a) of this title.
The contracting officer separately evaluates the submissions described in subparagraphs (A) and (B).
(5) The agency awards the contract in accordance with section 2305(b)(4) of this title.
(d)
Solicitation to State Number of Offerors To Be Selected for Phase Two Requests for Competitive Proposals.—
A solicitation issued pursuant to the procedures described in subsection (c) shall state the maximum number of offerors that are to be selected to submit competitive proposals pursuant to subsection (c)(4). If the contract value exceeds $4,000,000, the maximum number specified in the solicitation shall not exceed 5 unless—
(1) the solicitation is issued pursuant to an indefinite delivery-indefinite quantity contract for design-build construction; or
(2)
(A) the head of the contracting activity, delegable to a level no lower than the senior contracting official within the contracting activity, approves the contracting officer’s justification with respect to an individual solicitation that a maximum number greater than 5 is in the interest of the Federal Government; and
(B) the contracting officer provides written documentation of how a maximum number greater than 5 is consistent with the purposes and objectives of the two-phase selection procedures.
(e)
Requirement for Guidance and Regulations.—
The Federal Acquisition Regulation shall include guidance—
(1) regarding the factors that may be considered in determining whether the two-phase contracting procedures authorized by subsection (a) are appropriate for use in individual contracting situations;
(2) regarding the factors that may be used in selecting contractors; and
(3) providing for a uniform approach to be used Government-wide.
(f)
Special Authority for Military Construction Projects.—
(1) The Secretary of a military department may use funds available to the Secretary under section 2807(a) or 18233(e) of this title to accelerate the design effort in connection with a military construction project for which the two-phase selection procedures described in subsection (c) are used to select the contractor for both the design and construction portion of the project before the project is specifically authorized by law and before funds are appropriated for the construction portion of the project. Notwithstanding the limitations contained in such sections, use of such funds for the design portion of a military construction project may continue despite the subsequent authorization of the project. The advance notice requirement of section 2807(b) of this title shall continue to apply whenever the estimated cost of the design portion of the project exceeds the amount specified in such section.
(2) Any military construction contract that provides for an accelerated design effort, as authorized by paragraph (1), shall include as a condition of the contract that the liability of the United States in a termination for convenience before funds are first made available for construction may not exceed an amount attributable to the final design of the project.
(3) For each fiscal year during which the authority provided by this subsection is in effect, the Secretary of a military department may select not more than two military construction projects to include the accelerated design effort authorized by paragraph (1) for each armed force under the jurisdiction of the Secretary. To be eligible for selection under this subsection, a request for the authorization of the project, and for the authorization of appropriations for the project, must have been included in the annual budget of the President for a fiscal year submitted to Congress under section 1105(a) of title 31.
(4) Not later than March 1, 2008, the Secretary of Defense shall submit to the congressional defense committees a report evaluating the usefulness of the authority provided by this subsection in expediting the design and construction of military construction projects. The authority provided by this subsection expires September 30, 2008, except that, if the report required by this paragraph is not submitted by March 1, 2008, the authority shall expire on that date.
(Added Pub. L. 104–106, div. D, title XLI, § 4105(a)(1), Feb. 10, 1996, 110 Stat. 645; amended Pub. L. 105–85, div. A, title X, § 1073(a)(44), Nov. 18, 1997, 111 Stat. 1902; Pub. L. 107–217, § 3(b)(4), Aug. 21, 2002, 116 Stat. 1295; Pub. L. 108–178, § 4(b)(3), Dec. 15, 2003, 117 Stat. 2641; Pub. L. 108–375, div. B, title XXVIII, § 2807, Oct. 28, 2004, 118 Stat. 2123; Pub. L. 109–163, div. B, title XXVIII, § 2807, Jan. 6, 2006, 119 Stat. 3508; Pub. L. 113–291, div. A, title VIII, § 814, Dec. 19, 2014, 128 Stat. 3430; Pub. L. 115–91, div. A, title VIII, § 823, Dec. 12, 2017, 131 Stat. 1465; Pub. L. 116–92, div. A, title XVII, § 1731(a)(38), Dec. 20, 2019, 133 Stat. 1814.)
§ 2306.
Kinds of contracts
(a) The cost-plus-a-percentage-of-cost system of contracting may not be used. Subject to the limitation in the preceding sentence, the other provisions of this section, and other applicable provisions of law, the head of an agency, in awarding contracts under this chapter after using procedures other than sealed-bid procedures, may enter into any kind of contract that he considers will promote the best interests of the United States.
(b) Each contract awarded under this chapter after using procedures other than sealed-bid procedures shall contain a warranty, determined to be suitable by the head of the agency, that the contractor has employed or retained no person or selling agency to solicit or obtain the contract under an understanding or agreement for a commission, percentage, brokerage, or contingent fee, except a bona fide employee or established commercial or selling agency maintained by him to obtain business. If a contractor breaks such a warranty the United States may annul the contract without liability or may deduct the commission, percentage, brokerage, or contingent fee from the contract price or consideration. This subsection does not apply to a contract that is for an amount not greater than the simplified acquisition threshold or to a contract for the acquisition of commercial products or commercial services.
(c) A contract entered into by the United States in connection with a military construction project or a military family housing project may not use any form of cost-plus contracting. This prohibition is in addition to the prohibition specified in subsection (a) on the use of the cost-plus-a-percentage-of-cost system of contracting and applies notwithstanding a declaration of war or the declaration by the President of a national emergency under section 201 of the National Emergencies Act (50 U.S.C. 1621) that includes the use of the armed forces.
(d) The fee for performing a cost-plus-a-fixed-fee contract for experimental, developmental, or research work may not be more than 15 percent of the estimated cost of the contract, not including the fee. The fee for performing a cost-plus-a-fixed-fee contract for architectural or engineering services for a public work or utility plus the cost of those services to the contractor may not be more than 6 percent of the estimated cost of that work or project, not including fees. The fee for performing any other cost-plus-a-fixed-fee contract may not be more than 10 percent of the estimated cost of the contract, not including the fee. Determinations under this subsection of the estimated costs of a contract or project shall be made by the head of the agency at the time the contract is made.
(e)
(1)
Except as provided in paragraph (2), each cost contract and each cost-plus-a-fixed-fee contract shall provide for notice to the agency by the contractor before the making, under the prime contract, of—
(A) a cost-plus-a-fixed-fee subcontract; or
(B) a fixed-price subcontract or purchase order involving more than the greater of (i) the simplified acquisition threshold, or (ii) 5 percent of the estimated cost of the prime contract.
(2) Paragraph (1) shall not apply to a prime contract with a contractor that maintains a purchasing system approved by the contracting officer for the contract.
(f) So-called “truth-in-negotiations” provisions relating to cost or pricing data to be submitted by certain contractors and subcontractors are provided in section 2306a of this title.
(g) Multiyear contracting authority for the acquisition of services is provided in section 2306c of this title.
(h) Multiyear contracting authority for the purchase of property is provided in section 2306b of this title.
(Aug. 10, 1956, ch. 1041, 70A Stat. 130; Pub. L. 87–653, § 1(d), (e), Sept. 10, 1962, 76 Stat. 528; Pub. L. 90–378, § 1, July 5, 1968, 82 Stat. 289; Pub. L. 90–512, Sept. 25, 1968, 82 Stat. 863; Pub. L. 96–513, title V, § 511(77), Dec. 12, 1980, 94 Stat. 2926; Pub. L. 97–86, title IX, §§ 907(b), 909(b), Dec. 1, 1981, 95 Stat. 1117, 1118; Pub. L. 98–369, div. B, title VII, § 2724, July 18, 1984, 98 Stat. 1192; Pub. L. 99–145, title XIII, § 1303(a)(15), Nov. 8, 1985, 99 Stat. 739; Pub. L. 99–500, § 101(c) [title X, § 952(b)(1), (c)(1)], Oct. 18, 1986, 100 Stat. 1783–82, 1783–169, and Pub. L. 99–591, § 101(c) [title X, § 952(b)(1), (c)(1)], Oct. 30, 1986, 100 Stat. 3341–82, 3341–169; Pub. L. 99–661, div. A, title IX, formerly title IV, § 952(b)(1), (c)(1), Nov. 14, 1986, 100 Stat. 3949, renumbered title IX, Pub. L. 100–26, § 3(5), Apr. 21, 1987, 101 Stat. 273; Pub. L. 101–189, div. A, title VIII, § 805(a), Nov. 29, 1989, 103 Stat. 1488; Pub. L. 101–510, div. A, title VIII, § 808, Nov. 5, 1990, 104 Stat. 1593; Pub. L. 102–25, title VII, § 701(d)(3), Apr. 6, 1991, 105 Stat. 114; Pub. L. 103–355, title I, §§ 1021, 1022(b), title IV, §§ 4102(b), 4401(c), title VIII, § 8105(a), Oct. 13, 1994, 108 Stat. 3257, 3260, 3340, 3348, 3392; Pub. L. 105–85, div. A, title X, § 1073(a)(45), Nov. 18, 1997, 111 Stat. 1902; Pub. L. 106–398, § 1 [[div. A], title VIII, § 802(b)], Oct. 30, 2000, 114 Stat. 1654, 1654A–205; Pub. L. 108–136, div. A, title VIII, § 842, Nov. 24, 2003, 117 Stat. 1552; Pub. L. 112–81, div. B, title XXVIII, § 2801(a), Dec. 31, 2011, 125 Stat. 1684; Pub. L. 115–232, div. A, title VIII, § 836(c)(4), Aug. 13, 2018, 132 Stat. 1865; Pub. L. 116–283, div. A, title XVIII, § 1817(b), (c), (e), (g)(1), Jan. 1, 2021, 134 Stat. 4186, 4187.)
§ 2306a.
Cost or pricing data: truth in negotiations
(a)
Required Cost or Pricing Data and Certification.—
(1)
The head of an agency shall require offerors, contractors, and subcontractors to make cost or pricing data available as follows:
(A)
An offeror for a prime contract under this chapter to be entered into using procedures other than sealed-bid procedures that is only expected to receive one bid 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 June 30, 2018, the price of the contract to the United States is expected to exceed $2,000,000; and
(ii) in the case of a prime contract entered into on or before June 30, 2018, the price of the contract to the United States is expected to exceed $750,000.
(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 the price adjustment is expected to exceed $2,000,000.
(C) An offeror for a subcontract (at any tier) of a contract under this chapter shall be required to submit cost or pricing data before the award of the subcontract if the prime contractor and each higher-tier subcontractor have been required to make available cost or pricing data under this section and the price of the subcontract is expected to exceed $2,000,000.
(D) The subcontractor for a subcontract covered by subparagraph (C) shall be required to submit cost or pricing data before the pricing of a change or modification to the subcontract if the price adjustment is expected to exceed $2,000,000.
(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 June 30, 2018, 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 in accordance with section 1908 of title 41.
(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 competition that results in at least two or more responsive and viable competing bids; or
(ii) prices set by law or regulation;
(B) for the acquisition of a commercial product or a commercial service;
(C) in an exceptional case when the head of the procuring activity, without delegation, determines that the requirements of this section may be waived and justifies in writing the reasons for such determination; or
(D)
to the extent such data—
(i) relates to an offset agreement in connection with a contract for the sale of a weapon system or defense-related item to a foreign country or foreign firm; and
(ii) does not relate to a contract or subcontract under the offset agreement for work performed in such foreign country or by such foreign firm that is directly related to the weapon system or defense-related item being purchased under the contract.
(2)
Modifications of contracts and subcontracts for commercial products or commercial services.—
In the case of a modification of a contract or subcontract for a commercial product or commercial services 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 product or commercial services to a contract or subcontract for the acquisition of an item other than a commercial product or commercial services.
(3)
Noncommercial modifications of commercial products.—
(A) The exception in paragraph (1)(B) does not apply to cost or pricing data on noncommercial modifications of a commercial product that are expected to cost, in the aggregate, more than the amount specified in subsection (a)(1)(A)(i), as adjusted from time to time under subsection (a)(7), or 5 percent of the total price of the contract (at the time of contract award), whichever is greater.
(B) In this paragraph, the term “noncommercial modification”, with respect to a commercial product, means a modification of such product that is not a modification described in section 103(3)(A) of title 41.
(C)
Nothing in subparagraph (A) shall be construed—
(i) to limit the applicability of the exception in subparagraph (A) or (C) of paragraph (1) to cost or pricing data on a noncommercial modification of a commercial product; or
(ii) to require the submission of cost or pricing data on any aspect of an acquisition of a commercial product other than the cost and pricing of noncommercial modifications of such product.
(4)
Commercial product or commercial service determination.—
(A)
(B) If the contracting officer does not make the presumption described in subparagraph (A) and instead chooses to proceed with a procurement of a product or service previously determined to be a commercial product or a commercial service using procedures other than the procedures authorized for the procurement of a commercial product or a commercial service, as the case may be, the contracting officer shall request a review of the commercial product or commercial service determination by the head of the contracting activity.
(C)
Not later than 30 days after receiving a request for review of a determination under subparagraph (B), the head of a contracting activity shall—
(i) confirm that the prior determination was appropriate and still applicable; or
(ii) issue a revised determination with a written explanation of the basis for the revision.
(5) A contracting officer shall consider evidence provided by an offeror of recent purchase prices paid by the Government for the same or similar commercial products or commercial services in establishing price reasonableness on a subsequent purchase if the contracting officer is satisfied that the prices previously paid remain a valid reference for comparison after considering the totality of other relevant factors such as the time elapsed since the prior purchase and any differences in the quantities purchased or applicable terms and conditions.
(6)
Determination by prime contractor.—
A prime contractor required to submit certified cost or pricing data under subsection (a) with respect to a prime contract shall be responsible for determining whether a subcontract under such contract qualifies for an exception under paragraph (1)(A) from such requirement.
(c)
Cost or Pricing Data on Below-Threshold Contracts.—
(1)
Authority to require submission.—
Subject to paragraph (2), when certified cost or pricing data are not required to be submitted by subsection (a) for a contract, subcontract, or modification of a contract or subcontract, such data may nevertheless be required to be submitted by the head of the procuring activity, but only if the head of the procuring activity determines that such data are necessary for the evaluation by the agency of the reasonableness of the price of the contract, subcontract, or modification of a contract or subcontract. In any case in which the head of the procuring activity requires such data to be submitted under this subsection, the head of the procuring activity shall justify in writing the reason for such requirement.
(2)
Exception.—
The head of the procuring activity may not require certified cost or pricing data to be submitted under this paragraph for any contract or subcontract, or modification of a contract or subcontract, covered by the exceptions in subparagraph (A) or (B) of subsection (b)(1).
(3)
Delegation of authority prohibited.—
The head of a procuring activity may not delegate functions under this paragraph.
(d)
Submission of Other Information.—
(1)
Authority to require submission.—
When certified cost or pricing data are not required to be submitted under this section for a contract, subcontract, or modification of a contract or subcontract, the offeror shall be required to submit to the contracting officer data other than certified cost or pricing data (if requested by the contracting officer), 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. If the contracting officer determines that the offeror does not have access to and cannot provide sufficient information on prices for the same or similar items to determine the reasonableness of price, the contracting officer shall require the submission of information on prices for similar levels of work or effort on related products or services, prices for alternative solutions or approaches, and other information that is relevant to the determination of a fair and reasonable price. Contracting officers shall not determine the price of a contract or subcontract to be fair and reasonable based solely on historical prices paid by the Government.
(2)
Ineligibility for award.—
(A)
In the event the contracting officer is unable to determine proposed prices are fair and reasonable by any other means, an offeror who fails to make a good faith effort to comply with a reasonable request to submit data in accordance with paragraph (1) is ineligible for award unless the head of the contracting activity, or the designee of the head of contracting activity, determines that it is in the best interest of the Government to make the award to that offeror, based on consideration of pertinent factors, including the following:
(i) The effort to obtain the data.
(ii) Availability of other sources of supply of the item or service.
(iii) The urgency or criticality of the Government’s need for the item or service.
(iv) Reasonableness of the price of the contract, subcontract, or modification of the contract or subcontract based on information available to the contracting officer.
(v) Rationale or justification made by the offeror for not providing the requested data.
(vi) Risk to the Government if award is not made.
(B)
(i) Any new determination made by the head of the contracting activity under subparagraph (A) shall be reported to the Principal Director, Defense Pricing and Contracting on a quarterly basis.
(ii) The Under Secretary of Defense for Acquisition and Sustainment, or a designee, shall produce an annual report identifying offerors that have denied multiple requests for submission of uncertified cost or pricing data over the preceding three-year period, but nevertheless received an award. The report shall identify products or services offered by such offerors that should undergo should-cost analysis. The Secretary of Defense may include a notation on such offerors in the system used by the Federal Government to monitor or record contractor past performance. The Under Secretary shall assess the extent to which these offerors are sole source providers within the defense industrial base and shall develop strategies to incentivize new entrants into the industrial base to increase the availability of other sources of supply for the product or service.
(3)
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 products or commercial services.
(B) A requirement that a contracting officer limit, to the maximum extent practicable, the scope of any request for information relating to commercial products or commercial services from an offeror to only that information that is in the form regularly maintained by the offeror in commercial operations.
(C) A statement that any information received relating to commercial products or commercial services that is exempt from disclosure under section 552(b) of title 5 shall not be disclosed by the Federal Government.
(e)
Price Reductions for Defective Cost or Pricing Data.—
(1)
(A) A prime contract (or change or modification to a prime contract) under which a certificate under subsection (a)(2) is required shall contain a provision that the price of the contract to the United States, including profit or fee, shall be adjusted to exclude any significant amount by which it may be determined by the head of the agency that such price was increased because the contractor (or any subcontractor required to make available such a certificate) submitted defective cost or pricing data.
(B) For the purposes of this section, defective cost or pricing data are cost or pricing data which, as of the date of agreement on the price of the contract (or another date agreed upon between the parties), were inaccurate, incomplete, or noncurrent. If for purposes of the preceding sentence the parties agree upon a date other than the date of agreement on the price of the contract, the date agreed upon by the parties shall be as close to the date of agreement on the price of the contract as is practicable.
(2) In determining for purposes of a contract price adjustment under a contract provision required by paragraph (1) whether, and to what extent, a contract price was increased because the contractor (or a subcontractor) submitted defective cost or pricing data, it shall be a defense that the United States did not rely on the defective data submitted by the contractor or subcontractor.
(3)
It is not a defense to an adjustment of the price of a contract under a contract provision required by paragraph (1) that—
(A)
the price of the contract would not have been modified even if accurate, complete, and current cost or pricing data had been submitted by the contractor or subcontractor because the contractor or subcontractor—
(i) was the sole source of the property or services procured; or
(ii) otherwise was in a superior bargaining position with respect to the property or services procured;
(B) the contracting officer should have known that the cost and pricing data in issue were defective even though the contractor or subcontractor took no affirmative action to bring the character of the data to the attention of the contracting officer;
(C) the contract was based on an agreement between the contractor and the United States about the total cost of the contract and there was no agreement about the cost of each item procured under such contract; or
(D) the prime contractor or subcontractor did not submit a certification of cost and pricing data relating to the contract as required under subsection (a)(2).
(4)
(A)
A contractor shall be allowed to offset an amount against the amount of a contract price adjustment under a contract provision required by paragraph (1) if—
(i) the contractor certifies to the contracting officer (or to a designated representative of the contracting officer) that, to the best of the contractor’s knowledge and belief, the contractor is entitled to the offset; and
(ii) the contractor proves that the cost or pricing data were available before the date of agreement on the price of the contract (or price of the modification) or, if applicable consistent with paragraph (1)(B), another date agreed upon between the parties, and that the data were not submitted as specified in subsection (a)(3) before such date.
(B)
A contractor shall not be allowed to offset an amount otherwise authorized to be offset under subparagraph (A) if—
(i) the certification under subsection (a)(2) with respect to the cost or pricing data involved was known to be false when signed; or
(ii) the United States proves that, had the cost or pricing data referred to in subparagraph (A)(ii) been submitted to the United States before the date of agreement on the price of the contract (or price of the modification) or, if applicable consistent with paragraph (1)(B), another date agreed upon between the parties, the submission of such cost or pricing data would not have resulted in an increase in that price in the amount to be offset.
(f)
Interest and Penalties for Certain Overpayments.—
(1)
If the United States makes an overpayment to a contractor under a contract subject to this section and the overpayment was due to the submission by the contractor of defective cost or pricing data, the contractor shall be liable to the United States—
(A)
for interest on the amount of such overpayment, to be computed—
(i) for the period beginning on the date the overpayment was made to the contractor and ending on the date the contractor repays the amount of such overpayment to the United States; and
(ii) at the current rate prescribed by the Secretary of the Treasury under section 6621 of the Internal Revenue Code of 1986; and
(B) if the submission of such defective data was a knowing submission, for an additional amount equal to the amount of the overpayment.
(2) Any liability under this subsection of a contractor that submits cost or pricing data but refuses to submit the certification required by subsection (a)(2) with respect to the cost or pricing data shall not be affected by the refusal to submit such certification.
(g)
Right of United States To Examine Contractor Records.—
For the purpose of evaluating the accuracy, completeness, and currency of cost or pricing data required to be submitted by this section, the head of an agency shall have the authority provided by section 2313(a)(2) of this title.
(h)
Definitions.—
In this section:
(1)
Cost or pricing data.—
The term “cost or pricing data” means all facts that, as of the date of agreement on the price of a contract (or the price of a contract modification), or, if applicable consistent with subsection (e)(1)(B), another date agreed upon between the parties, a prudent buyer or seller would reasonably expect to affect price negotiations significantly. Such term does not include information that is judgmental, but does include the factual information from which a judgment was derived.
(2)
Subcontract.—
The term “subcontract” includes a transfer of commercial products or commercial services between divisions, subsidiaries, or affiliates of a contractor or a subcontractor.
(Added Pub. L. 99–500, § 101(c) [title X, § 952(a)], Oct. 18, 1986, 100 Stat. 1783–82, 1783–166, and Pub. L. 99–591, § 101(c) [title X, § 952(a)], Oct. 30, 1986, 100 Stat. 3341–82, 3341–166; Pub. L. 99–661, div. A, title IX, formerly title IV, § 952(a), Nov. 14, 1986, 100 Stat. 3945, renumbered title IX, Pub. L. 100–26, § 3(5), Apr. 21, 1987, 101 Stat. 273; amended Pub. L. 100–180, div. A, title VIII, § 804(a), (b), Dec. 4, 1987, 101 Stat. 1125; Pub. L. 101–510, div. A, title VIII, § 803(a)(1), (d), Nov. 5, 1990, 104 Stat. 1589, 1590; Pub. L. 102–25, title VII, § 701(b), (f)(8), Apr. 6, 1991, 105 Stat. 113, 115; Pub. L. 102–190, div. A, title VIII, § 804(a)–(c)(1), title X, § 1061(a)(9), Dec. 5, 1991, 105 Stat. 1415, 1416, 1472; Pub. L. 103–355, title I, §§ 1201–1209, Oct. 13, 1994, 108 Stat. 3273–3277; Pub. L. 104–106, div. D, title XLII, § 4201(a), title XLIII, § 4321(a)(2), (b)(7), Feb. 10, 1996, 110 Stat. 649, 671, 672; Pub. L. 104–201, div. A, title X, § 1074(a)(12), Sept. 23, 1996, 110 Stat. 2659; Pub. L. 105–85, div. A, title X, § 1073(a)(46), Nov. 18, 1997, 111 Stat. 1902; Pub. L. 105–261, div. A, title VIII, §§ 805(a), 808(a), Oct. 17, 1998, 112 Stat. 2083, 2085; Pub. L. 108–375, div. A, title VIII, § 818(a), Oct. 28, 2004, 118 Stat. 2015; Pub. L. 110–181, div. A, title VIII, § 814, Jan. 28, 2008, 122 Stat. 222; Pub. L. 111–350, § 5(b)(15), Jan. 4, 2011, 124 Stat. 3843; Pub. L. 113–291, div. A, title X, § 1071(a)(3), Dec. 19, 2014, 128 Stat. 3504; Pub. L. 114–92, div. A, title VIII, §§ 812, 851(b), 852(e), 853, Nov. 25, 2015, 129 Stat. 891, 916, 918, 919; Pub. L. 114–328, div. A, title VIII, § 822, Dec. 23, 2016, 130 Stat. 2276; Pub. L. 115–91, div. A, title VIII, § 811(a)(1), (b), Dec. 12, 2017, 131 Stat. 1459; Pub. L. 115–232, div. A, title VIII, § 836(c)(5), Aug. 13, 2018, 132 Stat. 1865; Pub. L. 116–92, div. A, title VIII, § 803, Dec. 20, 2019, 133 Stat. 1483; Pub. L. 116–283, div. A, title VIII, § 814(a)(1), title X, § 1081(d)(4)(B)(i), title XVIII, § 1831(b), (c)(1), (d)(1), (e)(1), (f)(1), (g)(1), (h)(1), (i), Jan. 1, 2021, 134 Stat. 3749, 3874, 4209, 4211, 4213, 4214, 4216.)
