Subtitle I—Federal Procurement Policy

Division A—General

        

Division B—Office of Federal Procurement Policy

        

        

Division C—Procurement

        

Editorial Notes

Amendments

2011—Pub. L. 112–81, div. A, title VIII, §864(b)(2), Dec. 31, 2011, 125 Stat. 1524, added item for chapter 12.

¹ So in original. The period probably should not appear.

Division A—General

CHAPTER 1—DEFINITIONS

SUBCHAPTER I—SUBTITLE DEFINITIONS

        

SUBCHAPTER II—DIVISION B DEFINITIONS

        

SUBCHAPTER III—DIVISION C DEFINITIONS

        

Editorial Notes

Amendments

2018—Pub. L. 115–232, div. A, title VIII, §836(a)(3), Aug. 13, 2018, 132 Stat. 1860, substituted "Commercial product" for "Commercial item" in item 103 and added item 103a.

SUBCHAPTER I—SUBTITLE DEFINITIONS

§101. Administrator

In this subtitle, the term "Administrator" means the Administrator for Federal Procurement Policy appointed under section 1102 of this title.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3678.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
101	no source.

Statutory Notes and Related Subsidiaries

Short Title of 2024 Amendment

Pub. L. 118–74, §1, July 30, 2024, 138 Stat. 1505, provided that: "This Act [enacting section 6310 of this title and provisions set out as a note under section 6310 of this title] may be cited as the 'All-American Flag Act'."

Short Title of 2021 Amendment

Pub. L. 117–28, §1, July 26, 2021, 135 Stat. 304, provided that: "This Act [amending provisions set out as a note under section 3309 of this title] may be cited as the 'Construction Consensus Procurement Improvement Act of 2021'."

Short Title of 2020 Amendment

Pub. L. 116–260, div. U, title IV, §401, Dec. 27, 2020, 134 Stat. 2292, provided that: "This title [enacting provisions set out as a note under section 3309 of this title] may be cited as the 'Construction Consensus Procurement Improvement Act of 2020'."

Short Title of 2018 Amendment

Pub. L. 115–390, §1(a), Dec. 21, 2018, 132 Stat. 5173, provided that: "This Act [enacting subchapter III of chapter 13 of this title and section 4713 of this title, amending sections 3553 and 3554 of Title 44, Public Printing and Documents, and section 3348 of Title 50, War and National Defense, and enacting provisions set out as notes under this section and sections 1321 and 4713 of this title, section 663 of Title 6, Domestic Security, and section 3553 of Title 44] may be cited as the 'Strengthening and Enhancing Cyber-capabilities by Utilizing Risk Exposure Technology Act' or the 'SECURE Technology Act'."

Pub. L. 115–390, title II, §201, Dec. 21, 2018, 132 Stat. 5178, provided that: "This title [enacting subchapter III of chapter 13 of this title and section 4713 of this title, amending sections 3553 and 3554 of Title 44, Public Printing and Documents, and enacting provisions set out as notes under sections 1321 and 4713 of this title and section 3553 of Title 44] may be cited as the 'Federal Acquisition Supply Chain Security Act of 2018'."

Short Title of 2016 Amendment

Pub. L. 114–260, §1, Dec. 14, 2016, 130 Stat. 1361, provided that: "This Act [amending section 4106 of this title] may be cited as the 'GAO Civilian Task and Delivery Order Protest Authority Act of 2016'."

Short Title of 2012 Amendment

Pub. L. 112–194, §1, Oct. 5, 2012, 126 Stat. 1445, provided that: "This Act [enacting section 1909 of this title, amending section 2784 of Title 10, Armed Forces, enacting provisions set out as notes under section 1909 of this title and section 5701 of Title 5, Government Organization and Employees, and amending provisions set out as a note under section 5701 of Title 5] may be cited as the 'Government Charge Card Abuse Prevention Act of 2012'."

Short Title of 2008 Act

Pub. L. 110–417, [div. A], title VIII, §861, Oct. 14, 2008, 122 Stat. 4546, provided that: "This subtitle [subtitle G (§§861–874) of title VIII of Pub. L. 110–417, see Tables for classification] may be cited as the 'Clean Contracting Act of 2008'."

Pub. L. 110–252, title VI, §6101, June 30, 2008, 122 Stat. 2386, provided that: "This chapter [chapter 1 (§§6101–6103) of title VI of Pub. L. 110–252, see Tables for classification] may be cited as the 'Close the Contractor Fraud Loophole Act'."

Short Title of 2003 Act

Pub. L. 108–136, div. A, title XIV, §1401, Nov. 24, 2003, 117 Stat. 1663, provided that: "This title [see Tables for classification] may be cited as the 'Services Acquisition Reform Act of 2003'."

Short Title of 1996 Act

Pub. L. 104–106, div. D, §4001, Feb. 10, 1996, 110 Stat. 642, as amended by Pub. L. 104–208, div. A, title I, §101(f) [title VIII, §808(a)], Sept. 30, 1996, 110 Stat. 3009–314, 3009-393, provided that: "This division [div. D (§§4001–4402) of Pub. L. 104–106, see Tables for classification] and division E [§§5001–5703 of Pub. L. 104–106, repealed and reenacted, generally, as subtitle III (§11101 et seq.) of Title 40, Public Buildings, Property, and Works, by Pub. L. 107–217, §§1, 6(b), Aug. 21, 2002, 116 Stat. 1062, 1304, see Tables for complete classification] may be cited as the 'Clinger-Cohen Act of 1996'."

Short Title of 1994 Act

Pub. L. 103–355, §1, Oct. 13, 1994, 108 Stat. 3243, provided that: "This Act [see Tables for classification] may be cited as the 'Federal Acquisition Streamlining Act of 1994'."

Short Title of 1988 Act

Pub. L. 100–679, §1, Nov. 17, 1988, 102 Stat. 4055, provided that: "This Act [see Tables for classification] may be cited as the 'Office of Federal Procurement Policy Act Amendments of 1988'."

Pub. L. 100–418, title VII, §7001, Aug. 23, 1988, 102 Stat. 1545, provided that: "This title [see Tables for classification] may be cited as the 'Buy American Act of 1988'."

Short Title of 1986 Act

Pub. L. 99–634, §1, Nov. 7, 1986, 100 Stat. 3523, provided: "That this Act [see Tables for classification] may be cited as the 'Anti-Kickback Enforcement Act of 1986'."

Short Title of 1984 Act

Pub. L. 98–577, §1, Oct. 30, 1984, 98 Stat. 3066, provided that this Act [see Tables for classification] may be cited as the "Small Business and Federal Procurement Competition Enhancement Act of 1984".

Pub. L. 98–369, div. B, title VII, §2701, July 18, 1984, 98 Stat. 1175, provided that: "This title [see Tables for classification] may be cited as the 'Competition in Contracting Act of 1984'."

Short Title of 1983 Act

Pub. L. 98–191, §1, Dec. 1, 1983, 97 Stat. 1325, provided: "That this Act [see Tables for classification] may be cited as the 'Office of Federal Procurement Policy Act Amendments of 1983'."

Short Title of 1979 Act

Pub. L. 96–83, §1(a), Oct. 10, 1979, 93 Stat. 648, provided that: "This Act [see Tables for classification] may be cited as the 'Office of Federal Procurement Policy Act Amendments of 1979'."

Short Title of 1974 Act

Pub. L. 93–400, §1(a), Aug. 30, 1974, 88 Stat. 796, as amended by Pub. L. 103–355, title X, §10005(a)(1), Oct. 13, 1994, 108 Stat. 3406, provided that: "This Act [see Tables for classification] may be cited as the 'Office of Federal Procurement Policy Act'."

Short Title of 1949 Act

Act June 30, 1949, ch. 288, §1(a), 63 Stat. 377, as amended by Pub. L. 103–355, title X, §10005(a)(2), Oct. 13, 1994, 108 Stat. 3406; Pub. L. 107–217, §6(b), Aug. 21, 2002, 116 Stat. 1304; Pub. L. 108–178, §2(b)(1), Dec. 15, 2003, 117 Stat. 2640, provided that: "This Act [see Tables for classification] may be cited as the 'Federal Property and Administrative Services Act of 1949'."

[Pub. L. 107–217, §6(b), which had repealed section 1(a) of act June 30, 1949, set out above, was itself repealed effective Aug. 21, 2002, by Pub. L. 108–178, §2(b)(1), insofar as it related to section 1(a) of act June 30, 1949, and Pub. L. 108–178, §2(b)(1), further provided that section 1(a) of act June 30, 1949, was revived to read as if Pub. L. 107–217, §6(b), had not been enacted.]

Short Title of 1936 Act

Act June 30, 1936, ch. 881, §14, formerly §12, as added by Pub. L. 103–355, title X, §10005(f)(5), Oct. 13, 1994, 108 Stat. 3409; renumbered §14, Pub. L. 104–106, div. D, title XLIII, §4321(f)(1)(B), Feb. 10, 1996, 110 Stat. 675, provided that: "This Act [see Tables for classification] may be cited as the 'Walsh-Healey Act'."

Short Title of 1933 Act

Act Mar. 3, 1933, ch. 212, title III, §7, formerly §5, as added by Pub. L. 103–355, title X, §10005(f)(4), Oct. 13, 1994, 108 Stat. 3409; renumbered §7 and amended by Pub. L. 104–106, div. D, title XLIII, §4321(a)(11), Feb. 10, 1996, 110 Stat. 671, provided that: "This title [see Tables for classification] may be cited as the 'Buy American Act'."

§102. Commercial component

In this subtitle, the term "commercial component" means a component that is a commercial product.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3678; Pub. L. 115–232, div. A, title VIII, §836(a)(2)(A), Aug. 13, 2018, 132 Stat. 1860.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
102	41:259(c)(13).	June 30, 1949, ch. 288, title III, §309(c)(13), as added Pub. L. 98–369, title VII, §2711(a)(3), July 18, 1984, 98 Stat. 1180; Pub. L. 98–577, title V, §504(a)(4), Oct. 30, 1984, 98 Stat. 3086; Pub. L. 103–355, title I, §1551, Oct. 13, 1994, 108 Stat. 3299.
	41:264a ("commercial component").	June 30, 1949, ch. 288, title III, §314A ("commercial component"), as added Pub. L. 103–355, title VIII, §8202, Oct. 13, 1994, 108 Stat. 3394.
	41:403(15).	Pub. L. 93–400, §4(15), as added Pub. L. 103–355, title VIII, §8001(a), Oct. 13, 1994, 108 Stat. 3386.

Editorial Notes

Amendments

2018—Pub. L. 115–232 substituted "commercial product" for "commercial item".

Statutory Notes and Related Subsidiaries

Effective Date of 2018 Amendment

Amendment by Pub. L. 115–232 effective Jan. 1, 2020, subject to a savings provision, see section 836(h) of Pub. L. 115–232, set out as an Effective Date of 2018 Amendment; Savings Provision note under section 453b of Title 6, Domestic Security.

§103. Commercial product

In this subtitle, the term "commercial product" means any of the following:

(1) A product, other than real property, that—

(A) is of a type customarily used by the general public or by nongovernmental entities for purposes other than governmental purposes; and

(B) has been sold, leased, or licensed, or offered for sale, lease, or license, to the general public.

(2) A product that—

(A) evolved from a product described in paragraph (1) through advances in technology or performance; and

(B) is not yet available in the commercial marketplace but will be available in the commercial marketplace in time to satisfy the delivery requirements under a Federal Government solicitation.

(3) A product that would satisfy the criteria in paragraph (1) or (2) were it not for—

(A) modifications of a type customarily available in the commercial marketplace; or

(B) minor modifications made to meet Federal Government requirements.

(4) Any combination of products meeting the requirements of paragraph (1), (2), or (3) that are of a type customarily combined and sold in combination to the general public.

(5) A product, or combination of products, referred to in paragraphs (1) through (4), even though the product, or combination of products, is transferred between or among separate divisions, subsidiaries, or affiliates of a contractor.

(6) A nondevelopmental item if the procuring agency determines, in accordance with conditions in the Federal Acquisition Regulation, that—

(A) the product was developed exclusively at private expense; and

(B) has been sold in substantial quantities, on a competitive basis, to multiple State and local governments or to multiple foreign governments.

(Added Pub. L. 115–232, div. A, title VIII, §836(a)(1), Aug. 13, 2018, 132 Stat. 1859.)

Editorial Notes

Prior Provisions

A prior section 103, Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3679; Pub. L. 115–91, div. A, title VIII, §847(a), Dec. 12, 2017, 131 Stat. 1487, defined term "commercial item", prior to repeal by Pub. L. 115–232, div. A, title VIII, §836(a)(1), Aug. 13, 2018, 132 Stat. 1859, effective Jan. 1, 2020. See Effective Date note below.

Statutory Notes and Related Subsidiaries

Effective Date

Section effective, and repeal of former section 103 effective, on Jan. 1, 2020, subject to a savings provision, see section 836(h) of Pub. L. 115–232, set out as an Effective Date of 2018 Amendment; Savings Provision note under section 453b of Title 6, Domestic Security.

§103a. Commercial service

In this subtitle, the term "commercial service" means any of the following:

(1) Installation services, maintenance services, repair services, training services, and other services if—

(A) those services are procured for support of a commercial product, regardless of whether the services are provided by the same source or at the same time as the commercial product; and

(B) the source of the services provides similar services contemporaneously to the general public under terms and conditions similar to those offered to the Federal Government;

(2) Services of a type offered and sold competitively, in substantial quantities, in the commercial marketplace—

(A) based on established catalog or market prices;

(B) for specific tasks performed or specific outcomes to be achieved; and

(C) under standard commercial terms and conditions.

(3) A service described in paragraph (1) or (2), even though the service is transferred between or among separate divisions, subsidiaries, or affiliates of a contractor.

(Added Pub. L. 115–232, div. A, title VIII, §836(a)(1), Aug. 13, 2018, 132 Stat. 1860.)

Statutory Notes and Related Subsidiaries

Effective Date

Section effective Jan. 1, 2020, subject to a savings provision, see section 836(h) of Pub. L. 115–232, set out as an Effective Date of 2018 Amendment; Savings Provision note under section 453b of Title 6, Domestic Security.

§104. Commercially available off-the-shelf item

In this subtitle, the term "commercially available off-the-shelf item"—

(1) means an item that—

(A) is a commercial product (as described in section 103(1) of this title);

(B) is sold in substantial quantities in the commercial marketplace; and

(C) is offered to the Federal Government, without modification, in the same form in which it is sold in the commercial marketplace; but

(2) does not include bulk cargo, as defined in section 40102(4) of title 46, such as agricultural products and petroleum products.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3679; Pub. L. 115–232, div. A, title VIII, §836(a)(2)(B), Aug. 13, 2018, 132 Stat. 1860; Pub. L. 116–283, div. A, title X, §1081(d)(4)(A), Jan. 1, 2021, 134 Stat. 3874.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
104	41:431(c).	Pub. L. 93–400, §35(c), as added Pub. L. 104–106, title XLII, §4203(a), Feb. 10, 1996, 110 Stat. 655.

In paragraph (2), the words "section 40102(4) of title 46" are substituted for "section 3 of the Shipping Act of 1984 (46 U.S.C. App. 1702)" because of section 18(c) of Public Law 109–304 (46 U.S.C. note prec. 101).

Editorial Notes

Amendments

2021—Par. (1)(A). Pub. L. 116–283, §1081(d)(4)(A), made technical correction to directory language of Pub. L. 115–232, §836(a)(2)(B). See 2018 Amendment note below.

2018—Par. (1)(A). Pub. L. 115–232, as amended by Pub. L. 116–283, §1081(d)(4)(A), substituted "commercial product" for "commercial item".

Statutory Notes and Related Subsidiaries

Effective Date of 2021 Amendment

Pub. L. 116–283, div. A, title X, §1081(d), Jan. 1, 2021, 134 Stat. 3873, provided that the amendment made by section 1081(d)(4)(A) to section 836(a)(2)(B) of Pub. L. 115–232, which amended this section, is effective as of Aug. 13, 2018, and as if included in Pub. L. 115–232.

Effective Date of 2018 Amendment

Amendment by Pub. L. 115–232 effective Jan. 1, 2020, subject to a savings provision, see section 836(h) of Pub. L. 115–232, set out as an Effective Date of 2018 Amendment; Savings Provision note under section 453b of Title 6, Domestic Security.

§105. Component

In this subtitle, the term "component" means an item supplied to the Federal Government as part of an end item or of another component.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3680.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
105	41:259(c)(14).	June 30, 1949, ch. 288, title III, §309(c)(14), as added Pub. L. 98–369, title VII, §2711(a)(3), July 18, 1984, 98 Stat. 1180; Pub. L. 98–577, title V, §504(a)(4), Oct. 30, 1984, 98 Stat. 3086; Pub. L. 103–355, title I, §1551, Oct. 13, 1994, 108 Stat. 3299.
	41:264a ("component").	June 30, 1949, ch. 288, title III, §314A ("component"), as added Pub. L. 103–355, title VIII, §8202, Oct. 13, 1994, 108 Stat. 3394.
	41:403(14).	Pub. L. 93–400, §4(14), as added Pub. L. 103–355, title VIII, §8001(a), Oct. 13, 1994, 108 Stat. 3386.

§106. Federal Acquisition Regulation

In this subtitle, the term "Federal Acquisition Regulation" means the regulation issued under section 1303(a)(1) of this title.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3680.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
106	41:259(e).	June 30, 1949, ch. 288, title III, §309(e), as added Pub. L. 103–355, title I, §1551, Oct. 13, 1994, 108 Stat. 3299.

The defined term is made applicable to the subtitle because of the numerous references throughout the Office of Federal Procurement Policy Act (Public Law 93–400, 88 Stat. 796), restated in division B of this subtitle, and especially because of sections 6(a) and 25(c) of the Act, restated in sections 1121 and 1303, respectively.

§107. Full and open competition

In this subtitle, the term "full and open competition", when used with respect to a procurement, means that all responsible sources are permitted to submit sealed bids or competitive proposals on the procurement.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3680.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
107	41:259(c)(4).	June 30, 1949, ch. 288, title III, §309(c)(4), as added Pub. L. 98–369, title VII, §2711(a)(3), July 18, 1984, 98 Stat. 1180; Pub. L. 98–577, title V, §504(a)(4), Oct. 30, 1984, 98 Stat. 3086; Pub. L. 103–355, title I, §1551, Oct. 13, 1994, 108 Stat. 3299.
	41:403(6).	Pub. L. 93–400, §4(6), formerly §4(7), as added Pub. L. 98–369, title VII, §2731(3), July 18, 1984, 98 Stat. 1195; Pub. L. 98–577, title I, §102(1), Oct. 30, 1984, 98 Stat. 3067; redesignated as §4(6), Pub. L. 100–679, §3(c), Nov. 17, 1988, 102 Stat. 4056; Pub. L. 103–355, title VIII, §8001(b)(1)–(3), Oct. 13, 1994, 108 Stat. 3386.

§108. Item and item of supply

In this subtitle, the terms "item" and "item of supply"—

(1) mean an individual part, component, subassembly, assembly, or subsystem integral to a major system, and other property which may be replaced during the service life of the system, including spare parts and replenishment spare parts; but

(2) do not include packaging or labeling associated with shipment or identification of an item.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3680.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
108	41:259(c)(8), (9).	June 30, 1949, ch. 288, title III, §309(c)(8), (9), as added Pub. L. 98–369, title VII, §2711(a)(3), July 18, 1984, 98 Stat. 1180; Pub. L. 98–577, title V, §504(a)(4), Oct. 30, 1984, 98 Stat. 3086; Pub. L. 103–355, title I, §1551, Oct. 13, 1994, 108 Stat. 3299.
	41:403(10) ("item", "item of supply").	Pub. L. 93–400, §4(10) ("item", "item of supply"), formerly §4(11), as added Pub. L. 98–577, title I, §102(3), Oct. 30, 1984, 98 Stat. 3067; redesignated as §4(10), Pub. L. 100–679, §3(c), Nov. 17, 1988, 102 Stat. 4056; Pub. L. 103–355, title VIII, §8001(b)(1), (2), (4), Oct. 13, 1994, 108 Stat. 3386.

§109. Major system

(a) In General.—In this subtitle, the term "major system" means a combination of elements that will function together to produce the capabilities required to fulfill a mission need. These elements may include hardware, equipment, software, or a combination of hardware, equipment, and software, but do not include construction or other improvements to real property.

(b) System Deemed To Be Major System.—A system is deemed to be a major system if—

(1) the Department of Defense is responsible for the system and the total expenditures for research, development, testing, and evaluation for the system are estimated to exceed $75,000,000 (based on fiscal year 1980 constant dollars) or the eventual total expenditure for procurement exceeds $300,000,000 (based on fiscal year 1980 constant dollars);

(2) a civilian agency is responsible for the system and total expenditures for the system are estimated to exceed the greater of $750,000 (based on fiscal year 1980 constant dollars) or the dollar threshold for a major system established by the agency pursuant to Office of Management and Budget (OMB) Circular A–109, entitled "Major Systems Acquisitions"; or

(3) the head of the agency responsible for the system designates the system a major system.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3680.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
109	41:259(c)(7).	June 30, 1949, ch. 288, title III, §309(c)(7), as added Pub. L. 98–369, title VII, §2711(a)(3), July 18, 1984, 98 Stat. 1180; Pub. L. 98–577, title V, §504(a)(4), Oct. 30, 1984, 98 Stat. 3086; Pub. L. 103–355, title I, §1551, Oct. 13, 1994, 108 Stat. 3299.
	41:403(9).	Pub. L. 93–400, §4(9), formerly §4(10), as added Pub. L. 98–577, title I, §102(3), Oct. 30, 1984, 98 Stat. 3067; redesignated as §4(9), Pub. L. 100–679, §3(c), Nov. 17, 1988, 102 Stat. 4056; Pub. L. 103–355, title VIII, §8001(b)(1)–(3), Oct. 13, 1994, 108 Stat. 3386.

§110. Nondevelopmental item

In this subtitle, the term "nondevelopmental item" means—

(1) a commercial product;

(2) a previously developed item of supply that is in use by a department or agency of the Federal Government, a State or local government, or a foreign government with which the United States has a mutual defense cooperation agreement;

(3) an item of supply described in paragraph (1) or (2) that requires only minor modification or modification of the type customarily available in the commercial marketplace to meet the requirements of the procuring department or agency; or

(4) an item of supply currently being produced that does not meet the requirements of paragraph (1), (2), or (3) solely because the item is not yet in use.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3680; Pub. L. 115–232, div. A, title VIII, §836(a)(2)(C), Aug. 13, 2018, 132 Stat. 1860.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
110	41:259(c)(12).	June 30, 1949, ch. 288, title III, §309(c)(12), as added Pub. L. 98–369, title VII, §2711(a)(3), July 18, 1984, 98 Stat. 1180; Pub. L. 98–577, title V, §504(a)(4), Oct. 30, 1984, 98 Stat. 3086; Pub. L. 103–355, title I, §1551, Oct. 13, 1994, 108 Stat. 3299.
	41:264a ("nondevelopmental item").	June 30, 1949, ch. 288, title III, §314A ("nondevelopmental item"), as added Pub. L. 103–355, title VIII, §8202, Oct. 13, 1994, 108 Stat. 3394.
	41:403(13).	Pub. L. 93–400, §4(13), as added Pub. L. 103–355, title VIII, §8001(a), Oct. 13, 1994, 108 Stat. 3385.

Editorial Notes

Amendments

2018—Par. (1). Pub. L. 115–232 substituted "commercial product" for "commercial item".

Statutory Notes and Related Subsidiaries

Effective Date of 2018 Amendment

Amendment by Pub. L. 115–232 effective Jan. 1, 2020, subject to a savings provision, see section 836(h) of Pub. L. 115–232, set out as an Effective Date of 2018 Amendment; Savings Provision note under section 453b of Title 6, Domestic Security.

