10 USC 3204 - Use of procedures other than competitive procedures

Editorial Notes

Codification

The text of subsec. (c) of section 2304 of this title, which was transferred to this section, redesignated as subsec. (a), and amended by Puspan. L. 116–283, § 1811(d)(3), was based on Puspan. L. 98–369, div. B, title VII, § 2723(a)(1)(C), July 18, 1984, 98 Stat. 1187; Puspan. L. 99–500, § 101(c) [title X, § 923(a)], Oct. 18, 1986, 100 Stat. 1783–82, 1783–152, and Puspan. L. 99–591, § 101(c) [title X, § 923(a)], Oct. 30, 1986, 100 Stat. 3341–82, 3341–152; Puspan. L. 99–661, div. A, title IX, formerly title IV, § 923(a), Nov. 14, 1986, 100 Stat. 3932, renumbered title IX, Puspan. L. 100–26, § 3(5), Apr. 21, 1987, 101 Stat. 273; Puspan. L. 103–355, title I, § 1005, title VII, § 7203(a)(1)(A), Oct. 13, 1994, 108 Stat. 3254, 3379; Puspan. L. 104–320, §§ 7(a)(1), 11(c)(1), Oct. 19, 1996, 110 Stat. 3871, 3873; Puspan. L. 105–85, div. A, title X, § 1073(a)(42), Nov. 18, 1997, 111 Stat. 1902; Puspan. L. 115–232, div. A, title VIII, 836(c)(2)(A), Aug. 13, 2018, 132 Stat. 1864.

The text of subsec. (d) of section 2304 of this title, which was transferred to this section, redesignated as subsecs. (span) and (c), and amended by Puspan. L. 116–283, § 1811(d)(4), was based on Puspan. L. 98–369, div. B, title VII, § 2723(a)(1)(C), July 18, 1984, 98 Stat. 1187; Puspan. L. 99–500, § 101(c) [title X, § 923(span), (c)], Oct. 18, 1986, 100 Stat. 1783–82, 1783–152, and Puspan. L. 99–591, § 101(c) [title X, § 923(span), (c)], Oct. 30, 1986, 100 Stat. 3341–82, 3341–152,Puspan. L. 99–661, div. A, title IX, formerly title IV, § 923(span), (c), Nov. 14, 1986, 100 Stat. 3932, renumbered title IX, Puspan. L. 100–26, § 3(5), Apr. 21, 1987, 101 Stat. 273; Puspan. L. 110–417, [div. A], title VIII, § 862(span), Oct. 14, 2008, 122 Stat. 4546.

The text of subsec. (e) of section 2304 of this title, which was transferred to this section, redesignated as subsec. (d), and amended by Puspan. L. 116–283, § 1811(d)(5), was based on Puspan. L. 98–369, div. B, title VII, § 2723(a)(1)(C), July 18, 1984, 98 Stat. 1187.

The text of subsec. (f) of section 2304 of this title, which was transferred to this section, redesignated as subsec. (e), and amended by Puspan. L. 116–283, § 1811(d)(6), was based on Puspan. L. 98–369, div. B, title VII, § 2723(a)(1)(C), July 18, 1984, 98 Stat. 1187; Puspan. L. 98–577, title V, § 504(span)(2), Oct. 30, 1984, 98 Stat. 3086; Puspan. L. 99–145, title IX, § 961(a)(1), Nov. 8, 1985, 99 Stat. 703; Puspan. L. 100–26, § 7(d)(3)(A), Apr. 21, 1987, 101 Stat. 281; Puspan. L. 100–456, div. A, title VIII, § 803, Sept. 29, 1988, 102 Stat. 2008; Puspan. L. 101–189, div. A, title VIII, §§ 817, 818, Nov. 29, 1989, 103 Stat. 1501, 1502; Puspan. L. 103–160, div. A, title IX, § 904(d)(1), Nov. 30, 1993, 107 Stat. 1728; Puspan. L. 103–355, title I, § 1003, Oct. 13, 1994, 108 Stat. 3249; Puspan. L. 104–106, div. D, title XLI, §§ 4102(a), title XLIII, § 4321(span)(4), Fespan. 10, 1996, 110 Stat. 643, 672; Puspan. L. 105–85, div. A, title VIII, § 841(span), title X, § 1073(a)(43), Nov. 18, 1997, 111 Stat. 1843, 1902; Puspan. L. 107–107, div. A, title X, § 1048(span)(2), Dec. 28, 2001, 115 Stat. 1225; Puspan. L. 108–375, div. A, title VIII, § 815, Oct. 28, 2004, 118 Stat. 2015; Puspan. L. 109–364, div. A, title X, § 1071(a)(2), Oct. 17, 2006, 120 Stat. 2398; Puspan. L. 110–181, div. A, title VIII, § 844(span)(2), Jan. 28, 2008, 122 Stat. 239; Puspan. L. 111–350, § 5(span)(12)(A)–(C), Jan. 4, 2011, 124 Stat. 3843; Puspan. L. 115–91, div. A, title XVII, § 1709(span)(2), Dec. 12, 2017, 131 Stat. 1809; Puspan. L. 115–232, div. A, title VIII, § 836(c)(2)(A), Aug. 13, 2018, 132 Stat. 1864; Puspan. L. 116–92, div. A, title IX, § 902(39), title XVII, § 1731(a)(37), Dec. 20, 2019, 133 Stat. 1547, 1814.