§ 2306b.
Multiyear contracts: acquisition of property
(a)
In General.—
To the extent that funds are otherwise available for obligation, the head of an agency may enter into multiyear contracts for the purchase of property whenever the head of that agency finds each of the following:
(1) That the use of such a contract will result in significant 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.
(7) In the case of a contract in an amount equal to or greater than $500,000,000, that the conditions required by subparagraphs (C) through (F) of subsection (i)(3) will be met, in accordance with the Secretary’s certification and determination under such subsection, by such contract.
(b)
Regulations.—
(1) Each official named in paragraph (2) shall prescribe acquisition regulations for the agency or agencies under the jurisdiction of such official to promote the use of multiyear contracting as authorized by subsection (a) in a manner that will allow the most efficient use of multiyear contracting.
(2)
(A) The Secretary of Defense shall prescribe the regulations applicable to the Department of Defense.
(B) The Secretary of Homeland Security shall prescribe the regulations applicable to the Coast Guard, except that the regulations prescribed by the Secretary of Defense shall apply to the Coast Guard when it is operating as a service in the Navy.
(C) The Administrator of the National Aeronautics and Space Administration shall prescribe the regulations applicable to the National Aeronautics and Space Administration.
(c)
Contract Cancellations.—
The regulations may provide for cancellation provisions in multiyear contracts to the extent that such provisions are necessary and in the best interests of the United States. The cancellation provisions may include consideration of both recurring and nonrecurring costs of the contractor associated with the production of the items to be delivered under the contract.
(d)
Participation by Subcontractors, Vendors, and Suppliers.—
In order to broaden the defense industrial base, the regulations shall provide that, to the extent practicable—
(1) multiyear contracting under subsection (a) shall be used in such a manner as to seek, retain, and promote the use under such contracts of companies that are subcontractors, vendors, or suppliers; and
(2) upon accrual of any payment or other benefit under such a multiyear contract to any subcontractor, vendor, or supplier company participating in such contract, such payment or benefit shall be delivered to such company in the most expeditious manner practicable.
(e)
Protection of Existing Authority.—
The regulations shall provide that, to the extent practicable, the administration of this section, and of the regulations prescribed under this section, shall not be carried out in a manner to preclude or curtail the existing ability of an agency—
(1) to provide for competition in the production of items to be delivered under such a contract; or
(2) to provide for termination of a prime contract the performance of which is deficient with respect to cost, quality, or schedule.
(f)
Cancellation or Termination for Insufficient Funding.—
In the event funds are not made available for the continuation of a contract made under this section into a subsequent fiscal year, the contract shall be canceled or terminated. The costs of cancellation or termination may be paid from—
(1) appropriations originally available for the performance of the contract concerned;
(2) appropriations currently available for procurement of the type of property concerned, and not otherwise obligated; or
(3) funds appropriated for those payments.
(g)
Contract Cancellation Ceilings Exceeding $100,000,000.—
(1) Before any contract described in subsection (a) that contains a clause setting forth a cancellation ceiling in excess of $100,000,000 may be awarded, the head of the agency concerned shall give written notification of the proposed contract and of the proposed cancellation ceiling for that contract to the congressional defense committees, and such contract may not then be awarded until the end of a period of 30 days beginning on the date of such notification.
(2)
In the case of a contract described in subsection (a) with a cancellation ceiling described in paragraph (1), if the budget for the contract does not include proposed funding for the costs of contract cancellation up to the cancellation ceiling established in the contract, the head of the agency concerned shall, as part of the certification required by subsection (i)(1)(A),1
1 See References in Text note below.
give written notification to the congressional defense committees of—
(A) the cancellation ceiling amounts planned for each program year in the proposed multiyear procurement contract, together with the reasons for the amounts planned;
(B) the extent to which costs of contract cancellation are not included in the budget for the contract; and
(C) a financial risk assessment of not including budgeting for costs of contract cancellation.
(h)
Defense Acquisitions of Weapon Systems.—
In the case of the Department of Defense, the authority under subsection (a) includes authority to enter into the following multiyear contracts in accordance with this section:
(1) A multiyear contract for the purchase of a weapon system, items and services associated with a weapon system, and logistics support for a weapon system.
(2) A multiyear contract for advance procurement of components, parts, and materials necessary to the manufacture of a weapon system, including a multiyear contract for such advance procurement that is entered into in order to achieve economic-lot purchases and more efficient production rates.
(i)
Defense Acquisitions Specifically Authorized by Law.—
(1) 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 under this section unless the contract is specifically authorized by law in an Act other than an appropriations Act.
(2)
In submitting a request for a specific authorization by law to carry out a defense acquisition program using multiyear contract authority under this section, the Secretary of Defense shall include in the request the following:
(A) A report containing preliminary findings of the agency head required in paragraphs (1) through (6) of subsection (a), together with the basis for such findings.
(B) Confirmation that the preliminary findings of the agency head under subparagraph (A) were supported by a preliminary cost analysis performed by the Director of Cost Assessment and Program Evaluation.
(3)
A multiyear contract may not be entered into under this section for a defense acquisition program that has been specifically authorized by law to be carried out using multiyear contract authority unless the Secretary of Defense certifies in writing, not later than 30 days before entry into the contract, that each of the following conditions is satisfied:
(A) The Secretary has determined that each of the requirements in paragraphs (1) through (6) of subsection (a) will be met by such contract and has provided the basis for such determination to the congressional defense committees.
(B) The Secretary’s determination under subparagraph (A) was made after completion of a cost analysis conducted on the basis of section 2334(e)(2) 1 of this title, and the analysis supports the determination.
(C) The system being acquired pursuant to such contract has not been determined to have experienced cost growth in excess of the critical cost growth threshold pursuant to section 2433(d) of this title within 5 years prior to the date the Secretary anticipates such contract (or a contract for advance procurement entered into consistent with the authorization for such contract) will be awarded.
(D) A sufficient number of end items of the system being acquired under such contract have been delivered at or within the most current estimates of the program acquisition unit cost or procurement unit cost for such system to determine that current estimates of such unit costs are realistic.
(E) During the fiscal year in which such contract is to be awarded, sufficient funds will be available to perform the contract in such fiscal year, and the future-years defense program for such fiscal year will include the funding required to execute the program without cancellation.
(F) The contract is a fixed price type contract.
(G) The proposed multiyear contract provides for production at not less than minimum economic rates given the existing tooling and facilities.
(4) 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 significant 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.
(5)
(A) The Secretary 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 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).
(6) The Secretary may make the certification under paragraph (3) notwithstanding the fact that one or more of the conditions of such certification are not met, if the Secretary determines that, due to exceptional circumstances, proceeding with a multiyear contract under this section is in the best interest of the Department of Defense and the Secretary provides the basis for such determination with the certification.
(7) The Secretary may not delegate the authority to make the certification under paragraph (3) or the determination under paragraph (6) to an official below the level of Under Secretary of Defense for Acquisition and Sustainment.
(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)
Each report required by paragraph (5) with respect to a contract (or contract extension) shall contain the following:
(A)
The amount of total obligational authority under the contract (or contract extension) and the percentage that such amount represents of—
(i) the applicable procurement account; and
(ii) the agency procurement total.
(B)
The amount of total obligational authority under all multiyear procurements of the agency concerned (determined without regard to the amount of the multiyear contract (or contract extension)) under multiyear contracts in effect at the time the report is submitted and the percentage that such amount represents of—
(i) the applicable procurement account; and
(ii) the agency procurement total.
(C)
The amount equal to the sum of the amounts under subparagraphs (A) and (B), and the percentage that such amount represents of—
(i) the applicable procurement account; and
(ii) the agency procurement total.
(D) The amount of total obligational authority under all Department of Defense multiyear procurements (determined without regard to the amount of the multiyear contract (or contract extension)), including any multiyear contract (or contract extension) that has been authorized by the Congress but not yet entered into, and the percentage that such amount represents of the procurement accounts of the Department of Defense treated in the aggregate.
(5) The head of an agency may not enter into a multiyear contract (or extend an existing multiyear contract), the value of which would exceed $500,000,000 (when entered into or when extended, as the case may be), until the Secretary of Defense submits to the congressional defense committees a report containing the information described in paragraph (4) with respect to the contract (or contract extension).
(6) The head of an agency may not terminate a multiyear procurement contract until 10 days after the date on which notice of the proposed termination is provided to the congressional defense committees.
(7) The execution of multiyear contracting authority shall require the use of a present value analysis to determine lowest cost compared to an annual procurement.
(8) This subsection does not apply to the National Aeronautics and Space Administration or to the Coast Guard.
(9)
In this subsection:
(A) The term “applicable procurement account” means, with respect to a multiyear procurement contract (or contract extension), the appropriation account from which payments to execute the contract will be made.
(B) The term “agency procurement total” means the procurement accounts of the agency entering into a multiyear procurement contract (or contract extension) treated in the aggregate.
(m)
Increased Funding and Reprogramming Requests.—
Any request for increased funding for the procurement of a major system under a multiyear contract authorized under this section shall be accompanied by an explanation of how the request for increased funding affects the determinations made by the Secretary under subsection (i).
(Added Pub. L. 103–355, title I, § 1022(a)(1), Oct. 13, 1994, 108 Stat. 3257; amended Pub. L. 104–106, div. A, title XV, § 1502(a)(10), div. E, title LVI, § 5601(b), Feb. 10, 1996, 110 Stat. 503, 699; Pub. L. 105–85, div. A, title VIII, § 806(a)(1), (b)(1), (c), title X, § 1073(a)(47), (48)(A), Nov. 18, 1997, 111 Stat. 1834, 1835, 1903; Pub. L. 106–65, div. A, title VIII, § 809, title X, § 1067(1), Oct. 5, 1999, 113 Stat. 705, 774; Pub. L. 106–398, § 1 [[div. A], title VIII, §§ 802(c), 806], Oct. 30, 2000, 114 Stat. 1654, 1654A–205, 1654A–207; Pub. L. 107–296, title XVII, § 1704(b)(1), Nov. 25, 2002, 116 Stat. 2314; Pub. L. 107–314, div. A, title VIII, § 820(a), Dec. 2, 2002, 116 Stat. 2613; Pub. L. 108–136, div. A, title X, § 1043(b)(10), Nov. 24, 2003, 117 Stat. 1611; Pub. L. 108–375, div. A, title VIII, § 814(a), title X, § 1084(b)(2), Oct. 28, 2004, 118 Stat. 2014, 2060; Pub. L. 110–181, div. A, title VIII, § 811(a), Jan. 28, 2008, 122 Stat. 217; Pub. L. 111–23, title I, § 101(d)(2), May 22, 2009, 123 Stat. 1709; Pub. L. 113–291, div. A, title VIII, § 816(a), (b), Dec. 19, 2014, 128 Stat. 3430, 3432; Pub. L. 114–92, div. A, title VIII, § 811, Nov. 25, 2015, 129 Stat. 891; Pub. L. 115–91, div. A, title X, § 1051(a)(14), Dec. 12, 2017, 131 Stat. 1561; Pub. L. 115–232, div. A, title VIII, § 817, Aug. 13, 2018, 132 Stat. 1852; Pub. L. 116–92, div. A, title IX, § 902(48), Dec. 20, 2019, 133 Stat. 1548; Pub. L. 116–283, div. A, title XVIII, § 1822(b)(1), (c)(1), (d)(1), (e)(1), (f)(1), (g)(1), (h)(1), (i)(1), (j)(1)(A)(i), (iii), (iv), (B), (C), (k), (l), Jan. 1, 2021, 134 Stat. 4197–4199, 4201, 4202.)
§ 2306c.
Multiyear contracts: acquisition of services
(a)
Authority.—
Subject to subsections (d) and (e), the head of an agency may enter into contracts for periods of not more than five years for services described in subsection (b), and for items of supply related to such services, for which funds would otherwise be available for obligation only within the fiscal year for which appropriated whenever the head of the agency finds that—
(1) there will be a continuing requirement for the services consonant with current plans for the proposed contract period;
(2) the furnishing of such services will require a substantial initial investment in plant or equipment, or the incurrence of substantial contingent liabilities for the assembly, training, or transportation of a specialized work force; and
(3) the use of such a contract will promote the best interests of the United States by encouraging effective competition and promoting economies in operation.
(b)
Covered Services.—
The authority under subsection (a) applies to the following types of services:
(1) Operation, maintenance, and support of facilities and installations.
(2) Maintenance or modification of aircraft, ships, vehicles, and other highly complex military equipment.
(3) Specialized training necessitating high quality instructor skills (for example, pilot and air crew members; foreign language training).
(4) Base services (for example, ground maintenance; in-plane refueling; bus transportation; refuse collection and disposal).
(5)
Environmental remediation services for—
(A) an active military installation;
(B) a military installation being closed or realigned under a base closure law; or
(C) a site formerly used by the Department of Defense.
(c)
Applicable Principles.—
In entering into multiyear contracts for services under the authority of this section, the head of the agency shall be guided by the following principles:
(1) The portion of the cost of any plant or equipment amortized as a cost of contract performance should not exceed the ratio between the period of contract performance and the anticipated useful commercial life of such plant or equipment. Useful commercial life, for this purpose, means the commercial utility of the facilities rather than the physical life thereof, with due consideration given to such factors as location of facilities, specialized nature thereof, and obsolescence.
(2) Consideration shall be given to the desirability of obtaining an option to renew the contract for a reasonable period not to exceed three years, at prices not to include charges for plant, equipment and other nonrecurring costs, already amortized.
(3) Consideration shall be given to the desirability of reserving in the agency the right, upon payment of the unamortized portion of the cost of the plant or equipment, to take title thereto under appropriate circumstances.
(d)
Restrictions Applicable Generally.—
(1) The head of an agency may not initiate under this section a contract for services that includes an unfunded contingent liability in excess of $20,000,000 unless the congressional defense committees are notified of the proposed contract at least 30 days in advance of the award of the proposed contract.
(2) The head of an agency may not initiate a multiyear contract for services under this section if the value of the multiyear contract would exceed $500,000,000 unless authority for the contract is specifically provided by law.
(3) The head of an agency may not terminate a multiyear procurement contract for services until 10 days after the date on which notice of the proposed termination is provided to the congressional defense committees.
(4) Before any contract described in subsection (a) that contains a clause setting forth a cancellation ceiling in excess of $100,000,000 may be awarded, the head of the agency concerned shall give written notification of the proposed contract and of the proposed cancellation ceiling for that contract to the congressional defense committees, and such contract may not then be awarded until the end of a period of 30 days beginning on the date of such notification.
(5)
In the case of a contract described in subsection (a) with a cancellation ceiling described in paragraph (4), if the budget for the contract does not include proposed funding for the costs of contract cancellation up to the cancellation ceiling established in the contract, the head of the agency concerned shall give written notification to the congressional defense committees of—
(A) the cancellation ceiling amounts planned for each program year in the proposed multiyear procurement contract, together with the reasons for the amounts planned;
(B) the extent to which costs of contract cancellation are not included in the budget for the contract; and
(C) a financial risk assessment of not including budgeting for costs of contract cancellation.
(e)
Cancellation or Termination for Insufficient Funding After First Year.—
In the event that funds are not made available for the continuation of a multiyear contract for services into a subsequent fiscal year, the contract shall be canceled or terminated, and the costs of cancellation or termination may be paid from—
(1) appropriations originally available for the performance of the contract concerned;
(2) appropriations currently available for procurement of the type of services concerned, and not otherwise obligated; or
(3) funds appropriated for those payments.
(f)
Multiyear Contract Defined.—
For the purposes of this section, a multiyear contract is a contract for the purchase of services for more than one, but not more than five, program years. Such a contract may provide that performance under the contract during the second and subsequent years of the contract is contingent upon the appropriation of funds and (if it does so provide) may provide for a cancellation payment to be made to the contractor if such appropriations are not made.
[(g) Repealed. Pub. L. 108–136, div. A, title VIII, § 843(a), Nov. 24, 2003, 117 Stat. 1553.]
(h)
Military Installation Defined.—
In this section, the term “military installation” has the meaning given such term in section 2801(c)(4) of this title.
(Added Pub. L. 106–398, § 1 [[div. A], title VIII, § 802(a)(1)], Oct. 30, 2000, 114 Stat. 1654, 1654A–203; amended Pub. L. 107–314, div. A, title VIII, §§ 811(a), 827, Dec. 2, 2002, 116 Stat. 2608, 2617; Pub. L. 108–136, div. A, title VIII, § 843(a), title X, § 1043(c)(1), Nov. 24, 2003, 117 Stat. 1553, 1611; Pub. L. 108–375, div. A, title VIII, § 814(b), Oct. 28, 2004, 118 Stat. 2014; Pub. L. 111–84, div. A, title X, § 1073(a)(22), Oct. 28, 2009, 123 Stat. 2473; Pub. L. 116–283, div. A, title XVIII, § 1822(n)(1), (o), (p), (q)(2), (r), (s)(1), Jan. 1, 2021, 134 Stat. 4203, 4204.)
§ 2307.
Contract financing
(a)
Payment Authority.—
(1)
The head of any agency may—
(A) make advance, partial, progress, or other payments under contracts for property or services made by the agency; and
(B) insert in solicitations for procurement of property or services a provision limiting to small business concerns advance or progress payments.
(2)
(A) For a prime contractor (as defined in section 8701 of title 41) that is a small business concern (as defined in section 3 of the Small Business Act (15 U.S.C. 632)), the Secretary of Defense shall, to the fullest extent permitted by law, establish an accelerated payment date with a goal of 15 days after receipt of a proper invoice for the amount due.
(B) For a prime contractor that subcontracts with a small business concern, the Secretary of Defense shall, to the fullest extent permitted by law, establish an accelerated payment date with a goal of 15 days after receipt of a proper invoice for the amount due if the prime contractor agrees or proposes to make payments to the subcontractor in accordance with the accelerated payment date, to the maximum extent practicable, without any further consideration from or fees charged to the subcontractor.
(b)
Preference for Performance-Based Payments.—
(1)
Whenever practicable, payments under subsection (a) shall be made using performance-based payments on any of the following bases:
(A) Performance measured by objective, quantifiable methods such as delivery of acceptable items, work measurement, or statistical process controls.
(B) Accomplishment of events defined in the program management plan.
(C) Other quantifiable measures of results.
(2) Performance-based payments shall not be conditioned upon costs incurred in contract performance but on the achievement of performance outcomes listed in paragraph (1).
(3) The Secretary of Defense shall ensure that nontraditional defense contractors and other private sector companies are eligible for performance-based payments, consistent with best commercial practices.
(4)
(A) In order to receive performance-based payments, a contractor’s accounting system shall be in compliance with Generally Accepted Accounting Principles, and there shall be no requirement for a contractor to develop Government-unique accounting systems or practices as a prerequisite for agreeing to receive performance-based payments.
(B) Nothing in this section shall be construed to grant the Defense Contract Audit Agency the authority to audit compliance with Generally Accepted Accounting Principles.
(c)
Payment Amount.—
Payments made under subsection (a) may not exceed the unpaid contract price.
(d)
Security for Advance Payments.—
Advance payments made under subsection (a) may be made only if the contractor gives adequate security and after a determination by the head of the agency that to do so would be in the public interest. Such security may be in the form of a lien in favor of the United States on the property contracted for, on the balance in an account in which such payments are deposited, and on such of the property acquired for performance of the contract as the parties may agree. This lien is paramount to any other liens and is effective immediately upon the first advancement of funds without filing, notice, or any other action by the United States.
(e)
Conditions for Progress Payments.—
(1) The Secretary of Defense shall ensure that any payment for work in progress (including materials, labor, and other items) under a defense contract that provides for such payments is commensurate with the work accomplished that meets standards established under the contract. The contractor shall provide such information and evidence as the Secretary of Defense determines necessary to permit the Secretary to carry out the preceding sentence.
(2) The Secretary shall ensure that progress payments referred to in paragraph (1) are not made for more than 80 percent of the work accomplished under a defense contract so long as the Secretary has not made the contractual terms, specifications, and price definite.
(3) This subsection applies to any contract in an amount greater than $25,000.
(f)
Conditions for Payments for Commercial Products and Commercial Services.—
(1) Payments under subsection (a) for commercial products and commercial services 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 products and commercial services may include payments, in a total amount of not more than 15 percent of the contract price, in advance of any performance of work under the contract.
(3) The conditions of subsections (d) and (e) need not be applied if they would be inconsistent, as determined by the head of the agency, with commercial terms and conditions pursuant to paragraphs (1) and (2).
(g)
Certain Navy Contracts.—
(1)
The Secretary of the Navy shall provide that the rate for progress payments on any contract awarded by the Secretary for repair, maintenance, or overhaul of a naval vessel shall be not less than—
(A) 95 percent, in the case of a firm considered to be a small business; and
(B) 90 percent, in the case of any other firm.
(2) The Secretary of the Navy may advance to private salvage companies such funds as the Secretary considers necessary to provide for the immediate financing of salvage operations. Advances under this paragraph shall be made on terms that the Secretary considers adequate for the protection of the United States.
(3) The Secretary of the Navy shall provide, in each contract for construction or conversion of a naval vessel, that, when partial, progress, or other payments are made under such contract, the United States is secured by a lien upon work in progress and on property acquired for performance of the contract on account of all payments so made. The lien is paramount to all other liens.
(h)
Vesting of Title in the United States.—
If a contract paid by a method authorized under subsection (a)(1) provides for title to property to vest in the United States, the title to the property shall vest in accordance with the terms of the contract, regardless of any security interest in the property that is asserted before or after the contract is entered into.
(i)
Action in Case of Fraud.—
(1) In any case in which the remedy coordination official of an agency finds that there is substantial evidence that the request of a contractor for advance, partial, or progress payment under a contract awarded by that agency is based on fraud, the remedy coordination official shall recommend that the head of the agency reduce or suspend further payments to such contractor.
(2) The head of an agency receiving a recommendation under paragraph (1) in the case of a contractor’s request for payment under a contract shall determine whether there is substantial evidence that the request is based on fraud. Upon making such a determination, the agency head may reduce or suspend further payments to the contractor under such contract.
(3) The extent of any reduction or suspension of payments by the head of an agency under paragraph (2) on the basis of fraud shall be reasonably commensurate with the anticipated loss to the United States resulting from the fraud.
(4) A written justification for each decision of the head of an agency whether to reduce or suspend payments under paragraph (2) and for each recommendation received by such agency head in connection with such decision shall be prepared and be retained in the files of such agency.
(5) The head of an agency shall prescribe procedures to ensure that, before such agency head decides to reduce or suspend payments in the case of a contractor under paragraph (2), the contractor is afforded notice of the proposed reduction or suspension and an opportunity to submit matters to the head of the agency in response to such proposed reduction or suspension.
(6)
Not later than 180 days after the date on which the head of an agency reduces or suspends payments to a contractor under paragraph (2), the remedy coordination official of such agency shall—
(A) review the determination of fraud on which the reduction or suspension is based; and
(B) transmit a recommendation to the head of such agency whether the suspension or reduction should continue.
(7) The head of an agency shall prepare for each year a report containing the recommendations made by the remedy coordination official of that agency to reduce or suspend payments under paragraph (2), the actions taken on the recommendations and the reasons for such actions, and an assessment of the effects of such actions on the Federal Government. The Secretary of each military department shall transmit the annual report of such department to the Secretary of Defense. Each such report shall be available to any member of Congress upon request.