§111. Procurement

In this subtitle, the term "procurement" includes all stages of the process of acquiring property or services, beginning with the process for determining a need for property or services and ending with contract completion and closeout.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3681.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
111	41:259(c)(1).	June 30, 1949, ch. 288, title III, §309(c)(1), as added Pub. L. 98–369, title VII, §2711(a)(3), July 18, 1984, 98 Stat. 1180; Pub. L. 98–577, title V, §504(a)(4), Oct. 30, 1984, 98 Stat. 3086; Pub. L. 103–355, title I, §1551, Oct. 13, 1994, 108 Stat. 3298.
	41:403(2).	Pub. L. 93–400, §4(2), Aug. 30, 1974, 88 Stat. 797; Pub. L. 96–83, §3, Oct. 10, 1979, 93 Stat. 649; Pub. L. 98–191, §4, Dec. 1, 1983, 97 Stat. 1326; Pub. L. 103–355, title VIII, §8001(b)(1)–(3), Oct. 13, 1994, 108 Stat. 3386.

§112. Procurement system

In this subtitle, the term "procurement system" means the integration of the procurement process, the professional development of procurement personnel, and the management structure for carrying out the procurement function.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3681.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
112	41:259(c)(2).	June 30, 1949, ch. 288, title III, §309(c)(2), as added Pub. L. 98–369, title VII, §2711(a)(3), July 18, 1984, 98 Stat. 1180; Pub. L. 98–577, title V, §504(a)(4), Oct. 30, 1984, 98 Stat. 3086; Pub. L. 103–355, title I, §1551, Oct. 13, 1994, 108 Stat. 3299.
	41:403(3).	Pub. L. 93–400, §4(3), Aug. 30, 1974, 88 Stat. 797; Pub. L. 96–83, §3, Oct. 10, 1979, 93 Stat. 649; Pub. L. 98–191, §4, Dec. 1, 1983, 97 Stat. 1326; Pub. L. 103–355, title VIII, §8001(b)(1)–(3), Oct. 13, 1994, 108 Stat. 3386.

§113. Responsible source

In this subtitle, the term "responsible source" means a prospective contractor that—

(1) has adequate financial resources to perform the contract or the ability to obtain those resources;

(2) is able to comply with the required or proposed delivery or performance schedule, taking into consideration all existing commercial and Government business commitments;

(3) has a satisfactory performance record;

(4) has a satisfactory record of integrity and business ethics;

(5) has the necessary organization, experience, accounting and operational controls, and technical skills, or the ability to obtain the organization, experience, controls, and skills;

(6) has the necessary production, construction, and technical equipment and facilities, or the ability to obtain the equipment and facilities; and

(7) is otherwise qualified and eligible to receive an award under applicable laws and regulations.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3681.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
113	41:259(c)(5).	June 30, 1949, ch. 288, title III, §309(c)(5), as added Pub. L. 98–369, title VII, §2711(a)(3), July 18, 1984, 98 Stat. 1180; Pub. L. 98–577, title V, §504(a)(4), Oct. 30, 1984, 98 Stat. 3086; Pub. L. 103–355, title I, §1551, Oct. 13, 1994, 108 Stat. 3299.
	41:403(7).	Pub. L. 93–400, §4(7), formerly §4(8), as added Pub. L. 98–369, title VII, §2731(3), July 18, 1984, 98 Stat. 1195; Pub. L. 98–577, title I, §102(2), Oct. 30, 1984, 98 Stat. 3067; redesignated as §4(7), Pub. L. 100–679, §3(c), Nov. 17, 1988, 102 Stat. 4056; Pub. L. 103–355, title VIII, §8001(b)(1)–(3), Oct. 13, 1994, 108 Stat. 3386.

§114. Standards

In this subtitle, the term "standards" means the criteria for determining the effectiveness of the procurement system by measuring the performance of the various elements of the system.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3681.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
114	41:259(c)(3).	June 30, 1949, ch. 288, title III, §309(c)(3), as added Pub. L. 98–369, title VII, §2711(a)(3), July 18, 1984, 98 Stat. 1180; Pub. L. 98–577, title V, §504(a)(4), Oct. 30, 1984, 98 Stat. 3086; Pub. L. 103–355, title I, §1551, Oct. 13, 1994, 108 Stat. 3299.
	41:403(4).	Pub. L. 93–400, §4(4), formerly §4(5), Aug. 30, 1974, 88 Stat. 797; Pub. L. 96–83, §3, Oct. 10, 1979, 93 Stat. 649; Pub. L. 98–191, §4, Dec. 1, 1983, 97 Stat. 1326; Pub. L. 98–369, title VII, §2731(2), July 18, 1984, 98 Stat. 1195; redesignated as §4(4), Pub. L. 100–679, §3(c), Nov. 17, 1988, 102 Stat. 4056; Pub. L. 103–355, title VIII, §8001(b)(1), (2), (4), Oct. 13, 1994, 108 Stat. 3386.

§115. Supplies

In this subtitle, the term "supplies" has the same meaning as the terms "item" and "item of supply".

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3681.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
115	41:259(c)(10).	June 30, 1949, ch. 288, title III, §309(c)(10) ("supplies"), as added Pub. L. 98–369, title VII, §2711(a)(3), July 18, 1984, 98 Stat. 1180; Pub. L. 98–577, title V, §504(a)(4), Oct. 30, 1984, 98 Stat. 3086; Pub. L. 103–355, title I, §1551, Oct. 13, 1994, 108 Stat. 3299.
	41:403(10) ("supplies").	Pub. L. 93–400, §4(10) ("supplies"), formerly §4(11), as added Pub. L. 98–577, title I, §102(3), Oct. 30, 1984, 98 Stat. 3067; redesignated as §4(10), Pub. L. 100–679, §3(c), Nov. 17, 1988, 102 Stat. 4056; Pub. L. 103–355, title VIII, §8001(b)(1), (2), (4), Oct. 13, 1994, 108 Stat. 3386.

§116. Technical data

In this subtitle, the term "technical data"—

(1) 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; but

(2) does not include computer software or financial, administrative, cost or pricing, or management data or other information incidental to contract administration.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3681.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
116	41:259(c)(6).	June 30, 1949, ch. 288, title III, §309(c)(6), as added Pub. L. 98–369, title VII, §2711(a)(3), July 18, 1984, 98 Stat. 1180; Pub. L. 98–577, title V, §504(a)(4), Oct. 30, 1984, 98 Stat. 3086; Pub. L. 103–355, title I, §1551, Oct. 13, 1994, 108 Stat. 3299.
	41:403(8).	Pub. L. 93–400, §4(8), formerly §4(9), as added Pub. L. 98–577, title I, §102(3), Oct. 30, 1984, 98 Stat. 3067; redesignated as §4(8), Pub. L. 100–679, §3(c), Nov. 17, 1988, 102 Stat. 4056; Pub. L. 103–355, title VIII, §8001(b)(1)–(3), Oct. 13, 1994, 108 Stat. 3386.

SUBCHAPTER II—DIVISION B DEFINITIONS

§131. Acquisition

In division B, the term "acquisition"—

(1) means the process of acquiring, with appropriated amounts, by contract for purchase or lease, property or services (including construction) that support the missions and goals of an executive agency, from the point at which the requirements of the executive agency are established in consultation with the chief acquisition officer of the executive agency; and

(2) includes—

(A) the process of acquiring property or services that are already in existence, or that must be created, developed, demonstrated, and evaluated;

(B) the description of requirements to satisfy agency needs;

(C) solicitation and selection of sources;

(D) award of contracts;

(E) contract performance;

(F) contract financing;

(G) management and measurement of contract performance through final delivery and payment; and

(H) technical and management functions directly related to the process of fulfilling agency requirements by contract.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3682.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
131	41:403(16).	Pub. L. 93–400, §4(16), as added Pub. L. 108–136, title XIV, §1411, Nov. 24, 2003, 117 Stat. 1663.

§132. Competitive procedures

In division B, the term "competitive procedures" means procedures under which an agency enters into a contract pursuant to full and open competition.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3682.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
132	41:403(5).	Pub. L. 93–400, §4(5), formerly §4(6), as added Pub. L. 98–369, title VII, §2731(3), July 18, 1984, 98 Stat. 1195; redesignated as §4(5), Pub. L. 100–679, §3(c), Nov. 17, 1988, 102 Stat. 4056; Pub. L. 103–355, title VIII, §8001(b)(1)–(3), Oct. 13, 1994, 108 Stat. 3386.

§133. Executive agency

In division B, the term "executive agency" means—

(1) an executive department specified in section 101 of title 5;

(2) a military department specified in section 102 of title 5;

(3) an independent establishment as defined in section 104(1) of title 5; and

(4) a wholly owned Government corporation fully subject to chapter 91 of title 31.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3682.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
133	41:403(1).	Pub. L. 93–400, §4(1), Aug. 30, 1974, 88 Stat. 797; Pub. L. 96–83, §3, Oct. 10, 1979, 93 Stat. 649; Pub. L. 98–191, §4, Dec. 1, 1983, 97 Stat. 1326; Pub. L. 103–355, title VIII, §8001(b)(1)–(3), Oct. 13, 1994, 108 Stat. 3386.

§134. Simplified acquisition threshold

In division B, the term "simplified acquisition threshold" means $250,000.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3682; Pub. L. 115–91, div. A, title VIII, §805, Dec. 12, 2017, 131 Stat. 1456.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
134	41:403(11).	Pub. L. 93–400, §4(11), as added Pub. L. 101–510, title VIII, §806(a)(1), Nov. 5, 1990, 104 Stat. 1592; Pub. L. 103–355, title IV, §4001, title VIII, §8001(b)(1), (2), Oct. 13, 1994, 108 Stat. 3338, 3386.

Editoral Notes

Amendments

2017—Pub. L. 115–91 substituted "$250,000" for "$100,000".

SUBCHAPTER III—DIVISION C DEFINITIONS

Statutory Notes and Related Subsidiaries

Definitions

For additional definitions of terms used in division C of this subtitle, with certain exceptions, see section 102 of Title 40, Public Buildings, Property, and Works.

§151. Agency head

In division C, the term "agency head" means the head or any assistant head of an executive agency, and may at the option of the Administrator of General Services include the chief official of any principal organizational unit of the General Services Administration.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3682.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
151	41:259(a).	June 30, 1949, ch. 288, title III, §309(a), 63 Stat. 397.

§152. Competitive procedures

In division C, the term "competitive procedures" means procedures under which an executive agency enters into a contract pursuant to full and open competition. The term also includes—

(1) procurement of architectural or engineering services conducted in accordance with chapter 11 of title 40;

(2) the competitive selection of basic research proposals resulting from a general solicitation and the peer review or scientific review (as appropriate) of those proposals;

(3) the procedures established by the Administrator of General Services for the multiple awards schedule program of the General Services Administration if—

(A) participation in the program has been open to all responsible sources; and

(B) orders and contracts under those procedures result in the lowest overall cost alternative to meet the needs of the Federal Government;

(4) 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 those procurements are permitted to compete; and

(5) 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 that Act (15 U.S.C. 638).

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3683.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
152	41:259(b).	June 30, 1949, ch. 288, §309(b), as added Pub. L. 98–369, title VII, §2711(a)(3), July 18, 1984, 98 Stat. 1180; Pub. L. 98–577, §504(a)(3), Oct. 30, 1984, 98 Stat. 3086; Pub. L. 105–85, title X, §1073(g)(1), Nov. 18, 1997, 111 Stat. 1906.

§153. Simplified acquisition threshold for contract in support of humanitarian or peacekeeping operation

(1) In general.—In division C, the term "simplified acquisition threshold" has the meaning provided that term in section 134 of this title, except that, in the case of a contract to be awarded and performed, or purchase to be made, outside the United States in support of a humanitarian or peacekeeping operation, the term means an amount equal to two times the amount specified for that term in section 134 of this title.

(2) Definition.—In paragraph (1), 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.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3683.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
153(1)	41:259(d)(1).	June 30, 1949, ch. 288, title III, §309(d)(1), as added Pub. L. 103–355, title I, §1551, Oct. 13, 1994, 108 Stat. 3299; Pub. L. 104–201, title VIII, §807(b)(1), (2), Sept. 23, 1996, 110 Stat. 2606.
153(2)	41:259(d)(2).	June 30, 1949, ch. 288, title III, §309(d)(2), as added Pub. L. 104–201, title VIII, §807(b)(3), Sept. 23, 1996, 110 Stat. 2606.

In paragraph (1), the words "a contingency operation or", and the text of 41 U.S.C. 259(d)(2)(A), are omitted because the increased simplified acquisition threshold established under section 32A of the Office of Federal Procurement Policy Act (Public Law 93–400) in the case of a contract to be awarded and performed, or purchase to be made, outside the United States in support of a contingency operation supersedes the threshold established under this section. Section 32A is restated as section 1903 of the revised title.

Division B—Office of Federal Procurement Policy

CHAPTER 11—ESTABLISHMENT OF OFFICE AND AUTHORITY AND FUNCTIONS OF ADMINISTRATOR

SUBCHAPTER I—GENERAL

        

SUBCHAPTER II—AUTHORITY AND FUNCTIONS OF THE ADMINISTRATOR

        

Amendment of Analysis

Pub. L. 113–67, div. A, title VII, §702(b)(2), (c), Dec. 26, 2013, 127 Stat. 1189, provided that, applicable only with respect to costs of compensation incurred under contracts entered into on or after the date that is 180 days after Dec. 26, 2013, this analysis is amended by striking out item 1127. See 2013 Amendment note below.

Pub. L. 113–66, div. A, title VIII, §811(c)(2), (d), Dec. 26, 2013, 127 Stat. 806, provided that, applicable with respect to costs of compensation incurred under contracts entered into on or after the date that is 180 days after Dec. 26, 2013, this analysis is amended by striking out item 1127. See 2013 Amendment note below.

Editorial Notes

Amendments

2013—Pub. L. 113–66, div. A, title VIII, §811(c)(2), Dec. 26, 2013, 127 Stat. 806, and Pub. L. 113–67, div. A, title VII, §702(b)(2), Dec. 26, 2013, 127 Stat. 1189, struck out item 1127 "Determining benchmark compensation amount".

SUBCHAPTER I—GENERAL

§1101. Office of Federal Procurement Policy

(a) Organization.—There is an Office of Federal Procurement Policy in the Office of Management and Budget.

(b) Purposes.—The purposes of the Office of Federal Procurement Policy are to—

(1) provide overall direction of Government-wide procurement policies, regulations, procedures, and forms for executive agencies; and

(2) promote economy, efficiency, and effectiveness in the procurement of property and services by the executive branch of the Federal Government.

(c) Authorization of Appropriations.—Necessary amounts may be appropriated each fiscal year for the Office of Federal Procurement Policy to carry out the responsibilities of the Office for that fiscal year.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3684.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
1101(a), (b)	41:404(a).	Pub. L. 93–400, §(5)(a), Aug. 30, 1974, 88 Stat. 797; Pub. L. 104–106, title XLIII, §4305(a)(1), Feb. 10, 1996, 110 Stat. 665.
1101(c)	41:410.	Pub. L. 93–400, §11, Aug. 30, 1974, 88 Stat. 799; Pub. L. 96–83, §7, Oct. 10, 1979, 93 Stat 651; Pub. L. 98–191, §6, Dec. 1, 1983, 97 Stat 1329; Pub. L. 100–679, §3(b), Nov. 17, 1988, 102 Stat 4056; Pub. L. 104–106, title XLIII, §4305(c)(2), Feb. 10, 1996, 110 Stat. 665.

Statutory Notes and Related Subsidiaries

Promoting Rigorous and Innovative Cost Efficiencies for Federal Procurement and Acquisitions

Pub. L. 117–88, Feb. 22, 2022, 136 Stat. 20, provided that:

"SECTION 1. SHORT TITLE.

"This Act may be cited as the 'Promoting Rigorous and Innovative Cost Efficiencies for Federal Procurement and Acquisitions Act of 2021' or the 'PRICE Act of 2021'.

"SEC. 2. FINDINGS.

"Congress finds that—

"(1) small business participation in the Federal marketplace is key to ensuring a strong industrial base;

"(2) the Business Opportunity Development Reform Act of 1988 (Public Law 100–656) [see Tables for classification] sets forth the requirement for the President to establish Government-wide goals for procurement contracts awarded to small businesses;

"(3) each year, the Small Business Administration works with each Federal agency to set their respective contracting goals and publishes a scorecard to ensure that the total of all Federal agency goals meets the required targets for the Federal Government;

"(4) the Department has received among the highest scorecard letter grades 10 years in a row and is the largest Federal agency to have such a track record;

"(5) in virtually every segment of the economy of the United States, including the homeland security community, there are small businesses working to support the mission and playing a critical role in delivering efficient and innovative solutions to the acquisition needs of the Federal Government;

"(6) the Procurement Innovation Lab of the Department—

"(A) is aimed at experimenting with innovative acquisition techniques across the Homeland Security Enterprise;

"(B) provides a forum to test new ideas, share lessons learned, and promote best practices;

"(C) fosters cultural changes that promote innovation and managed risk taking through a continuous cycle of testing, obtaining feedback, sharing information, and retesting where appropriate; and

"(D) aims to make the acquisition process more smooth and innovative within the construct of the Federal Acquisition Regulation for both the Federal Government and contractors; and

"(7) despite progress in the adoption of new and better business practices by many Federal agencies, the overall adoption of modernized business practices and advanced technologies across the Federal Government remains slow and uneven.

"SEC. 3. DEFINITIONS.

"In this Act:

"(1) Administrator.—The term 'Administrator' means the Administrator for Federal Procurement Policy.

"(2) Appropriate congressional committees.—The term 'appropriate congressional committees' means—

"(A) the Committee on Homeland Security and Governmental Affairs and the Committee on Small Business and Entrepreneurship of the Senate; and

"(B) the Committee on Homeland Security, the Committee on Oversight and Reform [now Committee on Oversight and Accountability], and the Committee on Small Business of the House of Representatives.

"(3) Council.—The term 'Council' means the Chief Acquisition Officers Council established under section 1311 of title 41, United States Code.

"(4) Department.—The term 'Department' means the Department of Homeland Security.

"(5) Homeland security enterprise.—The term 'Homeland Security Enterprise' has the meaning given the term in section 2211(h) of the Homeland Security Act of 2002 (6 U.S.C. 661(h)) [see 6 U.S.C. 650(11)].

"(6) Scorecard.—The term 'scorecard' means the scorecard described in section 868(b) of the National Defense Authorization Act for Fiscal Year 2016 [Pub. L. 114–92] (15 U.S.C. 644 note) [now 15 U.S.C. 644(y)(6)].

"(7) Secretary.—The term 'Secretary' means the Secretary of Homeland Security.

"(8) Small business.—The term 'small business' means—

"(A) a qualified HUBZone small business concern, a small business concern, a small business concern owned and controlled by service-disabled veterans, or a small business concern owned and controlled by women, as those terms are defined in section 3 of the Small Business Act (15 U.S.C. 632);

"(B) a small business concern owned and controlled by socially and economically disadvantaged individuals, as defined in section 8(d)(3)(C) of the Small Business Act (15 U.S.C. 637(d)(3)(C)); or

"(C) a small business concern unconditionally owned by an economically disadvantaged Indian tribe or an economically disadvantaged Native Hawaiian organization that qualifies as a socially and economically disadvantaged small business concern, as defined in section 8(a)(4) of the Small Business Act (15 U.S.C. 637(a)(4)).

"(9) Under secretary.—The term 'Under Secretary' means the Under Secretary for Management of the Department.

"SEC. 4. PROCUREMENT INNOVATION LAB REPORT.

"(a) Report.—The Under Secretary shall publish an annual report on a website of the Department on Procurement Innovation Lab projects that have used innovative techniques within the Department to accomplish—

"(1) improving or encouraging better competition;

"(2) reducing time to award;

"(3) cost savings;

"(4) better mission outcomes; or

"(5) meeting the goals for contracts awarded to small business concerns under section 15(g) of the Small Business Act (15 U.S.C. 644(g)).

"(b) Education.—The Under Secretary shall develop and disseminate guidance and offer training for contracting officers, contracting specialists, program managers, and other personnel of the Department, as determined appropriate by the Under Secretary, concerning when and how to use the innovative procurement techniques of the Department.

"(c) Best Practices.—The Under Secretary shall share best practices across the Department and make available to other Federal agencies information to improve procurement methods and training, as determined appropriate by the Under Secretary.

"(d) Sunset.—This section shall cease to be effective on the date that is 3 years after the date of enactment of this Act [Feb. 22, 2022].

"SEC. 5. COUNCIL.

"(a) Establishment.—Not later than 45 days after the date of enactment of this Act [Feb. 22, 2022], the Administrator shall convene the Council to examine best practices for acquisition innovation in contracting in the Federal Government, including small business contracting in accordance with the goals established under section 15(g) of the Small Business Act (15 U.S.C. 644(g)).

"(b) Working Group.—The Council may form a working group to address the requirements of this section, which, if formed, shall—

"(1) be chaired by the Administrator or a designee of the Administrator; and

"(2) be composed of—

"(A) the Chief Procurement Officer of the Department;

"(B) Council members from—

"(i) the General Services Administration;

"(ii) the Department of Defense;

"(iii) the Department of the Treasury;

"(iv) the Department of Veterans Affairs;

"(v) the Department of Health and Human Services;

"(vi) the Small Business Administration; and

"(vii) such other Federal agencies as determined by the chair of the Council from among Federal agencies that have demonstrated significant, sustained progress using innovative acquisition practices and technologies, including for small business contracting, during each of the 3 years preceding the date of enactment of this Act; and

"(C) other employees, as determined appropriate by the chair of the Council, of Federal agencies with the requisite senior experience to make recommendations to improve Federal agency efficiency, effectiveness, and economy, including in promoting small business contracting.

"(c) Duties of the Council.—The Council, or a working group formed under subsection (b), shall—

"(1) convene not later than 90 days after the date of enactment of this Act and thereafter on a quarterly basis until the Council submits the report required under subsection (d)(1); and

"(2) conduct outreach with the workforce and the public in meeting the requirements under subsection (d)(1).

"(d) Report.—

"(1) In general.—Not later than 1 year after the date of enactment of this Act, the Council shall submit to the appropriate congressional committees a report that describes—

"(A) innovative acquisition practices and applications of technologies that have worked well in achieving better procurement outcomes, including increased efficiency, improved program outcomes, better customer experience, and meeting or exceeding the goals under section 15(g) of the Small Business Act (15 U.S.C. 644(g)), and the reasons why those practices have succeeded;

"(B) steps to identify and adopt transformational commercial business practices, modernized data analytics, and advanced technologies that allow decision making to occur in a more friction-free buying environment and improve customer experience; and

"(C) any recommendations for statutory changes to accelerate the adoption of innovative acquisition practices.

"(2) Briefing.—Not later than 18 months after the date of enactment of this Act, the Administrator shall brief the appropriate congressional committees on the means by which the findings and recommendations of the report have been disseminated under paragraph (3).

"(3) Publication and dissemination of report findings.—To promote more rapid adoption of acquisition best practices, the Administrator shall—

"(A) publish the report required under paragraph (1) on the website of the Office of Management and Budget and on the Innovation Hub on the Acquisition Gateway or any successor Government-wide site available for increasing awareness of resources dedicated to procurement innovation; and

"(B) encourage the head of each Federal agency to maintain a site on the website of the Federal agency for acquisition and contracting professionals, program managers, members of the public, and others as appropriate that is—

"(i) dedicated to acquisition innovation; and

"(ii) identifies—

     "(I) resources, including the acquisition innovation advocate and industry liaison of the Federal agency;

     "(II) learning assets for the workforce, including the findings and recommendations made in the report required under paragraph (1);

     "(III) events to build awareness and understanding of innovation activities;

     "(IV) award recognition programs and recent recipients; and

     "(V) upcoming plans to leverage innovative practices and technologies.

"(e) Experts.—In carrying out the duties of the Council under this section, the Council is encouraged to consult with governmental and nongovernmental experts.

"(f) Termination.—The duties of the Council as set forth in this section shall terminate 30 days after the date on which the Council conducts the briefing required under subsection (d)(2)."