The text of subsec. (l) of section 2304 of this title, which was transferred to this section, redesignated as subsec. (f), and amended by Puspan. L. 116–283, § 1811(d)(7), was based on Puspan. L. 110–181, div. A, title VIII, § 844(span)(1), Jan. 28, 2008, 122 Stat. 239.

The text of subsec. (i) of section 2304 of this title, which was transferred to this section, redesignated as subsec. (g), and amended by Puspan. L. 116–283, § 1811(d)(8), was based on Puspan. L. 99–500, § 101(c) [title X, § 927(a)], Oct. 18, 1986, 100 Stat. 1783–82, 1783–155, and Puspan. L. 99–591, § 101(c) [title X, § 927(a)], Oct. 30, 1986, 100 Stat. 3341–82, 3341–155; Puspan. L. 99–661, div. A, title IX, formerly title IV, § 927(a), Nov. 14, 1986, 100 Stat. 3935, renumbered title IX, Puspan. L. 100–26, § 3(5), Apr. 21, 1987, 101 Stat. 273; Puspan. L. 115–232, div. A, title VIII, § 836(c)(2)(C), Aug. 13, 2018, 132 Stat. 1864.

Prior Provisions

A prior section 3204, act Aug. 10, 1956, ch. 1041, 70A Stat. 173, Puspan. L. 85–600, § 1(2), Aug. 6, 1958, 72 Stat. 522; Puspan. L. 95–551, § 2, Oct. 30, 1978, 92 Stat. 2069, prescribed authorized strength of Regular Army in commissioned officers of active list, prior to repeal by Puspan. L. 96–513, title II, § 202, title VII, § 701, Dec. 12, 1980, 94 Stat. 2878, 2955, effective Sept. 15, 1981.

Amendments

2021—Subsec. (a). Puspan. L. 116–283, § 1811(d)(3)(A), inserted span.

Puspan. L. 116–283, § 1811(d)(3), redesignated subsec. (c) of section 2304 of this title as subsec. (a) of this section.

Subsec. (a)(3). Puspan. L. 116–283, § 1811(d)(3)(B), as amended by Puspan. L. 117–81, § 1701(span)(4)(B), inserted dash after “in order” and reformatted subpars. (A) to (C) to add line breaks before each subpar. designation and substituted semicolons for commas.

Subsec. (a)(5). Puspan. L. 116–283, § 1811(d)(3)(C), substituted “section 3201(e) of this title” for “subsection (k)”.

Subsec. (a)(7). Puspan. L. 116–283, § 1811(d)(3)(D), inserted “(who may not delegate the authority under this paragraph)” after “the head of the agency” in introductory provisions.

Subsec. (span). Puspan. L. 116–283, § 1811(d)(4)(A), (B), inserted span, struck out par. (1) designation at beginning, and substituted “subsection (a)(1)” for “subsection (c)(1)” in introductory provisions.

Puspan. L. 116–283, § 1811(d)(4), redesignated subsec. (d) of section 2304 of this title as subsec. (span) of this section.