(8) This subsection applies to the agencies named in paragraphs (1), (2), (3), (4), and (6) of section 2303(a) of this title.
(9) The head of an agency may not delegate responsibilities under this subsection to any person in a position below level IV of the Executive Schedule.
(10) In this subsection, the term “remedy coordination official”, with respect to an agency, means the person or entity in that agency who coordinates within that agency the administration of criminal, civil, administrative, and contractual remedies resulting from investigations of fraud or corruption related to procurement activities.
(Aug. 10, 1956, ch. 1041, 70A Stat. 131; Pub. L. 85–800, § 9, Aug. 28, 1958, 72 Stat. 967; Pub. L. 93–155, title VIII, § 807(c), Nov. 16, 1973, 87 Stat. 616; Pub. L. 100–370, § 1(f)(1)(A), July 19, 1988, 102 Stat. 846; Pub. L. 101–510, div. A, title VIII, § 836(a), (b), title XIII, § 1322(a)(4), Nov. 5, 1990, 104 Stat. 1615, 1616, 1671; Pub. L. 102–25, title VII, § 701(d)(4), (j)(2)(A), Apr. 6, 1991, 105 Stat. 114, 116; Pub. L. 102–190, div. A, title X, § 1061(a)(10), Dec. 5, 1991, 105 Stat. 1472; Pub. L. 102–484, div. A, title X, § 1052(24), Oct. 23, 1992, 106 Stat. 2500; Pub. L. 103–355, title II, § 2001(a)–(g), Oct. 13, 1994, 108 Stat. 3301, 3302; Pub. L. 105–85, div. A, title VIII, § 802, Nov. 18, 1997, 111 Stat. 1831; Pub. L. 106–391, title III, § 306, Oct. 30, 2000, 114 Stat. 1592; Pub. L. 114–328, div. A, title VIII, § 831(a), Dec. 23, 2016, 130 Stat. 2282; Pub. L. 115–232, div. A, title VIII, §§ 836(c)(6), 852, Aug. 13, 2018, 132 Stat. 1866, 1884; Pub. L. 116–92, div. A, title XVII, § 1731(a)(40), Dec. 20, 2019, 133 Stat. 1814; Pub. L. 116–283, div. A, title VIII, § 815, title XVIII, §§ 1834(b)(1), (c)(1), (d), (e)(1), (f)(1), (g)(1), (h), 1876(e), Jan. 1, 2021, 134 Stat. 3750, 4234–4237, 4239, 4291.)
§ 2308.
Buy-to-budget acquisition: end items
(a)
Authority To Acquire Additional End Items.—
Using funds available to the Department of Defense for the acquisition of an end item, the head of an agency making the acquisition may acquire a higher quantity of the end item than the quantity specified for the end item in a law providing for the funding of that acquisition if that head of an agency makes each of the following findings:
(1) The agency has an established requirement for the end item that is expected to remain substantially unchanged throughout the period of the acquisition.
(2) It is possible to acquire the higher quantity of the end item without additional funding because of production efficiencies or other cost reductions.
(3) The amount of the funds used for the acquisition of the higher quantity of the end item will not exceed the amount provided under that law for the acquisition of the end item.
(4) The amount so provided is sufficient to ensure that each unit of the end item acquired within the higher quantity is fully funded as a complete end item.
(b)
Regulations.—
The Secretary of Defense shall prescribe regulations for the administration of this section. The regulations shall include, at a minimum, the following:
(1) The level of approval within the Department of Defense that is required for a decision to acquire a higher quantity of an end item under subsection (a).
(2) Authority (subject to subsection (a)) to acquire up to 10 percent more than the quantity of an end item approved in a justification and approval of the use of procedures other than competitive procedures for the acquisition of the end item under section 2304 of this title.
(c)
Notification of Congress.—
(1) The head of an agency is not required to notify Congress in advance regarding a decision under the authority of this section to acquire a higher quantity of an end item than is specified in a law described in subsection (a), but, except as provided in paragraph (2), shall notify the congressional defense committees of the decision not later than 30 days after the date of the decision.
(2) A notification is not required under paragraph (1) if the end item being acquired in a higher quantity is an end item under a tactical missile program or a munitions program.
(d)
Waiver by Other Law.—
A provision of law may not be construed as prohibiting the acquisition of a higher quantity of an end item under this section unless that provision of law—
(1) specifically refers to this section; and
(2) specifically states that the acquisition of the higher quantity of the end item is prohibited notwithstanding the authority provided in this section.
(e)
Definitions.—
(1) For the purposes of this section, a quantity of an end item shall be considered specified in a law if the quantity is specified either in a provision of that law or in any related representation that is set forth separately in a table, chart, or explanatory text included in a joint explanatory statement or governing committee report accompanying the law.
(2)
In this section:
(A) The term “end item” means a production product assembled, completed, and ready for issue or deployment.
(B) The term “head of an agency” means the Secretary of Defense, the Secretary of the Army, the Secretary of the Navy, and the Secretary of the Air Force.
(Added Pub. L. 107–314, div. A, title VIII, § 801(a)(1), Dec. 2, 2002, 116 Stat. 2600; amended Pub. L. 108–136, div. A, title X, § 1043(b)(11), Nov. 24, 2003, 117 Stat. 1611; Pub. L. 114–328, div. A, title VIII, § 852, Dec. 23, 2016, 130 Stat. 2296.)
§ 2309.
Allocation of appropriations
(a) Appropriations available for procurement by an agency named in section 2303 of this title may, through administrative allotment, be made available for obligation for procurement by any other agency in amounts authorized by the head of the allotting agency and without transfer of funds on the books of the Department of the Treasury.
(b) A disbursing official of the allotting agency may make any disbursement chargeable to an allotment under subsection (a) upon a voucher certified by an officer or civilian employee of the procuring agency.
(Aug. 10, 1956, ch. 1041, 70A Stat. 132; Pub. L. 97–258, § 2(b)(1)(B), Sept. 13, 1982, 96 Stat. 1052.)
§ 2310.
Determinations and decisions
(a)
Individual or Class Determinations and Decisions Authorized.—
Determinations and decisions required to be made under this chapter by the head of an agency may be made for an individual purchase or contract or, except to the extent expressly prohibited by another provision of law, for a class of purchases or contracts. Such determinations and decisions are final.
(b)
Written Findings Required.—
(1) Each determination or decision under section 2306(g)(1), 2307(d), or 2313(c)(2)(B) of this title shall be based on a written finding by the person making the determination or decision. The finding shall set out facts and circumstances that support the determination or decision.
(2)
(Aug. 10, 1956, ch. 1041, 70A Stat. 132; Pub. L. 85–800, § 10, Aug. 28, 1958, 72 Stat. 967; Pub. L. 87–653, § 1(f), Sept. 10, 1962, 76 Stat. 529; Pub. L. 89–607, § 1(1), Sept. 27, 1966, 80 Stat. 850; Pub. L. 90–378, § 2, July 5, 1968, 82 Stat. 290; Pub. L. 98–369, div. B, title VII, § 2725, July 18, 1984, 98 Stat. 1193; Pub. L. 99–145, title XIII, § 1303(a)(16), Nov. 8, 1985, 99 Stat. 739; Pub. L. 103–355, title I, § 1504, Oct. 13, 1994, 108 Stat. 3297.)
§ 2311.
Assignment and delegation of procurement functions and responsibilities
(a)
In General.—
Except to the extent expressly prohibited by another provision of law, the head of an agency may delegate, subject to his direction, to any other officer or official of that agency, any power under this chapter.
(b)
Procurements For or With Other Agencies.—
Subject to subsection (a), to facilitate the procurement of property and services covered by this chapter by each agency named in section 2303 of this title for any other agency, and to facilitate joint procurement by those agencies—
(1) the head of an agency may delegate functions and assign responsibilities relating to procurement to any officer or employee within such agency;
(2) the heads of two or more agencies may by agreement delegate procurement functions and assign procurement responsibilities from one agency to another of those agencies or to an officer or civilian employee of another of those agencies; and
(3) the heads of two or more agencies may create joint or combined offices to exercise procurement functions and responsibilities.
(c)
Approval of Terminations and Reductions of Joint Acquisition Programs.—
(1) The Secretary of Defense shall prescribe regulations that prohibit each military department participating in a joint acquisition program approved by the Under Secretary of Defense for Acquisition and Sustainment 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 and Sustainment to require a military department whose participation in a joint acquisition program has been approved for termination or substantial reduction to continue to provide some or all of the funding necessary for the acquisition program to be continued in an efficient manner.
(Aug. 10, 1956, ch. 1041, 70A Stat. 132; Pub. L. 85–800, § 11, Aug. 28, 1958, 72 Stat. 967; Pub. L. 87–653, § 1(g), Sept. 10, 1962, 76 Stat. 529; Pub. L. 90–378, § 3, July 5, 1968, 82 Stat. 290; Pub. L. 97–86, title IX, §§ 907(c), 909(f), Dec. 1, 1981, 95 Stat. 1117, 1120; Pub. L. 98–369, div. B, title VII, § 2726, July 18, 1984, 98 Stat. 1194; Pub. L. 98–525, title XII, § 1214, Oct. 19, 1984, 98 Stat. 2592; Pub. L. 98–577, title V, § 505, Oct. 30, 1984, 98 Stat. 3087; Pub. L. 103–355, title I, § 1503(a)(1), Oct. 13, 1994, 108 Stat. 3296; Pub. L. 107–107, div. A, title X, § 1048(b)(2), Dec. 28, 2001, 115 Stat. 1225; Pub. L. 116–92, div. A, title IX, § 902(49), Dec. 20, 2019, 133 Stat. 1548.)
§ 2312.
Remission of liquidated damages

Upon the recommendation of the head of an agency, the Secretary of the Treasury may remit all or part, as he considers just and equitable, of any liquidated damages assessed for delay in performing a contract, made by that agency, that provides for such damages.

(Aug. 10, 1956, ch. 1041, 70A Stat. 132; Pub. L. 104–316, title II, § 202(c), Oct. 19, 1996, 110 Stat. 3842.)
§ 2313.
Examination of records of contractor
(a)
Agency Authority.—
(1)
The head of an agency, acting through an authorized representative, is authorized to inspect the plant and audit the records of—
(A) a contractor performing a cost-reimbursement, incentive, time-and-materials, labor-hour, or price-redeterminable contract, or any combination of such contracts, made by that agency under this chapter; and
(B) a subcontractor performing any cost-reimbursement, incentive, time-and-materials, labor-hour, or price-redeterminable 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;
(C) pricing of the contract or subcontract; or
(D) performance of the contract or subcontract.
(b)
DCAA Subpoena Authority.—
(1) The Director of the Defense Contract Audit Agency (or any successor agency) may require by subpoena the production of any records of a contractor that the Secretary of Defense is authorized to audit or examine under subsection (a).
(2) Any such subpoena, in the 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.
(c)
Comptroller General Authority.—
(1) Except as provided in 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 and to interview any current employee regarding such transactions.
(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.
(Aug. 10, 1956, ch. 1041, 70A Stat. 132; Pub. L. 89–607, § 1(2), Sept. 27, 1966, 80 Stat. 850; Pub. L. 98–369, div. B, title VII, § 2727(c), July 18, 1984, 98 Stat. 1195; Pub. L. 99–145, title IX, § 935, Nov. 8, 1985, 99 Stat. 700; Pub. L. 100–26, § 7(g)(1), Apr. 21, 1987, 101 Stat. 282; Pub. L. 101–510, div. A, title XIII, § 1301(9), Nov. 5, 1990, 104 Stat. 1668; Pub. L. 103–355, title II, § 2201(a)(1), title IV, § 4102(c), Oct. 13, 1994, 108 Stat. 3316, 3340; Pub. L. 104–106, div. A, title XV, § 1502(a)(1), Feb. 10, 1996, 110 Stat. 502; Pub. L. 104–201, div. A, title VIII, § 808(a), Sept. 23, 1996, 110 Stat. 2607; Pub. L. 106–65, div. A, title X, § 1032(a)(2), Oct. 5, 1999, 113 Stat. 751; Pub. L. 110–417, [div. A], title VIII, § 871(b), Oct. 14, 2008, 122 Stat. 4555; Pub. L. 116–283, div. A, title XVIII, § 1835(b)(1), (2), Jan. 1, 2021, 134 Stat. 4239.)
§ 2313a.
Defense Contract Audit Agency: annual report
(a)
Required Report.—
The Director of the Defense Contract Audit Agency shall prepare an annual report of the activities of the Agency during the previous fiscal year. The report shall include, at a minimum—
(1) a description of significant problems, abuses, and deficiencies encountered during the conduct of contractor audits;
(2)
statistical tables showing—
(A) the total number and dollar value of audit reports completed and pending, set forth separately by type of audit;
(B) the priority given to each type of audit;
(C) the length of time taken for each type of audit, both from the date of receipt of a qualified incurred cost submission and from the date the audit begins;
(D) the sustained questioned costs, set forth separately by type of audit, both as a total value and as a percentage of the total questioned costs for the audit;
(E) the total number and dollar value of incurred cost audits completed, and the method by which such incurred cost audits were completed;
(F) the aggregate cost of performing audits, set forth separately by type of audit;
(G) the ratio of sustained questioned costs to the aggregate costs of performing audits, set forth separately by type of audit; and
(H) the total number and dollar value of audits that are pending for a period longer than one year as of the end of the fiscal year covered by the report, and the fiscal year in which the qualified submission was received, set forth separately by type of audit;
(3) a summary of any recommendations of actions or resources needed to improve the audit process;
(4) a summary, set forth separately by dollar amount and percentage, of indirect costs for independent research and development incurred by contractors in the previous fiscal year;
(5) a summary, set forth separately by dollar amount and percentage, of indirect costs for bid and proposal costs incurred by contractors in the previous fiscal year;
(6) a description of outreach actions toward industry to promote more effective use of audit resources; and
(7) any other matters the Director considers appropriate.
(b)
Submission of Annual Report.—
Not later than March 30 of each year, the Director shall submit to the congressional defense committees the report required by subsection (a).
(c)
Public Availability.—
Not later than 60 days after the submission of an annual report to the congressional defense committees under subsection (b), the Director shall make the report available on the publicly available website of the Agency or such other publicly available website as the Director considers appropriate.
(d)
Definitions.—
(1) The terms “incurred cost audit” and “qualified incurred cost submission” have the meaning given those terms in section 2313b of this title.
(2) The term “sustained questioned costs” means questioned costs that were recovered by the Federal Government as a result of contract negotiations related to such questioned costs.
(Added Pub. L. 112–81, div. A, title VIII, § 805(a), Dec. 31, 2011, 125 Stat. 1486; amended Pub. L. 114–92, div. A, title VIII, § 893(b), Nov. 25, 2015, 129 Stat. 952; Pub. L. 114–328, div. A, title VIII, § 824(d)(1), Dec. 23, 2016, 130 Stat. 2279; Pub. L. 115–91, div. A, title VIII, § 811(d)(1), title X, § 1081(d)(5), Dec. 12, 2017, 131 Stat. 1460, 1600.)
§ 2313b.
Performance of incurred cost audits
(a)
Compliance With Standards of Risk and Materiality.—
Not later than October 1, 2020, the Secretary of Defense shall comply with commercially accepted standards of risk and materiality in the performance of each incurred cost audit of costs associated with a contract of the Department of Defense.
(b)
Conditions for the Use of Qualified Auditors to Perform Incurred Cost Audits.—
(1)
To support the need of the Department of Defense for timely and effective incurred cost audits, and to ensure that the Defense Contract Audit Agency is able to allocate resources to higher-risk and more complex audits, the Secretary of Defense shall use qualified private auditors to perform a sufficient number of incurred cost audits of contracts of the Department of Defense to—
(A) eliminate, by October 1, 2020, any backlog of incurred cost audits of the Defense Contract Audit Agency;
(B) ensure that incurred cost audits are completed not later than one year after the date of receipt of a qualified incurred cost submission;
(C) maintain an appropriate mix of Government and private sector capacity to meet the current and future needs of the Department of Defense for the performance of incurred cost audits;
(D) ensure that qualified private auditors perform incurred cost audits on an ongoing basis to improve the efficiency and effectiveness of the performance of incurred cost audits; and
(E)
limit multiyear auditing to ensure that multiyear auditing is conducted only—
(i) to address outstanding incurred cost audits for which a qualified incurred cost submission was submitted to the Defense Contract Audit Agency more than 12 months before the date of the enactment of this section; or
(ii)
(2) The Secretary of Defense shall consult with Federal agencies that have awarded contracts or task orders to qualified private auditors to ensure that the Department of Defense is using, as appropriate, best practices relating to contracting with qualified private auditors.
(3)
The Secretary of Defense shall ensure that a qualified private auditor performing an incurred cost audit under this section—
(A) has no conflict of interest in performing such an audit, as defined by generally accepted government auditing standards;
(B) possesses the necessary independence to perform such an audit, as defined by generally accepted government auditing standards;
(C) signs a nondisclosure agreement, as appropriate, to protect proprietary or nonpublic data;
(D) accesses and uses proprietary or nonpublic data furnished to the qualified private auditor only for the purposes stated in the contract;
(E) takes all reasonable steps to protect proprietary and nonpublic data furnished during the audit; and
(F) does not use proprietary or nonpublic data provided to the qualified private auditor under the authority of this section to compete for Government or nongovernment contracts.
(c)
Procedures for the Use of Qualified Private Auditors.—
(1)
Not later than October 1, 2018, the Secretary of Defense shall submit to the congressional defense committees a plan to implement the requirements of subsection (b). Such plan shall include, at a minimum—
(A) a description of the incurred cost audits that the Secretary determines are appropriate to be conducted by qualified private auditors, including the approximate number and dollar value of such incurred cost audits;
(B) an estimate of the number and dollar value of incurred cost audits to be conducted by qualified private auditors for each of the fiscal years 2019 through 2025 necessary to meet the requirements of subsection (b); and
(C) all other elements of an acquisition plan as required by the Federal Acquisition Regulation.
(2) Not later than April 1, 2019, the Secretary of Defense or a Federal department or agency authorized by the Secretary shall award a contract or issue a task order under an existing contract to two or more qualified private auditors to perform incurred cost audits of costs associated with contracts of the Department of Defense. The Defense Contract Management Agency or a contract administration office of a military department shall use a contract or a task order awarded or issued pursuant to this paragraph for the performance of an incurred cost audit, if doing so will assist the Secretary in meeting the requirements in subsection (b).
(3) To improve the quality of incurred cost audits and reduce duplication of performance of such audits, the Secretary of Defense may provide a qualified private auditor with information on past or ongoing audit results or other relevant information on the entities the qualified private auditor is auditing.
(4) The Secretary of Defense shall consider the results of an incurred cost audit performed under this section without regard to whether the Defense Contract Audit Agency or a qualified private auditor performed the audit.
(5) The contracting officer for a contract that is the subject of an incurred cost audit shall have the sole discretion to determine what action should be taken based on an audit finding on direct costs of the contract.
(d)
Qualified Private Auditor Requirements.—
(1) A qualified private auditor awarded a contract or issued a task order under subsection (c)(2) shall conduct an incurred cost audit in accordance with the generally accepted government auditing standards.
(2) A qualified private auditor awarded a contract or issued a task order under subsection (c)(2) shall develop and maintain complete and accurate working papers on each incurred cost audit. All working papers and reports on the incurred cost audit prepared by such qualified private auditor shall be the property of the Department of Defense, except that the qualified private auditor may retain a complete copy of all working papers to support such reports made pursuant to this section.
(3)
A breach of contract by a qualified private auditor with respect to use of proprietary or nonpublic data may subject the qualified private auditor to—
(A) criminal, civil, administrative, and contractual actions for penalties, damages, and other appropriate remedies by the United States; and
(B) civil actions for damages and other appropriate remedies by the contractor or subcontractor whose data are affected by the breach.
(e)
Peer Review.—
(1) Effective October 1, 2022, the Defense Contract Audit Agency may issue unqualified audit findings for an incurred cost audit only if the Defense Contract Audit Agency is peer reviewed by a commercial auditor and passes such peer review. Such peer review shall be conducted in accordance with the peer review requirements of generally accepted government auditing standards, including the requirements related to frequency of peer reviews, and shall be deemed to meet the requirements of the Defense Contract Audit Agency for a peer review under such standards.
(2) Not later than October 1, 2019, the Secretary of Defense shall provide to the Committees on Armed Services of the Senate and the House of Representatives an update on the process of securing a commercial auditor to perform the peer review referred to in paragraph (1).
(f)
Numeric Materiality Standards for Incurred Cost Audits.—
(1) Not later than October 1, 2020, the Department of Defense shall implement numeric materiality standards for incurred cost audits to be used by auditors that are consistent with commercially accepted standards of risk and materiality.
(2) Not later than October 1, 2019, the Secretary of Defense shall submit to the congressional defense committees a report containing proposed numeric materiality standards required under paragraph (1). In developing such standards, the Secretary shall consult with commercial auditors that conduct incurred cost audits, the advisory panel authorized under section 809 of the National Defense Authorization Act for Fiscal Year 2016 (Public Law 114–92; 129 Stat. 889), and other governmental and nongovernmental entities with relevant expertise.
(g)
Timeliness of Incurred Cost Audits.—
(1) The Secretary of Defense shall ensure that all incurred cost audits performed by qualified private auditors or the Defense Contract Audit Agency are performed in a timely manner.
(2) The Secretary of Defense shall notify a contractor of the Department of Defense within 60 days after receipt of an incurred cost submission from the contractor whether the submission is a qualified incurred cost submission.
(3) With respect to qualified incurred cost submissions received on or after the date of the enactment of this section, audit findings shall be issued for an incurred cost audit not later than one year after the date of receipt of such qualified incurred cost submission.
(4) Not later than October 1, 2020, and subject to paragraph (5), if audit findings are not issued within one year after the date of receipt of a qualified incurred cost submission, the audit shall be considered to be complete and no additional audit work shall be conducted.
(5) The Under Secretary of Defense (Comptroller) may waive the requirements of paragraph (4) on a case-by-case basis if the Director of the Defense Contract Audit Agency submits a written request. The Director of the Defense Contract Audit Agency shall include in the report required under section 2313a of this title the total number of waivers issued and the reasons for issuing each such waiver.
(h)
Review of Audit Performance.—
Not later than April 1, 2025, the Comptroller General of the United States shall submit to the congressional defense committees a report that evaluates for the period beginning on October 1, 2019, and ending on August 31, 2023
(1) the timeliness, individual cost, and quality of incurred cost audits, set forth separately by incurred cost audits performed by the Defense Contract Audit Agency and by qualified private auditors;
(2) the cost to contractors of the Department of Defense for incurred cost audits, set forth separately by incurred cost audits performed by the Defense Contract Audit Agency and by qualified private auditors;
(3) the effect, if any, on other types of audits conducted by the Defense Contract Audit Agency that results from incurred cost audits conducted by qualified private auditors; and
(4) the capability and capacity of qualified private auditors to conduct incurred cost audits for the Department of Defense.
(i)
Definitions.—
In this section:
(1) The term “commercial auditor” means a private entity engaged in the business of performing audits.
(2) The term “incurred cost audit” means an audit of charges to the Government by a contractor under a flexibly priced contract.
(3) The term “flexibly priced contract” has the meaning given the term “flexibly-priced contracts and subcontracts” in part 30 of the Federal Acquisition Regulation (section 30.001 of title 48, Code of Federal Regulations).
(4) The term “generally accepted government auditing standards” means the generally accepted government auditing standards of the Comptroller General of the United States.
(5) The term “numeric materiality standard” means a dollar amount of misstatements, including omissions, contained in an incurred cost audit that would be material if the misstatements, individually or in the aggregate, could reasonably be expected to influence the economic decisions of the Government made on the basis of the incurred cost audit.
(6) The term “qualified incurred cost submission” means a submission by a contractor of costs incurred under a flexibly priced contract that has been qualified by the Department of Defense as sufficient to conduct an incurred cost audit.
(7)
The term “qualified private auditor” means a commercial auditor—
(A) that performs audits in accordance with generally accepted government auditing standards; and
(B) that has received a passing peer review rating, as defined by generally accepted government auditing standards.