Requirements for Use of Appropriations by Executive Agencies for Services by Contract

Pub. L. 102–394, title V, §502, Oct. 6, 1992, 106 Stat. 1825, provided that: "No part of any appropriation contained in this Act or subsequent Departments of Labor, Health and Human Services, and Education, and Related Agencies Appropriations Acts shall be expended by an executive agency, as referred to in the Office of Federal Procurement Policy Act ([former] 41 U.S.C. 401 et seq.) [see this division (except sections 1123, 2303, 2304, and 2313)], pursuant to any obligation for services by contract, unless such executive agency has awarded and entered into such contract in full compliance with such Act and regulations promulgated thereunder."

Similar provisions were contained in the following prior appropriation acts:

Pub. L. 102–170, title V, §502, Nov. 26, 1991, 105 Stat. 1140.

Pub. L. 101–517, title V, §502, Nov. 5, 1990, 104 Stat. 2221.

Pub. L. 101–166, title V, §502, Nov. 21, 1989, 103 Stat. 1189.

Pub. L. 100–202, §101(h) [title V, §502], Dec. 22, 1987, 101 Stat. 1329–256, 1329-287.

Pub. L. 99–500, §101(i) [H.R. 5233, title V, §502], Oct. 18, 1986, 100 Stat. 1783–287, and Pub. L. 99–591, §101(i) [H.R. 5233, title V, §502], Oct. 30, 1986, 100 Stat. 3341–287.

Pub. L. 99–178, title V, §502, Dec. 12, 1985, 99 Stat. 1132.

Pub. L. 98–619, title V, §502, Nov. 8, 1984, 98 Stat. 3332.

Pub. L. 98–139, title V, §502, Oct. 31, 1983, 97 Stat. 899.

Pub. L. 97–377, title I, §101(e)(1) [title V, §502], Dec. 21, 1982, 96 Stat. 1878, 1904.

§1102. Administrator

(a) Head of Office.—The head of the Office of Federal Procurement Policy is the Administrator for Federal Procurement Policy.

(b) Appointment.—The Administrator is appointed by the President, by and with the advice and consent of the Senate.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3684.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
1102	41:404(b).	Pub. L. 93–400, §(5)(b), Aug. 30, 1974, 88 Stat. 797.

SUBCHAPTER II—AUTHORITY AND FUNCTIONS OF THE ADMINISTRATOR

§1121. General authority

(a) Overall Direction and Leadership.—The Administrator shall provide overall direction of procurement policy and leadership in the development of procurement systems of the executive agencies.

(b) Federal Acquisition Regulation.—To the extent that the Administrator considers appropriate in carrying out the policies and functions set forth in this division, and with due regard for applicable laws and the program activities of the executive agencies, the Administrator may prescribe Government-wide procurement policies. The policies shall be implemented in a single Government-wide procurement regulation called the Federal Acquisition Regulation.

(c) Policies To Be Followed by Executive Agencies.—

(1) Areas of procurement for which policies are to be followed.—The policies implemented in the Federal Acquisition Regulation shall be followed by executive agencies in the procurement of—

(A) property other than real property in being;

(B) services, including research and development; and

(C) construction, alteration, repair, or maintenance of real property.

(2) Procedures to ensure compliance.—The Administrator shall establish procedures to ensure compliance with the Federal Acquisition Regulation by all executive agencies.

(3) Application of other laws.—The authority of an executive agency under another law to prescribe policies, regulations, procedures, and forms for procurement is subject to the authority conferred in this section and sections 1122(a) to (c)(1), 1125, 1126, 1130, 1131, and 2305 of this title.

(d) When Certain Agencies Are Unable To Agree or Fail To Act.—In any instance in which the Administrator determines that the Department of Defense, the National Aeronautics and Space Administration, and the General Services Administration are unable to agree on or fail to issue Government-wide regulations, procedures, and forms in a timely manner, including regulations, procedures, and forms necessary to implement prescribed policy the Administrator initiates under subsection (b), the Administrator, with due regard for applicable laws and the program activities of the executive agencies and consistent with the policies and functions set forth in this division, shall prescribe Government-wide regulations, procedures, and forms which executive agencies shall follow in procuring items listed in subsection (c)(1).

(e) Oversight of Procurement Regulations of Other Agencies.—The Administrator, with the concurrence of the Director of the Office of Management and Budget, and with consultation with the head of the agency concerned, may deny the promulgation of or rescind any Government-wide regulation or final rule or regulation of any executive agency relating to procurement if the Administrator determines that the rule or regulation is inconsistent with any policies, regulations, or procedures issued pursuant to subsection (b).

(f) Limitation on Authority.—The authority of the Administrator under this division shall not be construed to—

(1) impair or interfere with the determination by executive agencies of their need for, or their use of, specific property, services, or construction, including particular specifications for the property, services, or construction; or

(2) interfere with the determination by executive agencies of specific actions in the award or administration of procurement contracts.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3684.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
1121(a)–(c) (1)	41:405(a).	Pub. L. 93–400, §6(a), Aug. 30, 1974, 88 Stat. 797; Pub. L. 96–83, §4, Oct. 10, 1979, 93 Stat. 649; Pub. L. 98–191, §5, Dec. 1, 1983, 97 Stat. 1326; Pub. L. 100–679, §3(a)(1), Nov. 17, 1988, 102 Stat. 4055.
1121(c)(2)	41:405a (1st sentence).	Pub. L. 95–507, title II, §222 (1st sentence), Oct. 24, 1978, 92 Stat. 1771.
1121(c)(3)	41:408.	Pub. L. 93–400, §9, Aug. 30, 1974, 88 Stat. 799.
1121(d)	41:405(b).	Pub. L. 93–400, §6(b), Aug. 30, 1974, 88 Stat. 797; Pub. L. 96–83, §4, Oct. 10, 1979, 93 Stat. 649; Pub. L. 98–191, §5, Dec. 1, 1983, 97 Stat. 1327; Pub. L. 100–679, §3(a)(2), Nov. 17, 1988, 102 Stat. 4055; Pub. L. 104–106, title XLIII, §4322(a)(1), Feb. 10, 1996, 110 Stat. 677.
1121(e)	41:405(f).	Pub. L. 93–400, §6(f), Aug. 30, 1974, 88 Stat. 797; Pub. L. 96–83, §4, Oct. 10, 1979, 93 Stat. 649; Pub. L. 98–191, §5, Dec. 1, 1983, 97 Stat. 1328; Pub. L. 100–679, §3(a)(4), Nov. 17, 1988, 102 Stat. 4056; Pub. L. 104–201, title X, §1074(f)(1), Sept. 23, 1996, 110 Stat. 2661.
1121(f)	41:405(c).	Pub. L. 93–400, §6(c), Aug. 30, 1974, 88 Stat. 797; Pub. L. 96–83, §4, Oct. 10, 1979, 93 Stat. 649; Pub. L. 98–191, §5, Dec. 1, 1983, 97 Stat. 1327.

In subsection (c)(2), the text of 41:405a (1st sentence relating to promulgating a single, simplified, uniform Federal procurement regulation) is omitted as superseded by 41:405(a) because of section 11 of the Office of Federal Procurement Policy Act Amendments of 1979 (Public Law 96–83, 93 Stat. 652).

Statutory Notes and Related Subsidiaries

Supersedure of Inconsistent Statutory Provisions

Pub. L. 96–83, §11, Oct. 10, 1979, 93 Stat. 652, provided that: "The provisions of the Act [Pub. L. 93–400, Aug. 30, 1974, 88 Stat. 796, see this division (except sections 1123, 2303, 2304, and 2313)] as amended by this Act [see Short Title of 1979 Act note set out under section 101 of this title] shall supersede the provisions of section 222 of the Act of October 24, 1978, entitled 'An Act to amend the Small Business Act and the Small Business Investment Act of 1958' ([former] 41 U.S.C. 405a) [now 41 U.S.C. 1121(c)(2), 1123] to the extent they are inconsistent therewith."

Federal Support for Enhancement of State and Local Anti-Terrorism Response Capabilities

Pub. L. 108–136, div. A, title VIII, §803, Nov. 24, 2003, 117 Stat. 1541, provided that:

"(a) Procurements of Anti-Terrorism Technologies and Services by State and Local Governments.—The Administrator for Federal Procurement Policy shall establish a program under which States and units of local government may procure through contracts entered into by the Department of Defense or the Department of Homeland Security anti-terrorism technologies or anti-terrorism services for the purpose of preventing, detecting, identifying, deterring, or recovering from acts of terrorism.

"(b) Authorities.—Under the program, the Secretary of Defense and the Secretary of Homeland Security may, but shall not be required to, award contracts using the procedures established by the Administrator of General Services for the multiple awards schedule program of the General Services Administration.

"(c) Definition.—In this section, the term 'State or local government' has the meaning provided in section 502(c)(3) of title 40, United States Code."

Profit Methodology Study

Pub. L. 100–679, §7, Nov. 17, 1988, 102 Stat. 4068, provided that:

"(a) In General.—The Administrator shall conduct a study to develop a consistent methodology which executive agencies should use for measuring the profits earned by government contractors on procurements, other than procurements where the price is based on adequate price competition or on established catalog or market prices of commercial items sold in substantial quantities to the general public.

"(b) Contractors' Financial Data.—The methodology developed under subsection (a) shall include adequate procedures for verifying and maintaining the confidentiality of contractors' financial data."

§1122. Functions

(a) In General.—The functions of the Administrator include—

(1) providing leadership and ensuring action by the executive agencies in establishing, developing, and maintaining the single system of simplified Government-wide procurement regulations and resolving differences among the executive agencies in developing simplified Government-wide procurement regulations, procedures, and forms;

(2) coordinating the development of Government-wide procurement system standards that executive agencies shall implement in their procurement systems;

(3) providing leadership and coordination in formulating the executive branch position on legislation relating to procurement;

(4)(A) providing for and directing the activities of the computer-based Federal Procurement Data System (including recommending to the Administrator of General Services a sufficient budget for those activities), which shall be located in the General Services Administration, in order to adequately collect, develop, and disseminate procurement data; and

(B) ensuring executive agency compliance with the record requirements of section 1712 of this title;

(5) providing for and directing the activities of the Federal Acquisition Institute established under section 1201 of this title, including recommending to the Administrator of General Services a sufficient budget for such activities.¹

(6) administering section 1703(a) to (i) of this title;

(7) establishing criteria and procedures to ensure the effective and timely solicitation of the viewpoints of interested parties in the development of procurement policies, regulations, procedures, and forms;

(8) developing standard contract forms and contract language in order to reduce the Federal Government's cost of procuring property and services and the private sector's cost of doing business with the Federal Government;

(9) providing for a Government-wide award to recognize and promote vendor excellence;

(10) providing for a Government-wide award to recognize and promote excellence in officers and employees of the Federal Government serving in procurement-related positions;

(11) developing policies, in consultation with the Administrator of the Small Business Administration, that ensure that small businesses, qualified HUBZone small business concerns (as defined in section 31(b) of the Small Business Act), small businesses owned and controlled by socially and economically disadvantaged individuals, and small businesses owned and controlled by women are provided with the maximum practicable opportunities to participate in procurements that are conducted for amounts below the simplified acquisition threshold;

(12) developing policies that will promote achievement of goals for participation by small businesses, small business concerns owned and controlled by service-disabled veterans, qualified HUBZone small business concerns (as defined in section 31(b) of the Small Business Act), small businesses owned and controlled by socially and economically disadvantaged individuals, and small businesses owned and controlled by women; and

(13) completing action, as appropriate, on the recommendations of the Commission on Government Procurement.

(b) Consultation and Assistance.—In carrying out the functions in subsection (a), the Administrator—

(1) shall consult with the affected executive agencies, including the Small Business Administration;

(2) with the concurrence of the heads of affected executive agencies, may designate one or more executive agencies to assist in performing those functions; and

(3) may establish advisory committees or other interagency groups to assist in providing for the establishment, development, and maintenance of a single system of simplified Government-wide procurement regulations and to assist in performing any other function the Administrator considers appropriate.

(c) Assignment, Delegation, or Transfer.—

(1) To administrator.—Except as otherwise provided by law, only duties, functions, or responsibilities expressly assigned by this division shall be assigned, delegated, or transferred to the Administrator.

(2) By administrator.—

(A) Within office.—The Administrator may make and authorize delegations within the Office of Federal Procurement Policy that the Administrator determines to be necessary to carry out this division.

(B) To another executive agency.—The Administrator may delegate, and authorize successive redelegations of, an authority, function, or power of the Administrator under this division (other than the authority to provide overall direction of Federal procurement policy and to prescribe policies and regulations to carry out the policy) to another executive agency with the consent of the head of the executive agency or at the direction of the President.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3685; Pub. L. 112–81, div. A, title VIII, §864(b)(3), Dec. 31, 2011, 125 Stat. 1524; Pub. L. 115–91, div. A, title XVII, §1701(a)(4)(F)(i), Dec. 12, 2017, 131 Stat. 1796.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
1122(a)	41:405(d).	Pub. L. 93–400, §6(d), Aug. 30, 1974, 88 Stat. 797; Pub. L. 96–83, §4, Oct. 10, 1979, 93 Stat. 649; Pub. L. 98–191, §5, Dec. 1, 1983, 97 Stat. 1327; Pub. L. 100–679, §3(a)(3), Nov. 17, 1988, 102 Stat. 4055; Pub. L. 103–355, title V, §5091, title VII, §7108, Oct. 13, 1994, 108 Stat. 3361, 3378; Pub. L. 104–106, title XLIII, §§4307(b), 4321(h)(1), (2), Feb. 10, 1996, 110 Stat. 668, 675; Pub. L. 105–85, title X, §1073(g)(2)(B), Nov. 18, 1997, 111 Stat. 1906; Pub. L. 105–135, title VI, §604(f)(1), Dec. 2, 1997, 111 Stat. 2634.
1122(b)	41:405(e).	Pub. L. 93–400, §6(e), Aug. 30, 1974, 88 Stat. 797; Pub. L. 96–83, §4, Oct. 10, 1979, 93 Stat. 649; Pub. L. 98–191, §5, Dec. 1, 1983, 97 Stat. 1328; Pub. L. 98–369, title VII, §2732(b)(1), July 18, 1984, 98 Stat. 1199.
1122(c)(1)	41:405(g).	Pub. L. 93–400, §6(g), Aug. 30, 1974, 88 Stat. 797; Pub. L. 96–83, §4, Oct. 10, 1979, 93 Stat. 649; Pub. L. 98–191, §5, Dec. 1, 1983, 97 Stat. 1328.
1122(c)(2)(A)	41:411(b).	Pub. L. 93–400, §12, Aug. 30, 1974, 88 Stat. 799; Pub. L. 96–83, §8, Oct. 10, 1979, 93 Stat. 652; Pub. L. 98–191, §8(c), Dec. 1, 1983, 97 Stat. 1331.
1122(c)(2)(B)	41:411(a).

In clause (12), the words "small business concerns owned and controlled by service-disabled veterans" are added to conform to section 15(g)(1) of the Small Business Act (15:644(g)(1)).

Editorial Notes

References in Text

Section 31(b) of the Small Business Act, referred to in subsec. (a)(11), (12), is classified to section 657a(b) of Title 15, Commerce and Trade.

Amendments

2017—Subsec. (a)(11), (12). Pub. L. 115–91, §1701(a)(4)(F)(i), substituted "section 31(b) of the Small Business Act" for "section 3(p) of the Small Business Act (15 U.S.C. 632(p))".

2011—Subsec. (a)(5). Pub. L. 112–81 amended par. (5) generally. Prior to amendment, par. (5) related to the purposes of the activities of the Federal Acquisition Institute.

Statutory Notes and Related Subsidiaries

Effective Date of 2017 Amendment

Amendment by Pub. L. 115–91 effective Jan. 1, 2020, see section 1701(j) of Pub. L. 115–91, set out as a note under section 657a of Title 15, Commerce and Trade.

Revision to the Federal Procurement Data System

Pub. L. 116–92, div. A, title VIII, §806(b), Dec. 20, 2019, 133 Stat. 1485, provided that: "Not later than 180 days after the date of the enactment of this Act [Dec. 20, 2019], the Administrator of General Services, in coordination with the Administrator for Federal Procurement Policy, shall direct appropriate revisions to the Federal procurement data system established pursuant to section 1122(a)(4) of title 41, United States Code (or any successor system), to facilitate the collection of complete, timely, and reliable data on the source selection processes used by Federal agencies for the contract actions being reported in the system. The Administrator of General Services shall ensure that data are collected—

"(1) at a minimum, on the usage of the lowest price technically acceptable contracting methods and best value contracting methods process; and

"(2) on all applicable contracting actions, including task orders or delivery orders issued under indefinite delivery-indefinite quantity contracts."

Procurement Administrative Lead Time Definition and Plan

Pub. L. 115–232, div. A, title VIII, §878, Aug. 13, 2018, 132 Stat. 1908, provided that:

"(a) In General.—Not later than 180 days after the date of the enactment of this Act [Aug. 13, 2018], the Administrator for Federal Procurement Policy shall develop, make available for public comment, and finalize—

"(1) a definition of the term 'Procurement administrative lead time' or 'PALT', to be applied Government-wide, that describes the amount of time from the date on which a solicitation for a contract or task order is issued to the date of an initial award of the contract or task order; and

"(2) a plan for measuring and publicly reporting data on PALT for Federal Government contracts and task orders in amounts greater than the simplified acquisition threshold.

"(b) Requirement for Definition.—Unless the Administrator determines otherwise, the amount of time in the definition of PALT developed under subsection (a) shall—

"(1) begin on the date on which an initial solicitation is issued by a Federal department or agency for a contract or task order; and

"(2) end on the date of the award of the contract or task order.

"(c) Coordination.—In developing the definition of PALT, the Administrator shall coordinate with—

"(1) the senior procurement executives of Federal agencies;

"(2) the Secretary of Defense; and

"(3) the Administrator of the General Services Administration on modifying the existing data system of the Federal Government to determine the date on which the initial solicitation is issued.

"(d) Use of Existing Procurement Data System.—In developing the plan for measuring and publicly reporting data on PALT required by subsection (a), the Administrator shall, to the maximum extent practicable, rely on the information contained in the Federal procurement data system established pursuant to section 1122(a)(4) of title 41, United States Code, including any modifications to that system."

Pilot Program To Inventory Cost and Size of Service Contracts

Pub. L. 110–161, div. D, title VII, §748, Dec. 26, 2007, 121 Stat. 2035, provided that: "No later than 180 days after enactment of this Act [Dec. 26, 2007], the Office of Management and Budget shall establish a pilot program to develop and implement an inventory to track the cost and size (in contractor manpower equivalents) of service contracts, particularly with respect to contracts that have been performed poorly by a contractor because of excessive costs or inferior quality, as determined by a contracting officer within the last five years, involve inherently governmental functions, or were undertaken without competition. The pilot program shall be established in at least three Cabinet-level departments, based on varying levels of annual contracting for services, as reported by the Federal Procurement Data System's Federal Procurement Report for fiscal year 2005, including at least one Cabinet-level department that contracts out annually for $10,000,000,000 or more in services, at least one Cabinet-level department that contracts out annually for between $5,000,000,000 and $9,000,000,000 in services, and at least one Cabinet-level department that contracts out annually for under $5,000,000,000 in services."

Reporting of Bundled Contract Opportunities

Pub. L. 105–135, title IV, §414, Dec. 2, 1997, 111 Stat. 2619, provided that:

"(a) Data Collection Required.—The Federal Procurement Data System described in section 6(d)(4)(A) of the Office of Federal Procurement Policy Act ([former] 41 U.S.C. 405(d)(4)(A)) [now 41 U.S.C. 1122(a)(4)(A)] shall be modified to collect data regarding bundling of contract requirements when the contracting officer anticipates that the resulting contract price, including all options, is expected to exceed $5,000,000. The data shall reflect a determination made by the contracting officer regarding whether a particular solicitation constitutes a contract bundling.

"(b) Definitions.—In this section, the term 'bundling of contract requirements' has the meaning given that term in section 3(o) of the Small Business Act (15 U.S.C. 632(o)) (as added by section 412 of this subtitle)."

Results-Oriented Acquisition Process

Pub. L. 103–355, title V, §5052, Oct. 13, 1994, 108 Stat. 3352, provided that:

"(a) Development of Process Required.—The Administrator for Federal Procurement Policy, in consultation with the heads of appropriate Federal agencies, shall develop results-oriented acquisition process guidelines for implementation by agencies in acquisitions of property and services by the Federal agencies. The process guidelines shall include the identification of quantitative measures and standards for determining the extent to which an acquisition of items other than commercial items by a Federal agency satisfies the needs for which the items are being acquired.

"(b) Inapplicability of Process to Department of Defense.—The process guidelines developed pursuant to subsection (a) may not be applied to the Department of Defense."

Data Collection Through Federal Procurement Data System

Pub. L. 103–355, title X, §10004, Oct. 13, 1994, 108 Stat. 3405, as amended by Pub. L. 115–232, div. A, title VIII, §812(a)(2)(C)(iv), Aug. 13, 2018, 132 Stat. 1847, provided that:

"(a) Data Collection Required.—The Federal Procurement Data System described in section 6(d)(4)(A) of the Office of Federal Procurement Policy Act ([former] 41 U.S.C. 405(d)(4)(A)) [now 41 U.S.C. 1122(a)(4)(A)] shall be modified to collect from contracts in excess of the simplified acquisition threshold data identifying the following matters:

"(1) Contract awards made pursuant to competitions conducted pursuant to section 7102 of the Federal Acquisition Streamlining Act of 1994 [Pub. L. 103–355, 15 U.S.C. 644 note].

"(2) Awards to business concerns owned and controlled by women.

"(3) Number of offers received in response to a solicitation.

"(4) Task order contracts.

"(5) Contracts for the acquisition of commercial items.

"(b) Definition.—In this section, the term 'simplified acquisition threshold' has the meaning given such term in section 4(11) of the Office of Federal Procurement Policy Act ([former] 41 U.S.C. 403(11)) [now 41 U.S.C. 134]."

¹ So in original. The period probably should be a semicolon.

§1123. Small business concerns

In formulating the Federal Acquisition Regulation and procedures to ensure compliance with the Regulation, the Administrator, in consultation with the Small Business Administration, shall—

(1) conduct analyses of the impact on small business concerns resulting from revised procurement regulations; and

(2) incorporate into revised procurement regulations simplified bidding, contract performance, and contract administration procedures for small business concerns.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3687.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
1123	41:405a (last sentence).	Pub. L. 95–507, title II, §222 (last sentence), Oct. 24, 1978, 92 Stat. 1771.

§1124. Tests of innovative procurement methods and procedures

(a) In General.—The Administrator may develop innovative procurement methods and procedures to be tested by selected executive agencies. In developing a program to test innovative procurement methods and procedures under this subsection, the Administrator shall consult with the heads of executive agencies to—

(1) ascertain the need for and specify the objectives of the program;

(2) develop the guidelines and procedures for carrying out the program and the criteria to be used in measuring the success of the program;

(3) evaluate the potential costs and benefits which may be derived from the innovative procurement methods and procedures tested under the program;

(4) select the appropriate executive agencies or components of executive agencies to carry out the program;

(5) specify the categories and types of products or services to be procured under the program; and

(6) develop the methods to be used to analyze the results of the program.

(b) Approval of Executive Agencies Required.—A program to test innovative procurement methods and procedures may not be carried out unless approved by the heads of the executive agencies selected to carry out the program.