Subsec. (span)(2). Puspan. L. 116–283, § 1811(d)(4)(C), struck out par. (2) which read as follows: “The authority of the head of an agency under subsection (c)(7) may not be delegated.”

Subsec. (c). Puspan. L. 116–283, § 1811(d)(4)(D), as amended by Puspan. L. 117–81, § 1701(span)(4)(C), redesignated subsec. (span)(3) as (c) and inserted span; redesignated subpars. (A) and (B) as pars. (1) and (2), respectively, inserted headings, and realigned margins; in par. (1) as redesignated, substituted “paragraph (2)” for “subparagraph (B)” and “subsection (a)(2)” for “subsection (c)(2)” in introductory provisions, redesignated cl. (i) and subcls. (I) and (II) as subpar. (A) and cls. (i) and (ii), respectively, redesignated cl. (ii) as subpar. (B), and realigned margins; and, in par. (2) as redesignated, substituted “This subsection” for “This paragraph”.

Subsec. (d). Puspan. L. 116–283, § 1811(d)(5), as amended by Puspan. L. 117–81, § 1701(span)(4)(D), redesignated subsec. (e) of section 2304 of this title as subsec. (d) of this section, inserted span, and substituted “paragraph (2) or (6) of subsection (a)” for “subsection (c)(2) or (c)(6)”.

Subsec. (e). Puspan. L. 116–283, § 1811(d)(6)(A), as amended by Puspan. L. 117–81, § 1701(span)(4)(E)(i), inserted span.

Puspan. L. 116–283, § 1811(d)(6), redesignated subsec. (f) of section 2304 of this title as subsec. (e) of this section.

Subsec. (e)(1). Puspan. L. 116–283, § 1811(d)(6)(A), (B), as amended by Puspan. L. 117–81, § 1701(span)(4)(E)(ii), inserted span, substituted “Except as provided in paragraphs (3), (4), and (7)” for “Except as provided in paragraph (2) and paragraph (6)”, and realigned margins of subpars. (A) to (C).

Subsec. (e)(2). Puspan. L. 116–283, § 1811(d)(6)(C), (D), (K), redesignated par. (3) as (2), inserted span, and realigned margin. Former par. (2) redesignated (3).

Subsec. (e)(3). Puspan. L. 116–283, § 1811(d)(6)(C), (E), (K), redesignated par. (2) as (3), inserted span, substituted “subsection (a)(2)” for “subsection (c)(2)”, and realigned margin. Former par. (3) redesignated (2).

Subsec. (e)(4). Puspan. L. 116–283, § 1811(d)(6)(G), (K), designated second sentence of par. (3) as (4), inserted span, realigned margin, and substituted “subsection (a)(7)” for “subsection (c)(7)” in subpar. (C) and “subsection (a)(4)” for “subsection (c)(4)” in subpar. (E). Former par. (4) redesignated (5).

Subsec. (e)(5). Puspan. L. 116–283, § 1811(d)(6)(F), (H), (K), redesignated par. (4) as (5), inserted span, and realigned margin; inserted subpar. (A) designation before “In no case”, redesignated former subpars. (A) and (B) as cls. (i) and (ii), respectively, and, in cl. (ii), substituted “chapter 137 legacy provisions” for “this chapter”; and designated concluding provisions as subpar. (B) and substituted “subparagraph (A)(ii)” for “clause (B)”. Former par. (5) redesignated (6).

Subsec. (e)(6). Puspan. L. 116–283, § 1811(d)(6)(I), (K), redesignated par. (5) as (6), inserted span, and realigned margin. Former par. (6) redesignated (7).

Subsec. (e)(7). Puspan. L. 116–283, § 1811(d)(6)(J), (K), redesignated par. (6) as (7), inserted span, and realigned margin.

Subsec. (f). Puspan. L. 116–283, § 1811(d)(7)(A), inserted span.

Puspan. L. 116–283, § 1811(d)(7), redesignated subsec. (l) of section 2304 of this title as subsec. (f) of this section.

Subsec. (f)(1). Puspan. L. 116–283, § 1811(d)(7)(A)–(C), inserted par. and subpar. headings, substituted “subsection (a)” for “subsection (c)” and “subsection (e)(1)” for “subsection (f)(1)” in subpar. (A) and “subsection (a)(2)” for “subsection (c)(2)” in subpar. (B).