(Added Pub. L. 115–91, div. A, title VIII, § 803(a), Dec. 12, 2017, 131 Stat. 1451; amended Pub. L. 115–232, div. A, title X, § 1081(a)(19), Aug. 13, 2018, 132 Stat. 1984; Pub. L. 116–92, div. A, title XVII, § 1731(a)(41), Dec. 20, 2019, 133 Stat. 1814.)
§ 2314.
Laws inapplicable to agencies named in section 2303 of this title

Sections 6101 and 6304 of title 41 do not apply to the procurement or sale of property or services by the agencies named in section 2303 of this title.

(Aug. 10, 1956, ch. 1041, 70A Stat. 133; Pub. L. 96–513, title V, § 511(78), Dec. 12, 1980, 94 Stat. 2927; Pub. L. 103–160, div. A, title VIII, § 822(b)(2), Nov. 30, 1993, 107 Stat. 1706; Pub. L. 111–350, § 5(b)(16), Jan. 4, 2011, 124 Stat. 3843; Pub. L. 113–291, div. A, title X, § 1071(a)(4), Dec. 19, 2014, 128 Stat. 3504; Pub. L. 116–283, div. A, title XVIII, § 1807(e)(2), Jan. 1, 2021, 134 Stat. 4158.)
§ 2315.
Law inapplicable to the procurement of automatic data processing equipment and services for certain defense purposes

(Added Pub. L. 97–86, title IX, § 908(a)(1), Dec. 1, 1981, 95 Stat. 1117; amended Pub. L. 97–295, § 1(25), Oct. 12, 1982, 96 Stat. 1291; Pub. L. 104–106, div. E, title LVI, § 5601(c), Feb. 10, 1996, 110 Stat. 699; Pub. L. 104–201, div. A, title X, § 1074(b)(4)(B), Sept. 23, 1996, 110 Stat. 2660; Pub. L. 105–85, div. A, title X, § 1073(a)(49), Nov. 18, 1997, 111 Stat. 1903; Pub. L. 107–217, § 3(b)(5), Aug. 21, 2002, 116 Stat. 1295; Pub. L. 109–364, div. A, title IX, § 906(c), Oct. 17, 2006, 120 Stat. 2354; Pub. L. 113–283, § 2(e)(5)(C), Dec. 18, 2014, 128 Stat. 3087; Pub. L. 114–92, div. A, title X, § 1081(a)(7), Nov. 25, 2015, 129 Stat. 1001; Pub. L. 116–283, div. A, title XVIII, § 1807(e)(3), Jan. 1, 2021, 134 Stat. 4159.)
§ 2316.
Disclosure of identity of contractor

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.

(Added Pub. L. 97–295, § 1(26)(A), Oct. 12, 1982, 96 Stat. 1291.)
[§ 2317.
Repealed. Pub. L. 103–160, div. A, title VIII, § 821(a)(2), Nov. 30, 1993, 107 Stat. 1704]
§ 2318.
Advocates for competition

Each advocate for competition designated pursuant to section 1705(a) of title 41 for 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 in a position classified above GS–15 pursuant to section 5108 of title 5, if a civilian employee and shall be designated to serve for a minimum of two years.

(Added Pub. L. 98–525, title XII, § 1216(a), Oct. 19, 1984, 98 Stat. 2593; amended Pub. L. 100–26, § 7(d)(4), Apr. 21, 1987, 101 Stat. 281; Pub. L. 102–25, title VII, § 701(f)(1), Apr. 6, 1991, 105 Stat. 115; Pub. L. 103–355, title I, § 1031, Oct. 13, 1994, 108 Stat. 3260; Pub. L. 111–350, § 5(b)(17), Jan. 4, 2011, 124 Stat. 3843; Pub. L. 112–239, div. A, title X, § 1076(f)(24), Jan. 2, 2013, 126 Stat. 1953; Pub. L. 115–232, div. A, title VIII, § 811(d), Aug. 13, 2018, 132 Stat. 1845.)
§ 2319.
Encouragement of new competitors
(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 (or, in the case of a contract for the procurement of an aviation critical safety item or ship critical safety item, the head of the design control activity for such item) 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).
(g)
Definitions.—
In this section:
(1) The term “aviation critical safety item” means a part, an assembly, installation equipment, launch equipment, recovery equipment, or support equipment for an aircraft or aviation weapon system if the part, assembly, or equipment contains a characteristic any failure, malfunction, or absence of which could cause a catastrophic or critical failure resulting in the loss of or serious damage to the aircraft or weapon system, an unacceptable risk of personal injury or loss of life, or an uncommanded engine shutdown that jeopardizes safety.
(2) The term “ship critical safety item” means any ship part, assembly, or support equipment containing a characteristic the failure, malfunction, or absence of which could cause a catastrophic or critical failure resulting in loss of or serious damage to the ship or unacceptable risk of personal injury or loss of life.
(3) The term “design control activity”, with respect to an aviation critical safety item or ship critical safety item, means the systems command of a military department that is specifically responsible for ensuring the airworthiness of an aviation system or equipment, or the seaworthiness of a ship or ship equipment, in which such item is to be used.
(Added Pub. L. 98–525, title XII, § 1216(a), Oct. 19, 1984, 98 Stat. 2593; amended Pub. L. 100–26, § 7(d)(5), (i)(4), (k)(3), Apr. 21, 1987, 101 Stat. 281, 282, 284; Pub. L. 108–136, div. A, title VIII, § 802(d), Nov. 24, 2003, 117 Stat. 1541; Pub. L. 109–364, div. A, title I, § 130(d), Oct. 17, 2006, 120 Stat. 2110.)
§ 2320.
Rights in technical data
(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)
Development exclusively with federal funds.—
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)
Development exclusively at private expense.—
Except as provided in subparagraphs (C), (D), and (G), 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.
(C)
Exception to subparagraph (b).—
Subparagraph (B) does not apply to technical data that—
(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, including such data pertaining to a major system component); 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)
Exception to subparagraph (b).—
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;(II) is a release, disclosure, or use of technical data pertaining to an interface between an item or process and other items or processes necessary for the segregation of an item or process from, or the reintegration of that item or process (or a physically or functionally equivalent item or process) with, other items or processes; or(III) 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)
Development with mixed funding.—
Except as provided in subparagraphs (F) and (G), 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 on 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)
Interfaces developed with mixed funding.—
Notwithstanding subparagraph (E), the United States shall have government purpose rights in technical data pertaining to an interface between an item or process and other items or processes that was developed in part with Federal funds and in part at private expense, except in any case in which the Secretary of Defense determines, on the basis of criteria established in the regulations, that negotiation of different rights in such technical data would be in the best interest of the United States.
(G)
Modular system interfaces developed exclusively at private expense or with mixed funding.—
Notwithstanding subparagraphs (B) and (E), the United States shall have government purpose rights in technical data pertaining to a modular system interface developed exclusively at private expense or in part with Federal funds and in part at private expense and used in a modular open system approach pursuant to section 2446a of this title, except in any case in which the Secretary of Defense determines that negotiation of different rights in such technical data would be in the best interest of the United States. Such modular system interface shall be identified in the contract solicitation and the contract. For technical data pertaining to a modular system interface developed exclusively at private expense for which the United States asserts government purpose rights, the Secretary of Defense shall negotiate with the contractor the appropriate and reasonable compensation for such technical data.
(H)
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 (A) for which a use or release restriction has been erroneously asserted by a contractor or subcontractor;(II) rights in technical data described in subparagraph (C); or(III) 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).
(I)
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 the 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 product, the product 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) 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;
(8) 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;
(9)
providing that, in addition to technical data that is already subject to a contract delivery requirement, the United States may require, until the date occurring six years after acceptance of the last item (other than technical data) under a contract or the date of contract termination, whichever is later, the delivery of technical data that has been generated in the performance of the contract, and compensate the contractor only for reasonable costs incurred for having converted and delivered the data in the required form, upon a determination that—
(A) the technical data is needed for the purpose of reprocurement, sustainment, modification, or upgrade (including through competitive means) of a major system or subsystem thereof, a weapon system or subsystem thereof, or any noncommercial product or process; and
(B)
the technical data—
(i) pertains to an item or process developed in whole or in part with Federal funds; or
(ii) is described in subparagraphs (D)(i)(II), (F), and (G) of subsection (a)(2); and
(10) providing that the United States is not foreclosed from requiring the delivery of the technical data by a failure to challenge, in accordance with the requirements of section 2321(d) of this title, the contractor’s assertion of a use or release restriction on the technical data.
(c)
Nothing in this section or in section 2305(d) of this title 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;
(2) notwithstanding any limitation upon the license rights conveyed under subsection (a), allowing a covered Government support contractor access to and use of any technical data delivered under a contract for the sole purpose of furnishing independent and impartial advice or technical assistance directly to the Government in support of the Government’s management and oversight of the program or effort to which such technical data relates; or
(3) 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.
(e)
The Secretary of Defense shall require program managers for major weapon systems and subsystems of major weapon systems to assess the long-term technical data needs of such systems and subsystems and establish corresponding acquisition strategies that provide for technical data rights needed to sustain such systems and subsystems over their life cycle. Such strategies may include the development of maintenance capabilities within the Department of Defense or competition for contracts for sustainment of such systems or subsystems. Assessments and corresponding acquisition strategies developed under this section with respect to a weapon system or subsystem shall—
(1) be developed before issuance of a contract solicitation for the weapon system or subsystem;
(2) address the merits of including a priced contract option for the future delivery of technical data that were not acquired upon initial contract award;
(3) address the potential for changes in the sustainment plan over the life cycle of the weapon system or subsystem; and
(4) apply to weapon systems and subsystems that are to be supported by performance-based logistics arrangements as well as to weapons systems and subsystems that are to be supported by other sustainment approaches.
(f)
Preference for Specially Negotiated Licenses.—
The Secretary of Defense shall, to the maximum extent practicable, negotiate and enter into a contract with a contractor for a specially negotiated license for technical data to support the product support strategy of a major weapon system or subsystem of a major weapon system. In performing the assessment and developing the corresponding strategy required under subsection (e) for such a system or subsystem, a program manager shall consider the use of specially negotiated licenses to acquire customized technical data appropriate for the particular elements of the product support strategy.
(g)
Covered Government Support Contractor Defined.—
In this section, the term “covered Government support contractor” means a contractor under a contract the primary purpose of which is to furnish independent and impartial advice or technical assistance directly to the Government in support of the Government’s management and oversight of a program or effort (rather than to directly furnish an end item or service to accomplish a program or effort), which contractor—
(1) is not affiliated with the prime contractor or a first-tier subcontractor on the program or effort, or with any direct competitor of such prime contractor or any such first-tier subcontractor in furnishing end items or services of the type developed or produced on the program or effort; and
(2)
executes a contract with the Government agreeing to and acknowledging—
(A) that proprietary or nonpublic technical data furnished will be accessed and used only for the purposes stated in that contract;
(B) that the covered Government support contractor will enter into a non-disclosure agreement with the contractor to whom the rights to the technical data belong;
(C) that the covered Government support contractor will take all reasonable steps to protect the proprietary and nonpublic nature of the technical data furnished to the covered Government support contractor during the program or effort for the period of time in which the Government is restricted from disclosing the technical data outside of the Government;
(D)
that a breach of that contract by the covered Government support contractor with regard to a third party’s ownership or rights in such technical data may subject the covered Government support contractor—
(i) to criminal, civil, administrative, and contractual actions in law and equity for penalties, damages, and other appropriate remedies by the United States; and
(ii) to civil actions for damages and other appropriate remedies by the contractor or subcontractor whose technical data is affected by the breach; and
(E) that such technical data provided to the covered Government support contractor under the authority of this section shall not be used by the covered Government support contractor to compete against the third party for Government or non-Government contracts.
(h)
Additional Definitions.—
In this section, the terms “major system component”, “modular system interface”, and “modular open system approach” have the meanings provided in section 2446a of this title.
(Added Pub. L. 98–525, title XII, § 1216(a), Oct. 19, 1984, 98 Stat. 2595; amended Pub. L. 98–577, title III, § 301(b), Oct. 30, 1984, 98 Stat. 3076; Pub. L. 99–145, title IX, § 961(d)(1), Nov. 8, 1985, 99 Stat. 703; Pub. L. 99–500, § 101(c) [title X, § 953(a)], Oct. 18, 1986, 100 Stat. 1783–82, 1783–169, and Pub. L. 99–591, § 101(c) [title X, § 953(a)], Oct. 30, 1986, 100 Stat. 3341–82, 3341–169; Pub. L. 99–661, div. A, title IX, formerly title IV, § 953(a), Nov. 14, 1986, 100 Stat. 3949, renumbered title IX, Pub. L. 100–26, § 3(5), Apr. 21, 1987, 101 Stat. 273; Pub. L. 100–26, § 7(a)(4), Apr. 21, 1987, 101 Stat. 275; Pub. L. 100–180, div. A, title VIII, § 808(a), (b), Dec. 4, 1987, 101 Stat. 1128, 1130; Pub. L. 101–189, div. A, title VIII, § 853(b)(2), Nov. 29, 1989, 103 Stat. 1518; Pub. L. 103–355, title VIII, § 8106(a), Oct. 13, 1994, 108 Stat. 3393; Pub. L. 108–136, div. A, title VIII, § 844, Nov. 24, 2003, 117 Stat. 1553; Pub. L. 109–364, div. A, title VIII, § 802(a), Oct. 17, 2006, 120 Stat. 2312; Pub. L. 111–84, div. A, title VIII, § 821, Oct. 28, 2009, 123 Stat. 2411; Pub. L. 111–383, div. A, title VIII, §§ 801(a), 824(b), Jan. 7, 2011, 124 Stat. 4253, 4269; Pub. L. 112–81, div. A, title VIII, §§ 802(b), 815(a), Dec. 31, 2011, 125 Stat. 1485, 1491; Pub. L. 114–328, div. A, title VIII, § 809(a)–(e), Dec. 23, 2016, 130 Stat. 2266, 2267; Pub. L. 115–91, div. A, title VIII, § 835(c), Dec. 12, 2017, 131 Stat. 1471; Pub. L. 115–232, div. A, title VIII, § 836(c)(7), Aug. 13, 2018, 132 Stat. 1866; Pub. L. 116–283, div. A, title VIII, § 804(b)(2)(A), title XVIII, § 1833(b)(1), (c)(1), (d), (e)(1), (f)(1), Jan. 1, 2021, 134 Stat. 3738, 4226, 4228–4230.)
§ 2321.
Validation of proprietary data restrictions
(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.
(c)
Review of Restrictions.—
(1) The Secretary of Defense shall 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 a use or release restriction asserted by the contractor in accordance with applicable regulations may not be made under paragraph (1) after the end of the six-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;
(iii) have been otherwise made available without restriction; or
(iv) are the subject of a fraudulently asserted use or release restriction.
(B)
The six-year period referred to in subparagraph (A) is the six-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
(C) state that evidence of a justification described in 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.—
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 products, the contracting officer shall presume that the contractor or subcontractor has justified the restriction on the basis that the item 1
1 So in original. Probably should be “the product”.
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 1 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 chapter 71 of title 41.
(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.
(Added Pub. L. 98–525, title XII, § 1216(a), Oct. 19, 1984, 98 Stat. 2597; amended Pub. L. 99–500 § 101(c) [title X, § 953(b)], Oct. 18, 1986, 100 Stat. 1783–82, 1783–171, and Pub. L. 99–591, § 101(c) [title X, § 953(b)], Oct. 30, 1986, 100 Stat. 3341–82, 3341–171; Pub. L. 99–661, div. A, title IX, formerly title IV, § 953(b), Nov. 14, 1986, 100 Stat. 3951, renumbered title IX, Pub. L. 100–26, § 3(5), Apr. 21, 1987, 101 Stat. 273; Pub. L. 100–26, § 7(a)(5), Apr. 21, 1987, 101 Stat. 276; Pub. L. 100–180, div. A, title XII, § 1231(6), Dec. 4, 1987, 101 Stat. 1160; Pub. L. 103–35, title II, § 201(g)(4), May 31, 1993, 107 Stat. 100; Pub. L. 103–355, title VIII, § 8106(b), Oct. 13, 1994, 108 Stat. 3393; Pub. L. 109–364, div. A, title VIII, § 802(b), Oct. 17, 2006, 120 Stat. 2313; Pub. L. 110–181, div. A, title VIII, § 815(a)(2), Jan. 28, 2008, 122 Stat. 223; Pub. L. 111–350, § 5(b)(18), Jan. 4, 2011, 124 Stat. 3844; Pub. L. 111–383, div. A, title VIII, § 824(c), Jan. 7, 2011, 124 Stat. 4269; Pub. L. 112–81, div. A, title VIII, § 815(b), Dec. 31, 2011, 125 Stat. 1492; Pub. L. 113–291, div. A, title X, § 1071(a)(5), Dec. 19, 2014, 128 Stat. 3504; Pub. L. 114–92, div. A, title VIII, § 813(a), Nov. 25, 2015, 129 Stat. 891; Pub. L. 115–232, div. A, title VIII, §§ 836(c)(8), 865, 866(a), Aug. 13, 2018, 132 Stat. 1866, 1901; Pub. L. 116–92, div. A, title VIII, § 808(b), Dec. 20, 2019, 133 Stat. 1486; Pub. L. 116–283, div. A, title X, § 1081(d)(4)(B)(ii), title XVIII, § 1833(h)(1), (i)(1), (j)(1), (k), (l)(1), (m), Jan. 1, 2021, 134 Stat. 3874, 4231–4233.)
§ 2322.
Management of intellectual property matters within the Department of Defense
(a)
Policy Required.—
The Secretary of Defense, acting through the Under Secretary of Defense for Acquisition and Sustainment, shall develop policy on the acquisition or licensing of intellectual property—
(1) to enable coordination and consistency across the military departments and the Department of Defense in strategies for acquiring or licensing intellectual property and communicating with industry;
(2) to ensure that program managers are aware of the rights afforded the Federal Government and contractors in intellectual property and that program managers fully consider and use all available techniques and best practices for acquiring or licensing intellectual property early in the acquisition process; and
(3) to encourage customized intellectual property strategies for each system based on, at a minimum, the unique characteristics of the system and its components, the product support strategy for the system, the organic industrial base strategy of the military department concerned, and the commercial market.
(b)
Cadre of Intellectual Property Experts.—
(1) The Secretary of Defense, acting through the Under Secretary of Defense for Acquisition and Sustainment, shall establish a cadre of personnel who are experts in intellectual property matters. The purpose of the cadre is to ensure a consistent, strategic, and highly knowledgeable approach to acquiring or licensing intellectual property by providing expert advice, assistance, and resources to the acquisition workforce on intellectual property matters, including acquiring or licensing intellectual property.
(2) The Under Secretary shall establish an appropriate leadership structure and office within which the cadre shall be managed, and shall determine the appropriate official to whom members of the cadre shall report.
(3)
The cadre of experts shall be assigned to a program office or an acquisition command within a military department to advise, assist, and provide resources to a program manager or program executive officer on intellectual property matters at various stages of the life cycle of a system. In performing such duties, the experts shall—
(A) interpret and provide counsel on laws, regulations, and policies relating to intellectual property;
(B) advise and assist in the development of an acquisition strategy, product support strategy, and intellectual property strategy for a system;
(C) conduct or assist with financial analysis and valuation of intellectual property;
(D) assist in the drafting of a solicitation, contract, or other transaction;
(E) interact with or assist in interactions with contractors, including communications and negotiations with contractors on solicitations and awards; and
(F) conduct or assist with mediation if technical data delivered pursuant to a contract is incomplete or does not comply with the terms of agreements.
(4)
(A) In order to achieve the purpose set forth in paragraph (1), the Under Secretary shall ensure the cadre has the appropriate number of staff and such staff possesses the necessary skills, knowledge, and experience to carry out the duties under paragraph (2), including in relevant areas of law, contracting, acquisition, logistics, engineering, financial analysis, and valuation. The Under Secretary, in coordination with the Defense Acquisition University and in consultation with academia and industry, shall develop a career path, including development opportunities, exchanges, talent management programs, and training, for the cadre. The Under Secretary may use existing authorities to staff the cadre, including those in subparagraphs (B), (C), (D), and (F).
(B) Civilian personnel from within the Office of the Secretary of Defense, Joint Staff, military departments, Defense Agencies, and combatant commands may be assigned to serve as members of the cadre, upon request of the Director.
(C) The Under Secretary may use the authorities for highly qualified experts under section 9903 of title 5, to hire experts as members of the cadre who are skilled professionals in intellectual property and related matters.
(D) The Under Secretary may enter into a contract with a private-sector entity for specialized expertise to support the cadre. Such entity may be considered a covered Government support contractor, as defined in section 2320 of this title.
(E) In establishing the cadre, the Under Secretary shall give preference to civilian employees of the Department of Defense, rather than members of the armed forces, to maintain continuity in the cadre.
(F) The Under Secretary is authorized to use amounts in the Defense Acquisition Workforce Development Fund for the purpose of recruitment, training, and retention of the cadre, including paying salaries of newly hired members of the cadre for up to three years.
(Added Pub. L. 115–91, div. A, title VIII, § 802(a)(1), Dec. 12, 2017, 131 Stat. 1450; amended Pub. L. 116–283, div. A, title XVIII, §§ 1833(o)(1), 1877(b), Jan. 1, 2021, 134 Stat. 4234, 4291.)
§ 2322a.
Requirement for consideration of certain matters during acquisition of noncommercial computer software
(a)
Consideration Required.—
As part of any negotiation for the acquisition of noncommercial computer software, the Secretary of Defense shall ensure that such negotiations consider, to the maximum extent practicable, acquisition, at the appropriate time in the life cycle of the noncommercial computer software, of all software and related materials necessary—
(1) to reproduce, build, or recompile the software from original source code and required libraries;
(2) to conduct required computer software testing; and
(3) to deploy working computer software system binary files on relevant system hardware.
(b)
Delivery of Software and Related Materials.—
Any noncommercial computer software or related materials required to be delivered as a result of considerations in subsection (a) shall, to the extent appropriate as determined by the Secretary—
(1) include computer software delivered in a useable, digital format;
(2) not rely on external or additional software code or data, unless such software code or data is included in the items to be delivered; and
(3) in the case of negotiated terms that do not allow for the inclusion of dependent software code or data, sufficient documentation to support maintenance and understanding of interfaces and software revision history.
(Added Pub. L. 115–91, div. A, title VIII, § 871(a)(1), Dec. 12, 2017, 131 Stat. 1496.)
[§ 2323.
Repealed. Pub. L. 115–232, div. A, title VIII, § 812(a)(2)(A), Aug. 13, 2018, 132 Stat. 1846]
§ 2323a.
Credit for Indian contracting in meeting certain subcontracting goals for small disadvantaged businesses
(a)
Regulations.—
Subject to subsections (b) and (c), in any case in which a subcontracting goal is specified in a Department of Defense contract in the implementation of section 8(d) of the Small Business Act (15 U.S.C. 637(d)), credit toward meeting that subcontracting goal shall be given for—
(1) work performed in connection with that Department of Defense contract, and work performed in connection with any subcontract awarded under that Department of Defense contract, if such work is performed on any Indian lands and meets the requirements of paragraph (1) of subsection (b); or
(2) work performed in connection with that Department of Defense contract, and work performed in connection with any subcontract awarded under that Department of Defense contract, if the performance of such contract or subcontract is undertaken as a joint venture that meets the requirements of paragraph (2) of that subsection.
(b)
Eligible Work.—
(1)
Work performed on Indian lands meets the requirements of this paragraph if—
(A) not less than 40 percent of the workers directly engaged in the performance of the work are Indians; or
(B) the contractor or subcontractor has an agreement with the tribal government having jurisdiction over such Indian lands that provides goals for training and development of the Indian workforce and Indian management.
(2)
A joint venture undertaking to perform a contract or subcontract meets the requirements of this paragraph if—
(A) an Indian tribe or tribally owned corporation owns at least 50 percent of the joint venture;
(B) the activities of the joint venture under the contract or subcontract provide employment opportunities for Indians either directly or through the purchase of products or services for the performance of such contract or subcontract; and
(C) the Indian tribe or tribally owned corporation manages the performance of such contract or subcontract.