(c) Request for Waiver of Law.—If the Administrator determines that it is necessary to waive the application of a provision of law to carry out a proposed program to test innovative procurement methods and procedures under subsection (a), the Administrator shall transmit notice of the proposed program to the Committee on Oversight and Government Reform of the House of Representatives and the Committee on Homeland Security and Governmental Affairs of the Senate and request that the Committees take the necessary action to provide that the provision of law does not apply with respect to the proposed program. The notification to Congress shall include—

(1) a description of the proposed program (including the scope and purpose of the proposed program);

(2) the procedures to be followed in carrying out the proposed program;

(3) the provisions of law affected and the application of any provision of law that must be waived in order to carry out the proposed program; and

(4) the executive agencies involved in carrying out the proposed program.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3688.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
1124(a)	41:413(a) (1st, 2d sentences).	Pub. L. 93–400, §15, as added Pub. L. 98–191, §7, Dec. 1, 1983, 97 Stat. 1329; Pub. L. 104–201, title X, §1074(f)(2), Sept. 23, 1996, 110 Stat. 2661.
1124(b)	41:413(a) (last sentence).
1124(c)	41:413(b).

In subsection (c), the words "Committee on Oversight and Government Reform" are substituted for "Committee on Government Operations" on authority of section 1(a)(6) of Public Law 104–14 (2 U.S.C. note prec. 21), Rule X(1)(h) of the Rules of the House of Representatives, adopted by House Resolution No. 5 (106th Congress, January 6, 1999), and Rule X(1)(m) of the Rules of the House of Representatives, adopted by House Resolution No. 6 (110th Congress, January 5, 2007). The words "Committee on Homeland Security and Governmental Affairs" are substituted for "Committee on Governmental Affairs" on authority of Senate Resolution No. 445 (108th Congress, October 9, 2004).

Statutory Notes and Related Subsidiaries

Change of Name

Committee on Oversight and Government Reform of House of Representatives changed to Committee on Oversight and Reform of House of Representatives by House Resolution No. 6, One Hundred Sixteenth Congress, Jan. 9, 2019. Committee on Oversight and Reform of House of Representatives changed to Committee on Oversight and Accountability of House of Representatives by House Resolution No. 5, One Hundred Eighteenth Congress, Jan. 9, 2023.

§1125. Recipients of Federal grants or assistance

(a) Authority.—With due regard to applicable laws and the program activities of the executive agencies administering Federal programs of grants or assistance, the Administrator may prescribe Government-wide policies, regulations, procedures, and forms that the Administrator considers appropriate and that executive agencies shall follow in providing for the procurement, to the extent required under those programs, of property or services referred to in section 1121(c)(1) of this title by recipients of Federal grants or assistance under the programs.

(b) Limitation.—Subsection (a) does not—

(1) permit the Administrator to authorize procurement or supply support, either directly or indirectly, to a recipient of a Federal grant or assistance; or

(2) authorize action by a recipient contrary to State and local law in the case of a program to provide a Federal grant or assistance to a State or political subdivision.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3688.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
1125(a)	41:405(i)(1).	Pub. L. 93–400, §6(i), Aug. 30, 1974, 88 Stat. 797; Pub. L. 96–83, §4, Oct. 10, 1979, 93 Stat. 649; Pub. L. 98–191, §5, Dec. 1, 1983, 97 Stat. 1328.
1125(b)	41:405(i)(2).

§1126. Policy regarding consideration of contractor past performance

(a) Guidance.—The Administrator shall prescribe for executive agencies guidance regarding consideration of the past contract performance of offerors in awarding contracts. The guidance shall include—

(1) standards for evaluating past performance with respect to cost (when appropriate), schedule, compliance with technical or functional specifications, and other relevant performance factors that facilitate consistent and fair evaluation by all executive agencies;

(2) policies for the collection and maintenance of information on past contract performance that, to the maximum extent practicable, facilitate automated collection, maintenance, and dissemination of information and provide for ease of collection, maintenance, and dissemination of information by other methods, as necessary;

(3) policies for ensuring that—

(A) offerors are afforded an opportunity to submit relevant information on past contract performance, including performance under contracts entered into by the executive agency concerned, other departments and agencies of the Federal Government, agencies of State and local governments, and commercial customers; and

(B) the information submitted by offerors is considered; and

(4) the period for which information on past performance of offerors may be maintained and considered.

(b) Information Not Available.—If there is no information on past contract performance of an offeror or the information on past contract performance is not available, the offeror may not be evaluated favorably or unfavorably on the factor of past contract performance.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3689.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
1126(a)	41:405(j)(1).	Pub. L. 93–400, §6(j), as added Pub. L. 103–355, title I, §1091(b)(2), Oct. 13, 1994, 108 Stat. 3272.
1126(b)	41:405(j)(2).

Statutory Notes and Related Subsidiaries

Inclusion of Data on Contractor Performance in Past Performance Databases for Executive Agency Source Selection Decisions

Pub. L. 112–239, div. A, title VIII, §853, Jan. 2, 2013, 126 Stat. 1856, provided that:

"(a) Strategy Required.—

"(1) In general.—Not later than 180 days after the date of the enactment of this Act [Jan. 2, 2013], the Federal Acquisition Regulatory Council shall develop a strategy for ensuring that timely, accurate, and complete information on contractor performance is included in past performance databases used by executive agencies for making source selection decisions.

"(2) Consultation with usdatl.—In developing the strategy required by this subsection, the Federal Acquisition Regulatory Council shall consult with the Under Secretary of Defense for Acquisition, Technology, and Logistics to ensure that the strategy is, to the extent practicable, consistent with the strategy developed by the Under Secretary pursuant to section 806 of the National Defense Authorization Act for Fiscal Year 2012 (Public Law 112–81; 125 Stat. 1487; 10 U.S.C. 2302 note).

"(b) Elements.—The strategy required by subsection (a) shall, at a minimum—

"(1) establish standards for the timeliness and completeness of past performance submissions for purposes of databases described in subsection (a);

"(2) assign responsibility and management accountability for the completeness of past performance submissions for such purposes; and

"(3) ensure that past performance submissions for such purposes are consistent with award fee evaluations in cases where such evaluations have been conducted.

"(c) Contractor Comments.—Not later than 180 days after the date of the enactment of this Act [Jan. 2, 2013], the Federal Acquisition Regulation shall be revised to require the following:

"(1) That affected contractors are provided, in a timely manner, information on contractor performance to be included in past performance databases in accordance with subsection (a).

"(2) That such contractors are afforded up to 14 calendar days, from the date of delivery of the information provided in accordance with paragraph (1), to submit comments, rebuttals, or additional information pertaining to past performance for inclusion in such databases.

"(3) That agency evaluations of contractor past performance, including any comments, rebuttals, or additional information submitted under paragraph (2), are included in the relevant past performance database not later than the date that is 14 days after the date of delivery of the information provided in accordance with paragraph (1).

"(d) Construction.—Nothing in this section shall be construed to prohibit a contractor from submitting comments, rebuttals, or additional information pertaining to past performance after the period described in subsection (c)(2) has elapsed or to prohibit a contractor from challenging a past performance evaluation in accordance with applicable laws, regulations, or procedures.

"(e) Comptroller General Report.—Not later than 18 months after the date of the enactment of this Act [Jan. 2, 2013], the Comptroller General of the United States shall submit to the appropriate committees of Congress a report on the actions taken by the Federal Acquisition Regulatory Council pursuant to this section, including an assessment of the following:

"(1) The extent to which the strategy required by subsection (a) is consistent with the strategy developed by the Under Secretary of Defense for Acquisition, Technology, and Logistics as described in subsection (a)(2).

"(2) The extent to which the actions of the Federal Acquisition Regulatory Council pursuant to this section have otherwise achieved the objectives of this section.

"(f) Definitions.—In this section:

"(1) The term 'appropriate committees of Congress' means—

"(A) the Committee on Armed Services, the Committee on Foreign Relations, the Committee on Homeland Security and Governmental Affairs, and the Committee on Appropriations of the Senate; and

"(B) the Committee on Armed Services, the Committee on Foreign Affairs, the Committee on Oversight and Government Reform [now Committee on Oversight and Accountability], and the Committee on Appropriations of the House of Representatives.

"(2) The term 'executive agency' has the meaning given that term in section 133 of title 41, United States Code, except that the term excludes the Department of Defense and the military departments.

"(3) The term 'Federal Acquisition Regulatory Council' means the Federal Acquisition Regulatory Council under section 1302(a) of title 41, United States Code."

Congressional Findings Regarding Consideration of Past Contract Performance

Pub. L. 103–355, title I, §1091(b)(1), Oct. 13, 1994, 108 Stat. 3272, provided that: "Congress makes the following findings:

"(A) Past contract performance of an offeror is one of the relevant factors that a contracting official of an executive agency should consider in awarding a contract.

"(B) It is appropriate for a contracting official to consider past contract performance of an offeror as an indicator of the likelihood that the offeror will successfully perform a contract to be awarded by that official."

§1127. Determining benchmark compensation amount

(a) Definitions.—In this section:

(1) Benchmark compensation amount.—The term "benchmark compensation amount", for a fiscal year, is the median amount of the compensation provided for all senior executives of all benchmark corporations for the most recent year for which data is available at the time the determination under subsection (b) is made.

(2) Benchmark corporation.—The term "benchmark corporation", with respect to a fiscal year, means a publicly-owned United States corporation that has annual sales in excess of $50,000,000 for the fiscal year.

(3) Compensation.—The term "compensation", for a fiscal year, means the total amount of wages, salary, bonuses, and deferred compensation for the fiscal year, whether paid, earned, or otherwise accruing, as recorded in an employer's cost accounting records for the fiscal year.

(4) Fiscal year.—The term "fiscal year" means a fiscal year a contractor establishes for accounting purposes.

(5) Publicly-owned united states corporation.—The term "publicly-owned United States corporation" means a corporation—

(A) organized under the laws of a State of the United States, the District of Columbia, Puerto Rico, or a possession of the United States; and

(B) whose voting stock is publicly traded.

(6) Senior executives.—The term "senior executives", with respect to a contractor, means the 5 most highly compensated employees in management positions at each home office and each segment of the contractor.

(b) Determining Benchmark Compensation Amount.—For purposes of section 4304(a)(16) of this title and section 3744(a)(16) of title 10, the Administrator shall review commercially available surveys of executive compensation and, on the basis of the results of the review, determine a benchmark compensation amount to apply for each fiscal year. In making determinations under this subsection, the Administrator shall consult with the Director of the Defense Contract Audit Agency and other officials of executive agencies as the Administrator considers appropriate.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3689; Pub. L. 117–81, div. A, title XVII, §1702(h)(1), Dec. 27, 2021, 135 Stat. 2158.)

Repeal of Section

Pub. L. 113–67, div. A, title VII, §702(b)(1), (c), Dec. 26, 2013, 127 Stat. 1189, repealed this section applicable only with respect to costs of compensation incurred under contracts entered into on or after the date that is 180 days after Dec. 26, 2013.

Pub. L. 113–66, div. A, title VIII, §811(c)(1), (d), Dec. 26, 2013, 127 Stat. 806, repealed this section applicable with respect to costs of compensation incurred under contracts entered into on or after the date that is 180 days after Dec. 26, 2013.

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
1127(a)(1)	41:435(b).	Pub. L. 93–400, §39, as added Pub. L. 105–85, title VIII, §808(c)(1), Nov. 18, 1997, 111 Stat. 1837; Pub. L. 105–261, title VIII, §804(c)(1), Oct. 17, 1998, 112 Stat. 2083.
1127(a)(2)	41:435(c)(3).
1127(a)(3)	41:435(c)(1).
1127(a)(4)	41:435(c)(5).
1127(a)(5)	41:435(c)(4).
1127(a)(6)	41:435(c)(2).
1127(b)	41:435(a).

Editorial Notes

Amendments

2021—Subsec. (b). Pub. L. 117–81 substituted "section 3744(a)(16)" for "section 2324(e)(1)(P)".

Statutory Notes and Related Subsidiaries

Effective Date of Repeal

Repeal by Pub. L. 113–67 applicable only with respect to costs of compensation incurred under contracts entered into on or after the date that is 180 days after Dec. 26, 2013, see section 702(c) of Pub. L. 113–67, set out as an Effective Date of 2013 Amendment note under section 4304 of this title.

Repeal by Pub. L. 113–66 applicable with respect to costs of compensation incurred under contracts entered into on or after the date that is 180 days after Dec. 26, 2013, see section 811(d) of Pub. L. 113–66, set out as an Effective Date of 2013 Amendment note under section 4304 of this title.

Exclusive Applicability of Provisions Limiting Allowability of Compensation for Certain Contractor Personnel

Pub. L. 105–85, div. A, title VIII, §808(f), Nov. 18, 1997, 111 Stat. 1838, provided that: "Notwithstanding any other provision of law, no other limitation in law on the allowability of costs of compensation of senior executives under covered contracts shall apply to such costs of compensation incurred after January 1, 1998."

Definitions for Purposes of Section 808 of Pub. L. 105–85

Pub. L. 105–85, div. A, title VIII, §808(g), Nov. 18, 1997, 111 Stat. 1838, as amended by Pub. L. 105–261, div. A, title VIII, §804(c)(2), Oct. 17, 1998, 112 Stat. 2083, provided that: "In this section [see Tables for classification]:

"(1) The term 'covered contract' has the meaning given such term in section 2324(l) of title 10, United States Code [see 10 U.S.C. 3741], and section 306(l) of the Federal Property and Administrative Services Act of 1949 ([former] 41 U.S.C. 256(l)) [see 41 U.S.C. 4301].

"(2) The terms 'compensation' and 'senior executives' have the meanings given such terms in section 2324(l) of title 10, United States Code [see 10 U.S.C. 3741 as to "compensation" and former 10 U.S.C. 2324(l)(5) as to "senior executives"], and section 306(m) of the Federal Property and Administrative Services Act of 1949 [see 41 U.S.C. 4301]."

§1128. Maintaining necessary capability with respect to acquisition of architectural and engineering services

The Administrator, in consultation with the Secretary of Defense, the Administrator of General Services, and the Director of the Office of Personnel Management, shall develop and implement a plan to ensure that the Federal Government maintains the necessary capability with respect to the acquisition of architectural and engineering services to—

(1) ensure that Federal Government employees have the expertise to determine agency requirements for those services;

(2) establish priorities and programs, including acquisition plans;

(3) establish professional standards;

(4) develop scopes of work; and

(5) award and administer contracts for those services.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3690.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
1128	41:433 note.	Pub. L. 108–136, title XIV, §1414, Nov. 24, 2003, 117 Stat. 1666.

§1129. Center of excellence in contracting for services

The Administrator shall maintain a center of excellence in contracting for services. The center shall assist the acquisition community by identifying, and serving as a clearinghouse for, best practices in contracting for services in the public and private sectors.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3690.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
1129	41:405 note.	Pub. L. 108–136, title XIV, §1431(b), Nov. 24, 2003, 117 Stat. 1671.

The words "Not later than 180 days after the date of the enactment of this Act" are omitted, and the word "maintain" is substituted for "establish", to eliminate obsolete words.

§1130. Effect of division on other law

This division does not impair or affect the authorities or responsibilities relating to the procurement of real property conferred by division C of this subtitle and chapters 1 to 11 of title 40.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3690.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
1130	41:405(h)(1).	Pub. L. 93–400, §6(h)(1), Aug. 30, 1974, 88 Stat. 797; Pub. L. 96–83, §4, Oct. 10, 1979, 93 Stat. 649; Pub. L. 98–191, §5, Dec. 1, 1983, 97 Stat. 1328; Pub. L. 104–106, title LVI, §5607(d), Feb. 10, 1996, 110 Stat. 702.

§1131. Annual report

The Administrator annually shall submit to Congress an assessment of the progress made in executive agencies in implementing the policy regarding major acquisitions that is stated in section 3103(a) of this title. The Administrator shall use data from existing management systems in making the assessment.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3690.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
1131	41:405(k).	Pub. L. 93–400, §6(k), as added Pub. L. 103–355, title V, §5051(b), Oct. 13, 1994, 108 Stat. 3351; Pub. L. 105–85, title VIII, §851(b), Nov. 18, 1997, 111 Stat. 1851.

CHAPTER 12—FEDERAL ACQUISITION INSTITUTE

        

§1201. Federal Acquisition Institute

(a) In General.—There is established a Federal Acquisition Institute (FAI) in order to—

(1) foster and promote the development of a professional acquisition workforce Government-wide;

(2) promote and coordinate Government-wide research and studies to improve the procurement process and the laws, policies, methods, regulations, procedures, and forms relating to acquisition by the executive agencies;

(3) collect data and analyze acquisition workforce data from the Office of Personnel Management, the heads of executive agencies, and, through periodic surveys, from individual employees;

(4) periodically analyze acquisition career fields to identify critical competencies, duties, tasks, and related academic prerequisites, skills, and knowledge;

(5) coordinate and assist agencies in identifying and recruiting highly qualified candidates for acquisition fields;

(6) develop instructional materials for acquisition personnel in coordination with private and public acquisition colleges and training facilities;

(7) evaluate the effectiveness of training and career development programs for acquisition personnel;

(8) promote the establishment and utilization of academic programs by colleges and universities in acquisition fields;

(9) facilitate, to the extent requested by agencies, interagency intern and training programs;

(10) collaborate with other civilian agency acquisition training programs to leverage training supporting all members of the civilian agency acquisition workforce;

(11) assist civilian agencies with their acquisition and capital planning efforts; and

(12) perform other career management or research functions as directed by the Administrator.

(b) Budget Resources and Authority.—

(1) In general.—The Administrator shall recommend to the Administrator of General Services sufficient budget resources and authority for the Federal Acquisition Institute to support Government-wide training standards and certification requirements necessary to enhance the mobility and career opportunities of the Federal acquisition workforce.

(2) Acquisition workforce training fund.—Subject to the availability of funds, the Administrator of General Services shall provide the Federal Acquisition Institute with amounts from the acquisition workforce training fund established under section 1703(i) of this title sufficient to meet the annual budget for the Federal Acquisition Institute requested by the Administrator under paragraph (1).

(c) Federal Acquisition Institute Board of Directors.—

(1) Reporting to administrator.—The Federal Acquisition Institute shall report through its Board of Directors directly to the Administrator.

(2) Composition.—The Board shall be composed of not more than 8 individuals from the Federal Government representing a mix of acquisition functional areas, all of whom shall be appointed by the Administrator.

(3) Duties.—The Board shall provide general direction to the Federal Acquisition Institute to ensure that the Institute—

(A) meets its statutory requirements;

(B) meets the needs of the Federal acquisition workforce;

(C) implements appropriate programs;

(D) coordinates with appropriate organizations and groups that have an impact on the Federal acquisition workforce;

(E) develops and implements plans to meet future challenges of the Federal acquisition workforce; and

(F) works closely with the Defense Acquisition University.

(4) Recommendations.—The Board shall make recommendations to the Administrator regarding the development and execution of the annual budget of the Federal Acquisition Institute.

(d) Director.—The Director of the Federal Acquisition Institute shall be appointed by, be subject to the direction and control of, and report directly to the Administrator.

(e) Annual Report.—The Administrator shall submit to the Committee on Homeland Security and Governmental Affairs and the Committee on Appropriations of the Senate and the Committee on Oversight and Government Reform and the Committee on Appropriations of the House of Representatives an annual report on the projected budget needs and expense plans of the Federal Acquisition Institute to fulfill its mandate.

(Added Pub. L. 112–81, div. A, title VIII, §864(b)(1), Dec. 31, 2011, 125 Stat. 1523.)

Statutory Notes and Related Subsidiaries

Change of Name

Committee on Oversight and Government Reform of House of Representatives changed to Committee on Oversight and Reform of House of Representatives by House Resolution No. 6, One Hundred Sixteenth Congress, Jan. 9, 2019. Committee on Oversight and Reform of House of Representatives changed to Committee on Oversight and Accountability of House of Representatives by House Resolution No. 5, One Hundred Eighteenth Congress, Jan. 9, 2023.

Construction

Pub. L. 112–81, div. A, title VIII, §864(e), Dec. 31, 2011, 125 Stat. 1525, provided that: "Nothing in this section [enacting this chapter and amending sections 1122, 1703, and 1704 of this title], or the amendments made by this section, shall be construed to preclude the Secretary of Defense from establishing acquisition workforce policies, procedures, training standards, and certification requirements for acquisition positions in the Department of Defense, as provided in chapter 87 of title 10, United States Code."

Training Course on Human Trafficking and Government Contracting

Pub. L. 115–425, title I, §113, Jan. 8, 2019, 132 Stat. 5477, provided that: "Any curriculum, including any continuing education curriculum, for the acquisition workforce used by the Federal Acquisition Institute established under section 1201 of title 41, United States Code, shall include at least 1 course, lasting at least 30 minutes, regarding the law and regulations relating to human trafficking and contracting with the Federal Government."

CHAPTER 13—ACQUISITION COUNCILS

SUBCHAPTER I—FEDERAL ACQUISITION REGULATORY COUNCIL

        

SUBCHAPTER II—CHIEF ACQUISITION OFFICERS COUNCIL

        

SUBCHAPTER III—FEDERAL ACQUISITION SUPPLY CHAIN SECURITY

        

Editorial Notes

Amendments

2018—Pub. L. 115–390, title II, §202(b), Dec. 21, 2018, 132 Stat. 5188, added item for subchapter III and items 1321 to 1328.

SUBCHAPTER I—FEDERAL ACQUISITION REGULATORY COUNCIL

§1301. Definition

In this subchapter, the term "Council" means the Federal Acquisition Regulatory Council established under section 1302(a) of this title.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3691.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
1301	41:403(17).	Pub. L. 93–400, §4(17), as added Pub. L. 108–375, title VIII, §807(b), Oct. 28, 2004, 118 Stat. 2011.

§1302. Establishment and membership

(a) Establishment.—There is a Federal Acquisition Regulatory Council to assist in the direction and coordination of Government-wide procurement policy and Government-wide procurement regulatory activities in the Federal Government.

(b) Membership.—

(1) Makeup of council.—The Council consists of—

(A) the Administrator;

(B) the Secretary of Defense;

(C) the Administrator of National Aeronautics and Space; and

(D) the Administrator of General Services.

(2) Designation of other officials.—

(A) Officials who may be designated.—Notwithstanding section 121(d)(1) and (2) of title 40, the officials specified in subparagraphs (B) to (D) of paragraph (1) may designate to serve on and attend meetings of the Council in place of that official—

(i) the official assigned by statute with the responsibility for acquisition policy in each of their respective agencies or, in the case of the Secretary of Defense, an official at an organizational level not lower than an Assistant Secretary of Defense within the Office of the Under Secretary of Defense for Acquisition and Sustainment; or

(ii) if no official of that agency is assigned by statute with the responsibility for acquisition policy for that agency, the official designated pursuant to section 1702(c) of this title.

(B) Limitation on designation.—No other official or employee may be designated to serve on the Council.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3691; Pub. L. 116–92, div. A, title IX, §902(88), Dec. 20, 2019, 133 Stat. 1554.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
1302(a)	41:421(a).	Pub. L. 93–400, §25(a), (b), as added Pub. L. 100–679, §4, Nov. 17, 1988, 102 Stat. 4056; Pub. L. 101–510, title VIII, §807, Nov. 5, 1990, 104 Stat. 1593; Pub. L. 104–106, title XLIII, §4322(a)(2), Feb. 10, 1996, 110 Stat. 677.
1302(b)	41:421(b).

In subsection (a), the words "(hereinafter in this section referred to as the 'Council')" are omitted as unnecessary.

In subsection (b)(2)(A)(i), the words "Under Secretary of Defense for Acquisition, Technology, and Logistics" are substituted for "Under Secretary of Defense for Acquisition and Technology" because of section 911(a)(1) of the National Defense Authorization Act for Fiscal Year 2000 (Public Law 106–65, 113 Stat. 717, 10 U.S.C. 133 note).

In subsection (b)(2)(A)(ii), the cross-reference to section 16(3) of the Office of Federal Procurement Policy Act (41:414(3)) is treated as a cross-reference to section 16(c) of the Act to reflect the amendment of section 16 by section 1421(a)(1) of the National Defense Authorization Act for Fiscal Year 2004 (Public Law 108–136, 117 Stat. 1666).

Editorial Notes

Amendments

2019—Subsec. (b)(2)(A)(i). Pub. L. 116–92 substituted "Under Secretary of Defense for Acquisition and Sustainment" for "Under Secretary of Defense for Acquisition, Technology, and Logistics".