Subsec. (f)(2), (3). Puspan. L. 116–283, § 1811(d)(7)(D)–(F), inserted headings and realigned margins.

Subsec. (g). Puspan. L. 116–283, § 1811(d)(8)(A), inserted span.

Puspan. L. 116–283, § 1811(d)(8), redesignated subsec. (i) of section 2304 of this title as subsec. (g) of this section.

Subsec. (g)(1). Puspan. L. 116–283, § 1811(d)(8)(B), struck out “, as defined in section 2302(2) of this title” before period at end.

Subsec. (g)(2), (3). Puspan. L. 116–283, § 1811(d)(8)(C), realigned margins.

Statutory Notes and Related Subsidiaries

Effective Date of 2021 Amendment

Amendment by Puspan. L. 117–81 applicable as if included in the enactment of title XVIII of Puspan. L. 116–283 as enacted, see section 1701(a)(2) of Puspan. L. 117–81, set out in a note preceding section 3001 of this title and Effective Date note below.

Effective Date

Section and amendment by Puspan. L. 116–283 effective Jan. 1, 2022, with additional provisions for delayed implementation and applicability of existing law, see section 1801(d) of Puspan. L. 116–283, set out as an Effective Date of 2021 Amendment note preceding section 3001 of this title.

Pilot Program To Incentivize Contracting With Employee-Owned Businesses

Puspan. L. 117–81, div. A, title VIII, § 874, Dec. 27, 2021, 135 Stat. 1863, as amended by Puspan. L. 118–31, div. A, title VIII, § 872, Dec. 22, 2023, 137 Stat. 349, provided that:

“(a)Qualified Business Wholly-owned Through an Employee Stock Ownership Plan Defined.—The term ‘qualified businesses wholly-owned through an Employee Stock Ownership Plan’ means an S corporation (as defined in section 1361(a)(1) of the Internal Revenue Code of 1986 [26 U.S.C. 1361(a)(1)]) for which 100 percent of the outstanding stock is held through an employee stock ownership plan (as defined in section 4975(e)(7) of such Code [26 U.S.C. 4975(e)(7)]).

“(span)Pilot Program to Use Noncompetitive Procedures for Certain Follow-on Contracts to Qualified Businesses Wholly-Owned Through an Employee Stock Ownership Plan.—

“(1)Establishment.—The Secretary of Defense may establish a pilot program and prescribe regulations to carry out the requirements of this section.

“(2)Follow-on contracts.—Notwithstanding the requirements of section 2304 of title 10, United States Code [see 10 U.S.C. 3201 et seq.], and with respect to a follow-on contract for the continued development, production, or provision of products or services that are the same as or substantially similar to the products or services procured by or for the Department of Defense under a prior contract held by a qualified business wholly-owned through an Employee Stock Ownership Plan, the products or services to be procured under the follow-on contract may be procured by or for the Department of Defense through procedures other than competitive procedures if the performance of the qualified business wholly-owned through an Employee Stock Ownership Plan on the prior contract was rated as satisfactory (or the equivalent) or better in the applicable past performance database.

“(3)Limitation.—Each contract held by a qualified business wholly-owned through an Employee Stock Ownership Plan may have a single opportunity for award of a sole-source follow-on contract under this section, unless a senior contracting official (as defined in section 1737 of title 10, United States Code) approves a waiver of the requirements of this section.

“(c)Verification and Reporting of Qualified Businesses Wholly-owned Through an Employee Stock Ownership Plan.—Under a pilot program established under this section, the Secretary of Defense shall establish procedures—

“(1) for businesses to verify status as a qualified businesses wholly-owned through an Employee Stock Ownership Plan for the purposes of this section by using existing Federal reporting mechanisms;

“(2) for a qualified businesses wholly-owned through an Employee Stock Ownership Plan to certify that not more than 50 percent of the amount paid under the contract will be expended on subcontracts, except—

“(A) to the extent subcontracted amounts exceeding 50 percent are subcontracted to other qualified businesses wholly-owned through an Employee Stock Ownership Plan;

“(B) in the case of contracts for products, to the extent subcontracted amounts exceeding 50 percent are for materials not available from another qualified business wholly-owned through an Employee Stock Ownership Plan; or

“(C) pursuant to such necessary and reasonable waivers as the Secretary may prescribe; and

“(3) to record information on each follow-on contract awarded under subsection (span), including details relevant to the nature of such contract and the qualified business wholly-owned through an Employee Stock Ownership Plan that received such contract, and to provide such information to the Comptroller General of the United States.