(c)
Extent of Credit.—
The amount of the credit given toward the attainment of any subcontracting goal under subsection (a) shall be—
(1) in the case of work performed as described in subsection (a)(1), the value of the work performed; and
(2) in the case of a contract or subcontract undertaken to be performed by a joint venture as described in subsection (a)(2), an amount equal to the amount of the contract or subcontract multiplied by the percentage of the tribe’s or tribally owned corporation’s ownership interest in the joint venture.
(d)
Regulations.—
The Secretary of Defense shall prescribe regulations for the implementation of this section.
(e)
Definitions.—
In this section:
(1) The term “Indian lands” has the meaning given that term by section 4(4) of the Indian Gaming Regulatory Act (25 U.S.C. 2703(4)).
(2) The term “Indian” has the meaning given that term by section 4(d) of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 5304(d)).
(3) The term “Indian tribe” has the meaning given that term by section 4(e) of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 5304(e)).
(4) The term “tribally owned corporation” means a corporation owned entirely by an Indian tribe.
(Added Pub. L. 102–484, div. A, title VIII, § 801(g)(1), Oct. 23, 1992, 106 Stat. 2445; amended Pub. L. 104–201, div. A, title X, § 1074(a)(13), Sept. 23, 1996, 110 Stat. 2659; Pub. L. 115–232, div. A, title VIII, § 812(a)(2)(C)(vii), Aug. 13, 2018, 132 Stat. 1847; Pub. L. 116–92, div. A, title XVII, § 1731(a)(39)(B), Dec. 20, 2019, 133 Stat. 1814.)
§ 2324.
Allowable costs under defense contracts
(a)
Indirect Cost That Violates a FAR Cost Principle.—
The head of an agency shall require that a covered contract provide that if the contractor submits to the agency a proposal for settlement of indirect costs incurred by the contractor for any period after such costs have been accrued and if that proposal includes the submission of a cost which is unallowable because the cost violates a cost principle in the Federal Acquisition Regulation or applicable agency supplement to the Federal Acquisition Regulation, the cost shall be disallowed.
(b)
Penalty for Violation of Cost Principle.—
(1)
If the head of the agency determines that a cost submitted by a contractor in its proposal for settlement is expressly unallowable under a cost principle referred to in subsection (a) that defines the allowability of specific selected costs, the head of the agency shall assess a penalty against the contractor in an amount equal to—
(A) the amount of the disallowed cost allocated to covered contracts for which a proposal for settlement of indirect costs has been submitted; plus
(B) interest (to be computed based on provisions in the Federal Acquisition Regulation) to compensate the United States for the use of any funds which a contractor has been paid in excess of the amount to which the contractor was entitled.
(2) If the head of the agency determines that a proposal for settlement of indirect costs submitted by a contractor includes a cost determined to be unallowable in the case of such contractor before the submission of such proposal, the head of the agency shall assess a penalty against the contractor in an amount equal to two times the amount of the disallowed cost allocated to covered contracts for which a proposal for settlement of indirect costs has been submitted.
(c)
Waiver of Penalty.—
The Federal Acquisition Regulation shall provide for a penalty under subsection (b) to be waived in the case of a contractor’s proposal for settlement of indirect costs when—
(1) the contractor withdraws the proposal before the formal initiation of an audit of the proposal by the Federal Government and resubmits a revised proposal;
(2) the amount of unallowable costs subject to the penalty is insignificant; or
(3)
the contractor demonstrates, to the contracting officer’s satisfaction, that—
(A) it has established appropriate policies and personnel training and an internal control and review system that provide assurances that unallowable costs subject to penalties are precluded from being included in the contractor’s proposal for settlement of indirect costs; and
(B) the unallowable costs subject to the penalty were inadvertently incorporated into the proposal.
(d)
Applicability of Contract Disputes Procedure to Disallowance of Cost and Assessment of Penalty.—
An action of the head of an agency under subsection (a) or (b)—
(1) shall be considered a final decision for the purposes of section 7103 of title 41; and
(2) is appealable in the manner provided in section 7104(a) of title 41.
(e)
Specific Costs Not Allowable.—
(1)
The following costs are not allowable under a covered contract:
(A) Costs of entertainment, including amusement, diversion, and social activities and any costs directly associated with such costs (such as tickets to shows or sports events, meals, lodging, rentals, transportation, and gratuities).
(B) Costs incurred to influence (directly or indirectly) legislative action on any matter pending before Congress, a State legislature, or a legislative body of a political subdivision of a State.
(C) Costs incurred in defense of any civil or criminal fraud proceeding or similar proceeding (including filing of any false certification) brought by the United States where the contractor is found liable or has pleaded nolo contendere to a charge of fraud or similar proceeding (including filing of a false certification).
(D) Payments of fines and penalties resulting from violations of, or failure to comply with, Federal, State, local, or foreign laws and regulations, except when incurred as a result of compliance with specific terms and conditions of the contract or specific written instructions from the contracting officer authorizing in advance such payments in accordance with applicable provisions of the Federal Acquisition Regulation.
(E) Costs of membership in any social, dining, or country club or organization.
(F) Costs of alcoholic beverages.
(G) Contributions or donations, regardless of the recipient.
(H) Costs of advertising designed to promote the contractor or its products.
(I) Costs of promotional items and memorabilia, including models, gifts, and souvenirs.
(J) Costs for travel by commercial aircraft which exceed the amount of the standard commercial fare.
(K)
Costs incurred in making any payment (commonly known as a “golden parachute payment”) which is—
(i) in an amount in excess of the normal severance pay paid by the contractor to an employee upon termination of employment; and
(ii) is paid to the employee contingent upon, and following, a change in management control over, or ownership of, the contractor or a substantial portion of the contractor’s assets.
(L) Costs of commercial insurance that protects against the costs of the contractor for correction of the contractor’s own defects in materials or workmanship.
(M) Costs of severance pay paid by the contractor to foreign nationals employed by the contractor under a service contract performed outside the United States, to the extent that the amount of severance pay paid in any case exceeds the amount paid in the industry involved under the customary or prevailing practice for firms in that industry providing similar services in the United States, as determined under the Federal Acquisition Regulation.
(N) Costs of severance pay paid by the contractor to a foreign national employed by the contractor under a service contract performed in a foreign country if the termination of the employment of the foreign national is the result of the closing of, or the curtailment of activities at, a United States military facility in that country at the request of the government of that country.
(O) Costs incurred by a contractor in connection with any criminal, civil, or administrative proceeding commenced by the United States or a State, to the extent provided in subsection (k).
(P)1
1 So in original. Two subpars. (P) have been enacted.
Costs of compensation of any contractor employee for a fiscal year, regardless of the contract funding source, to the extent that such compensation exceeds $625,000 adjusted annually for the U.S. Bureau of Labor Statistics Employment Cost Index for total compensation for private industry workers, by occupational and industry group not seasonally adjusted, except that the Secretary of Defense may establish exceptions for positions in the science, technology, engineering, mathematics, medical, and cybersecurity fields and other fields requiring unique areas of expertise upon a determination that such exceptions are needed to ensure that the Department of Defense has continued access to needed skills and capabilities.
(P)1 Costs of compensation of contractor and subcontractor employees for a fiscal year, regardless of the contract funding source, to the extent that such compensation exceeds $487,000 per year, adjusted annually to reflect the change in the Employment Cost Index for all workers, as calculated by the Bureau of Labor Statistics, except that the head of an executive agency may establish one or more narrowly targeted exceptions for scientists, engineers, or other specialists upon a determination that such exceptions are needed to ensure that the executive agency has continued access to needed skills and capabilities.
(Q) Costs incurred by a contractor in connection with a congressional investigation or inquiry into an issue that is the subject matter of a proceeding resulting in a disposition as described in subsection (k)(2).
(2)
(A) The Secretary of Defense may provide in a military banking contract that the provisions of paragraphs (1)(M) and (1)(N) shall not apply to costs incurred under the contract by the contractor for payment of mandated foreign national severance pay. The Secretary may include such a provision in a military banking contract only if the Secretary determines, with respect to that contract, that the contractor has taken (or has established plans to take) appropriate actions within the contractor’s control to minimize the amount and number of incidents of the payment of severance pay by the contractor to employees under the contract who are foreign nationals.
(B)
In subparagraph (A):
(i) The term “military banking contract” means a contract between the Secretary and a financial institution under which the financial institution operates a military banking facility outside the United States for use by members of the armed forces stationed or deployed outside the United States and other authorized personnel.
(ii) The term “mandated foreign national severance pay” means severance pay paid by a contractor to a foreign national employee the payment of which by the contractor is required in order to comply with a law that is generally applicable to a significant number of businesses in the country in which the foreign national receiving the payment performed services under the contract.
(C) Subparagraph (A) does not apply to a contract with a financial institution that is owned or controlled by citizens or nationals of a foreign country, as determined by the Secretary of Defense. Such a determination shall be made in accordance with the criteria set out in paragraph (1) of section 4(g) of the Buy American Act (as added by section 7002(2) of the Omnibus Trade and Competitiveness Act of 1988) and the policy guidance referred to in paragraph (2)(A) of that section.
(3)
(A)
Pursuant to the Federal Acquisition Regulation and subject to the availability of appropriations, the head of an agency awarding a covered contract (other than a contract to which paragraph (2) applies) may waive the application of the provisions of paragraphs (1)(M) and (1)(N) to that contract if the head of the agency determines that—
(i) the application of such provisions to the contract would adversely affect the continuation of a program, project, or activity that provides significant support services for members of the armed forces stationed or deployed outside the United States;
(ii) the contractor has taken (or has established plans to take) appropriate actions within the contractor’s control to minimize the amount and number of incidents of the payment of severance pay by the contractor to employees under the contract who are foreign nationals; and
(iii) the payment of severance pay is necessary in order to comply with a law that is generally applicable to a significant number of businesses in the country in which the foreign national receiving the payment performed services under the contract or is necessary to comply with a collective bargaining agreement.
(B)
The head of an agency shall include in the solicitation for a covered contract a statement indicating—
(i) that a waiver has been granted under subparagraph (A) for the contract; or
(ii) whether the head of the agency will consider granting such a waiver, and, if the agency head will consider granting a waiver, the criteria to be used in granting the waiver.
(C) The head of an agency shall make the final determination regarding whether to grant a waiver under subparagraph (A) with respect to a covered contract before award of the contract.
(4) The provisions of the Federal Acquisition Regulation implementing this section may establish appropriate definitions, exclusions, limitations, and qualifications.
(f)
Required Regulations.—
(1)
The Federal Acquisition Regulation shall contain provisions on the allowability of contractor costs. Such provisions shall define in detail and in specific terms those costs which are unallowable, in whole or in part, under covered contracts. The regulations shall, at a minimum, clarify the cost principles applicable to contractor costs of the following:
(A) Air shows.
(B) Membership in civic, community, and professional organizations.
(C) Recruitment.
(D) Employee morale and welfare.
(E) Actions to influence (directly or indirectly) executive branch action on regulatory and contract matters (other than costs incurred in regard to contract proposals pursuant to solicited or unsolicited bids).
(F) Community relations.
(G) Dining facilities.
(H) Professional and consulting services, including legal services.
(I) Compensation.
(J) Selling and marketing.
(K) Travel.
(L) Public relations.
(M) Hotel and meal expenses.
(N) Expense of corporate aircraft.
(O) Company-furnished automobiles.
(P) Advertising.
(Q) Conventions.
(2)
The Federal Acquisition Regulation shall require that a contracting officer not resolve any questioned costs until he has obtained—
(A) adequate documentation with respect to such costs; and
(B) the opinion of the contract auditor on the allowability of such costs.
(3) The Federal Acquisition Regulation shall provide that, to the maximum extent practicable, the contract auditor be present at any negotiation or meeting with the contractor regarding a determination of the allowability of indirect costs of the contractor.
(4) The Federal Acquisition Regulation shall require that all categories of costs designated in the report of the contract auditor as questioned with respect to a proposal for settlement be resolved in such a manner that the amount of the individual questioned costs that are paid will be reflected in the settlement.
(g)
Applicability of Regulations to Subcontractors.—
The regulations referred to in subsections (e) and (f)(1) shall require prime contractors of a covered contract, to the maximum extent practicable, to apply the provisions of such regulations to all subcontractors of the covered contract.
(h)
Contractor Certification Required.—
(1) A proposal for settlement of indirect costs applicable to a covered contract shall include a certification by an official of the contractor that, to the best of the certifying official’s knowledge and belief, all indirect costs included in the proposal are allowable. Any such certification shall be in a form prescribed in the Federal Acquisition Regulation.
(2)
The head of the agency or the Secretary of the military department concerned may, in an exceptional case, waive the requirement for certification under paragraph (1) in the case of any contract if the head of the agency or the Secretary—
(A) determines in such case that it would be in the interest of the United States to waive such certification; and
(B) states in writing the reasons for that determination and makes such determination available to the public.
(i)
Penalties for Submission of Cost Known as Not Allowable.—
The submission to an agency of a proposal for settlement of costs for any period after such costs have been accrued that includes a cost that is expressly specified by statute or regulation as being unallowable, with the knowledge that such cost is unallowable, shall be subject to the provisions of section 287 of title 18 and section 3729 of title 31.
(j)
Contractor To Have Burden of Proof.—
In a proceeding before the Armed Services Board of Contract Appeals, the United States Court of Federal Claims, or any other Federal court in which the reasonableness of indirect costs for which a contractor seeks reimbursement from the Department of Defense is in issue, the burden of proof shall be upon the contractor to establish that those costs are reasonable.
(k)
Proceeding Costs Not Allowable.—
(1) Except as otherwise provided in this subsection, costs incurred by a contractor or subcontractor, or personal services contractor in connection with any criminal, civil, or administrative proceeding commenced by the United States, by a State, or by a contractor or subcontractor, or personal services contractor employee submitting a complaint under section 2409 of this title are not allowable as reimbursable costs under a covered contract, subcontract, or personal services contract if the proceeding (A) relates to a violation of, or failure to comply with, a Federal or State statute or regulation or to any other activity described in subparagraphs (A) through (C) of section 2409(a)(1) of this title, and (B) results in a disposition described in paragraph (2).
(2)
A disposition referred to in paragraph (1)(B) is any of the following:
(A) In the case of a criminal proceeding, a conviction (including a conviction pursuant to a plea of nolo contendere) by reason of the violation or failure referred to in paragraph (1).
(B) In the case of a civil or administrative proceeding involving an allegation of fraud or similar misconduct, a determination of contractor or subcontractor, or personal services contractor liability on the basis of the violation or failure referred to in paragraph (1).
(C) In the case of any civil or administrative proceeding, the imposition of a monetary penalty or an order to take corrective action under section 2409 of this title by reason of the violation or failure referred to in paragraph (1).
(D)
A final decision—
(i) to debar or suspend the contractor or subcontractor, or personal services contractor;
(ii) to rescind or void the contract, subcontract, or personal services contract; or
(iii) to terminate the contract, subcontract, or personal services contract for default;
by reason of the violation or failure referred to in paragraph (1).
(E) A disposition of the proceeding by consent or compromise if such action could have resulted in a disposition described in subparagraph (A), (B), (C), or (D).
(3) In the case of a proceeding referred to in paragraph (1) that is commenced by the United States and is resolved by consent or compromise pursuant to an agreement entered into by a contractor or subcontractor, or personal services contractor and the United States, the costs incurred by the contractor or subcontractor, or personal services contractor in connection with such proceeding that are otherwise not allowable as reimbursable costs under such paragraph may be allowed to the extent specifically provided in such agreement.
(4) In the case of a proceeding referred to in paragraph (1) that is commenced by a State, the head of the agency or Secretary of the military department concerned that awarded the covered contract, subcontract, or personal services contract involved in the proceeding may allow the costs incurred by the contractor or subcontractor, or personal services contractor in connection with such proceeding as reimbursable costs if the agency head or Secretary determines, in accordance with the Federal Acquisition Regulation, that the costs were incurred as a result of (A) a specific term or condition of the contract, subcontract, or personal services contract, or (B) specific written instructions of the agency or military department.
(5)
(A) Except as provided in subparagraph (C), costs incurred by a contractor or subcontractor, or personal services contractor in connection with a criminal, civil, or administrative proceeding commenced by the United States or a State in connection with a covered contract, subcontract, or personal services contract may be allowed as reimbursable costs under the contract, subcontract, or personal services contract if such costs are not disallowable under paragraph (1), but only to the extent provided in subparagraph (B).
(B)
(i) The amount of the costs allowable under subparagraph (A) in any case may not exceed the amount equal to 80 percent of the amount of the costs incurred, to the extent that such costs are determined to be otherwise allowable and allocable under the Federal Acquisition Regulation.
(ii) Regulations issued for the purpose of clause (i) shall provide for appropriate consideration of the complexity of procurement litigation, generally accepted principles governing the award of legal fees in civil actions involving the United States as a party, and such other factors as may be appropriate.
(C) In the case of a proceeding referred to in subparagraph (A), contractor or subcontractor, or personal services contractor costs otherwise allowable as reimbursable costs under this paragraph are not allowable if (i) such proceeding involves the same contractor or subcontractor, or personal services contractor misconduct alleged as the basis of another criminal, civil, or administrative proceeding, and (ii) the costs of such other proceeding are not allowable under paragraph (1).
(6)
In this subsection:
(A) The term “proceeding” includes an investigation.
(B)
The term “costs”, with respect to a proceeding—
(i) means all costs incurred by a contractor or subcontractor, or personal services contractor, whether before or after the commencement of any such proceeding; and
(ii)
includes—
(I) administrative and clerical expenses;(II) the cost of legal services, including legal services performed by an employee of the contractor or subcontractor, or personal services contractor;(III) the cost of the services of accountants and consultants retained by the contractor or subcontractor, or personal services contractor; and(IV) the pay of directors, officers, and employees of the contractor or subcontractor, or personal services contractor for time devoted by such directors, officers, and employees to such proceeding.
(C) The term “penalty” does not include restitution, reimbursement, or compensatory damages.
(l)
Definitions.—
In this section:
(1)
(A) The term “covered contract” means a contract for an amount in excess of $500,000 that is entered into by the head of an agency, except that such term does not include a fixed-price contract without cost incentives or any firm fixed-price contract for the purchase of commercial products or commercial services.
(B) Effective on October 1 of each year that is divisible by five, the amount set forth in subparagraph (A) shall be adjusted in accordance with section 1908 of title 41.
(2) The term “head of the agency” or “agency head” does not include the Secretary of a military department.
(3) The term “agency” means the Department of Defense, the Coast Guard, and the National Aeronautics and Space Administration.
(4) The term “compensation”, for a year, means the total amount of wages, salary, bonuses and deferred compensation for the year, whether paid, earned, or otherwise accruing, as recorded in an employer’s cost accounting records for the year.
[(5) Repealed. Pub. L. 112–81, div. A, title VIII, § 803(b), Dec. 31, 2011, 125 Stat. 1485.]
(6) The term “fiscal year” means a fiscal year established by a contractor for accounting purposes.
(Added Pub. L. 99–145, title IX, § 911(a)(1), Nov. 8, 1985, 99 Stat. 682; amended Pub. L. 99–190, § 101(b) [title VIII, § 8112(a)], Dec. 19, 1985, 99 Stat. 1185, 1223; Pub. L. 100–26, § 7(k)(3), Apr. 21, 1987, 101 Stat. 284; Pub. L. 100–180, div. A, title VIII, § 805(a), Dec. 4, 1987, 101 Stat. 1126; Pub. L. 100–370, § 1(f)(2)(A), (3)(A), July 19, 1988, 102 Stat. 846;
§ 2325.
Restructuring costs
(a)
Limitation on Payment of Restructuring Costs.—
(1)
The Secretary of Defense may not pay, under section 2324 of this title, a defense contractor for restructuring costs associated with a business combination of the contractor that occurs after November 18, 1997, unless the Secretary determines in writing either—
(A) that the amount of projected savings for the Department of Defense associated with the restructuring will be at least twice the amount of the costs allowed; or
(B) that the amount of projected savings for the Department of Defense associated with the restructuring will exceed the amount of the costs allowed and that the business combination will result in the preservation of a critical capability that otherwise might be lost to the Department.
(2)
The Secretary may not delegate the authority to make a determination under paragraph (1), with respect to a business combination, to an official of the Department of Defense—
(A) below the level of an Assistant Secretary of Defense for cases in which the amount of restructuring costs is expected to exceed $25,000,000 over a 5-year period; or
(B) below the level of the Director of the Defense Contract Management Agency for all other cases.
(b)
Definition.—
In this section, the term “business combination” includes a merger or acquisition.
(Added Pub. L. 105–85, div. A, title VIII, § 804(a)(1), Nov. 18, 1997, 111 Stat. 1832; amended Pub. L. 106–65, div. A, title X, § 1066(a)(19), Oct. 5, 1999, 113 Stat. 771; Pub. L. 108–375, div. A, title VIII, § 819, Oct. 28, 2004, 118 Stat. 2016; Pub. L. 112–239, div. A, title X, § 1076(g)(2), Jan. 2, 2013, 126 Stat. 1955.)
§ 2326.
Undefinitized contractual actions: restrictions
(a)
In General.—
The head of an agency may not enter into an undefinitized contractual action unless the request to the head of the agency for authorization of the contractual action includes a description of the anticipated effect on requirements of the military department concerned if a delay is incurred for purposes of determining contractual terms, specifications, and price before performance is begun under the contractual action.
(b)
Limitations on Obligation of Funds.—
(1)
A contracting officer of the Department of Defense may not enter into an undefinitized contractual action unless the contractual action provides for agreement upon contractual terms, specifications, and price by the earlier of—
(A) the end of the 180-day period beginning on the date on which the contractor submits a qualifying proposal to definitize the contractual terms, specifications, and price; or
(B) the date on which the amount of funds obligated under the contractual action is equal to more than 50 percent of the negotiated overall ceiling price for the contractual action.
(2) Except as provided in paragraph (3), the contracting officer for an undefinitized contractual action may not obligate with respect to such contractual action an amount that is equal to more than 50 percent of the negotiated overall ceiling price until the contractual terms, specifications, and price are definitized for such contractual action.
(3) If a contractor submits a qualifying proposal (as defined in subsection (h)) 1
1 See References in Text note below.
to definitize an undefinitized contractual action before an amount equal to more than 50 percent of the negotiated overall ceiling price is obligated on such action, the contracting officer for such action may not obligate with respect to such contractual action an amount that is equal to more than 75 percent of the negotiated overall ceiling price until the contractual terms, specifications, and price are definitized for such contractual action.
(4)
The head of an agency may waive the provisions of this subsection with respect to a contract of that agency if that head of an agency determines that the waiver is necessary in order to support any of the following operations:
(A) A contingency operation.
(B) A humanitarian or peacekeeping operation.
(5) This subsection does not apply to an undefinitized contractual action for the purchase of initial spares.
(c)
Limitation on Unilateral Definitization by Contracting Officer.—
With respect to any undefinitized contractual action with a value greater than $50,000,000, if agreement is not reached on contractual terms, specifications, and price within the period or by the date provided in subsection (b)(1), the contracting officer may not unilaterally definitize those terms, specifications, or price over the objection of the contractor until—
(1) the service acquisition executive for the military department that awarded the contract, or the Under Secretary of Defense for Acquisition and Sustainment if the contract was awarded by a Defense Agency or other component of the Department of Defense, approves the definitization in writing;
(2) the contracting officer provides a copy of the written approval to the contractor; and
(3) a period of 30 calendar days has elapsed after the written approval is provided to the contractor.
(d)
Inclusion of Non-Urgent Requirements.—
Requirements for spare parts and support equipment that are not needed on an urgent basis may not be included in an undefinitized contractual action for spare parts and support equipment that are needed on an urgent basis unless the head of the agency approves such inclusion as being—
(1) good business practice; and
(2) in the best interests of the United States.
(e)
Modification of Scope.—
The scope of an undefinitized contractual action under which performance has begun may not be modified unless the head of the agency approves such modification as being—
(1) good business practice; and
(2) in the best interests of the United States.