Statutory Notes and Related Subsidiaries

Status of Director of Defense Procurement

Pub. L. 102–190, div. A, title VIII, §809, Dec. 5, 1991, 105 Stat. 1423, as amended by Pub. L. 103–160, div. A, title IX, §904(f), Nov. 30, 1993, 107 Stat. 1729; Pub. L. 106–65, div. A, title IX, §911(a)(1), Oct. 5, 1999, 113 Stat. 717, provided that: "For the purposes of the amendment made by section 807 of the National Defense Authorization Act for Fiscal Year 1991 (Public Law 101–510; 104 Stat. 1593) to section 25(b)(2) of the Office of Federal Procurement Policy Act ([former] 41 U.S.C. 421(b)(2)) [now 41 U.S.C. 1302(b)(2)], the Director of Defense Procurement of the Department of Defense shall be considered to be an official at an organizational level of an Assistant Secretary of Defense within the Office of the Under Secretary of Defense for Acquisition, Technology, and Logistics."

§1303. Functions and authority

(a) Functions.—

(1) Issue and maintain federal acquisition regulation.—Subject to sections 1121, 1122(a) to (c)(1), 1125, 1126, 1130, 1131, and 2305 of this title, the Administrator of General Services, the Secretary of Defense, and the Administrator of National Aeronautics and Space, pursuant to their respective authorities under division C of this subtitle, chapter 4 of title 10, chapter 137 legacy provisions (as such term is defined in section 3016 of title 10), and the National Aeronautics and Space Act of 1958 (42 U.S.C. 2451 et seq.),¹ shall jointly issue and maintain in accordance with subsection (d) a single Government-wide procurement regulation, to be known as the Federal Acquisition Regulation.

(2) Limitation on other regulations.—Other regulations relating to procurement issued by an executive agency shall be limited to—

(A) regulations essential to implement Government-wide policies and procedures within the agency; and

(B) additional policies and procedures required to satisfy the specific and unique needs of the agency.

(3) Ensure consistent regulations.—The Administrator, in consultation with the Council, shall ensure that procurement regulations prescribed by executive agencies are consistent with the Federal Acquisition Regulation and in accordance with the policies prescribed pursuant to section 1121(b) of this title.

(4) Request to review regulation.—

(A) Basis for request.—Under procedures the Administrator establishes, a person may request the Administrator to review a regulation relating to procurement on the basis that the regulation is inconsistent with the Federal Acquisition Regulation.

(B) Period of review.—Unless the request is frivolous or does not, on its face, state a valid basis for the review, the Administrator shall complete the review not later than 60 days after receiving the request. The time for completion of the review may be extended if the Administrator determines that an additional period of review is required. The Administrator shall advise the requester of the reasons for the extension and the date by which the review will be completed.

(5) When regulation is inconsistent or needs to be improved.—If the Administrator determines that a regulation relating to procurement is inconsistent with the Federal Acquisition Regulation or that the regulation otherwise should be revised to remove an inconsistency with the policies prescribed under section 1121(b) of this title, the Administrator shall rescind or deny the promulgation of the regulation or take other action authorized under sections 1121, 1122(a) to (c)(1), 1125, 1126, 1130, 1131, and 2305 of this title as may be necessary to remove the inconsistency. If the Administrator determines that the regulation, although not inconsistent with the Federal Acquisition Regulation or those policies, should be revised to improve compliance with the Regulation or policies, the Administrator shall take action authorized under sections 1121, 1122(a) to (c)(1), 1125, 1126, 1130, 1131, and 2305 as may be necessary and appropriate.

(6) Decisions to be in writing and publicly available.—The decisions of the Administrator shall be in writing and made publicly available.

(b) Additional Responsibilities of Membership.—

(1) In general.—Subject to the authority, direction, and control of the head of the agency concerned, each official who represents an agency on the Council pursuant to section 1302(b) of this title shall—

(A) approve or disapprove all regulations relating to procurement that are proposed for public comment, prescribed in final form, or otherwise made effective by that agency before the regulation may be prescribed in final form, or otherwise made effective, except that the official may grant an interim approval, without review, for not more than 60 days for a procurement regulation in urgent and compelling circumstances;

(B) carry out the responsibilities of that agency set forth in chapter 35 of title 44 for each information collection request that relates to procurement rules or regulations; and

(C) eliminate or reduce—

(i) any redundant or unnecessary levels of review and approval in the procurement system of that agency; and

(ii) redundant or unnecessary procurement regulations which are unique to that agency.

(2) Limitation on delegation.—The authority to review and approve or disapprove regulations under paragraph (1)(A) may not be delegated to an individual outside the office of the official who represents the agency on the Council pursuant to section 1302(b) of this title.

(c) Governing Policies.—All actions of the Council and of members of the Council shall be in accordance with and furtherance of the policies prescribed under section 1121(b) of this title.

(d) General Authority With Respect to Federal Acquisition Regulation.—Subject to section 1121(d) of this title, the Council shall manage, coordinate, control, and monitor the maintenance of, issuance of, and changes in, the Federal Acquisition Regulation.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3691; Pub. L. 117–81, div. A, title XVII, §1702(h)(2), Dec. 27, 2021, 135 Stat. 2158

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
1303(a)	41:421(c).	Pub. L. 93–400, §25(c)–(f), as added Pub. L. 100–679, §4, Nov. 17, 1988, 102 Stat. 4056; Pub. L. 104–201, title VIII, §822, title X, §1074(f)(3), Sept. 23, 1996, 110 Stat. 2609, 2661; Pub. L. 105–85, title VIII, §841(d), Nov. 18, 1997, 111 Stat. 1843.
1303(b)	41:421(d).
1303(c)	41:421(e).
1303(d)	41:421(f).

In subsection (a)(6), the text of 41:421(c)(6) (last sentence) is omitted because 41:407 was repealed by section 4305(b) of the National Defense Authorization Act of Fiscal Year 1996 (Public Law 104–106, 110 Stat. 665).

In subsection (b)(1)(A), the words "after 60 days after November 17, 1988" are omitted as obsolete.

In subsection (b)(1)(B), the words "(as that term is defined in section 3502(11) of title 44)" are omitted because chapter 35 of title 44 was amended generally by the Paperwork Reduction Act of 1995 (Public Law 104–13, 109 Stat. 163) and 44:3502 no longer defines "information collection request". The term "information collection request" is retained in this section of the revised title, however, because 44:ch. 35 still contains provisions about requests for collection of information.

Editorial Notes

References in Text

The National Aeronautics and Space Act of 1958, referred to in subsec. (a)(1), is Pub. L. 85–568, July 29, 1958, 72 Stat. 426, which was classified principally to chapter 26 (§2451 et seq.) of Title 42, The Public Health and Welfare, and was substantially repealed and restated as chapter 201 (§20101 et seq.) of Title 51, National and Commercial Space Programs, by Pub. L. 111–314, §§3, 6, Dec. 18, 2010, 124 Stat. 3328, 3444. For complete classification of this Act to the Code, see Short Title of 1958 Act note set out under section 10101 of Title 51 and Tables.

Amendments

2021—Subsec. (a)(1). Pub. L. 117–81 substituted "chapter 4 of title 10, chapter 137 legacy provisions (as such term is defined in section 3016 of title 10)" for "chapters 4 and 137 of title 10".

¹ See References in Text note below.

§1304. Contract clauses and certifications

(a) Repetitive Nonstandard Contract Clauses Discouraged.—The Council shall prescribe regulations to discourage the use of a nonstandard contract clause on a repetitive basis. The regulations shall include provisions that—

(1) clearly define what types of contract clauses are to be treated as nonstandard clauses; and

(2) require prior approval for the use of a nonstandard clause on a repetitive basis by an official at a level of responsibility above the contracting officer.

(b) When Certification Required.—

(1) By law.—A provision of law may not be construed as requiring a certification by a contractor or offeror in a procurement made or to be made by the Federal Government unless that provision of law specifically provides that such a certification shall be required.

(2) In federal acquisition regulation.—A requirement for a certification by a contractor or offeror may not be included in the Federal Acquisition Regulation unless—

(A) the certification requirement is specifically imposed by statute; or

(B) written justification for the certification requirement is provided to the Administrator by the Council and the Administrator approves in writing the inclusion of the certification requirement.

(3) Executive agency procurement regulation.—

(A) Definition.—In subparagraph (B), the term "head of the executive agency" with respect to a military department means the Secretary of Defense.

(B) When certification requirement may be included in regulation.—A requirement for a certification by a contractor or offeror may not be included in a procurement regulation of an executive agency unless—

(i) the certification requirement is specifically imposed by statute; or

(ii) written justification for the certification requirement is provided to the head of the executive agency by the senior procurement executive of the agency and the head of the executive agency approves in writing the inclusion of the certification requirement.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3693.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
1304(a)	41:425(a).	Pub. L. 93–400, §29, as added Pub. L. 103–355, title I, §1093, Oct. 13, 1994, 108 Stat. 3273; Pub. L. 104–106, title XLIII, §4301(b)(2)(A), (c), Feb. 10, 1996, 110 Stat. 657, 658.
1304(b)(1)	41:425(b).
1304(b)(2), (3)	41:425(c).

Statutory Notes and Related Subsidiaries

Current Certification Requirements

Pub. L. 104–106, div. D, title XLIII, §4301(b)(1), Feb. 10, 1996, 110 Stat. 656, provided that:

"(A) Not later than 210 days after the date of the enactment of this Act [Feb. 10, 1996], the Administrator for Federal Procurement Policy shall issue for public comment a proposal to amend the Federal Acquisition Regulation to remove from the Federal Acquisition Regulation certification requirements for contractors and offerors that are not specifically imposed by statute. The Administrator may omit such a certification requirement from the proposal only if—

"(i) the Federal Acquisition Regulatory Council provides the Administrator with a written justification for the requirement and a determination that there is no less burdensome means for administering and enforcing the particular regulation that contains the certification requirement; and

"(ii) the Administrator approves in writing the retention of the certification requirement.

"(B)(i) Not later than 210 days after the date of the enactment of this Act, the head of each executive agency that has agency procurement regulations containing one or more certification requirements for contractors and offerors that are not specifically imposed by statute shall issue for public comment a proposal to amend the regulations to remove the certification requirements. The head of the executive agency may omit such a certification requirement from the proposal only if—

"(I) the senior procurement executive for the executive agency provides the head of the executive agency with a written justification for the requirement and a determination that there is no less burdensome means for administering and enforcing the particular regulation that contains the certification requirement; and

"(II) the head of the executive agency approves in writing the retention of such certification requirement.

"(ii) For purposes of clause (i), the term 'head of the executive agency' with respect to a military department means the Secretary of Defense."

Executive Documents

Addressing Tax Delinquency by Government Contractors

Memorandum of President of the United States, Jan. 20, 2010, 75 F.R. 3979, provided:

Memorandum for the Heads of Executive Departments and Agencies

The Federal Government pays more than half a trillion dollars a year to contractors and has an important obligation to protect American taxpayer money and the integrity of the Federal acquisition process. Yet reports by the Government Accountability Office (GAO) state that Federal contracts are awarded to tens of thousands of companies with serious tax delinquencies. The total amount in unpaid taxes owed by these contracting companies is estimated to be more than $5 billion.

Too often, Federal contracting officials do not have the most basic information they need to make informed judgments about whether a company trying to win a Federal contract is delinquent in paying its taxes. We need to give our contracting officials the tools they need to protect taxpayer dollars.

Accordingly, I hereby direct the Commissioner of Internal Revenue (Commissioner) to direct a review of certifications of non-delinquency in taxes that companies bidding for Federal contracts are required to submit pursuant to a 2008 amendment to the Federal Acquisition Regulation. I further direct that the Commissioner report to me within 90 days on the overall accuracy of contractors' certifications.

I also direct the Director of the Office of Management and Budget, working with the Secretary of the Treasury and other agency heads, to evaluate practices of contracting officers and debarring officials in response to contractors' certifications of serious tax delinquencies and to provide me, within 90 days, recommendations on process improvements to ensure these contractors are not awarded new contracts, including a plan to make contractor certifications available in a Government-wide database, as is already being done with other information on contractors.

Executive departments and agencies shall carry out the provisions of this memorandum to the extent permitted by law. This memorandum is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.

The Director of the Office of Management and Budget is hereby authorized and directed to publish this memorandum in the Federal Register.

Barack Obama.      

SUBCHAPTER II—CHIEF ACQUISITION OFFICERS COUNCIL

§1311. Establishment and membership

(a) Establishment.—There is in the executive branch a Chief Acquisition Officers Council.

(b) Membership.—The members of the Council are—

(1) the Deputy Director for Management of the Office of Management and Budget;

(2) the Administrator;

(3) the Under Secretary of Defense for Acquisition and Sustainment;

(4) the chief acquisition officer of each executive agency that is required to have a chief acquisition officer under section 1702 of this title and the senior procurement executive of each military department; and

(5) any other senior agency officer of each executive agency, appointed by the head of the agency in consultation with the Chairman of the Council, who can effectively assist the Council in performing the functions set forth in section 1312(b) of this title and supporting the associated range of acquisition activities.

(c) Leadership and Support.—

(1) Chairman.—The Deputy Director for Management of the Office of Management and Budget is the Chairman of the Council.

(2) Vice chairman.—The Vice Chairman of the Council shall be selected by the Council from among its members. The Vice Chairman serves for one year and may serve multiple terms.

(3) Leader of activities.—The Administrator shall lead the activities of the Council on behalf of the Deputy Director for Management.

(4) Support.—The Administrator of General Services shall provide administrative and other support for the Council.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3694; Pub. L. 116–92, div. A, title IX, §902(89), Dec. 20, 2019, 133 Stat. 1554.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
1311(a)	41:414b(a).	Pub. L. 93–400, §16A(a)–(c), as added Pub. L. 108–136, title XIV, §1422(a), Nov. 24, 2003, 117 Stat. 1668.
1311(b)	41:414b(b)(1) (words before comma), (2)–(5).
1311(c)(1)	41:414b(b)(1) (words after comma).
1311(c)(2)	41:414b(c)(2).
1311(c)(3)	41:414b(c)(1).
1311(c)(4)	41:414b(c)(3).

Editorial Notes

Amendments

2019—Subsec. (b)(3). Pub. L. 116–92 substituted "Under Secretary of Defense for Acquisition and Sustainment" for "Under Secretary of Defense for Acquisition, Technology, and Logistics".

§1312. Functions

(a) Principal Forum.—The Chief Acquisition Officers Council is the principal interagency forum for monitoring and improving the Federal acquisition system.

(b) Functions.—The Council shall perform functions that include the following:

(1) Develop recommendations for the Director of the Office of Management and Budget on Federal acquisition policies and requirements.

(2) Share experiences, ideas, best practices, and innovative approaches related to Federal acquisition.

(3) Assist the Administrator in the identification, development, and coordination of multiagency projects and other innovative initiatives to improve Federal acquisition.

(4) Promote effective business practices that ensure the timely delivery of best value products to the Federal Government and achieve appropriate public policy objectives.

(5) Further integrity, fairness, competition, openness, and efficiency in the Federal acquisition system.

(6) Work with the Office of Personnel Management to assess and address the hiring, training, and professional development needs of the Federal Government related to acquisition.

(7) Work with the Administrator and the Federal Acquisition Regulatory Council to promote the business practices referred to in paragraph (4) and other results of the functions carried out under this subsection.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3694.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
1312(a)	41:414b(d).	Pub. L. 93–400, §16A(d), (e), as added Pub. L. 108–136, title XIV, §1422(a), Nov. 24, 2003, 117 Stat. 1668.
1312(b)	41:414b(e).

SUBCHAPTER III—FEDERAL ACQUISITION SUPPLY CHAIN SECURITY

§1321. Definitions

In this subchapter:

(1) Appropriate congressional committees and leadership.—The term "appropriate congressional committees and leadership" means—

(A) the Committee on Homeland Security and Governmental Affairs, the Committee on the Judiciary, the Committee on Appropriations, the Committee on Armed Services, the Committee on Commerce, Science, and Transportation, the Select Committee on Intelligence, and the majority and minority leader of the Senate; and

(B) the Committee on Oversight and Government Reform, the Committee on the Judiciary, the Committee on Appropriations, the Committee on Homeland Security, the Committee on Armed Services, the Committee on Energy and Commerce, the Permanent Select Committee on Intelligence, and the Speaker and minority leader of the House of Representatives.

(2) Council.—The term "Council" means the Federal Acquisition Security Council established under section 1322(a) of this title.

(3) Covered article.—The term "covered article" has the meaning given that term in section 4713 of this title.

(4) Covered procurement action.—The term "covered procurement action" has the meaning given that term in section 4713 of this title.

(5) Information and communications technology.—The term "information and communications technology" has the meaning given that term in section 4713 of this title.

(6) Intelligence community.—The term "intelligence community" has the meaning given that term in section 3(4) of the National Security Act of 1947 (50 U.S.C. 3003(4)).

(7) National security system.—The term "national security system" has the meaning given that term in section 3552 of title 44.

(8) Supply chain risk.—The term "supply chain risk" has the meaning given that term in section 4713 of this title.

(Added Pub. L. 115–390, title II, §202(a), Dec. 21, 2018, 132 Stat. 5178.)

Statutory Notes and Related Subsidiaries

Change of Name

Committee on Oversight and Government Reform of House of Representatives changed to Committee on Oversight and Reform of House of Representatives by House Resolution No. 6, One Hundred Sixteenth Congress, Jan. 9, 2019. Committee on Oversight and Reform of House of Representatives changed to Committee on Oversight and Accountability of House of Representatives by House Resolution No. 5, One Hundred Eighteenth Congress, Jan. 9, 2023.

Effective Date

Pub. L. 115–390, title II, §202(c), Dec. 21, 2018, 132 Stat. 5188, provided that: "The amendments made by this section [enacting this subchapter] shall take effect on the date that is 90 days after the date of the enactment of this Act [Dec. 21, 2018] and shall apply to contracts that are awarded before, on, or after that date."

Pub. L. 115–390, title II, §205, Dec. 21, 2018, 132 Stat. 5193, provided that: "This title [see section 201 of Pub. L. 115–390, set out as a Short Title of 2018 note under section 101 of this title] shall take effect on the date that is 90 days after the date of the enactment of this Act [Dec. 21, 2018]."

Implementation

Pub. L. 115–390, title II, §202(d), Dec. 21, 2018, 132 Stat. 5188, provided that:

"(1) Interim final rule.—Not later than one year after the date of the enactment of this Act [Dec. 21, 2018], the Federal Acquisition Security Council shall prescribe an interim final rule to implement subchapter III of chapter 13 of title 41, United States Code, as added by subsection (a).

"(2) Final rule.—Not later than one year after prescribing the interim final rule under paragraph (1) and considering public comments with respect to such interim final rule, the Council shall prescribe a final rule to implement subchapter III of chapter 13 of title 41, United States Code, as added by subsection (a).

"(3) Failure to act.—

"(A) In general.—If the Council does not issue a final rule in accordance with paragraph (2) on or before the last day of the one-year period referred to in that paragraph, the Council shall submit to the appropriate congressional committees and leadership, not later than 10 days after such last day and every 90 days thereafter until the final rule is issued, a report explaining why the final rule was not timely issued and providing an estimate of the earliest date on which the final rule will be issued.

"(B) Appropriate congressional committees and leadership defined.—In this paragraph, the term 'appropriate congressional committees and leadership' has the meaning given that term in section 1321 of title 41, United States Code, as added by subsection (a)."

§1322. Federal Acquisition Security Council establishment and membership

(a) Establishment.—There is established in the executive branch a Federal Acquisition Security Council.

(b) Membership.—

(1) In general.—The following agencies shall be represented on the Council:

(A) The Office of Management and Budget.

(B) The General Services Administration.

(C) The Department of Homeland Security, including the Cybersecurity and Infrastructure Security Agency.

(D) The Office of the Director of National Intelligence, including the National Counterintelligence and Security Center.

(E) The Department of Justice, including the Federal Bureau of Investigation.

(F) The Department of Defense, including the National Security Agency.

(G) The Department of Commerce, including the National Institute of Standards and Technology.

(H) Such other executive agencies as determined by the Chairperson of the Council.

(2) Lead representatives.—

(A) Designation.—

(i) In general.—Not later than 45 days after the date of the enactment of the Federal Acquisition Supply Chain Security Act of 2018, the head of each agency represented on the Council shall designate a representative of that agency as the lead representative of the agency on the Council.

(ii) Requirements.—The representative of an agency designated under clause (i) shall have expertise in supply chain risk management, acquisitions, or information and communications technology.

(B) Functions.—The lead representative of an agency designated under subparagraph (A) shall ensure that appropriate personnel, including leadership and subject matter experts of the agency, are aware of the business of the Council.

(c) Chairperson.—

(1) Designation.—Not later than 45 days after the date of the enactment of the Federal Acquisition Supply Chain Security Act of 2018, the Director of the Office of Management and Budget shall designate a senior-level official from the Office of Management and Budget to serve as the Chairperson of the Council.

(2) Functions.—The Chairperson shall perform functions that include—

(A) subject to subsection (d), developing a schedule for meetings of the Council;

(B) designating executive agencies to be represented on the Council under subsection (b)(1)(H);

(C) in consultation with the lead representative of each agency represented on the Council, developing a charter for the Council; and

(D) not later than 7 days after completion of the charter, submitting the charter to the appropriate congressional committees and leadership.

(d) Meetings.—The Council shall meet not later than 60 days after the date of the enactment of the Federal Acquisition Supply Chain Security Act of 2018 and not less frequently than quarterly thereafter.

(Added Pub. L. 115–390, title II, §202(a), Dec. 21, 2018, 132 Stat. 5178.)

Editorial Notes

References in Text

The date of the enactment of the Federal Acquisition Supply Chain Security Act of 2018, referred to in subsecs. (b)(2)(A)(i), (c)(1), and (d), is the date of enactment of Pub. L. 115–390, which was approved Dec. 21, 2018.

Statutory Notes and Related Subsidiaries

Effective Date

Section effective 90 days after Dec. 21, 2018, and applicable to contracts that are awarded before, on, or after that date, see section 202(c) of Pub. L. 115–390, set out as a note under section 1321 of this title.

Title II of Pub. L. 115–390 effective 90 days after Dec. 21, 2018, see section 205 of Pub. L. 115–390, set out as a note under section 1321 of this title.

§1323. Functions and authorities

(a) In General.—The Council shall perform functions that include the following:

(1) Identifying and recommending development by the National Institute of Standards and Technology of supply chain risk management standards, guidelines, and practices for executive agencies to use when assessing and developing mitigation strategies to address supply chain risks, particularly in the acquisition and use of covered articles under section 1326(a) of this title.

(2) Identifying or developing criteria for sharing information with executive agencies, other Federal entities, and non-Federal entities with respect to supply chain risk, including information related to the exercise of authorities provided under this section and sections 1326 and 4713 of this title. At a minimum, such criteria shall address—

(A) the content to be shared;

(B) the circumstances under which sharing is mandated or voluntary; and

(C) the circumstances under which it is appropriate for an executive agency to rely on information made available through such sharing in exercising the responsibilities and authorities provided under this section and section 4713 of this title.

(3) Identifying an appropriate executive agency to—

(A) accept information submitted by executive agencies based on the criteria established under paragraph (2);

(B) facilitate the sharing of information received under subparagraph (A) to support supply chain risk analyses under section 1326 of this title, recommendations under this section, and covered procurement actions under section 4713 of this title;

(C) share with the Council information regarding covered procurement actions by executive agencies taken under section 4713 of this title; and

(D) inform the Council of orders issued under this section.

(4) Identifying, as appropriate, executive agencies to provide—

(A) shared services, such as support for making risk assessments, validation of products that may be suitable for acquisition, and mitigation activities; and

(B) common contract solutions to support supply chain risk management activities, such as subscription services or machine-learning-enhanced analysis applications to support informed decision making.

(5) Identifying and issuing guidance on additional steps that may be necessary to address supply chain risks arising in the course of executive agencies providing shared services, common contract solutions, acquisitions vehicles, or assisted acquisitions.