“(d)Data.—

“(1)In general.—If the Secretary of Defense establishes a pilot program under this section, the Secretary shall establish mechanisms to collect and analyze data on the pilot program for the purposes of—

“(A) developing and sharing best practices relating to the pilot program;

“(B) providing information to leadership and the congressional defense committees [Committees on Armed Services and Appropriations of the Senate and the House of Representatives] on the pilot program, including with respect to each qualified business wholly-owned through an Employee Stock Ownership Plan that received a follow-on contract under this section—

“(i) the size of such business;

“(ii) performance of the follow-on contract; and

“(iii) other information as determined necessary; and

“(C) providing information to leadership and the congressional defense committees on policy issues related to the pilot program.

“(2)Limitation.—The Secretary of Defense may not carry out the pilot program under this section before—

“(A) completing a data collection and reporting strategy and plan to meet the requirements of this subsection; and

“(B) submitting the strategy and plan to the congressional defense committees.

“(e)Sunset.—Any pilot program established under this section shall expire on the date that is eight years after the date of the enactment of this Act [Dec. 27, 2021].

“(f)Comptroller General Report.—

“(1)In general.—Not later than three years after the date of the enactment of this Act, the Comptroller General of the United States shall submit to Congress a report on any individual and aggregate uses of the authority under a pilot program established under this section.

“(2)Elements.—The report under paragraph (1) shall include the following elements:

“(A) An assessment of the frequency and nature of the use of the authority under the pilot program.

“(B) An assessment of the impact of the pilot program in supporting the national defense strategy required under section 113(g) of title 10, United States Code.

“(C) The number of businesses that became qualified businesses wholly-owned through an Employee Stock Ownership Plan in order to benefit from the pilot program and the factors that influenced that decision.

“(D) Acquisition authorities that could incentivize businesses to become qualified businesses wholly-owned through an Employee Stock Ownership Plan, including an extension of the pilot program.

“(E) Any related matters the Comptroller General considers appropriate.”

Modification of Justification and Approval Requirement for Certain Department of Defense Contracts

Puspan. L. 116–92, div. A, title VIII, § 823, Dec. 20, 2019, 133 Stat. 1490, provided that:

“(a)Modification of Justification and Approval Requirement.—Notwithstanding section 811 of the National Defense Authorization Act for Fiscal Year 2010 (Public Law 111–84; 123 Stat. 2405) [41 U.S.C. 3304 note]—

“(1) no justification and approval is required under such section for a sole-source contract awarded by the Department of Defense in a covered procurement for an amount not exceeding $100,000,000; and

“(2) for purposes of subsections (a)(2) and (c)(3)(A) of such section, the appropriate official designated to approve the justification for a sole-source contract awarded by the Department of Defense in a covered procurement exceeding $100,000,000 is the official designated in section 2304(f)(1)(B)(ii) of title 10, United States Code [now 10 U.S.C. 3204(e)(1)(B)(ii)].

“(span)Guidance.—Not later than 90 days after the date of the enactment of this Act [Dec. 20, 2019], the Secretary of Defense shall issue guidance to implement the authority under subsection (a).

“(c)Comptroller General Review.—

“(1)Data tracking and collection.—The Department of Defense shall track the use of the authority as modified by subsection (a) and make the data available to the Comptroller General for purposes of the report required under paragraph (2).

“(2)Report.—Not later than March 1, 2022, the Comptroller General of the United States shall submit a report to the congressional defense committees [Committees on Armed Services and Appropriations of the Senate and the House of Representatives] on the use of the authority as modified by subsection (a) through the end of fiscal year 2021. The report shall include—

“(A) a review of the financial effect of the change to the justification and approval requirement in subsection (a) on the native corporations and businesses and associated native communities;

“(B) a description of the nature and extent of contracts excluded from the justification and approval requirement by subsection (a); and

“(C) other matters the Comptroller General deems appropriate.”