(f)
Allowable Profit.—
(1)
The head of an agency shall ensure that the profit allowed on an undefinitized contractual action for which the final price is negotiated after a substantial portion of the performance required is completed reflects—
(A) the possible reduced cost risk of the contractor with respect to costs incurred during performance of the contract before the final price is negotiated; and
(B) the reduced cost risk of the contractor with respect to costs incurred during performance of the remaining portion of the contract.
(2) If a contractor submits a qualifying proposal to definitize an undefinitized contractual action and the contracting officer for such action definitizes the contract after the end of the 180-day period beginning on the date on which the contractor submitted the qualifying proposal, the head of the agency concerned shall ensure that the profit allowed on the contract accurately reflects the cost risk of the contractor as such risk existed on the date the contractor submitted the qualifying proposal.
(g)
Time Limit.—
No undefinitized contractual action may extend beyond 90 days without a written determination by the Secretary of the military department concerned, the head of the Defense Agency concerned, the commander of the combatant command concerned, or the Under Secretary of Defense for Acquisition and Sustainment (as applicable) that it is in the best interests of the military department, the Defense Agency, the combatant command, or the Department of Defense, respectively, to continue the action.
(h)
Foreign Military Contracts.—
(1) Except as provided in paragraph (2), a contracting officer of the Department of Defense may not enter into an undefinitized contractual action for a foreign military sale unless the contractual action provides for agreement upon contractual terms, specifications, and price by the end of the 180-day period described in subsection (b)(1)(A).
(2) The requirement under paragraph (1) may be waived in accordance with subsection (b)(4).
(i)
Applicability.—
This section does not apply to the Coast Guard or the National Aeronautics and Space Administration.
(j)
Definitions.—
In this section:
(1)
The term “undefinitized contractual action” means a new procurement action entered into by the head of an agency for which the contractual terms, specifications, or price are not agreed upon before performance is begun under the action. Such term does not include contractual actions with respect to the following:
(A) Purchases in an amount not in excess of the amount of the simplified acquisition threshold.
(B) Special access programs.
(C) Congressionally mandated long-lead procurement contracts.
(2) The term “qualifying proposal” means a proposal that contains sufficient information to enable the Department of Defense to conduct a meaningful audit of the information contained in the proposal.
(Added Pub. L. 99–500, § 101(c) [title X, § 908(d)(1)(A)], Oct. 18, 1986, 100 Stat. 1783–82, 1783–140, and Pub. L. 99–591, § 101(c) [title X, § 908(d)(1)(A)], Oct. 30, 1986, 100 Stat. 3341–82, 3341–140; Pub. L. 99–661, div. A, title IX, formerly title IV, § 908(d)(1)(A), Nov. 14, 1986, 100 Stat. 3920, renumbered title IX, Pub. L. 100–26, § 3(5), Apr. 21, 1987, 101 Stat. 273; amended Pub. L. 101–189, div. A, title XVI, § 1622(c)(6), Nov. 29, 1989, 103 Stat. 1604; Pub. L. 102–25, title VII, § 701(d)(5), Apr. 6, 1991, 105 Stat. 114; Pub. L. 103–355, title I, § 1505, Oct. 13, 1994, 108 Stat. 3298; Pub. L. 105–85, div. A, title VIII, § 803(a), Nov. 18, 1997, 111 Stat. 1831; Pub. L. 114–328, div. A, title VIII, § 811, Dec. 23, 2016, 130 Stat. 2268; Pub. L. 115–91, div. A, title VIII, § 815(a), (b), Dec. 12, 2017, 131 Stat. 1462; Pub. L. 116–92, div. A, title IX, § 902(50), Dec. 20, 2019, 133 Stat. 1548; Pub. L. 116–283, div. A, title XVIII, § 1819(b), (c)(1), (d), (e)(1), (f), (g), Jan. 1, 2021, 134 Stat. 4189–4191.)
§ 2327.
Contracts: consideration of national security objectives
(a)
Disclosure of Ownership or Control by a Foreign Government.—
The head of an agency shall require a firm or a subsidiary of a firm that submits a bid or proposal in response to a solicitation issued by the Department of Defense to disclose in that bid or proposal any significant interest in such firm or subsidiary (or, in the case of a subsidiary, in the firm that owns the subsidiary) that is owned or controlled (whether directly or indirectly) by a foreign government or an agent or instrumentality of a foreign government, if such foreign government is the government of a country that the Secretary of State determines under section 6(j)(1)(A) 1
1 See References in Text note below.
of the Export Administration Act of 1979 (50 U.S.C. 4605(j)(1)(A)) has repeatedly provided support for acts of international terrorism.
(b)
Prohibition on Entering Into Contracts Against the Interests of the United States.—
Except as provided in subsection (c), the head of an agency may not enter into a contract with a firm or a subsidiary of a firm if—
(1) a foreign government owns or controls (whether directly or indirectly) a significant interest in such firm or subsidiary (or, in the case of a subsidiary, in the firm that owns the subsidiary); and
(2) such foreign government is the government of a country that the Secretary of State determines under section 6(j)(1)(A) 1 of the Export Administration Act of 1979 (50 U.S.C. 4605(j)(1)(A)) has repeatedly provided support for acts of international terrorism.
(c)
Waiver.—
(1)
(A) If the Secretary of Defense determines under paragraph (2) that entering into a contract with a firm or a subsidiary of a firm described in subsection (b) is not inconsistent with the national security objectives of the United States, the head of an agency may enter into a contract with such firm or subsidiary if in the best interests of the Government.
(B)
The Secretary shall maintain records of each contract entered into by reason of subparagraph (A). Such records shall include the following:
(i) The identity of the foreign government concerned.
(ii) The nature of the contract.
(iii) The extent of ownership or control of the firm or subsidiary concerned (or, if appropriate in the case of a subsidiary, of the firm that owns the subsidiary) by the foreign government concerned or the agency or instrumentality of such foreign government.
(iv) The reasons for entering into the contract.
(2)
Upon the request of the head of an agency, the Secretary of Defense shall determine whether entering into a contract with a firm or subsidiary described in subsection (b) is inconsistent with the national security objectives of the United States. In making such a determination, the Secretary of Defense shall consider the following:
(A) The relationship of the United States with the foreign government concerned.
(B) The obligations of the United States under international agreements.
(C) The extent of the ownership or control of the firm or subsidiary (or, if appropriate in the case of a subsidiary, of the firm that owns the subsidiary) by the foreign government or an agent or instrumentality of the foreign government.
(D) Whether payments made, or information made available, to the firm or subsidiary under the contract could be used for purposes hostile to the interests of the United States.
(d)
List of Firms Subject to Prohibition.—
(1) The Secretary of Defense shall develop and maintain a list of all firms and subsidiaries of firms that the Secretary has identified as being subject to the prohibition in subsection (b).
(2)
(A) A person may request the Secretary to include on the list maintained under paragraph (1) any firm or subsidiary of a firm that the person believes to be owned or controlled by a foreign government described in subsection (b)(2). Upon receipt of such a request, the Secretary shall determine whether the conditions in paragraphs (1) and (2) of subsection (b) exist in the case of that firm or subsidiary. If the Secretary determines that such conditions do exist, the Secretary shall include the firm or subsidiary on the list.
(B) A firm or subsidiary of a firm included on the list may request the Secretary to remove such firm or subsidiary from the list on the basis that it has been erroneously included on the list or its ownership circumstances have significantly changed. Upon receipt of such a request, the Secretary shall determine whether the conditions in paragraphs (1) and (2) of subsection (b) exist in the case of that firm or subsidiary. If the Secretary determines that such conditions do not exist, the Secretary shall remove the firm or subsidiary from the list.
(C) The Secretary shall establish procedures to carry out this paragraph.
(3) The head of an agency shall prohibit each firm or subsidiary of a firm awarded a contract by the agency from entering into a subcontract under that contract in an amount in excess of $25,000 with a firm or subsidiary included on the list maintained under paragraph (1) unless there is a compelling reason to do so. In the case of any subcontract requiring consent by the head of an agency, the head of the agency shall not consent to the award of the subcontract to a firm or subsidiary included on such list unless there is a compelling reason for such approval.
(e)
Distribution of List.—
The Administrator of General Services shall ensure that the list developed and maintained under subsection (d) is made available to Federal agencies and the public in the same manner and to the same extent as the list of suspended and debarred contractors compiled pursuant to subpart 9.4 of the Federal Acquisition Regulation.
(f)
Applicability.—
(1) This section does not apply to a contract for an amount less than $100,000.
(2) This section does not apply to the Coast Guard or the National Aeronautics and Space Administration.
(g)
Regulations.—
The Secretary of Defense, after consultation with the Secretary of State, shall prescribe regulations to carry out this section. Such regulations shall include a definition of the term “significant interest”.
(Added Pub. L. 99–500, § 101(c) [title X, § 951(a)(1)], Oct. 18, 1986, 100 Stat. 1783–82, 1783–164, and Pub. L. 99–591, § 101(c) [title X, § 951(a)(1)], Oct. 30, 1986, 100 Stat. 3341–82, 3341–164; Pub. L. 99–661, div. A, title IX, formerly title IV, § 951(a)(1), Nov. 14, 1986, 100 Stat. 3944, renumbered title IX, Pub. L. 100–26, § 3(5), Apr. 21, 1987, 101 Stat. 273; amended Pub. L. 100–180, div. A, title XII, § 1231(8), Dec. 4, 1987, 101 Stat. 1160; Pub. L. 100–224, § 5(b)(2), Dec. 30, 1987, 101 Stat. 1538; Pub. L. 105–85, div. A, title VIII, § 843, Nov. 18, 1997, 111 Stat. 1844; Pub. L. 108–136, div. A, title X, § 1031(a)(16), Nov. 24, 2003, 117 Stat. 1597; Pub. L. 114–328, div. A, title X, § 1081(b)(3)(C), Dec. 23, 2016, 130 Stat. 2418.)
§ 2328.
Release of technical data under Freedom of Information Act: recovery of costs
(a)
In General.—
(1) The Secretary of Defense shall, if required to release technical data under section 552 of title 5 (relating to the Freedom of Information Act), release such technical data to the person requesting the release if the person pays all reasonable costs attributable to search, duplication, and review.
(2) The Secretary of Defense shall prescribe regulations, pursuant to notice and receipt of public comment, specifying a uniform schedule of fees under this section.
(b)
Crediting of Receipts.—
An amount received under this section—
(1) shall be retained by the Department of Defense or the element of the Department of Defense receiving the amount; and
(2) shall be merged with and available for the same purpose and the same time period as the appropriation from which the costs incurred in complying with requests for technical data were paid.
(c)
Waiver.—
The Secretary of Defense shall waive the payment of costs required by subsection (a) which are in an amount greater than the costs that would be required for such a release of information under section 552 of title 5 if—
(1) the request is made by a citizen of the United States or a United States corporation, and such citizen or corporation certifies that the technical data requested is required to enable such citizen or corporation to submit an offer or determine whether it is capable of submitting an offer to provide the product to which the technical data relates to the United States or a contractor with the United States (except that the Secretary may require the citizen or corporation to pay a deposit in an amount equal to not more than the cost of complying with the request, to be refunded upon submission of an offer by the citizen or corporation);
(2) the release of technical data is requested in order to comply with the terms of an international agreement; or
(3) the Secretary determines, in accordance with section 552(a)(4)(A)(iii) of title 5, that such a waiver is in the interests of the United States.
(Added Pub. L. 99–500, § 101(c) [title X, § 954(a)(1)], Oct. 18, 1986, 100 Stat. 1783–82, 1783–172, and Pub. L. 99–591, § 101(c) [title X, § 954(a)(1)], Oct. 30, 1986, 100 Stat. 3341–82, 3341–172; Pub. L. 99–661, div. A, title IX, formerly title IV, § 954(a)(1), Nov. 14, 1986, 100 Stat. 3952, renumbered title IX, Pub. L. 100–26, § 3(5), Apr. 21, 1987, 101 Stat. 273; amended Pub. L. 100–26, § 7(a)(7)(A), (B)(i), Apr. 21, 1987, 101 Stat. 278.)
§ 2329.
Procurement of services: data analysis and requirements validation
(a)
In General.—
The Secretary of Defense, acting through the Under Secretary of Defense (Comptroller) and Director of Cost Assessment and Program Evaluation, shall ensure that—
(1) appropriate and sufficiently detailed data are collected and analyzed to support the validation of requirements for services contracts and inform the planning, programming, budgeting, and execution process of the Department of Defense;
(2) requirements for services contracts are evaluated appropriately and in a timely manner to inform decisions regarding the procurement of services; and
(3) decisions regarding the procurement of services consider available resources and total force management policies and procedures.
(b)
Specification of Amounts Requested in Budget.—
Effective October 1, 2021, the Secretary of Defense, acting through the Under Secretary of Defense (Comptroller) and Director of Cost Assessment and Program Evaluation, shall annually submit to Congress information on services contracts that clearly and separately identifies the amount requested for each category of services to be procured for each Defense Agency, Department of Defense Field Activity, command, or military installation. Such information shall—
(1) be submitted at or before the time of the budget submission by the President under section 1105(a) of title 31 or on the date on which the future-years defense program is submitted to Congress under section 221 of this title;
(2) cover the fiscal year covered by such budget submission by the President;
(3) be consistent with total amounts of estimated expenditures and proposed appropriations necessary to support the programs, projects, and activities of the Department of Defense included in such budget submission by the President for that fiscal year;
(4) be organized using a common enterprise data structure developed under section 2222 of this title; and
(5) be included in the future-years defense program submitted to Congress under section 221 of this title.
(c)
Data Analysis.—
(1) Each Secretary of a military department shall regularly analyze past spending patterns and anticipated future requirements with respect to the procurement of services within such military department.
(2)
(A)
The Secretary of Defense, acting through the Under Secretary of Defense (Comptroller) and Director of Cost Assessment and Program Evaluation, shall regularly analyze past spending patterns and anticipated future requirements with respect to the procurement of services—
(i) within each Defense Agency and Department of Defense Field Activity; and
(ii) across military departments, Defense Agencies, and Department of Defense Field Activities.
(B) The Secretaries of the military departments shall make data on services contracts available to the Secretary of Defense for purposes of conducting the analysis required under subparagraph (A).
(3)
The analyses conducted under this subsection shall—
(A) identify contracts for similar services that are procured for three or more consecutive years at each Defense Agency, Department of Defense Field Activity, command, or military installation;
(B) evaluate patterns in the procurement of services, to the extent practicable, at each Defense Agency, Department of Defense Field Activity, command, or military installation and by category of services procured;
(C) be used to validate requirements for services contracts entered into after the date of the enactment of this subsection; and
(D) be used to inform decisions on the award of and funding for such services contracts.
(d)
Requirements Evaluation.—
Each Services Requirements Review Board shall evaluate each requirement for a services contract, taking into consideration total force management policies and procedures, available resources, the analyses conducted under subsection (c), and contracting efficacy and efficiency. An evaluation of a services contract for compliance with contracting policies and procedures may not be considered to be an evaluation of a requirement for such services contract.
(e)
Timely Planning to Avoid Bridge Contracts.—
(1) Effective October 1, 2018, the Secretary of Defense shall ensure that a requirements owner shall, to the extent practicable, plan appropriately before the date of need of a service at a Defense Agency, Department of Defense Field Activity, command, or military installation to avoid the use of a bridge contract to provide for continuation of a service to be performed through a services contract. Such planning shall include allowing time for a requirement to be validated, a services contract to be entered into, and funding for the services contract to be secured.
(2)
(A)
Upon the first use, due to inadequate planning (as determined by the Secretary of Defense), of a bridge contract to provide for continuation of a service to be performed through a services contract, the requirements owner, along with the contracting officer or a designee of the contracting officer for the contract, shall—
(i) for a services contract in an amount less than $10,000,000, provide an update on the status of the bridge contract (including the rationale for using the bridge contract) to the commander or the senior civilian official of the Defense Agency concerned, Department of Defense Field Activity concerned, command concerned, or military installation concerned, as applicable; or
(ii) for a services contract in an amount equal to or greater than $10,000,000, provide an update on the status of the bridge contract (including the rationale for using the bridge contract) to the service acquisition executive for the military department concerned, the head of the Defense Agency concerned, the combatant commander concerned, or the Under Secretary of Defense for Acquisition and Sustainment, as applicable.
(B) Upon the second use, due to inadequate planning (as determined by the Secretary of Defense), of a bridge contract to provide for continuation of a service to be performed through a services contract in an amount less than $10,000,000, the commander or senior civilian official referred to in subparagraph (A)(i) shall provide notification of such second use to the Vice Chief of Staff of the armed force concerned and the service acquisition executive of the military department concerned, the head of the Defense Agency concerned, the combatant commander concerned, or the Under Secretary of Defense for Acquisition and Sustainment, as applicable.
(f)
Exception.—
Except with respect to the analyses required under subsection (c), this section shall not apply to—
(1) services contracts in support of contingency operations, humanitarian assistance, or disaster relief;
(2) services contracts in support of a national security emergency declared with respect to a named operation; or
(3) services contracts entered into pursuant to an international agreement.
(g)
Definitions.—
In this section:
(1)
The term “bridge contract” means—
(A) an extension to an existing contract beyond the period of performance to avoid a lapse in service caused by a delay in awarding a subsequent contract; or
(B) a new short-term contract awarded on a sole-source basis to avoid a lapse in service caused by a delay in awarding a subsequent contract.
(2) The term “requirements owner” means a member of the armed forces (other than the Coast Guard) or a civilian employee of the Department of Defense responsible for a requirement for a service to be performed through a services contract.
(3) The term “Services Requirements Review Board” has the meaning given in Department of Defense Instruction 5000.74, titled “Defense Acquisition of Services” and dated January 5, 2016, or a successor instruction.
(Added Pub. L. 115–91, div. A, title VIII, § 851(a)(1), Dec. 12, 2017, 131 Stat. 1489; amended Pub. L. 115–232, div. A, title VIII, § 818(a), Aug. 13, 2018, 132 Stat. 1852; Pub. L. 116–92, div. A, title VIII, § 817(a), title XVII, § 1731(a)(42), Dec. 20, 2019, 133 Stat. 1488, 1814.)
§ 2330.
Procurement of contract services: management structure
(a)
Requirement for Management Structure.—
The Secretary of Defense shall establish and implement a management structure for the procurement of contract services for the Department of Defense. The management structure shall provide, at a minimum, for the following:
(1)
The Under Secretary of Defense for Acquisition and Sustainment shall—
(A)
develop and maintain (in consultation with the service acquisition executives) policies, procedures, and best practices guidelines addressing the procurement of contract services, including policies, procedures, and best practices guidelines for—
(i) acquisition planning;
(ii) solicitation and contract award;
(iii) requirements development and management;
(iv) contract tracking and oversight;
(v) performance evaluation; and
(vi) risk management;
(B)
work with the service acquisition executives and other appropriate officials of the Department of Defense—
(i) to identify the critical skills and competencies needed to carry out the procurement of contract services on behalf of the Department of Defense;
(ii) to develop a comprehensive strategy for recruiting, training, and deploying employees to meet the requirements for such skills and competencies; and
(iii) to ensure that the military departments and Defense Agencies have staff and administrative support that are adequate to effectively perform their duties under this section;
(C) establish contract services acquisition categories, based on dollar thresholds, for the purpose of establishing the level of review, decision authority, and applicable procedures in such categories; and
(D) oversee the implementation of the requirements of this section and the policies, procedures, and best practices guidelines established pursuant to subparagraph (A).
(2) The service acquisition executive of each military department shall be the senior official responsible for the management of acquisition of contract services for or on behalf of the military department.
(3) The Under Secretary of Defense for Acquisition and Sustainment shall be the senior official responsible for the management of acquisition of contract services for or on behalf of the Defense Agencies and other components of the Department of Defense outside the military departments.
(b)
Duties and Responsibilities of Senior Officials Responsible for the Management of Acquisition of Contract Services.—
(1) Except as provided in paragraph (2), the senior officials responsible for the management of acquisition of contract services shall assign responsibility for the review and approval of procurements in each contract services acquisition category established under subsection (a)(1)(C) to specific Department of Defense officials, subject to the direction, supervision, and oversight of such senior officials.
(2) With respect to the acquisition of contract services by a component or command of the Department of Defense the primary mission of which is the acquisition of products and services, such acquisition shall be conducted in accordance with policies, procedures, and best practices guidelines developed and maintained by the Under Secretary of Defense for Acquisition and Sustainment pursuant to subsection (a)(1), subject to oversight by the senior officials referred to in paragraph (1).
(3)
In carrying out paragraph (1), each senior official responsible for the management of acquisition of contract services shall—
(A) implement the requirements of this section and the policies, procedures, and best practices guidelines developed by the Under Secretary of Defense for Acquisition and Sustainment pursuant to subsection (a)(1)(A);
(B) authorize the procurement of contract services through contracts entered into by agencies outside the Department of Defense in appropriate circumstances, in accordance with the requirements of section 854 of the Ronald W. Reagan National Defense Authorization Act for Fiscal Year 2005 (10 U.S.C. 2304 note), section 814 of the Strom Thurmond National Defense Authorization Act for Fiscal Year 1999 (31 U.S.C. 1535 note), and the regulations implementing such sections;
(C) dedicate full-time commodity managers to coordinate the procurement of key categories of services;
(D) ensure that contract services are procured by means of procurement actions that are in the best interests of the Department of Defense and are entered into and managed in compliance with applicable laws, regulations, directives, and requirements;
(E) ensure that competitive procedures and performance-based contracting are used to the maximum extent practicable for the procurement of contract services; and
(F) monitor data collection under section 2330a of this title, and periodically conduct spending analyses, to ensure that funds expended for the procurement of contract services are being expended in the most rational and economical manner practicable.
(c)
Definitions.—
In this section:
(1)
The term “procurement action” includes the following actions:
(A) Entry into a contract or any other form of agreement.
(B) Issuance of a task order, delivery order, or military interdepartmental purchase request.
(2) The term “contract services” includes all services acquired from private sector entities by or for the Department of Defense, including services in support of contingency operations. The term does not include services relating to research and development or military construction.
(Added Pub. L. 107–107, div. A, title VIII, § 801(b)(1), Dec. 28, 2001, 115 Stat. 1174; amended Pub. L. 107–314, div. A, title X, § 1062(a)(8), Dec. 2, 2002, 116 Stat. 2650; Pub. L. 109–163, div. A, title VIII, § 812(a)(1), Jan. 6, 2006, 119 Stat. 3376; Pub. L. 112–239, div. A, title VIII, § 845(d), Jan. 2, 2013, 126 Stat. 1848; Pub. L. 116–92, div. A, title IX, § 902(51), Dec. 20, 2019, 133 Stat. 1548.)
§ 2330a.
Procurement of services: tracking of purchases
(a)
Data Collection Required.—
The Secretary of Defense shall establish a data collection system to provide management information with regard to each purchase of services by a military department or Defense Agency in excess of $3,000,000, regardless of whether such a purchase is made in the form of a contract, task order, delivery order, military interdepartmental purchase request, or any other form of interagency agreement, for services in the following service acquisition portfolio groups:
(1) Logistics management services.
(2) Equipment related services.
(3) Knowledge-based services.
(4) Electronics and communications services.
(b)
Data To Be Collected.—
The data required to be collected under subsection (a) includes the following:
(1) The services purchased.
(2) The total dollar amount of the purchase.
(3) The form of contracting action used to make the purchase.
(4)
Whether the purchase was made through—
(A) a performance-based contract, performance-based task order, or other performance-based arrangement that contains firm fixed prices for the specific tasks to be performed;
(B) any other performance-based contract, performance-based task order, or performance-based arrangement; or
(C) any contract, task order, or other arrangement that is not performance based.
(5) In the case of a purchase made through an agency other than the Department of Defense, the agency through which the purchase is made.
(6) The extent of competition provided in making the purchase and whether there was more than one offer.
(7)
Whether the purchase was made from—
(A) a small business concern;
(B) a small business concern owned and controlled by socially and economically disadvantaged individuals; or
(C) a small business concern owned and controlled by women.