(6) Engaging with the private sector and other nongovernmental stakeholders in performing the functions described in paragraphs (1) and (2) and on issues relating to the management of supply chain risks posed by the acquisition of covered articles.

(7) Carrying out such other actions, as determined by the Council, that are necessary to reduce the supply chain risks posed by acquisitions and use of covered articles.

(b) Program Office and Committees.—The Council may establish a program office and any committees, working groups, or other constituent bodies the Council deems appropriate, in its sole and unreviewable discretion, to carry out its functions.

(c) Authority for Exclusion or Removal Orders.—

(1) Criteria.—To reduce supply chain risk, the Council shall establish criteria and procedures for—

(A) recommending orders applicable to executive agencies requiring the exclusion of sources or covered articles from executive agency procurement actions (in this section referred to as "exclusion orders");

(B) recommending orders applicable to executive agencies requiring the removal of covered articles from executive agency information systems (in this section referred to as "removal orders");

(C) requesting and approving exceptions to an issued exclusion or removal order when warranted by circumstances, including alternative mitigation actions or other findings relating to the national interest, including national security reviews, national security investigations, or national security agreements; and

(D) ensuring that recommended orders do not conflict with standards and guidelines issued under section 11331 of title 40 and that the Council consults with the Director of the National Institute of Standards and Technology regarding any recommended orders that would implement standards and guidelines developed by the National Institute of Standards and Technology.

(2) Recommendations.—The Council shall use the criteria established under paragraph (1), information made available under subsection (a)(3), and any other information the Council determines appropriate to issue recommendations, for application to executive agencies or any subset thereof, regarding the exclusion of sources or covered articles from any executive agency procurement action, including source selection and consent for a contractor to subcontract, or the removal of covered articles from executive agency information systems. Such recommendations shall include—

(A) information necessary to positively identify the sources or covered articles recommended for exclusion or removal;

(B) information regarding the scope and applicability of the recommended exclusion or removal order;

(C) a summary of any risk assessment reviewed or conducted in support of the recommended exclusion or removal order;

(D) a summary of the basis for the recommendation, including a discussion of less intrusive measures that were considered and why such measures were not reasonably available to reduce supply chain risk;

(E) a description of the actions necessary to implement the recommended exclusion or removal order; and

(F) where practicable, in the Council's sole and unreviewable discretion, a description of mitigation steps that could be taken by the source that may result in the Council rescinding a recommendation.

(3) Notice of recommendation and review.—A notice of the Council's recommendation under paragraph (2) shall be issued to any source named in the recommendation advising—

(A) that a recommendation has been made;

(B) of the criteria the Council relied upon under paragraph (1) and, to the extent consistent with national security and law enforcement interests, of information that forms the basis for the recommendation;

(C) that, within 30 days after receipt of notice, the source may submit information and argument in opposition to the recommendation;

(D) of the procedures governing the review and possible issuance of an exclusion or removal order pursuant to paragraph (5); and

(E) where practicable, in the Council's sole and unreviewable discretion, a description of mitigation steps that could be taken by the source that may result in the Council rescinding the recommendation.

(4) Confidentiality.—Any notice issued to a source under paragraph (3) shall be kept confidential until—

(A) an exclusion or removal order is issued pursuant to paragraph (5); and

(B) the source has been notified pursuant to paragraph (6).

(5) Exclusion and removal orders.—

(A) Order issuance.—Recommendations of the Council under paragraph (2), together with any information submitted by a source under paragraph (3) related to such a recommendation, shall be reviewed by the following officials, who may issue exclusion and removal orders based upon such recommendations:

(i) The Secretary of Homeland Security, for exclusion and removal orders applicable to civilian agencies, to the extent not covered by clause (ii) or (iii).

(ii) The Secretary of Defense, for exclusion and removal orders applicable to the Department of Defense and national security systems other than sensitive compartmented information systems.

(iii) The Director of National Intelligence, for exclusion and removal orders applicable to the intelligence community and sensitive compartmented information systems, to the extent not covered by clause (ii).

(B) Delegation.—The officials identified in subparagraph (A) may not delegate any authority under this subparagraph to an official below the level one level below the Deputy Secretary or Principal Deputy Director, except that the Secretary of Defense may delegate authority for removal orders to the Commander of the United States Cyber Command, who may not redelegate such authority to an official below the level one level below the Deputy Commander.

(C) Facilitation of exclusion orders.—If officials identified under this paragraph from the Department of Homeland Security, the Department of Defense, and the Office of the Director of National Intelligence issue orders collectively resulting in a governmentwide exclusion, the Administrator for General Services and officials at other executive agencies responsible for management of the Federal Supply Schedules, governmentwide acquisition contracts and multi-agency contracts shall help facilitate implementation of such orders by removing the covered articles or sources identified in the orders from such contracts.

(D) Review of exclusion and removal orders.—The officials identified under this paragraph shall review all exclusion and removal orders issued under subparagraph (A) not less frequently than annually pursuant to procedures established by the Council.

(E) Rescission.—Orders issued pursuant to subparagraph (A) may be rescinded by an authorized official from the relevant issuing agency.

(6) Notifications.—Upon issuance of an exclusion or removal order pursuant to paragraph (5)(A), the official identified under that paragraph who issued the order shall—

(A) notify any source named in the order of—

(i) the exclusion or removal order; and

(ii) to the extent consistent with national security and law enforcement interests, information that forms the basis for the order;

(B) provide classified or unclassified notice of the exclusion or removal order to the appropriate congressional committees and leadership; and

(C) provide the exclusion or removal order to the agency identified in subsection (a)(3).

(7) Compliance.—Executive agencies shall comply with exclusion and removal orders issued pursuant to paragraph (5).

(d) Authority To Request Information.—The Council may request such information from executive agencies as is necessary for the Council to carry out its functions.

(e) Relationship to Other Councils.—The Council shall consult and coordinate, as appropriate, with other relevant councils and interagency committees, including the Chief Information Officers Council, the Chief Acquisition Officers Council, the Federal Acquisition Regulatory Council, and the Committee on Foreign Investment in the United States, with respect to supply chain risks posed by the acquisition and use of covered articles.

(f) Rules of Construction.—Nothing in this section shall be construed—

(1) to limit the authority of the Office of Federal Procurement Policy to carry out the responsibilities of that Office under any other provision of law; or

(2) to authorize the issuance of an exclusion or removal order based solely on the fact of foreign ownership of a potential procurement source that is otherwise qualified to enter into procurement contracts with the Federal Government.

(Added Pub. L. 115–390, title II, §202(a), Dec. 21, 2018, 132 Stat. 5180.)

Statutory Notes and Related Subsidiaries

Effective Date

Section effective 90 days after Dec. 21, 2018, and applicable to contracts that are awarded before, on, or after that date, see section 202(c) of Pub. L. 115–390, set out as a note under section 1321 of this title.

Title II of Pub. L. 115–390 effective 90 days after Dec. 21, 2018, see section 205 of Pub. L. 115–390, set out as a note under section 1321 of this title.

§1324. Strategic plan

(a) In General.—Not later than 180 days after the date of the enactment of the Federal Acquisition Supply Chain Security Act of 2018, the Council shall develop a strategic plan for addressing supply chain risks posed by the acquisition of covered articles and for managing such risks that includes—

(1) the criteria and processes required under section 1323(a) of this title, including a threshold and requirements for sharing relevant information about such risks with all executive agencies and, as appropriate, with other Federal entities and non-Federal entities;

(2) an identification of existing authorities for addressing such risks;

(3) an identification and promulgation of best practices and procedures and available resources for executive agencies to assess and mitigate such risks;

(4) recommendations for any legislative, regulatory, or other policy changes to improve efforts to address such risks;

(5) recommendations for any legislative, regulatory, or other policy changes to incentivize the adoption of best practices for supply chain risk management by the private sector;

(6) an evaluation of the effect of implementing new policies or procedures on existing contracts and the procurement process;

(7) a plan for engaging with executive agencies, the private sector, and other nongovernmental stakeholders to address such risks;

(8) a plan for identification, assessment, mitigation, and vetting of supply chain risks from existing and prospective information and communications technology made available by executive agencies to other executive agencies through common contract solutions, shared services, acquisition vehicles, or other assisted acquisition services; and

(9) plans to strengthen the capacity of all executive agencies to conduct assessments of—

(A) the supply chain risk posed by the acquisition of covered articles; and

(B) compliance with the requirements of this subchapter.

(b) Submission to Congress.—Not later than 7 calendar days after completion of the strategic plan required by subsection (a), the Chairperson of the Council shall submit the plan to the appropriate congressional committees and leadership.

(Added Pub. L. 115–390, title II, §202(a), Dec. 21, 2018, 132 Stat. 5184.)

Editorial Notes

References in Text

The date of the enactment of the Federal Acquisition Supply Chain Security Act of 2018, referred to in subsec. (a), is the date of enactment of Pub. L. 115–390, which was approved Dec. 21, 2018.

Statutory Notes and Related Subsidiaries

Effective Date

Section effective 90 days after Dec. 21, 2018, and applicable to contracts that are awarded before, on, or after that date, see section 202(c) of Pub. L. 115–390, set out as a note under section 1321 of this title.

Title II of Pub. L. 115–390 effective 90 days after Dec. 21, 2018, see section 205 of Pub. L. 115–390, set out as a note under section 1321 of this title.

§1325. Annual report

Not later than December 31 of each year, the Chairperson of the Council shall submit to the appropriate congressional committees and leadership a report on the activities of the Council during the preceding 12-month period.

(Added Pub. L. 115–390, title II, §202(a), Dec. 21, 2018, 132 Stat. 5184.)

Statutory Notes and Related Subsidiaries

Effective Date

Section effective 90 days after Dec. 21, 2018, and applicable to contracts that are awarded before, on, or after that date, see section 202(c) of Pub. L. 115–390, set out as a note under section 1321 of this title.

Title II of Pub. L. 115–390 effective 90 days after Dec. 21, 2018, see section 205 of Pub. L. 115–390, set out as a note under section 1321 of this title.

§1326. Requirements for executive agencies

(a) In General.—The head of each executive agency shall be responsible for—

(1) assessing the supply chain risk posed by the acquisition and use of covered articles and avoiding, mitigating, accepting, or transferring that risk, as appropriate and consistent with the standards, guidelines, and practices identified by the Council under section 1323(a)(1); and

(2) prioritizing supply chain risk assessments conducted under paragraph (1) based on the criticality of the mission, system, component, service, or asset.

(b) Inclusions.—The responsibility for assessing supply chain risk described in subsection (a) includes—

(1) developing an overall supply chain risk management strategy and implementation plan and policies and processes to guide and govern supply chain risk management activities;

(2) integrating supply chain risk management practices throughout the life cycle of the system, component, service, or asset;

(3) limiting, avoiding, mitigating, accepting, or transferring any identified risk;

(4) sharing relevant information with other executive agencies as determined appropriate by the Council in a manner consistent with section 1323(a) of this title;

(5) reporting on progress and effectiveness of the agency's supply chain risk management consistent with guidance issued by the Office of Management and Budget and the Council; and

(6) ensuring that all relevant information, including classified information, with respect to acquisitions of covered articles that may pose a supply chain risk, consistent with section 1323(a) of this title, is incorporated into existing processes of the agency for conducting assessments described in subsection (a) and ongoing management of acquisition programs, including any identification, investigation, mitigation, or remediation needs.

(c) Interagency Acquisitions.—

(1) In general.—Except as provided in paragraph (2), in the case of an interagency acquisition, subsection (a) shall be carried out by the head of the executive agency whose funds are being used to procure the covered article.

(2) Assisted acquisitions.—In an assisted acquisition, the parties to the acquisition shall determine, as part of the interagency agreement governing the acquisition, which agency is responsible for carrying out subsection (a).

(3) Definitions.—In this subsection, the terms "assisted acquisition" and "interagency acquisition" have the meanings given those terms in section 2.101 of title 48, Code of Federal Regulations (or any corresponding similar regulation or ruling).

(d) Assistance.—The Secretary of Homeland Security may—

(1) assist executive agencies in conducting risk assessments described in subsection (a) and implementing mitigation requirements for information and communications technology; and

(2) provide such additional guidance or tools as are necessary to support actions taken by executive agencies.

(Added Pub. L. 115–390, title II, §202(a), Dec. 21, 2018, 132 Stat. 5184.)

Statutory Notes and Related Subsidiaries

Effective Date

Section effective 90 days after Dec. 21, 2018, and applicable to contracts that are awarded before, on, or after that date, see section 202(c) of Pub. L. 115–390, set out as a note under section 1321 of this title.

Title II of Pub. L. 115–390 effective 90 days after Dec. 21, 2018, see section 205 of Pub. L. 115–390, set out as a note under section 1321 of this title.

§1327. Judicial review procedures

(a) In General.—Except as provided in subsection (b) and chapter 71 of this title, and notwithstanding any other provision of law, an action taken under section 1323 or 4713 of this title, or any action taken by an executive agency to implement such an action, shall not be subject to administrative review or judicial review, including bid protests before the Government Accountability Office or in any Federal court.

(b) Petitions.—

(1) In general.—Not later than 60 days after a party is notified of an exclusion or removal order under section 1323(c)(6) of this title or a covered procurement action under section 4713 of this title, the party may file a petition for judicial review in the United States Court of Appeals for the District of Columbia Circuit claiming that the issuance of the exclusion or removal order or covered procurement action is unlawful.

(2) Standard of review.—The Court shall hold unlawful a covered action taken under sections 1323 or 4713 of this title, in response to a petition that the court finds to be—

(A) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law;

(B) contrary to constitutional right, power, privilege, or immunity;

(C) in excess of statutory jurisdiction, authority, or limitation, or short of statutory right;

(D) lacking substantial support in the administrative record taken as a whole or in classified information submitted to the court under paragraph (3); or

(E) not in accord with procedures required by law.

(3) Exclusive jurisdiction.—The United States Court of Appeals for the District of Columbia Circuit shall have exclusive jurisdiction over claims arising under sections 1323(c)(5) or 4713 of this title against the United States, any United States department or agency, or any component or official of any such department or agency, subject to review by the Supreme Court of the United States under section 1254 of title 28.

(4) Administrative record and procedures.—

(A) In general.—The procedures described in this paragraph shall apply to the review of a petition under this section.

(B) Administrative record.—

(i) Filing of record.—The United States shall file with the court an administrative record, which shall consist of the information that the appropriate official relied upon in issuing an exclusion or removal order under section 1323(c)(5) or a covered procurement action under section 4713 of this title.

(ii) Unclassified, nonprivileged information.—All unclassified information contained in the administrative record that is not otherwise privileged or subject to statutory protections shall be provided to the petitioner with appropriate protections for any privileged or confidential trade secrets and commercial or financial information.

(iii) In camera and ex parte.—The following information may be included in the administrative record and shall be submitted only to the court ex parte and in camera:

(I) Classified information.

(II) Sensitive security information, as defined by section 1520.5 of title 49, Code of Federal Regulations.

(III) Privileged law enforcement information.

(IV) Information obtained or derived from any activity authorized under the Foreign Intelligence Surveillance Act of 1978 (50 U.S.C. 1801 et seq.), except that, with respect to such information, subsections (c), (e), (f), (g), and (h) of section 106 (50 U.S.C. 1806), subsections (d), (f), (g), (h), and (i) of section 305 (50 U.S.C. 1825), subsections (c), (e), (f), (g), and (h) of section 405 (50 U.S.C. 1845), and section 706 (50 U.S.C. 1881e) of that Act shall not apply.

(V) Information subject to privilege or protections under any other provision of law.

(iv) Under seal.—Any information that is part of the administrative record filed ex parte and in camera under clause (iii), or cited by the court in any decision, shall be treated by the court consistent with the provisions of this subparagraph and shall remain under seal and preserved in the records of the court to be made available consistent with the above provisions in the event of further proceedings. In no event shall such information be released to the petitioner or as part of the public record.

(v) Return.—After the expiration of the time to seek further review, or the conclusion of further proceedings, the court shall return the administrative record, including any and all copies, to the United States.

(C) Exclusive remedy.—A determination by the court under this subsection shall be the exclusive judicial remedy for any claim described in this section against the United States, any United States department or agency, or any component or official of any such department or agency.

(D) Rule of construction.—Nothing in this section shall be construed as limiting, superseding, or preventing the invocation of, any privileges or defenses that are otherwise available at law or in equity to protect against the disclosure of information.

(c) Definition.—In this section, the term "classified information"—

(1) has the meaning given that term in section 1(a) of the Classified Information Procedures Act (18 U.S.C. App.); and

(2) includes—

(A) any information or material that has been determined by the United States Government pursuant to an Executive order, statute, or regulation to require protection against unauthorized disclosure for reasons of national security; and

(B) any restricted data, as defined in section 11 of the Atomic Energy Act of 1954 (42 U.S.C. 2014).

(Added Pub. L. 115–390, title II, §202(a), Dec. 21, 2018, 132 Stat. 5185.)

Editorial Notes

References in Text

The Foreign Intelligence Surveillance Act of 1978, referred to in subsec. (b)(4)(B)(iii)(IV), is Pub. L. 95–511, Oct. 25, 1978, 92 Stat. 1783, which is classified principally to chapter 36 (§1801 et seq.) of Title 50, War and National Defense. For complete classification of this Act to the Code, see Short Title note set out under section 1801 of Title 50 and Tables.

The Classified Information Procedures Act, referred to in subsec. (c)(1), is Pub. L. 96–456, Oct. 15, 1980, 94 Stat. 2025, which is set out in the Appendix to Title 18, Crimes and Criminal Procedure.

Statutory Notes and Related Subsidiaries

Effective Date

Section effective 90 days after Dec. 21, 2018, and applicable to contracts that are awarded before, on, or after that date, see section 202(c) of Pub. L. 115–390, set out as a note under section 1321 of this title.

Title II of Pub. L. 115–390 effective 90 days after Dec. 21, 2018, see section 205 of Pub. L. 115–390, set out as a note under section 1321 of this title.

§1328. Termination

This subchapter shall terminate on December 31, 2033.

(Added Pub. L. 115–390, title II, §202(a), Dec. 21, 2018, 132 Stat. 5188; amended Pub. L. 117–263, div. E, title LIX, §5949(k)(1), Dec. 23, 2022, 136 Stat. 3492.)

Editorial Notes

Amendments

2022—Pub. L. 117–263 substituted "December 31, 2033" for "the date that is 5 years after the date of the enactment of the Federal Acquisition Supply Chain Security Act of 2018".

Statutory Notes and Related Subsidiaries

Effective Date

Section effective 90 days after Dec. 21, 2018, and applicable to contracts that are awarded before, on, or after that date, see section 202(c) of Pub. L. 115–390, set out as a note under section 1321 of this title.

Title II of Pub. L. 115–390 effective 90 days after Dec. 21, 2018, see section 205 of Pub. L. 115–390, set out as a note under section 1321 of this title.

CHAPTER 15—COST ACCOUNTING STANDARDS

        

§1501. Cost Accounting Standards Board

(a) Organization.—The Cost Accounting Standards Board is an independent board in the Office of Federal Procurement Policy.

(b) Membership.—

(1) Number of members, chairman, and appointment.—The Board consists of 5 members. One member is the Administrator, who serves as Chairman. The other 4 members, all of whom shall have experience in Federal Government contract cost accounting, are as follows:

(A) 2 representatives of the Federal Government—

(i) one of whom is a representative of the Department of Defense appointed by the Secretary of Defense; and

(ii) one of whom is an officer or employee of the General Services Administration appointed by the Administrator of General Services.

(B) 2 individuals from the private sector, each of whom is appointed by the Administrator, and—

(i) one of whom is a representative of industry; and

(ii) one of whom is particularly knowledgeable about cost accounting problems and systems and, if possible, is a representative of a public accounting firm.

(2) Term of office.—

(A) Length of term.—The term of office of each member, other than the Administrator, is 4 years. The terms are staggered, with the terms of 2 members expiring in the same year, the term of another member expiring the next year, and the term of the last member expiring the year after that.

(B) Individual required to remain with appointing agency.—A member appointed under paragraph (1)(A) may not continue to serve after ceasing to be an officer or employee of the agency from which that member was appointed.

(3) Vacancy.—A vacancy on the Board shall be filled in the same manner in which the original appointment was made. A member appointed to fill a vacancy serves for the remainder of the term for which that member's predecessor was appointed.

(c) Duties.—The Board shall—

(1) ensure that the cost accounting standards used by Federal contractors rely, to the maximum extent practicable, on commercial standards and accounting practices and systems;

(2) within one year after the date of enactment of this subsection, and on an ongoing basis thereafter, review any cost accounting standards established under section 1502 of this title and conform such standards, where practicable, to Generally Accepted Accounting Principles; and

(3) annually review disputes involving such standards brought to the boards established in section 7105 of this title or Federal courts, and consider whether greater clarity in such standards could avoid such disputes.

(d) Meetings.—The Board shall meet not less than once each quarter and shall publish in the Federal Register notice of each meeting and its agenda before such meeting is held.

(e) Report.—The Board shall annually submit a report to the congressional defense committees, the Committee on Oversight and Government Reform of the House of Representatives, and the Committee on Homeland Security and Governmental Affairs of the Senate describing the actions taken during the prior year—

(1) to conform the cost accounting standards established under section 1502 of this title with Generally Accepted Accounting Principles; and

(2) to minimize the burden on contractors while protecting the interests of the Federal Government.

(f) Senior Staff.—The Administrator, after consultation with the Board—

(1) without regard to the provisions of title 5 governing appointments in the competitive service—

(A) shall appoint an executive secretary; and

(B) may appoint, or detail pursuant to section 3341 of title 5, two additional staff members; and

(2) may pay those employees without regard to the provisions of chapter 51 and subchapter III of chapter 53 of title 5 relating to classification and General Schedule pay rates, except that those employees may not receive pay in excess of the maximum rate of basic pay payable for level IV of the Executive Schedule.

(g) Other Staff.—The Administrator may appoint, fix the compensation of, and remove additional employees of the Board under the applicable provisions of title 5.

(h) Detailed and Temporary Personnel.—For service on advisory committees and task forces to assist the Board in carrying out its functions and responsibilities—

(1) the Board, with the consent of the head of a Federal agency, may use, without reimbursement, personnel of that agency; and

(2) the Administrator, after consultation with the Board, may procure temporary and intermittent services of personnel under section 3109(b) of title 5.

(i) Compensation.—

(1) Officers and employees of the government.—Members of the Board who are officers or employees of the Federal Government, and officers and employees of other agencies of the Federal Government who are used under subsection (h)(1), shall not receive additional compensation for services but shall continue to be compensated by the employing department or agency of the officer or employee.

(2) Appointees from private sector.—Each member of the Board appointed from the private sector shall receive compensation at a rate not to exceed the daily equivalent of the rate for level IV of the Executive Schedule for each day (including travel time) in which the member is engaged in the actual performance of duties vested in the Board.

(3) Temporary and intermittent personnel.—An individual hired under subsection (h)(2) may receive compensation at a rate fixed by the Administrator, but not to exceed the daily equivalent of the rate for level V of the Executive Schedule for each day (including travel time) in which the individual is properly engaged in the actual performance of duties under this chapter.

(4) Travel expenses.—While serving away from home or regular place of business, Board members and other individuals serving on an intermittent basis under this chapter shall be allowed travel expenses in accordance with section 5703 of title 5.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3695; Pub. L. 114–328, div. A, title VIII, §820(a)(1), (3), Dec. 23, 2016, 130 Stat. 2273, 2274.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
1501(a)	41:422(a)(1) (1st sentence).	Pub. L. 93–400, §26(a)–(e), as added Pub. L. 100–679, §5(a), Nov. 17, 1988, 102 Stat. 4058.
1501(b)	41:422(a)(1) (last sentence), (2).
1501(c)	41:422(b).
1501(d)	41:422(c).
1501(e)	41:422(d).
1501(f)	41:422(e).

In subsection (b)(2), the text of 41:422(a)(2)(C) is omitted as obsolete.

In subsection (b)(2)(A), the last sentence is substituted for "of the initial members, two shall be appointed for terms of two years, one shall be appointed for a term of three years, and one shall be appointed for a term of four years" because the initial members have already been appointed.

In subsection (c)(2), the reference to section 5376 of title 5 is substituted for the reference to grade GS–18 of the General Schedule because of section 529 [title I, §101(c)(1)] of the Treasury, Postal Service, and General Government Appropriations Act, 1991 (Public Law 101–509, 104 Stat. 1442, 5:5376 note).

In subsection (f)(1), the words "Except as otherwise provided in subsection (a) of this section" are omitted because 41:422(a) does not provide any relevant exception.

In subsection (f)(2), the words "private sector" are substituted for "private life" for consistency with subsection (b)(1)(B) of the revised section.

In subsection (f)(3), the words "Executive Schedule" are substituted for "Federal Executive Salary Schedule under section 5316 of title 5" for consistency and to eliminate unnecessary words.

Senate Revision Amendment

In subsec. (c)(2), "for level IV of the Executive Schedule" substituted for "under section 5376 of title 5" by S. Amdt. 4726 (111th Cong.). See 156 Cong. Rec. 18682 (2010).

Editorial Notes

References in Text

The date of enactment of this subsection, referred to in subsec. (c)(2), is the date of enactment of Pub. L. 114–328, which was approved Dec. 23, 2016.

Level IV of the Executive Schedule, referred to in subsec. (f)(2), is set out under section 5315 of Title 5, Government Organization and Employees.

Amendments

2016—Subsec. (b)(1)(B)(ii). Pub. L. 114–328, §820(a)(1)(A), inserted "and, if possible, is a representative of a public accounting firm" after "systems".

Subsecs. (c) to (e). Pub. L. 114–328, §820(a)(1)(C), added subsecs. (c) to (e). Former subsecs. (c) to (e) redesignated (f) to (h), respectively.

Subsec. (f). Pub. L. 114–328, §820(a)(1)(B), (D), redesignated subsec. (c) as (f) and amended it generally. Prior to amendment, text read as follows: "The Administrator, after consultation with the Board, may—

"(1) appoint an executive secretary and 2 additional staff members without regard to the provisions of title 5 governing appointments in the competitive service; and

"(2) pay those employees without regard to the provisions of chapter 51 and subchapter III of chapter 53 of title 5 relating to classification and General Schedule pay rates, except that those employees may not receive pay in excess of the maximum rate of basic pay payable for level IV of the Executive Schedule."

Subsecs. (g) to (i). Pub. L. 114–328, §820(a)(1)(B), redesignated subsecs. (d) to (f) as (g) to (i), respectively.

Subsec. (i)(1). Pub. L. 114–328, §820(a)(3)(A), substituted "subsection (h)(1)" for "subsection (e)(1)".

Subsec. (i)(3). Pub. L. 114–328, §820(a)(3)(B), substituted "subsection (h)(2)" for "subsection (e)(2)".

Statutory Notes and Related Subsidiaries

Change of Name

Committee on Oversight and Government Reform of House of Representatives changed to Committee on Oversight and Reform of House of Representatives by House Resolution No. 6, One Hundred Sixteenth Congress, Jan. 9, 2019. Committee on Oversight and Reform of House of Representatives changed to Committee on Oversight and Accountability of House of Representatives by House Resolution No. 5, One Hundred Eighteenth Congress, Jan. 9, 2023.

Effective Date of 2016 Amendment

Pub. L. 114–328, div. A, title VIII, §820(d), Dec. 23, 2016, 130 Stat. 2276, provided that: "The amendments made by this section [enacting section 190 of Title 10, Armed Forces, and amending this section and section 1502 of this title] shall take effect on October 1, 2018."

§1502. Cost accounting standards

(a) Authority.—

(1) Cost accounting standards board.—The Cost Accounting Standards Board has exclusive authority to prescribe, amend, and rescind cost accounting standards, and interpretations of the standards, designed to achieve uniformity and consistency in the cost accounting standards governing measurement, assignment, and allocation of costs to contracts with the Federal Government.

(2) Administrator for federal procurement policy.—The Administrator, after consultation with the Board, shall prescribe rules and procedures governing actions of the Board under this chapter. The rules and procedures shall require that any action to prescribe, amend, or rescind a standard or interpretation be approved by majority vote of the Board.

(b) Mandatory Use of Standards.—

(1) Subcontract.—

(A) Definition.—In this paragraph, the term "subcontract" includes a transfer of commercial products or commercial services between divisions, subsidiaries, or affiliates of a contractor or subcontractor.

(B) When standards are to be used.—Cost accounting standards prescribed under this chapter are mandatory for use by all executive agencies and by contractors and subcontractors in estimating, accumulating, and reporting costs in connection with the pricing and administration of, and settlement of disputes concerning, all negotiated prime contract and subcontract procurements with the Federal Government in excess of the amount set forth in section 3702(a)(1)(A) of title 10 as the amount is adjusted in accordance with applicable requirements of law.

(C) Nonapplication of standards.—Subparagraph (B) does not apply to—

(i) a contract or subcontract for the acquisition of a commercial product or commercial service;

(ii) a contract or subcontract where the price negotiated is based on a price set by law or regulation;

(iii) a firm, fixed-price contract or subcontract awarded on the basis of adequate price competition without submission of certified cost or pricing data; or

(iv) a contract or subcontract with a value of less than $7,500,000 if, when the contract or subcontract is entered into, the segment of the contractor or subcontractor that will perform the work has not been awarded at least one contract or subcontract with a value of more than $7,500,000 that is covered by the standards.

(2) Exemptions and waivers by board.—The Board may—

(A) exempt classes of contractors and subcontractors from the requirements of this chapter; and

(B) establish procedures for the waiver of the requirements of this chapter for individual contracts and subcontracts.

(3) Waiver by head of executive agency.—

(A) In general.—The head of an executive agency may waive the applicability of the cost accounting standards for a contract or subcontract with a value of less than $100,000,000 if that official determines in writing that the segment of the contractor or subcontractor that will perform the work—

(i) is primarily engaged in the sale of commercial products or commercial services; and

(ii) would not otherwise be subject to the cost accounting standards under this section.

(B) In exceptional circumstances.—The head of an executive agency may waive the applicability of the cost accounting standards for a contract or subcontract under exceptional circumstances when necessary to meet the needs of the agency. A determination to waive the applicability of the standards under this subparagraph shall be set forth in writing and shall include a statement of the circumstances justifying the waiver.

(C) Restriction on delegation of authority.—The head of an executive agency may not delegate the authority under subparagraph (A) or (B) to an official in the executive agency below the senior policymaking level in the executive agency.

(D) Contents of federal acquisition regulation.—The Federal Acquisition Regulation shall include—

(i) criteria for selecting an official to be delegated authority to grant waivers under subparagraph (A) or (B); and

(ii) the specific circumstances under which the waiver may be granted.

(E) Report.—The head of each executive agency shall report the waivers granted under subparagraphs (A) and (B) for that agency to the Board on an annual basis.

(c) Required Board Action for Prescribing Standards and Interpretations.—Before prescribing cost accounting standards and interpretations, the Board shall—

(1) take into account, after consultation and discussions with the Comptroller General, professional accounting organizations, contractors, and other interested parties—

(A) the probable costs of implementation, including any inflationary effects, compared to the probable benefits;

(B) the advantages, disadvantages, and improvements anticipated in the pricing and administration of, and settlement of disputes concerning, contracts; and

(C) the scope of, and alternatives available to, the action proposed to be taken;

(2) prepare and publish a report in the Federal Register on the issues reviewed under paragraph (1);

(3)(A) publish an advanced notice of proposed rulemaking in the Federal Register to solicit comments on the report prepared under paragraph (2);

(B) provide all parties affected at least 60 days after publication to submit their views and comments; and

(C) during the 60-day period, consult with the Comptroller General and consider any recommendation the Comptroller General may make; and

(4) publish a notice of proposed rulemaking in the Federal Register and provide all parties affected at least 60 days after publication to submit their views and comments.

(d) Effective Dates.—Rules, regulations, cost accounting standards, and modifications thereof prescribed or amended under this chapter shall have the full force and effect of law, and shall become effective within 120 days after publication in the Federal Register in final form, unless the Board determines that a longer period is necessary. The Board shall determine implementation dates for contractors and subcontractors. The dates may not be later than the beginning of the second fiscal year of the contractor or subcontractor after the standard becomes effective.

(e) Accompanying Material.—Rules, regulations, cost accounting standards, and modifications thereof prescribed or amended under this chapter shall be accompanied by prefatory comments and by illustrations, if necessary.

(f) Implementing Regulations.—The Board shall prescribe regulations for the implementation of cost accounting standards prescribed or interpreted under this section. The regulations shall be incorporated into the Federal Acquisition Regulation and shall require contractors and subcontractors as a condition of contracting with the Federal Government to—

(1) disclose in writing their cost accounting practices, including methods of distinguishing direct costs from indirect costs and the basis used for allocating indirect costs; and

(2) agree to a contract price adjustment, with interest, for any increased costs paid to the contractor or subcontractor by the Federal Government because of a change in the contractor's or subcontractor's cost accounting practices or a failure by the contractor or subcontractor to comply with applicable cost accounting standards.

(g) Nonapplicability of Certain Sections of Title 5.—Functions exercised under this chapter are not subject to sections 551, 553 to 559, and 701 to 706 of title 5.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3696; Pub. L. 114–328, div. A, title VIII, §820(a)(2), Dec. 23, 2016, 130 Stat. 2274; Pub. L. 115–232, div. A, title VIII, §836(b)(1), Aug. 13, 2018, 132 Stat. 1860; Pub. L. 117–81, div. A, title XVII, §1702(h)(3), Dec. 27, 2021, 135 Stat. 2158.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
1502(a)	41:422(f)(1), (3).	Pub. L. 93–400, §26(f), as added Pub. L. 100–679, §5(a), Nov. 17, 1988, 102 Stat. 4060; Pub. L. 103–355, title II, §2453, title VIII, §8301(d), Oct. 13, 1994, 108 Stat. 3326, 3397; Pub. L. 104–106, title XLII, §4205, title XLIII, §4321(h)(4), Feb. 10, 1996, 110 Stat. 656, 675; Pub. L 106–65, title VIII, §802(a), (b), Oct. 5, 1999, 113 Stat. 701; Pub. L 109–163, div. A, title VIII, §822, Jan. 6, 2006, 119 Stat. 3386.
1502(b)(1)	41:422(f)(2), (4).
1502(b)(2)	41:422(f)(4).
1502(b)(3)	41:422(f)(5).
1502(c)	41:422(g)(1).	Pub. L. 93–400, §26(g), (h)(1), as added Pub. L. 100–679, §5(a), Nov. 17, 1988, 102 Stat. 4061.
1502(d)	41:422(g)(2) (1st, 2d sentences).
1502(e)	41:422(g)(2) (last sentence).
1502(f)	41:422(h)(1).
1502(g)	41:422(g)(3).

In subsection (a)(1), the word "make" is omitted as being included in "prescribe".

In subsection (b)(2)(A), the word "categories" is omitted as being included in "classes".

In subsection (b)(3)(A)(ii), the words "as in effect on or after the effective date of this paragraph" are omitted as obsolete.

Editorial Notes

Amendments

2021—Subsec. (b)(1)(B). Pub. L. 117–81 substituted "section 3702(a)(1)(A)" for "section 2306a(a)(1)(A)(i)".

2018—Subsec. (b)(1)(A). Pub. L. 115–232, §836(b)(1)(A), substituted "commercial products or commercial services" for "commercial items".

Subsec. (b)(1)(C)(i). Pub. L. 115–232, §836(b)(1)(B), substituted "commercial product or commercial service" for "commercial item".

Subsec. (b)(3)(A)(i). Pub. L. 115–232, §836(b)(1)(C), substituted "commercial products or commercial services" for "commercial items".

2016—Subsec. (b)(3)(A). Pub. L. 114–328 substituted "$100,000,000" for "$15,000,000" in introductory provisions.

Statutory Notes and Related Subsidiaries

Effective Date of 2018 Amendment

Amendment by Pub. L. 115–232 effective Jan. 1, 2020, subject to a savings provision, see section 836(h) of Pub. L. 115–232, set out as an Effective Date of 2018 Amendment; Savings Provision note under section 453b of Title 6, Domestic Security.

Effective Date of 2016 Amendment

Amendment by Pub. L. 114–328 effective Oct. 1, 2018, see section 820(d) of Pub. L. 114–328, set out as a note under section 1501 of this title.

Effective Date of Amendment by Pub. L. 106–65; Regulations; Implementation; Construction

Pub. L. 106–65, div. A, title VIII, §802(c)–(e), (g)–(i), Oct. 5, 1999, 113 Stat. 701, 702, provided that:

"(c) Regulation on Types of CAS Coverage.—(1) The Administrator for Federal Procurement Policy shall revise the rules and procedures prescribed pursuant to section 26(f) of the Office of Federal Procurement Policy Act ([former] 41 U.S.C. 422(f)) [now 41 U.S.C. 1502(a), (b)] to the extent necessary to increase the thresholds established in section 9903.201–2 of title 48 of the Code of Federal Regulations from $25,000,000 to $50,000,000.

"(2) Paragraph (1) requires only a change of the statement of a threshold condition in the regulation referred to by section number in that paragraph, and shall not be construed as—

"(A) a ratification or expression of approval of—

"(i) any aspect of the regulation; or

"(ii) the manner in which section 26 of the Office of Federal Procurement Policy Act [now 41 U.S.C. 1501 et seq.] is administered through the regulation; or

"(B) a requirement to apply the regulation.

"(d) Implementation.—The Administrator for Federal Procurement Policy shall ensure that this section [see Tables for classification] and the amendments made by this section are implemented in a manner that ensures that the Federal Government can recover costs, as appropriate, in a case in which noncompliance with cost accounting standards, or a change in the cost accounting system of a contractor segment or subcontractor segment that is not determined to be desirable by the Federal Government, results in a shift of costs from contracts that are not covered by the cost accounting standards to contracts that are covered by the cost accounting standards.

"(e) Implementation of Requirements for Revision of Regulations.—(1) Final regulations required by subsection (c) shall be issued not later than 180 days after the date of the enactment of this Act [Oct. 5, 1999].

"(2) Subsection (c) shall cease to be effective one year after the date on which final regulations issued in accordance with that subsection take effect.

"(g) Inapplicability of Standards to Certain Contracts.—The cost accounting standards issued pursuant to section 26(f) of the Office of Federal Procurement Policy Act ([former] 41 U.S.C. 422(f)) [now 41 U.S.C. 1502(a), (b)], as amended by this section, shall not apply during fiscal year 2000 with respect to a contract entered into under the authority provided in chapter 89 of title 5, United States Code (relating to health benefits for Federal employees).

"(h) Construction Regarding Certain Not-For-Profit Entities.—The amendments made by subsections (a) and (b) [see Tables for classification] shall not be construed as modifying or superseding, nor as intended to impair or restrict, the applicability of the cost accounting standards described in section 26(f) of the Office of Federal Procurement Policy Act ([former] 41 U.S.C. 422(f)) [now 41 U.S.C. 1502(a), (b)] to—

"(1) any educational institution or federally funded research and development center that is associated with an educational institution in accordance with Office of Management and Budget Circular A–21, as in effect on January 1, 1999; or

"(2) any contract with a nonprofit entity that provides research and development and related products or services to the Department of Defense.

"(i) Effective Date.—The amendments made by subsections (a) and (b) [see Tables for classification] shall take effect 180 days after the date of enactment of this Act [Oct. 5, 1999], and shall apply with respect to—

"(1) contracts that are entered into on or after such effective date; and

"(2) determinations made on or after such effective date regarding whether a segment of a contractor or subcontractor is subject to the cost accounting standards under section 26(f) of the Office of Federal Procurement Policy Act ([former] 41 U.S.C. 422(f)) [now 41 U.S.C. 1502(a), (b)], regardless of whether the contracts on which such determinations are made were entered into before, on, or after such date."

§1503. Contract price adjustment

(a) Disagreement Constitutes a Dispute.—If the Federal Government and a contractor or subcontractor fail to agree on a contract price adjustment, including whether the contractor or subcontractor has complied with the applicable cost accounting standards, the disagreement will constitute a dispute under chapter 71 of this title.

(b) Amount of Adjustment.—A contract price adjustment undertaken under section 1502(f)(2) of this title shall be made, where applicable, on relevant contracts between the Federal Government and the contractor that are subject to the cost accounting standards so as to protect the Federal Government from payment, in the aggregate, of increased costs, as defined by the Cost Accounting Standards Board. The Federal Government may not recover costs greater than the aggregate increased cost to the Federal Government, as defined by the Board, on the relevant contracts subject to the price adjustment unless the contractor made a change in its cost accounting practices of which it was aware or should have been aware at the time of the price negotiation and which it failed to disclose to the Federal Government.

(c) Interest.—The interest rate applicable to a contract price adjustment is the annual rate of interest established under section 6621 of the Internal Revenue Code of 1986 (26 U.S.C. 6621) for the period. Interest accrues from the time payments of the increased costs were made to the contractor or subcontractor to the time the Federal Government receives full compensation for the price adjustment.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3699.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
1503(a)	41:422(h)(2).	Pub. L. 93–400, §26(h)(2)–(4), as added Pub. L. 100–679, §5(a), Nov. 17, 1988, 102 Stat. 4062.
1503(b)	41:422(h)(3).
1503(c)	41:422(h)(4).

§1504. Effect on other standards and regulations

(a) Previously Existing Standards.—All cost accounting standards, waivers, exemptions, interpretations, modifications, rules, and regulations prescribed by the Cost Accounting Standards Board under section 719 of the Defense Production Act of 1950 (50 U.S.C. App. 2168)— ¹

(1) remain in effect until amended, superseded, or rescinded by the Board under this chapter; and

(2) are subject to the provisions of this division in the same manner as if prescribed by the Board under this division.

(b) Inconsistent Agency Regulations.—To ensure that a regulation or proposed regulation of an executive agency is not inconsistent with a cost accounting standard prescribed or amended under this chapter, the Administrator, under the authority in sections 1121, 1122(a) to (c)(1), 1125, 1126, 1130, 1131, and 2305 of this title, shall rescind or deny the promulgation of the inconsistent regulation or proposed regulation and take other appropriate action authorized under sections 1121, 1122(a) to (c)(1), 1125, 1126, 1130, 1131, and 2305.

(c) Costs Not Subject to Different Standards.—Costs that are the subject of cost accounting standards prescribed under this chapter are not subject to regulations established by another executive agency that differ from those standards with respect to the measurement, assignment, and allocation of those costs.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3699.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
1504(a)	41:422(j)(1), (2).	Pub. L. 93–400, §26(j), as added Pub. L. 100–679, §5(a), Nov. 17, 1988, 102 Stat. 4062.
1504(b)	41:422(j)(3).
1504(c)	41:422(j)(4).

Editorial Notes

References in Text

Section 719 of the Defense Production Act of 1950, referred to in subsec. (a), is section 719 of act Sept. 8, 1950, ch. 932, title VII, as added Pub. L. 91–379, title I, §103, Aug. 15, 1970, 84 Stat. 796, which was classified to section 2168 of the former Appendix to Title 50, War and National Defense, prior to repeal by Pub. L. 100–679, §5(b), Nov. 17, 1988, 102 Stat. 4063.

¹ See References in Text note below.

§1505. Examinations

To determine whether a contractor or subcontractor has complied with cost accounting standards prescribed under this chapter and has followed consistently the contractor's or subcontractor's disclosed cost accounting practices, an authorized representative of the head of the agency concerned, of the offices of inspector general established under chapter 4 of title 5, or of the Comptroller General shall have the right to examine and copy documents, papers, or records of the contractor or subcontractor relating to compliance with the standards.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3700; Pub. L. 117–286, §4(b)(71), Dec. 27, 2022, 136 Stat. 4350.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
1505	41:422(k).	Pub. L. 93–400, §26(k), as added Pub. L. 100–679, §5(a), Nov. 17, 1988, 102 Stat. 4062.

Editorial Notes

Amendments

2022—Pub. L. 117–286 substituted "chapter 4 of title 5," for "the Inspector General Act of 1978 (5 U.S.C. App.),".

§1506. Authorization of appropriations

Necessary amounts may be appropriated to carry out this chapter.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3700.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
1506	41:422(l).	Pub. L. 93–400, §26(l), as added Pub. L. 100–679, §5(a), Nov. 17, 1988, 102 Stat. 4063.

CHAPTER 17—AGENCY RESPONSIBILITIES AND PROCEDURES

        

§1701. Cooperation with the Administrator

On the request of the Administrator, each executive agency shall—

(1) make its services, personnel, and facilities available to the Office of Federal Procurement Policy to the greatest practicable extent for the performance of functions under this division; and

(2) except when prohibited by law, furnish to the Administrator, and give the Administrator access to, all information and records in its possession that the Administrator may determine to be necessary for the performance of the functions of the Office.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3700.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
1701	41:406.	Pub. L. 93–400, §7, Aug. 30, 1974, 88 Stat. 798.

Executive Documents

Ex. Ord. No. 12073. Federal Procurement in Labor Surplus Areas

Ex. Ord. No. 12073, Aug. 16, 1978, 43 F.R. 36873, provided:

By the authority vested in me as President by the Constitution of the United States of America, and in order to strengthen the economic base of our Nation, it is hereby ordered as follows:

1–1. Procurements in Labor Surplus Areas

1–101. Executive agencies shall emphasize procurement set-asides in labor surplus areas in order to strengthen our Nation's economy.

1–102. Labor surplus area procurements shall be consistent with this Order and, to the extent funds are available, the priorities of Section 15 of the Small Business Act, as amended by Public Law 95–89 (15 U.S.C. 644).

1–2. Administrator of General Services

1–201. The Administrator shall coordinate with and advise State and local officials with regard to Federal efforts to encourage procurements in labor surplus areas with the aim of fostering economic development in labor surplus areas.

1–202. The Administrator shall establish specific labor surplus area procurement targets for Executive agencies in consultation with the heads of those agencies.

1–203. In cooperation with the heads of Executive agencies, the Administrator shall encourage the use of set-asides or other appropriate methods for meeting procurement targets in labor surplus areas.

1–204. The Administrator shall report every six months to the President on the progress of the agencies in achieving the procurement targets.

1–3. Agency Responsibilities

1–301. The Secretary of Labor shall classify and designate labor markets which are labor surplus areas. The Secretary shall provide labor market data to the heads of agencies and State and local officials in order to promote the development of business opportunities in labor surplus areas.

1–302. The heads of Executive agencies shall cooperate with the Administrator in carrying out his responsibilities for labor surplus area programs and shall provide the information necessary for setting procurement targets and recording achievement. They shall keep the Administrator informed of plans and programs which affect labor surplus procurements, with particular attention to opportunities for minority firms.

1–303. In accord with Section 6 of the Office of Federal Procurement Policy Act (41 U.S.C. 405), the Administrator for Federal Procurement Policy shall be responsible for the overall direction and oversight of the policies affecting procurement programs for labor surplus areas.

Jimmy Carter.      