(c)
Inventory Summary.—
(1)
Not later than the end of the third quarter of each fiscal year, the Secretary of Defense shall prepare an annual inventory, and submit to Congress a summary of the inventory, of activities performed during the preceding fiscal year pursuant to staff augmentation contracts and contracts closely associated with inherently governmental functions on behalf of the Department of Defense. The guidance for compiling the inventory shall be issued by the Under Secretary of Defense for Personnel and Readiness, the Under Secretary of Defense (Comptroller), and the Under Secretary of Defense for Acquisition and Sustainment, as follows:
(A)
The Under Secretary of Defense for Personnel and Readiness, as supported by the Under Secretary of Defense (Comptroller), shall be responsible for developing guidance for—
(i) the collection of data regarding functions and missions performed by contractors in a manner that is comparable to the manpower data elements used in inventories of functions performed by Department of Defense employees;
(ii) the calculation of contractor full-time equivalents for direct labor, using direct labor hours in a manner that is comparable to the calculation of Department of Defense civilian full-time employees; and
(iii) the conduct and completion of the annual review required under subsection (e)(1).
(B) The Under Secretary of Defense for Acquisition and Sustainment shall be responsible for developing guidance on other data elements and implementing procedures for requirements relating to acquisition.
(2)
The entry for an activity on an inventory under this subsection shall include, for the fiscal year covered by such entry, the following:
(A) The functions and missions performed by the contractor.
(B) The contracting organization, the component of the Department of Defense administering the contract, and the organization whose requirements are being met through contractor performance of the function.
(C) The funding source for the contract under which the function is performed by appropriation and operating agency.
(D) The fiscal year for which the activity first appeared on an inventory under this section.
(E) The number of contractor employees, expressed as full-time equivalents for direct labor, using direct labor hours and associated cost data collected from contractors (except that estimates may be used where such data is not available and cannot reasonably be made available in a timely manner for the purpose of the inventory).
(F) A determination whether the contract pursuant to which the activity is performed is a personal services contract.
(G) A summary of the data required to be collected for the activity under subsection (a).
(3) The inventory required under this subsection shall be submitted in unclassified form, but may include a classified annex.
(d)
Review and Planning Requirements.—
Within 90 days after the date on which an inventory is submitted under subsection (c), the Secretary of the military department or head of the Defense Agency responsible for activities in the inventory shall—
(1)
review the contracts and activities in the inventory for which such Secretary or agency head is responsible, with particular focus and attention on the following categories of high-risk product service codes (also referred to as Federal supply codes):
(A) Special studies or analysis that is not research and development.
(B) Information technology and telecommunications.
(C) Support, including professional, administrative, and management;
(2)
ensure that—
(A) each contract on the list that is a personal services contract has been entered into, and is being performed, in accordance with applicable statutory and regulatory requirements;
(B) the activities on the list do not include any inherently governmental functions; and
(C) to the maximum extent practicable, the activities on the list do not include any functions closely associated with inherently governmental functions; and
(3)
identify activities that should be considered for conversion—
(A) to performance by civilian employees of the Department of Defense pursuant to section 2463 of this title; or
(B) to an acquisition approach that would be more advantageous to the Department of Defense.
(e)
Development of Plan and Enforcement and Approval Mechanisms.—
The Secretary of the military department or head of the Defense Agency responsible for activities in the inventory shall develop a plan, including an enforcement mechanism and approval process, to—
(1) provide for the use of the inventory by the military department or Defense Agency to implement the requirements of section 129a of this title;
(2) ensure the inventory is used to inform strategic workforce planning;
(3) facilitate use of the inventory for compliance with section 235 of this title; and
(4) provide for appropriate consideration of the conversion of activities identified under subsection (e)(3) within a reasonable period of time.
(f)
Comptroller General Report.—
Not later than March 31, 2018, the Comptroller General of the United States shall submit to the congressional defense committees a report on the status of the data collection required in subsection (a) and an assessment of the efforts by the Department of Defense to implement subsection (e).
(g)
Rule of Construction.—
Nothing in this section shall be construed to authorize the performance of personal services by a contractor except where expressly authorized by a provision of law other than this section.
(h)
Definitions.—
In this section:
(1)
Performance-based.—
The term “performance-based”, with respect to a contract, task order, or arrangement, means that the contract, task order, or arrangement, respectively, includes the use of performance work statements that set forth contract requirements in clear, specific, and objective terms with measurable outcomes.
(2)
Function closely associated with inherently governmental functions.—
The term “function closely associated with inherently governmental functions” has the meaning given that term in section 2383(b)(3) of this title.
(3)
Inherently governmental functions.—
The term “inherently governmental functions” has the meaning given that term in section 2383(b)(2) of this title.
(4)
Personal services contract.—
The term “personal services contract” means a contract under which, as a result of its terms or conditions or the manner of its administration during performance, contractor personnel are subject to the relatively continuous supervision and control of one or more Government officers or employees, except that the giving of an order for a specific article or service, with the right to reject the finished product or result, is not the type of supervision or control that makes a contract a personal services contract.
(5)
Service acquisition portfolio groups.—
The term “service acquisition portfolio groups” means the groups identified in Department of Defense Instruction 5000.74, Defense Acquisition of Services (January 5, 2016) or successor guidance.
(6)
Staff augmentation contracts.—
The term “staff augmentation contracts” means services contracts for personnel who are physically present in a Government work space on a full-time or permanent part-time basis, for the purpose of advising on, providing support to, or assisting a Government agency in the performance of the agency’s missions, including authorized personal services contracts (as that term is defined in section 2330a(g)(5) of this title).1
1 See References in Text note below.
(7)
Simplified acquisition threshold.—
The term “simplified acquisition threshold” has the meaning given the term in section 134 of title 41.
(8)
Small business act definitions.—
(A) The term “small business concern” has the meaning given such term under section 3 of the Small Business Act (15 U.S.C. 632).
(B) The terms “small business concern owned and controlled by socially and economically disadvantaged individuals” and “small business concern owned and controlled by women” have the meanings given such terms, respectively, in section 8(d)(3) of the Small Business Act (15 U.S.C. 637(d)(3)).
(Added Pub. L. 107–107, div. A, title VIII, § 801(c), Dec. 28, 2001, 115 Stat. 1176; amended Pub. L. 110–181, div. A, title VIII, § 807(a), Jan. 28, 2008, 122 Stat. 213; Pub. L. 111–84, div. A, title VIII, § 803(b), Oct. 28, 2009, 123 Stat. 2402; Pub. L. 111–383, div. A, title III, § 321, Jan. 7, 2011, 124 Stat. 4183; Pub. L. 112–81, div. A, title IX, § 936, Dec. 31, 2011, 125 Stat. 1545; Pub. L. 113–66, div. A, title IX, § 951(a), Dec. 26, 2013, 127 Stat. 839; Pub. L. 114–328, div. A, title VIII, §§ 812, 833(b)(2)(C)(ii), Dec. 23, 2016, 130 Stat. 2269, 2284; Pub. L. 115–91, div. A, title X, § 1081(a)(30), (d)(6)(A), Dec. 12, 2017, 131 Stat. 1595, 1600; Pub. L. 115–232, div. A, title VIII, § 819, Aug. 13, 2018, 132 Stat. 1853.)
§ 2331.
Procurement of services: contracts for professional and technical services
(a)
In General.—
The Secretary of Defense shall prescribe regulations to ensure, to the maximum extent practicable, that professional and technical services are acquired on the basis of the task to be performed rather than on the basis of the number of hours of services provided.
(b)
Content of Regulations.—
With respect to contracts to acquire services on the basis of the number of hours of services provided, the regulations described in subsection (a) shall—
(1) include standards and approval procedures to minimize the use of such contracts;
(2) establish criteria to ensure that proposals for contracts for technical and professional services are evaluated on a basis which does not encourage contractors to propose uncompensated overtime;
(3) ensure appropriate emphasis on technical and quality factors in the source selection process;
(4) require identification of any hours in excess of 40-hour weeks included in a proposal;
(5) ensure that offerors are notified that proposals which include unrealistically low labor rates or which do not otherwise demonstrate cost realism will be considered in a risk assessment and evaluated appropriately; and
(6) provide guidance to contracting officers to ensure that any use of uncompensated overtime will not degrade the level of technical expertise required to perform the contract.
(Added Pub. L. 101–510, div. A, title VIII, § 834(a)(1), Nov. 5, 1990, 104 Stat. 1613; amended Pub. L. 102–25, title VII, § 701(a), Apr. 6, 1991, 105 Stat. 113; Pub. L. 103–355, title I, § 1004(c), Oct. 13, 1994, 108 Stat. 3253; Pub. L. 107–107, div. A, title VIII, § 801(g)(1), Dec. 28, 2001, 115 Stat. 1177.)
[§ 2332.
Repealed. Pub. L. 115–232, div. A, title VIII, § 812(a)(3)(A), Aug. 13, 2018, 132 Stat. 1847]
§ 2333.
Joint policies on requirements definition, contingency program management, and contingency contracting
(a)
Joint Policy Requirement.—
The Secretary of Defense, in consultation with the Chairman of the Joint Chiefs of Staff, shall develop joint policies for requirements definition, contingency program management, and contingency contracting during combat operations and post-conflict operations.
(b)
Requirements Definition Matters Covered.—
The joint policy for requirements definition required by subsection (a) shall, at a minimum, provide for the following:
(1) The assignment of a senior commissioned officer or civilian member of the senior executive service, with appropriate experience and qualifications related to the definition of requirements to be satisfied through acquisition contracts (such as for delivery of products or services, performance of work, or accomplishment of a project), to act as head of requirements definition and coordination during combat operations, post-conflict operations, and contingency operations, if required, including leading a requirements review board involving all organizations concerned.
(2) An organizational approach to requirements definition and coordination during combat operations, post-conflict operations, and contingency operations that is designed to ensure that requirements are defined in a way that effectively implements United States Government and Department of Defense objectives, policies, and decisions regarding the allocation of resources, coordination of interagency efforts in the theater of operations, and alignment of requirements with the proper use of funds.
(c)
Contingency Program Management Matters Covered.—
The joint policy for contingency program management required by subsection (a) shall, at a minimum, provide for the following:
(1) The assignment of a senior commissioned officer or civilian member of the senior executive service, with appropriate program management experience and qualifications, to act as head of program management during combat operations, post-conflict operations, and contingency operations, including stabilization and reconstruction operations involving multiple United States Government agencies and international organizations, if required.
(2) A preplanned organizational approach to program management during combat operations, post-conflict operations, and contingency operations that is designed to ensure that the Department of Defense is prepared to conduct such program management.
(3) Identification of a deployable cadre of experts, with the appropriate tools and authority, and trained in processes under paragraph (6).
(4) Utilization of the hiring and appointment authorities necessary for the rapid deployment of personnel to ensure the availability of key personnel for sufficient lengths of time to provide for continuing program and project management.
(5)
A requirement to provide training (including training under a program to be created by the Defense Acquisition University) to program management personnel in—
(A) the use of laws, regulations, policies, and directives related to program management in combat or contingency environments;
(B) the integration of cost, schedule, and performance objectives into practical acquisition strategies aligned with available resources and subject to effective oversight; and
(C) procedures of the Department of Defense related to funding mechanisms and contingency contract management.
(6) Appropriate steps to ensure that training is maintained for such personnel even when they are not deployed in a contingency operation.
(7) Such steps as may be needed to ensure jointness and cross-service coordination in the area of program management during contingency operations.
(d)
Contingency Contracting Matters Covered.—
(1)
The joint policy for contingency contracting required by subsection (a) shall, at a minimum, provide for the following:
(A) The designation of a senior commissioned officer or civilian member of the senior executive service in each military department with the responsibility for administering the policy.
(B) The assignment of a senior commissioned officer with appropriate acquisition experience and qualifications to act as head of contingency contracting during combat operations, post-conflict operations, and contingency operations, who shall report directly to the commander of the combatant command in whose area of responsibility the operations occur.
(C) A sourcing approach to contingency contracting that is designed to ensure that each military department is prepared to conduct contingency contracting during combat operations, post-conflict operations, and contingency operations, including stabilization and reconstruction operations involving interagency organizations, if required.
(D)
A requirement to provide training (including training under a program to be created by the Defense Acquisition University) to contingency contracting personnel in—
(i) the use of law, regulations, policies, and directives related to contingency contracting operations;
(ii) the appropriate use of rapid acquisition methods, including the use of exceptions to competition requirements under section 2304 of this title, sealed bidding, letter contracts, indefinite delivery-indefinite quantity task orders, set asides under section 8(a) of the Small Business Act (15 U.S.C. 637(a)), undefinitized contract actions, and other tools available to expedite the delivery of goods and services during combat operations or post-conflict operations;
(iii) the appropriate use of rapid acquisition authority, commanders’ emergency response program funds, and other tools unique to contingency contracting; and
(iv) instruction on the necessity for the prompt transition from the use of rapid acquisition authority to the use of full and open competition and other methods of contracting that maximize transparency in the acquisition process.
(E) Appropriate steps to ensure that training is maintained for such personnel even when they are not deployed in a contingency operation.
(F) Such steps as may be needed to ensure jointness and cross-service coordination in the area of contingency contracting.
(2) To the extent practicable, the joint policy for contingency contracting required by subsection (a) should be taken into account in the development of interagency plans for stabilization and reconstruction operations, consistent with the report submitted by the President under section 1035 of the John Warner National Defense Authorization Act for Fiscal Year 2007 (Public Law 109–364; 120 Stat. 2388) on interagency operating procedures for the planning and conduct of stabilization and reconstruction operations.
(e)
Training for Personnel Outside Acquisition Workforce.—
(1) The joint policy for requirements definition, contingency program management, and contingency contracting required by subsection (a) shall provide for training of military personnel outside the acquisition workforce (including operational field commanders and officers performing key staff functions for operational field commanders) who are expected to have acquisition responsibility, including oversight duties associated with contracts or contractors, during combat operations, post-conflict operations, and contingency operations.
(2) Training under paragraph (1) shall be sufficient to ensure that the military personnel referred to in that paragraph understand the scope and scale of contractor support they will experience in contingency operations and are prepared for their roles and responsibilities with regard to requirements definition, program management (including contractor oversight), and contingency contracting.
(3) The joint policy shall also provide for the incorporation of contractors and contract operations in mission readiness exercises for operations that will include contracting and contractor support.
(f)
Definitions.—
In this section:
(1)
Contingency contracting personnel.—
The term “contingency contracting personnel” means members of the armed forces and civilian employees of the Department of Defense who are members of the defense acquisition workforce and, as part of their duties, are assigned to provide support to contingency operations (whether deployed or not).
(2)
Contingency contracting.—
The term “contingency contracting” means all stages of the process of acquiring property or services by the Department of Defense during a contingency operation.
(3)
Contingency operation.—
The term “contingency operation” has the meaning provided in section 101(a)(13) of this title.
(4)
Acquisition support agencies.—
The term “acquisition support agencies” means Defense Agencies and Department of Defense Field Activities that carry out and provide support for acquisition-related activities.
(5)
Contingency program management.—
The term “contingency program management” means the process of planning, organizing, staffing, controlling, and leading the combined efforts of participating civilian and military personnel and organizations for the management of a specific defense acquisition program or programs during combat operations, post-conflict operations, and contingency operations.
(6)
Requirements definition.—
The term “requirements definition” means the process of translating policy objectives and mission needs into specific requirements, the description of which will be the basis for awarding acquisition contracts for projects to be accomplished, work to be performed, or products to be delivered.
(Added Pub. L. 109–364, div. A, title VIII, § 854(a)(1), Oct. 17, 2006, 120 Stat. 2343; amended Pub. L. 110–181, div. A, title VIII, § 849(a), Jan. 28, 2008, 122 Stat. 245; Pub. L. 111–84, div. A, title X, § 1073(a)(23), Oct. 28, 2009, 123 Stat. 2473; Pub. L. 116–283, div. A, title XVIII, § 1810(b), Jan. 1, 2021, 134 Stat. 4162.)
§ 2334.
Independent cost estimation and cost analysis
(a)
In General.—
The Director of Cost Assessment and Program Evaluation shall ensure that the cost estimation and cost analysis processes of the Department of Defense provide accurate information and realistic estimates of cost for the acquisition programs of the Department of Defense. In carrying out that responsibility, the Director shall—
(1) prescribe, by authority of the Secretary of Defense, policies and procedures for the conduct of cost estimation and cost analysis for the acquisition programs of the Department of Defense;
(2) provide guidance to and consult with the Secretary of Defense, the Under Secretary of Defense for Acquisition and Sustainment, the Under Secretary of Defense (Comptroller), the Secretaries of the military departments, and the heads of the Defense Agencies with respect to cost estimation in the Department of Defense in general and with respect to specific cost estimates and cost analyses to be conducted in connection with a major defense acquisition program or major subprogram under chapter 144 of this title;
(3) issue guidance relating to the proper discussion of risk in cost estimates generally, and specifically, for the proper discussion of risk in cost estimates for major defense acquisition programs and major subprograms;
(4) issue guidance relating to full consideration of life-cycle management and sustainability costs in major defense acquisition programs and major subprograms;
(5) review all cost estimates and cost analyses conducted in connection with major defense acquisition programs and major subprograms;
(6)
conduct or approve independent cost estimates and cost analyses for all major defense acquisition programs and major subprograms—
(A)
in advance of—
(i) any decision to grant milestone approval pursuant to section 2366a or 2366b of this title;
(ii) any decision to enter into low-rate initial production or full-rate production;
(iii) any certification under section 2433a of this title; and
(iv) any report under section 2445c(f) of this title; and
(B) at any other time considered appropriate by the Director, upon the request of the Under Secretary of Defense for Acquisition and Sustainment, or upon the request of the milestone decision authority;
(7) periodically assess and update the cost indexes used by the Department to ensure that such indexes have a sound basis and meet the Department’s needs for realistic cost estimation; and
(8) annually review the cost and associated information required to be included, by section 2432(c)(1) of this title, in the Selected Acquisition Reports required by that section.
(b)
Independent Cost Estimate Required Before Approval.—
(1)
A milestone decision authority may not approve entering a milestone phase of a major defense acquisition program or major subprogram unless an independent cost estimate has been conducted or approved by the Director of Cost Assessment and Program Evaluation and considered by the milestone decision authority that—
(A) for the technology maturation and risk reduction phase, includes the identification and sensitivity analysis of key cost drivers that may affect life-cycle costs of the program or subprogram; and
(B) for the engineering and manufacturing development phase, or production and deployment phase, includes a cost estimate of the full life-cycle cost of the program or subprogram.
(2)
The regulations governing the content and submission of independent cost estimates required by subsection (a) shall require that the independent cost estimate of the full life-cycle cost of a program or subprogram include—
(A) all costs of development, procurement, military construction, operations and support, and trained manpower to operate, maintain, and support the program or subprogram upon full operational deployment, without regard to funding source or management control; and
(B) an analysis to support decisionmaking that identifies and evaluates alternative courses of action that may reduce cost and risk, and result in more affordable programs and less costly systems.
(c)
Review of Cost Estimates, Cost Analyses, and Records of the Military Departments and Defense Agencies.—
The Secretary of Defense shall ensure that the Director of Cost Assessment and Program Evaluation—
(1) promptly receives the results of all cost estimates and cost analyses conducted by the military departments and Defense Agencies, and all studies conducted by the military departments and Defense Agencies in connection with such cost estimates and cost analyses, for major defense acquisition programs and major subprograms of the military departments and Defense Agencies; and
(2) has timely access to any records and data in the Department of Defense (including the records and data of each military department and Defense Agency and including classified and proprietary information) that the Director considers necessary to review in order to carry out any duties under this section.
(d)
Participation, Concurrence, and Approval in Cost Estimation.—
The Director of Cost Assessment and Program Evaluation may—
(1) participate in the discussion of any discrepancies between an independent cost estimate and the cost estimate of a military department or Defense Agency for a major defense acquisition program or major subprogram of the Department of Defense;
(2) comment on deficiencies in the methodology or execution of any cost estimate or cost analysis developed by a military department or Defense Agency for a major defense acquisition program or major subprogram;
(3) concur in the choice of a cost estimate within the baseline description or any other cost estimate (including the discussion of risk for any such cost estimate) for use at any event specified in subsection (a)(6); and
(4) participate in the consideration of any decision to request authorization of a multiyear procurement contract for a major defense acquisition program or major subprogram.
(e)
Discussion of Risk in Cost Estimates.—
The Director of Cost Assessment and Program Evaluation, and the Secretary of the military department concerned or the head of the Defense Agency concerned (as applicable), shall each—
(1) issue guidance requiring a discussion of risk, the potential impacts of risk on program costs, and approaches to mitigate risk in cost estimates for major defense acquisition programs and major subprograms;
(2) ensure that cost estimates are developed, to the extent practicable, based on historical actual cost information that is based on demonstrated contractor and Government performance and that such estimates provide a high degree of confidence that the program or subprogram can be completed without the need for significant adjustment to program budgets; and
(3)
include the information required in the guidance under paragraph (1)—
(A) in any decision documentation approving a cost estimate within the baseline description or any other cost estimate for use at any event specified in subsection (a)(6); and
(B) in the next Selected Acquisition Report pursuant to section 2432 of this title in the case of a major defense acquisition program or major subprogram, or the next quarterly report pursuant to section 2445c of this title in the case of a major automated information system program.
(f)
Estimates for Program Baseline and Analyses and Targets for Contract Negotiation Purposes.—
(1) The policies, procedures, and guidance issued by the Director of Cost Assessment and Program Evaluation in accordance with the requirements of subsection (a) shall provide that cost estimates developed for baseline descriptions and other program purposes conducted pursuant to subsection (a)(6) are not to be used for the purpose of contract negotiations or the obligation of funds.
(2) The Under Secretary of Defense for Acquisition and Sustainment shall, in consultation with the Director of Cost Assessment and Program Evaluation, develop policies, procedures, and guidance to ensure that cost analyses and targets developed for the purpose of contract negotiations and the obligation of funds are based on the Government’s reasonable expectation of successful contractor performance in accordance with the contractor’s proposal and previous experience.
(3) The Program Manager and contracting officer for each major defense acquisition program and major subprogram shall ensure that cost analyses and targets developed for the purpose of contract negotiations and the obligation of funds are carried out in accordance with the requirements of paragraph (1) and the policies, procedures, and guidance issued by the Under Secretary of Defense for Acquisition and Sustainment under paragraph (2).
(4) Funds that are made available for a major defense acquisition program or major subprogram in accordance with a cost estimate conducted pursuant to subsection (a)(6), but are excess to a cost analysis or target developed pursuant to paragraph (2), shall remain available for obligation in accordance with the terms of applicable authorization and appropriations Acts.
(5)
Funds described in paragraph (4)—
(A)
may be used—
(i) to cover any increased program costs identified by a revised cost analysis or target developed pursuant to paragraph (2);
(ii) to acquire additional end items in accordance with the requirements of section 2308 of this title; or
(iii) to cover the cost of risk reduction and process improvements; and
(B) may be reprogrammed, in accordance with established procedures, only if determined to be excess to program needs on the basis of a cost estimate developed with the concurrence of the Director of Cost Assessment and Program Evaluation.
(g)
Guidelines and Collection of Cost Data.—
(1) The Director of Cost Assessment and Program Evaluation shall, in consultation with the Under Secretary of Defense for Acquisition and Sustainment, develop policies, procedures, guidance, and a collection method to ensure that quality acquisition cost data are collected to facilitate cost estimation and comparison across acquisition programs.
(2) The program manager and contracting officer for each acquisition program in an amount greater than $100,000,000, in consultation with the cost estimating component of the relevant military department or Defense Agency, shall ensure that cost data are collected in accordance with the requirements of paragraph (1).
(3) The requirement under paragraph (1) may be waived only by the Director of Cost Assessment and Program Evaluation.
(h)
Staff.—
The Secretary of Defense shall ensure that the Director of Cost Assessment and Program Evaluation has sufficient professional staff of military and civilian personnel to enable the Director to carry out the duties and responsibilities of the Director under this section.
(Added Pub. L. 111–23, title I, § 101(b)(1), May 22, 2009, 123 Stat. 1706; amended Pub. L. 111–383, div. A, title VIII, § 811, Jan. 7, 2011, 124 Stat. 4263; Pub. L. 112–81, div. A, title VIII, § 833, Dec. 31, 2011, 125 Stat. 1506; Pub. L. 113–66, div. A, title VIII, § 812(c), Dec. 26, 2013, 127 Stat. 808; Pub. L. 114–92, div. A, title VIII, § 824(b), title X, § 1077(a), Nov. 25, 2015, 129 Stat. 907, 998; Pub. L. 114–328, div. A, title VIII, §§ 842(a), (b), 846(3), Dec. 23, 2016, 130 Stat. 2288, 2289, 2292; Pub. L. 115–91, div. A, title X, § 1081(a)(31), Dec. 12, 2017, 131 Stat. 1596; Pub. L. 116–92, div. A, title IX, § 902(53), Dec. 20, 2019, 133 Stat. 1549; Pub. L. 116–283, div. A, title XVIII, § 1812(b)(1), (3), (c)(1), (d), (e)(1), (f)(1), (g)(1), (h)(1), Jan. 1, 2021, 134 Stat. 4174–4177.)
§ 2335.
Prohibition on collection of political information
(a)
Prohibition on Requiring Submission of Political Information.—
The head of an agency may not require a contractor to submit political information related to the contractor or a subcontractor at any tier, or any partner, officer, director, or employee of the contractor or subcontractor—
(1) as part of a solicitation, request for bid, request for proposal, or any other form of communication designed to solicit offers in connection with the award of a contract for procurement of property or services; or
(2) during the course of contract performance as part of the process associated with modifying a contract or exercising a contract option.
(b)
Scope.—
The prohibition under this section applies to the procurement of commercial products and commercial services, the procurement of commercial-off-the-shelf-items, and the non-commercial procurement of supplies, property, services, and manufactured items, irrespective of contract vehicle, including contracts, purchase orders, task or deliver orders under indefinite delivery/indefinite quantity contracts, blanket purchase agreements, and basic ordering agreements.
(c)
Rule of Construction.—
Nothing in this section shall be construed as—
(1) waiving, superseding, restricting, or limiting the application of the Federal Election Campaign Act of 1971 (52 U.S.C. 30101 et seq.) or preventing Federal regulatory or law enforcement agencies from collecting or receiving information authorized by law; or
(2) precluding the Defense Contract Audit Agency from accessing and reviewing certain information, including political information, for the purpose of identifying unallowable costs and administering cost principles established pursuant to section 2324 of this title.
(d)
Definitions.—
In this section:
(1)
Contractor.—
The term “contractor” includes contractors, bidders, and offerors, and individuals and legal entities who would reasonably be expected to submit offers or bids for Federal Government contracts.
(2)
Political information.—
The term “political information” means information relating to political spending, including any payment consisting of a contribution, expenditure, independent expenditure, or disbursement for an electioneering communication that is made by the contractor, any of its partners, officers, directors or employees, or any of its affiliates or subsidiaries to a candidate or on behalf of a candidate for election for Federal office, to a political committee, to a political party, to a third party entity with the intention or reasonable expectation that it would use the payment to make independent expenditures or electioneering communications, or that is otherwise made with respect to any election for Federal office, party affiliation, and voting history.
(3)
Other terms.—
Each of the terms “contribution”, “expenditure”, “independent expenditure”, “candidate”, “election”, “electioneering communication”, and “Federal office” has the meaning given that term in the Federal Election Campaign Act of 1971 (52 U.S.C. 30101 et seq.).
(Added Pub. L. 112–81, div. A, title VIII, § 823(a), Dec. 31, 2011, 125 Stat. 1502; amended Pub. L. 113–291, div. A, title X, § 1071(f)(17), Dec. 19, 2014, 128 Stat. 3511; Pub. L. 115–91, div. A, title X, § 1081(a)(32), Dec. 12, 2017, 131 Stat. 1596; Pub. L. 115–232, div. A, title VIII, § 836(c)(10), Aug. 13, 2018, 132 Stat. 1866.)
[§ 2336.
Renumbered § 2679]
§ 2337.
Life-cycle management and product support
(a)
Guidance on Life-Cycle Management.—
The Secretary of Defense shall issue and maintain comprehensive guidance on life-cycle management and the development and implementation of product support strategies for covered systems. The guidance issued pursuant to this subsection shall—
(1) maximize competition and make the best possible use of available Department of Defense and industry resources at the system, subsystem, and component levels; and
(2) maximize value to the Department of Defense by providing the best possible product support outcomes at the lowest operations and support cost.
(b)
Life Cycle Sustainment Plan.—
Before granting Milestone B approval (or the equivalent), the milestone decision authority shall ensure that each covered system has an approved life cycle sustainment plan. The life cycle sustainment plan shall include—
(1) a comprehensive product support strategy;
(2) performance goals, including key performance parameters for sustainment, key system attributes of the covered system, and other appropriate metrics;
(3) an approved life-cycle cost estimate for the covered system;
(4) affordability constraints and key cost factors that could affect the operating and support costs of the covered system;
(5) sustainment risks and proposed mitigation plans for such risks;
(6) engineering and design considerations that support cost-effective sustainment of the covered system;
(7) a technical data and intellectual property management plan for product support; and
(8) major maintenance and overhaul requirements that will be required during the life cycle of the covered system.
(c)
Product Support Managers.—
(1)
Requirement.—
The Secretary of Defense shall require that each covered system be supported by a product support manager in accordance with this subsection.
(2)
Responsibilities.—
A product support manager for a covered system shall—
(A) develop, update, and implement a life cycle sustainment plan described in subsection (b);
(B) ensure the life cycle sustainment plan is informed by appropriate predictive analysis and modeling tools that can improve material availability and reliability, increase operational availability rates, and reduce operation and sustainment costs;
(C) conduct appropriate cost analyses to validate the product support strategy and life cycle sustainment plan, including cost-benefit analyses as outlined in Office of Management and Budget Circular A–94;
(D) ensure achievement of desired product support outcomes through development and implementation of appropriate product support arrangements;
(E) adjust performance requirements and resource allocations across product support integrators and product support providers as necessary to optimize implementation of the product support strategy;
(F) periodically review product support arrangements between the product support integrators and product support providers to ensure the arrangements are consistent with the overall product support strategy;
(G) prior to each change in the product support strategy or every five years, whichever occurs first, revalidate any business-case analysis performed in support of the product support strategy;
(H) ensure that the product support strategy maximizes small business participation at the appropriate tiers; and
(I) ensure that product support arrangements for the covered system describe how such arrangements will ensure efficient procurement, management, and allocation of Government-owned parts inventories in order to prevent unnecessary procurements of such parts.
(d)
Definitions.—
In this section:
(1)
Product support.—
The term “product support” means the package of support functions required to field and maintain the readiness and operational capability of covered systems, subsystems, and components, including all functions related to covered system readiness.
(2)
Product support arrangement.—
The term “product support arrangement” means a contract, task order, or any type of other contractual arrangement, or any type of agreement or non-contractual arrangement within the Federal Government, for the performance of sustainment or logistics support required for covered systems, subsystems, or components. The term includes arrangements for any of the following:
(A) Performance-based logistics.
(B) Sustainment support.
(C) Contractor logistics support.
(D) Life-cycle product support.
(E) Weapon systems product support.
(3)
Product support integrator.—
The term “product support integrator” means an entity within the Federal Government or outside the Federal Government charged with integrating all sources of product support, both private and public, defined within the scope of a product support arrangement.
(4)
Product support provider.—
The term “product support provider” means an entity that provides product support functions. The term includes an entity within the Department of Defense, an entity within the private sector, or a partnership between such entities.
(5)
Covered system.—
The term “covered system” means—
(A) a major defense acquisition program as defined in section 2430 of this title; or
(B) an acquisition program or project that is carried out using the rapid fielding or rapid prototyping acquisition pathway under section 804 of the National Defense Authorization Act for Fiscal Year 2016 (Public Law 114–92; 10 U.S.C. 2302 note) that is estimated by the Secretary of Defense to require an eventual total expenditure described in section 2430(a)(1)(B).
(6)
Milestone b approval.—
The term “Milestone B approval” has the meaning given that term in section 2366(e)(7) of this title.
(7)
Milestone decision authority.—
The term “milestone decision authority” has the meaning given in section 2431a(e)(5) of this title.
(Added Pub. L. 112–239, div. A, title VIII, § 823(a)(1), Jan. 2, 2013, 126 Stat. 1830; amended Pub. L. 113–66, div. A, title VIII, § 823, Dec. 26, 2013, 127 Stat. 809; Pub. L. 116–283, div. A, title VIII, § 802(a), Jan. 1, 2021, 134 Stat. 3731.)
§ 2337a.
Assessment, management, and control of operating and support costs for major weapon systems
(a)
Guidance Required.—
The Secretary of Defense shall issue and maintain guidance on actions to be taken to assess, manage, and control Department of Defense costs for the operation and support of major weapon systems.
(b)
Elements.—
The guidance required by subsection (a) shall, at a minimum—
(1) be issued in conjunction with the comprehensive guidance on life-cycle management and the development and implementation of product support strategies for major weapon systems required by section 2337 of this title;
(2) require the military departments to retain each estimate of operating and support costs that is developed at any time during the life cycle of a major weapon system, together with supporting documentation used to develop the estimate;
(3) require the military departments to update estimates of operating and support costs periodically throughout the life cycle of a major weapon system, to determine whether preliminary information and assumptions remain relevant and accurate, and identify and record reasons for variances;
(4) establish policies and procedures for the collection, organization, maintenance, and availability of standardized data on operating and support costs for major weapon systems in accordance with section 2222 of this title;
(5) establish standard requirements for the collection and reporting of data on operating and support costs for major weapon systems by contractors performing weapon system sustainment functions in an appropriate format, and develop contract clauses to ensure that contractors comply with such requirements;
(6)
require the military departments—
(A) to collect and retain data from operational and developmental testing and evaluation on the reliability and maintainability of major weapon systems; and
(B) to use such data to inform system design decisions, provide insight into sustainment costs, and inform estimates of operating and support costs for such systems;
(7) require the military departments to ensure that sustainment factors are fully considered at key life-cycle management decision points and that appropriate measures are taken to reduce operating and support costs by influencing system design early in development, developing sound sustainment strategies, and addressing key drivers of costs;
(8) require the military departments to conduct an independent logistics assessment of each major weapon system prior to key acquisition decision points (including milestone decisions) to identify features that are likely to drive future operating and support costs, changes to system design that could reduce such costs, and effective strategies for managing such costs;
(9)
include—
(A) reliability metrics for major weapon systems; and
(B)
requirements on the use of metrics under subparagraph (A) as triggers—
(i) to conduct further investigation and analysis into drivers of those metrics; and
(ii) to develop strategies for improving reliability, availability, and maintainability of such systems at an affordable cost; and
(10) require the military departments to conduct periodic reviews of operating and support costs of major weapon systems after such systems achieve initial operational capability to identify and address factors resulting in growth in operating and support costs and adapt support strategies to reduce such costs.
(c)
Retention of Data on Operating and Support Costs.—
(1)
In general.—
The Director of Cost Assessment and Program Evaluation shall be responsible for developing and maintaining a database on operating and support estimates, supporting documentation, and actual operating and support costs for major weapon systems.
(2)
Support.—
The Secretary of Defense shall ensure that the Director, in carrying out such responsibility—
(A) promptly receives the results of all cost estimates and cost analyses conducted by the military departments with regard to operating and support costs of major weapon systems;
(B) has timely access to any records and data of the military departments (including classified and proprietary information) that the Director considers necessary to carry out such responsibility; and
(C) with the concurrence of the Under Secretary of Defense for Acquisition and Sustainment, may direct the military departments to collect and retain information necessary to support the database.
(d)
Major Weapon System Defined.—
In this section, the term “major weapon system” has the meaning given that term in section 2379(f) of this title.
(Added Pub. L. 115–91, div. A, title VIII, § 836(a)(1), Dec. 12, 2017, 131 Stat. 1472; amended Pub. L. 115–232, div. A, title X, § 1081(a)(20), Aug. 13, 2018, 132 Stat. 1984.)
§ 2338.
Micro-purchase threshold

The micro-purchase threshold for the Department of Defense is $10,000.

(Added Pub. L. 114–328, div. A, title VIII, § 821(a), Dec. 23, 2016, 130 Stat. 2276; amended Pub. L. 115–232, div. A, title VIII, § 821(a), Aug. 13, 2018, 132 Stat. 1853.)
§ 2339.
Prohibition on criminal history inquiries by contractors prior to conditional offer
(a)
Limitation on Criminal History Inquiries.—
(1)
In general.—
Except as provided in paragraphs (2) and (3), the head of an agency—
(A) may not require that an individual or sole proprietor who submits a bid for a contract to disclose criminal history record information regarding that individual or sole proprietor before determining the apparent awardee; and
(B) shall require as a condition of receiving a Federal contract and receiving payments under such contract that the contractor may not verbally or through written form request the disclosure of criminal history record information regarding an applicant for a position related to work under such contract before such contractor extends a conditional offer to the applicant.
(2)
Otherwise required by law.—
The prohibition under paragraph (1) does not apply with respect to a contract if consideration of criminal history record information prior to a conditional offer with respect to the position is otherwise required by law.
(3)
Exception for certain positions.—
(A)
In general.—
The prohibition under paragraph (1) does not apply with respect to—
(i) a contract that requires an individual hired under the contract to access classified information or to have sensitive law enforcement or national security duties; or
(ii) a position that the Secretary of Defense identifies under the regulations issued under subparagraph (B).
(B)
Regulations.—
(i)
Issuance.—
Not later than 16 months after the date of enactment of the Fair Chance to Compete for Jobs Act of 2019, the Secretary of Defense, in consultation with the Administrator of General Services, shall issue regulations identifying additional positions with respect to which the prohibition under paragraph (1) shall not apply, giving due consideration to positions that involve interaction with minors, access to sensitive information, or managing financial transactions.
(ii)
Compliance with civil rights laws.—
The regulations issued under clause (i) shall—
(I) be consistent with, and in no way supersede, restrict, or limit the application of title VII of the Civil Rights Act of 1964 (42 U.S.C. 2000e et seq.) or other relevant Federal civil rights laws; and(II) ensure that all hiring activities conducted pursuant to the regulations are conducted in a manner consistent with relevant Federal civil rights laws.
(b)
Complaint Procedures.—
The Secretary of Defense shall establish and publish procedures under which an applicant for a position with a Department of Defense contractor may submit a complaint, or any other information, relating to compliance by the contractor with subsection (a)(1)(B).
(c)
Action for Violations of Prohibition on Criminal History Inquiries.—
(1)
First violation.—
If the Secretary of Defense determines that a contractor has violated subsection (a)(1)(B), the Secretary shall—
(A) notify the contractor;
(B) provide 30 days after such notification for the contractor to appeal the determination; and
(C) issue a written warning to the contractor that includes a description of the violation and the additional remedies that may apply for subsequent violations.
(2)
Subsequent violations.—
If the Secretary of Defense determines that a contractor that was subject to paragraph (1) has committed a subsequent violation of subsection (a)(1)(B), the Secretary shall notify the contractor, shall provide 30 days after such notification for the contractor to appeal the determination, and, in consultation with the relevant Federal agencies, may take actions, depending on the severity of the infraction and the contractor’s history of violations, including—
(A) providing written guidance to the contractor that the contractor’s eligibility for contracts requires compliance with this section;
(B) requiring that the contractor respond within 30 days affirming that the contractor is taking steps to comply with this section; and
(C) suspending payment under the contract for which the applicant was being considered until the contractor demonstrates compliance with this section.
(d)
Definitions.—
In this section:
(1)
Conditional offer.—
The term “conditional offer” means an offer of employment for a position related to work under a contract that is conditioned upon the results of a criminal history inquiry.
(2)
Criminal history record information.—
The term “criminal history record information” has the meaning given that term in section 9201 of title 5.
(Added Pub. L. 116–92, div. A, title XI, § 1123(b)(1), Dec. 20, 2019, 133 Stat. 1612.)
§ 2339a.
Requirements for information relating to supply chain risk
(a)
Authority.—
Subject to subsection (b), the head of a covered agency may—
(1) carry out a covered procurement action; and
(2) limit, notwithstanding any other provision of law, in whole or in part, the disclosure of information relating to the basis for carrying out a covered procurement action.
(b)
Determination and Notification.—
The head of a covered agency may exercise the authority provided in subsection (a) only after—
(1) obtaining a joint recommendation by the Under Secretary of Defense for Acquisition and Sustainment and the Chief Information Officer of the Department of Defense, on the basis of a risk assessment by the Under Secretary of Defense for Intelligence and Security, that there is a significant supply chain risk to a covered system;
(2)
making a determination in writing, in unclassified or classified form, with the concurrence of the Under Secretary of Defense for Acquisition and Sustainment, that—
(A) use of the authority in subsection (a)(1) is necessary to protect national security by reducing supply chain risk;
(B) less intrusive measures are not reasonably available to reduce such supply chain risk; and
(C) in a case where the head of the covered agency plans to limit disclosure of information under subsection (a)(2), the risk to national security due to the disclosure of such information outweighs the risk due to not disclosing such information; and
(3)
providing a classified or unclassified notice of the determination made under paragraph (2) to the appropriate congressional committees, which notice shall include—
(A) the information required by section 2304(f)(3) of this title;
(B) the joint recommendation by the Under Secretary of Defense for Acquisition and Sustainment and the Chief Information Officer of the Department of Defense as specified in paragraph (1);
(C) a summary of the risk assessment by the Under Secretary of Defense for Intelligence 1 that serves as the basis for the joint recommendation specified in paragraph (1); and
(D) a summary of the basis for the determination, including a discussion of less intrusive measures that were considered and why they were not reasonably available to reduce supply chain risk.
(c)
Delegation.—
The head of a covered agency may not delegate the authority provided in subsection (a) or the responsibility to make a determination under subsection (b) to an official below the level of the service acquisition executive for the agency concerned.
(d)
Limitation on Disclosure.—
If the head of a covered agency has exercised the authority provided in subsection (a)(2) to limit disclosure of information—
(1) no action undertaken by the agency head under such authority shall be subject to review in a bid protest before the Government Accountability Office or in any Federal court; and
(2)
the agency head shall—
(A) notify appropriate parties of a covered procurement action and the basis for such action only to the extent necessary to effectuate the covered procurement action;
(B) notify other Department of Defense components or other Federal agencies responsible for procurements that may be subject to the same or similar supply chain risk, in a manner and to the extent consistent with the requirements of national security; and
(C) ensure the confidentiality of any such notifications.
(e)
Definitions.—
In this section:
(1)
Head of a covered agency.—
The term “head of a covered agency” means each of the following:
(A) The Secretary of Defense.
(B) The Secretary of the Army.
(C) The Secretary of the Navy.
(D) The Secretary of the Air Force.
(2)
Covered procurement action.—
The term “covered procurement action” means any of the following actions, if the action takes place in the course of conducting a covered procurement:
(A) The exclusion of a source that fails to meet qualification standards established in accordance with the requirements of section 2319 of this title for the purpose of reducing supply chain risk in the acquisition of covered systems.
(B) The exclusion of a source that fails to achieve an acceptable rating with regard to an evaluation factor providing for the consideration of supply chain risk in the evaluation of proposals for the award of a contract or the issuance of a task or delivery order.
(C) The decision to withhold consent for a contractor to subcontract with a particular source or to direct a contractor for a covered system to exclude a particular source from consideration for a subcontract under the contract.
(3)
Covered procurement.—
The term “covered procurement” means—
(A) a source selection for a covered system or a covered item of supply involving either a performance specification, as provided in section 2305(a)(1)(C)(ii) of this title, or an evaluation factor, as provided in section 2305(a)(2)(A) of this title, relating to supply chain risk;
(B) the consideration of proposals for and issuance of a task or delivery order for a covered system or a covered item of supply, as provided in section 2304c(d)(3) of this title, where the task or delivery order contract concerned includes a contract clause establishing a requirement relating to supply chain risk; or
(C) any contract action involving a contract for a covered system or a covered item of supply where such contract includes a clause establishing requirements relating to supply chain risk.
(4)
Supply chain risk.—
The term “supply chain risk” means the risk that an adversary may sabotage, maliciously introduce unwanted function, or otherwise subvert the design, integrity, manufacturing, production, distribution, installation, operation, or maintenance of a covered system so as to surveil, deny, disrupt, or otherwise degrade the function, use, or operation of such system.
(5)
Covered system.—
The term “covered system” means a national security system, as that term is defined in section 3552(b)(6) of title 44.
(6)
Covered item of supply.—
The term “covered item of supply” means an item of information technology (as that term is defined in section 11101 of title 40) that is purchased for inclusion in a covered system, and the loss of integrity of which could result in a supply chain risk for a covered system.
(7)
Appropriate congressional committees.—
The term “appropriate congressional committees” means—
(A) in the case of a covered system included in the National Intelligence Program or the Military Intelligence Program, the Select Committee on Intelligence of the Senate, the Permanent Select Committee on Intelligence of the House of Representatives, and the congressional defense committees; and
(B) in the case of a covered system not otherwise included in subparagraph (A), the congressional defense committees.
(Added Pub. L. 115–232, div. A, title VIII, § 881(a)(1), Aug. 13, 2018, 132 Stat. 1910; amended Pub. L. 116–92, div. A, title XVII, § 1731(a)(43), Dec. 20, 2019, 133 Stat. 1814; Pub. L. 116–283, div. A, title X, § 1081(a)(36), Jan. 1, 2021, 134 Stat. 3872.)
§ 2339b.
Notification of Navy procurement production disruptions
(a)
Requirement for Contractor To Provide Notice of Delays.—
The Secretary of the Navy shall require prime contractors of any Navy procurement program funded under either the Shipbuilding and Conversion, Navy account or the Other Procurement, Navy account to report within 15 calendar days any stop work order or other manufacturing disruption of 15 calendar days or more, by the prime contractor or any subcontractor, to the respective program manager and Navy technical authority.
(b)
Quarterly Reports.—
The Secretary of the Navy shall submit to the congressional defense committees not later than 15 calendar days after the end of each quarter of a fiscal year a report listing all notifications made pursuant to subsection (a) during the preceding quarter.
(Added Pub. L. 116–92, div. A, title VIII, § 820(a), Dec. 20, 2019, 133 Stat. 1489.)
§ 2339c.
Disclosures for offerors for certain shipbuilding major defense acquisition program contracts
(a)
In General.—
Any covered offeror seeking to be awarded a shipbuilding construction contract as part of a major defense acquisition program with funds from the Shipbuilding and Conversion, Navy account shall disclose along with the offer and any subsequent revisions of the offer (including the final proposal revision offer) if any part of the planned contract performance will or is expected to include foreign government subsidized performance, foreign financing, foreign financial guarantees, or foreign tax concessions.
(b)
Requirements.—
A disclosure required under subsection (a) shall be made in a form prescribed by the Secretary of the Navy and shall include a specific description of the extent to which the planned contract performance will include, with or without contingencies, any foreign government subsidized performance, foreign financing, foreign financial guarantees, or foreign tax concessions.
(c)
Congressional Notification.—
Not later than 5 days after awarding a contract described under subsection (a), the Secretary of the Navy shall notify the congressional defense committees and summarize the disclosure provided under such subsection.
(d)
Definitions.—
In this section:
(1)
Covered offeror.—
The term “covered offeror” means any offeror that requires or may reasonably be expected to require, during the period of performance on a shipbuilding construction contract described in subsection (a), a method to mitigate or negate foreign ownership under section 2004.34(f)(6) of title 32, Code of Federal Regulations.
(2)
Foreign government subsidized performance.—
The term “foreign government subsidized performance” means any financial support, materiel, services, or guarantees of support, services, supply, performance, or intellectual property concessions, that may be provided to or for the covered offeror or the customer of the offeror by a foreign government or entity effectively owned or controlled by a foreign government, which may have the effect of supplementing, supplying, servicing, or reducing the cost or price of an end item, or supporting, financing in whole or in part, or guaranteeing contract performance by the offeror.
(3)
Major defense acquisition program.—
The term “major defense acquisition program” has the meaning given the term in section 2430 of this title.
(Added Pub. L. 116–283, div. A, title VIII, § 803(a), Jan. 1, 2021, 134 Stat. 3734.)