Ex. Ord. No. 12931. Federal Procurement Reform

Ex. Ord. No. 12931, Oct. 13, 1994, 59 F.R. 52387, provided:

By the authority vested in me as President by the Constitution and the laws of the United States of America, and in order to ensure effective and efficient spending of public funds through fundamental reforms in Government procurement, it is hereby ordered as follows:

Section 1. To make procurement more effective in support of mission accomplishment and consistent with recommendations of the National Performance Review, heads of executive agencies engaged in the procurement of supplies and services shall:

(a) Review agency procurement rules, reporting requirements, contractual requirements, certification procedures, and other administrative procedures over and above those required by statute, and, where practicable, replace them with guiding principles that encourage and reward innovation;

(b) Review existing and planned agency programs to assure that such programs meet agency mission needs;

(c) Ensure that procurement organizations focus on measurable results and on increased attention to understanding and meeting customer needs;

(d) Increase the use of commercially available items where practicable, place more emphasis on past contractor performance, and promote best value rather than simply low cost in selecting sources for supplies and services;

(e) Ensure that simplified acquisition procedures are used, to the maximum extent practicable, for procurements under the simplified acquisition threshold in order to reduce administrative burdens and more effectively support the accomplishment of agency missions;

(f) Expand the use of the Government purchase card by the agency and take maximum advantage of the micro-purchase authority provided in the Federal Acquisition Streamlining Act of 1994 [Pub. L. 103–355, see Short Title of 1994 Act note set out under section 101 of this title] by delegating the authority, to the maximum extent practicable, to the offices that will be using the supplies or services to be purchased;

(g) Establish clear lines of contracting authority and accountability;

(h) Establish career education programs for procurement professionals, including requirements for successful completion of educational requirements or mandatory training for entry level positions and for promotion to higher level positions, in order to ensure a highly qualified procurement work force;

(i) Designate a Procurement Executive with agency-wide responsibility to oversee development of procurement goals, guidelines, and innovation, measure and evaluate procurement office performance against stated goals, enhance career development of the procurement work force, and advise the agency heads whether goals are being achieved; and

(j) Review existing and planned information technology acquisitions and contracts to ensure that the agency receives the best value with regard to price and technology, and consider alternatives in cases where best value is not being obtained.

Sec. 2. The Director of the Office of Personnel Management, in consultation with the heads of executive agencies, shall ensure that personnel policies and classification standards meet the needs of executive agencies for a professional procurement work force.

Sec. 3. The Administrator of the Office of Federal Procurement Policy, after consultation with the Director of the Office of Management and Budget, shall work jointly with the heads of executive agencies to provide broad policy guidance and overall leadership necessary to achieve procurement reform, including, but not limited to:

(a) Coordinating Government-wide efforts;

(b) Assisting executive agencies in streamlining guidance for procurement processes;

(c) Identifying desirable Government-wide procurement system criteria; and

(d) Identifying major inconsistencies in law and policies relating to procurement that impose unnecessary burdens on the private sector and Federal procurement officials, and, following coordination with executive agencies, submitting necessary legislative initiatives to the Office of Management and Budget for the resolution of such inconsistencies.

Sec. 4. Executive Order No. 12352 is revoked.

William J. Clinton.      

§1702. Chief Acquisition Officers and senior procurement executives

(a) Appointment or Designation of Chief Acquisition Officer.—The head of each executive agency described in section 901(b)(1) (other than the Department of Defense) or 901(b)(2)(C) of title 31 with a Chief Financial Officer appointed or designated under section 901(a) of title 31 shall appoint or designate a non-career employee as Chief Acquisition Officer for the agency.

(b) Authority and Functions of Chief Acquisition Officer.—

(1) Primary duty.—The primary duty of a Chief Acquisition Officer is acquisition management.

(2) Advice and assistance.—A Chief Acquisition Officer shall advise and assist the head of the executive agency and other agency officials to ensure that the mission of the executive agency is achieved through the management of the agency's acquisition activities.

(3) Other functions.—The functions of each Chief Acquisition Officer include—

(A) monitoring the performance of acquisition activities and acquisition programs of the executive agency, evaluating the performance of those programs on the basis of applicable performance measurements, and advising the head of the executive agency regarding the appropriate business strategy to achieve the mission of the executive agency;

(B) increasing the use of full and open competition in the acquisition of property and services by the executive agency by establishing policies, procedures, and practices that ensure that the executive agency receives a sufficient number of sealed bids or competitive proposals from responsible sources to fulfill the Federal Government's requirements (including performance and delivery schedules) at the lowest cost or best value considering the nature of the property or service procured;

(C) increasing appropriate use of performance-based contracting and performance specifications;

(D) making acquisition decisions consistent with all applicable laws and establishing clear lines of authority, accountability, and responsibility for acquisition decisionmaking within the executive agency;

(E) managing the direction of acquisition policy for the executive agency, including implementation of the unique acquisition policies, regulations, and standards of the executive agency;

(F) advising the executive agency on the applicability of relevant policy on the contracts of the agency for overseas contingency operations and ensuring the compliance of the contracts and contracting activities of the agency with such policy;

(G) developing and maintaining an acquisition career management program in the executive agency to ensure that there is an adequate professional workforce; and

(H) as part of the strategic planning and performance evaluation process required under section 306 of title 5 and sections 1105(a)(28), 1115, 1116, and 9703 (added by section 5(a) of Public Law 103–62 (107 Stat. 289)) of title 31—

(i) assessing the requirements established for agency personnel regarding knowledge and skill in acquisition resources management and the adequacy of those requirements for facilitating the achievement of the performance goals established for acquisition management;

(ii) developing strategies and specific plans for hiring, training, and professional development to rectify a deficiency in meeting those requirements; and

(iii) reporting to the head of the executive agency on the progress made in improving acquisition management capability.

(c) Senior Procurement Executive.—

(1) Designation.—The head of each executive agency shall designate a senior procurement executive.

(2) Responsibility.—The senior procurement executive is responsible for management direction of the procurement system of the executive agency, including implementation of the unique procurement policies, regulations, and standards of the executive agency.

(3) When chief acquisition officer appointed or designated.—For an executive agency for which a Chief Acquisition Officer has been appointed or designated under subsection (a), the head of the executive agency shall—

(A) designate the Chief Acquisition Officer as the senior procurement executive for the executive agency; or

(B) ensure that the senior procurement executive designated under paragraph (1) reports directly to the Chief Acquisition Officer without intervening authority.

(d) Overseas Contingency Operations Defined.—In this section, the term "overseas contingency operations" means military operations outside the United States and its territories and possessions that are a contingency operation (as that term is defined in section 101(a)(13) of title 10).

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3701; Pub. L. 112–239, div. A, title VIII, §849, Jan. 2, 2013, 126 Stat. 1853.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
1702(a), (b)(1), (2)	41:414(a).	Pub. L. 93–400, §16, as added Pub. L. 98–191, §7, Dec. 1, 1983, 97 Stat. 1330; Pub. L. 98–369, title VII, §2732(b)(2), July 18, 1984, 98 Stat. 1199; Pub. L. 108–136, div. A, title XIV, §1421(a)(1), Nov. 24, 2003, 117 Stat. 1666.
1702(b)(3)	41:414(b).
1702(c)	41:414(c).

Editorial Notes

Amendments

2013—Subsec. (b)(3)(F) to (H). Pub. L. 112–239, §849(a), added subpar. (F) and redesignated former subpars. (F) and (G) as (G) and (H), respectively.

Subsec. (d). Pub. L. 112–239, §849(b), added subsec. (d).

§1703. Acquisition workforce

(a) Description.—For purposes of this section, the acquisition workforce of an agency consists of all employees serving in acquisition positions listed in subsection (g)(1)(A).

(b) Applicability.—

(1) Nonapplicability to certain executive agencies.—Except as provided in subsection (i), this section does not apply to an executive agency that is subject to chapter 87 of title 10.

(2) Applicability of programs.—The programs established by this section apply to the acquisition workforce of each executive agency.

(c) Management Policies.—

(1) Duties of head of executive agency.—

(A) Establish policies and procedures.—After consultation with the Administrator, the head of each executive agency shall establish policies and procedures for the effective management (including accession, education, training, career development, and performance incentives) of the acquisition workforce of the agency. The development of acquisition workforce policies under this section shall be carried out consistent with the merit system principles set forth in section 2301(b) of title 5.

(B) Ensure uniform implementation.—The head of each executive agency shall ensure that, to the maximum extent practicable, acquisition workforce policies and procedures established are uniform in their implementation throughout the agency.

(2) Duties of administrator.—

(A) In general.—The Administrator shall issue policies to promote uniform implementation of this section by executive agencies, with due regard for differences in program requirements among agencies that may be appropriate and warranted in view of the agency mission. The Administrator shall coordinate with the Deputy Director for Management of the Office of Management and Budget to ensure that the policies are consistent with the policies and procedures established, and enhanced system of incentives provided, pursuant to section 5051(c) of the Federal Acquisition Streamlining Act of 1994 (Public Law 103–355, 108 Stat. 3351). The Administrator shall evaluate the implementation of this section by executive agencies.

(B) Government-wide training standards and certification.—The Administrator, acting through the Federal Acquisition Institute, shall provide and update government-wide training standards and certification requirements, including—

(i) developing and modifying acquisition certification programs;

(ii) ensuring quality assurance for agency implementation of government-wide training and certification standards;

(iii) analyzing the acquisition training curriculum to ascertain if all certification competencies are covered or if adjustments are necessary;

(iv) developing career path information for certified professionals to encourage retention in government positions;

(v) coordinating with the Office of Personnel Management for human capital efforts; and

(vi) managing rotation assignments to support opportunities to apply skills included in certification.

(d) Authority and Responsibility of Senior Procurement Executive.—Subject to the authority, direction, and control of the head of an executive agency, the senior procurement executive of the agency shall carry out all powers, functions, and duties of the head of the agency with respect to implementing this section. The senior procurement executive shall ensure that the policies of the head of the executive agency established in accordance with this section are implemented throughout the agency.

(e) Collecting and Maintaining Information.—The Administrator shall ensure that the heads of executive agencies collect and maintain standardized information on the acquisition workforce related to implementing this section. To the maximum extent practicable, information requirements shall conform to standards the Director of the Office of Personnel Management establishes for the Central Personnel Data File.

(f) Career Development.—

(1) Career paths.—

(A) Identification.—The head of each executive agency shall ensure that appropriate career paths for personnel who desire to pursue careers in acquisition are identified in terms of the education, training, experience, and assignments necessary for career progression to the most senior acquisition positions. The head of each executive agency shall make available information on those career paths.

(B) Critical duties and tasks.—For each career path, the head of each executive agency shall identify the critical acquisition-related duties and tasks in which, at minimum, employees of the agency in the career path shall be competent to perform at full performance grade levels. For this purpose, the head of the executive agency shall provide appropriate coverage of the critical duties and tasks identified by the Director of the Federal Acquisition Institute.

(C) Mandatory training and education.—For each career path, the head of each executive agency shall establish requirements for the completion of course work and related on-the-job training in the critical acquisition-related duties and tasks of the career path. The head of each executive agency also shall encourage employees to maintain the currency of their acquisition knowledge and generally enhance their knowledge of related acquisition management disciplines through academic programs and other self-developmental activities.

(2) Performance incentives.—The head of each executive agency shall provide for an enhanced system of incentives to encourage excellence in the acquisition workforce that rewards performance of employees who contribute to achieving the agency's performance goals. The system of incentives shall include provisions that—

(A) relate pay to performance (including the extent to which the performance of personnel in the workforce contributes to achieving the cost goals, schedule goals, and performance goals established for acquisition programs pursuant to section 3103(b) of this title); and

(B) provide for consideration, in personnel evaluations and promotion decisions, of the extent to which the performance of personnel in the workforce contributes to achieving the cost goals, schedule goals, and performance goals.

(g) Qualification Requirements.—

(1) In general.—Subject to paragraph (2), the Administrator shall—

(A) establish qualification requirements, including education requirements, for—

(i) entry-level positions in the General Schedule Contracting series (GS–1102);

(ii) senior positions in the General Schedule Contracting series (GS–1102);

(iii) all positions in the General Schedule Purchasing series (GS–1105); and

(iv) positions in other General Schedule series in which significant acquisition-related functions are performed; and

(B) prescribe the manner and extent to which the qualification requirements shall apply to an individual serving in a position described in subparagraph (A) at the time the requirements are established.

(2) Relationship to requirements applicable to defense acquisition workforce.—The Administrator shall establish qualification requirements and make prescriptions under paragraph (1) that are comparable to those established for the same or equivalent positions pursuant to chapter 87 of title 10 with appropriate modifications.

(3) Approval of requirements.—The Administrator shall submit any requirement established or prescription made under paragraph (1) to the Director of the Office of Personnel Management for approval. The Director is deemed to have approved the requirement or prescription if the Director does not disapprove the requirement or prescription within 30 days after receiving it.

(h) Education and Training.—

(1) Funding levels.—The head of an executive agency shall set forth separately the funding levels requested for educating and training the acquisition workforce in the budget justification documents submitted in support of the President's budget submitted to Congress under section 1105 of title 31.

(2) Tuition assistance.—The head of an executive agency may provide tuition reimbursement in education (including a full-time course of study leading to a degree) in accordance with section 4107 of title 5 for personnel serving in acquisition positions in the agency.

(3) Restricted obligation.—Amounts appropriated for education and training under this section may not be obligated for another purpose.

(i) Training Fund.—

(1) Purposes.—The purposes of this subsection are to ensure that the Federal acquisition workforce—

(A) adapts to fundamental changes in the nature of Federal Government acquisition of property and services associated with the changing roles of the Federal Government; and

(B) acquires new skills and a new perspective to enable it to contribute effectively in the changing environment of the 21st century.

(2) Establishment and management of fund.—There is an acquisition workforce training fund. The Administrator of General Services shall manage the fund through the Federal Acquisition Institute to support the activities set forth in section 1201(a) of this title, except as provided in paragraph (5). The Administrator of General Services shall consult with the Administrator in managing the fund.

(3) Credits to fund.—Five percent of the fees collected by executive agencies (other than the Department of Defense) under the following contracts shall be credited to the fund:

(A) Government-wide task and delivery-order contracts entered into under sections 4103 and 4105 of this title.

(B) Government-wide contracts for the acquisition of information technology as defined in section 11101 of title 40 and multiagency acquisition contracts for that technology authorized by section 11314 of title 40.

(C) multiple-award schedule contracts entered into by the Administrator of General Services.

(4) Remittance by head of executive agency.—The head of an executive agency that administers a contract described in paragraph (3) shall remit to the General Services Administration the amount required to be credited to the fund with respect to the contract at the end of each quarter of the fiscal year.

(5) Transfer and use of fees collected from department of defense.—The Administrator of General Services shall transfer to the Secretary of Defense fees collected from the Department of Defense pursuant to paragraph (3). The Defense Acquisition University shall use the fees for acquisition workforce training.

(6) Amounts not to be used for other purposes.—The Administrator of General Services, through the Office of Federal Procurememt ¹ Policy, shall ensure that amounts collected under this section are not used for a purpose other than the activities set forth in section 1201(a) of this title.

(7) Amounts are in addition to other amounts for education and training.—Amounts credited to the fund are in addition to amounts requested and appropriated for education and training referred to in subsection (h)(1).

(8) Availability of amounts.—Amounts credited to the fund remain available to be expended only in the fiscal year for which they are credited and the 2 succeeding fiscal years.

(j) Recruitment Program.—

(1) Shortage category positions.—For purposes of sections 3304, 5333, and 5753 of title 5, the head of a department or agency of the Federal Government (other than the Secretary of Defense) may determine, under regulations prescribed by the Office of Personnel Management, that certain Federal acquisition positions (as described in subsection (g)(1)(A)) are shortage category positions in order to use the authorities in those sections to recruit and appoint highly qualified individuals directly to those positions in the department or agency.

(2) Termination of authority.—The head of a department or agency may not appoint an individual to a position of employment under this subsection after September 30, 2017.

(k) Reemployment Without Loss of Annuity.—

(1) Establishment of policies and procedures.—The head of each executive agency, after consultation with the Administrator and the Director of the Office of Personnel Management, shall establish policies and procedures under which the agency head may reemploy in an acquisition-related position (as described in subsection (g)(1)(A)) an individual receiving an annuity from the Civil Service Retirement and Disability Fund, on the basis of the individual's service, without discontinuing the annuity. The head of each executive agency shall keep the Administrator informed of the agency's use of this authority.

(2) Criteria for continuation of annuity.—Policies and procedures established under paragraph (1) shall authorize the head of the executive agency, on a case-by-case basis, to continue an annuity if any of the following makes the reemployment of an individual essential:

(A) The unusually high or unique qualifications of an individual receiving an annuity from the Civil Service Retirement and Disability Fund on the basis of the individual's service.

(B) The exceptional difficulty in recruiting or retaining a qualified employee.

(C) A temporary emergency hiring need.

(3) Service not subject to csrs or fers.—An individual reemployed under this subsection shall not be deemed an employee for purposes of chapter 83 or 84 of title 5.

(4) Reporting requirement.—The Administrator shall submit annually to the Committee on Oversight and Government Reform of the House of Representatives and the Committee on Homeland Security and Governmental Affairs of the Senate a report on the use of the authority under this subsection, including the number of employees reemployed under authority of this subsection.

(5) Sunset provision.—The authority under this subsection expires on December 31, 2011.

(l) Acquisition Internship and Training Programs.—All Federal civilian agency acquisition internship or acquisition training programs shall follow guidelines provided by the Office of Federal Procurement Policy to ensure consistent training standards necessary to develop uniform core competencies throughout the Federal Government.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3702; Pub. L. 112–74, div. C, title V, §526, Dec. 23, 2011, 125 Stat. 914; Pub. L. 112–81, div. A, title VIII, §864(c), (d), Dec. 31, 2011, 125 Stat. 1525; Pub. L. 112–239, div. A, title X, §1076(a)(15), title XI, §1103, Jan. 2, 2013, 126 Stat. 1948, 1973.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
1703(a)	41:433(e) (last sentence).	Pub. L. 93–400, §37(b)–(h)(2), as added Pub. L. 104–106, title XLIII, §4307(a)(1), Feb. 10, 1996, 110 Stat. 666.
1703(b)(1)	41:433(a).	Pub. L. 93–400, §37(a), as added Pub. L. 104–106, title XLIII, §4307(a)(1), Feb. 10, 1996, 110 Stat. 666; Pub. L. 109–163, div. A, title VIII, §821(b)(1), Jan. 6, 2006, 119 Stat. 3386.
1703(b)(2)	41:433(e) (1st sentence).
1703(c)	41:433(b).
1703(d)	41:433(c).
1703(e)	41:433(d).
1703(f)	41:433(f).
1703(g)	41:433(g).
1703(h)(1)	41:433(h)(1)(A).
1703(h)(2)	41:433(h)(2).
1703(h)(3)	41:433(h)(1)(B).
1703(i)(1)	41:433 note.	Pub. L. 108–136, div. A, title XIV, §1412(a), Nov. 24, 2003, 117 Stat. 1664.
1703(i)(2)–(8)	41:433(h)(3).	Pub. L. 93–400, §37(h)(3), as added Pub. L. 108–136, div. A, title XIV, §1412(b), Nov. 24, 2003, 117 Stat. 1664; Pub. L. 109–163, div. A, title VIII, §821(a), Jan. 6, 2006, 119 Stat. 3386; Pub. L. 110–181, div. A, title VIII, §854, Jan. 28, 2008, 122 Stat. 251.
1703(j)	41:433 note.	Pub. L. 108–136, div. A, title XIV, §1413, Nov. 24, 2003, 117 Stat. 1665; Pub. L. 110–181, div. A, title VIII, §853, title X, §1063(g)(2), Jan. 28, 2008, 122 Stat. 250, 323.
1703(k)	41:433(i).	Pub. L. 93–400, §37(i), as added Pub. L. 109–313, §4, Oct. 6, 2006, 120 Stat. 1737.

In subsection (e), the word "information" the second time it appears is substituted for "data" for consistency in the subsection.

In subsection (i)(6), the words "Office of Federal Procurement Policy" are substituted for "Office of Federal Acquisition Policy" to provide the correct name of the office.

In subsection (j), the text of 1413(c) of the National Defense Authorization Act for Fiscal Year 2004 (Pub. L. 108–136, 117 Stat. 1665) is omitted as obsolete.

In subsection (k)(4), the words "Committee on Oversight and Government Reform" are substituted for "Committee on Government Reform" on authority of Rule X(1)(m) of the Rules of the House of Representatives, adopted by House Resolution No. 6 (110th Congress, January 5, 2007).

Editorial Notes

References in Text

Section 5051(c) of the Federal Acquisition Streamlining Act of 1994, referred to in subsec. (c)(2)(A), is section 5051(c) of Pub. L. 103–305, which is set out as a note under this section.

Amendments

2013—Subsec. (i)(6). Pub. L. 112–239, §1076(a)(15), amended Pub. L. 112–81, §864(d)(2). See 2011 Amendment note below.

Subsec. (j)(2). Pub. L. 112–239, §1103, substituted "September 30, 2017" for "September 30, 2012".

2011—Subsec. (c)(2). Pub. L. 112–81, §864(c)(1), designated existing provisions as subpar. (A), inserted subpar. heading, and added subpar. (B).

Subsec. (i)(2). Pub. L. 112–81, §864(d)(1), substituted "to support the activities set forth in section 1201(a) of this title" for "to support the training of the acquisition workforce of the executive agencies".

Subsec. (i)(6). Pub. L. 112–81, §864(d)(2), as amended by Pub. L. 112–239, §1076(a)(15), substituted "ensure that amounts collected under this section are not used for a purpose other than the activities set forth in section 1201(a) of this title." for "ensure that amounts collected under this subsection are not used for a purpose other than the purpose specified in subparagraphs (A) and (C) to (J) of section 1122(a)(5) of this title."

Pub. L. 112–74 struck out "for training" after "amounts collected" and substituted "subparagraphs (A) and (C) to (J) of section 1122(a)(5) of this title" for "paragraph (2)".

Subsec. (l). Pub. L. 112–81, §864(c)(2), added subsec. (l).

Statutory Notes and Related Subsidiaries

Change of Name

Committee on Oversight and Government Reform of House of Representatives changed to Committee on Oversight and Reform of House of Representatives by House Resolution No. 6, One Hundred Sixteenth Congress, Jan. 9, 2019. Committee on Oversight and Reform of House of Representatives changed to Committee on Oversight and Accountability of House of Representatives by House Resolution No. 5, One Hundred Eighteenth Congress, Jan. 9, 2023.

Effective Date of 2013 Amendment

Pub. L. 112–239, div. A, title X, §1076(a), Jan. 2, 2013, 126 Stat. 1947, provided that the amendment made by section 1076(a)(15) is effective Dec. 31, 2011, and as if included in Pub. L. 112–81 as enacted.

Artificial Intelligence Training for the Acquisition Workforce

Pub. L. 117–207, Oct. 17, 2022, 136 Stat. 2238, provided that:

"SECTION 1. SHORT TITLE.

"This Act may be cited as the 'Artificial Intelligence Training for the Acquisition Workforce Act' or the 'AI Training Act'.

"SEC. 2. ARTIFICIAL INTELLIGENCE TRAINING PROGRAMS.

"(a) Definitions.—In this section:

"(1) AI.—The term 'AI' has the meaning given the term 'artificial intelligence' in section 238(g) of the John S. McCain National Defense Authorization Act for Fiscal Year 2019 [Pub. L. 115–232] (10 U.S.C. 2358 note [now 10 U.S.C. 4061 note prec.]).

"(2) AI training program.—The term 'AI training program' means the training program established under subsection (b)(1).

"(3) Covered workforce.—The term 'covered workforce' means—

"(A) employees of an executive agency who are responsible for—

"(i) program management;

"(ii) the planning, research, development, engineering, testing, and evaluation of systems, including quality control and assurance;

"(iii) procurement and contracting;

"(iv) logistics; or

"(v) cost estimating; and

"(B) other personnel of an executive agency designated by the head of the executive agency to participate in the AI training program.

"(4) Director.—The term 'Director' means the Director of the Office of Management and Budget.

"(5) Executive agency.—The term 'executive agency'—

"(A) has the meaning given the term in section 133 of title 41, United States Code; and

"(B) does not include—

"(i) the Department of Defense or a component of the Department of Defense; or

"(ii) the National Nuclear Security Administration or a component of the National Nuclear Security Administration.

"(b) Requirement.—

"(1) In general.—Not later than 1 year after the date of enactment of this Act [Oct. 17, 2022], and not less frequently than annually thereafter, the Director, in coordination with the Administrator of General Services and any other person determined relevant by the Director, shall develop and implement or otherwise provide an AI training program for the covered workforce.

"(2) Purpose.—The purpose of the AI training program shall be to ensure that the covered workforce has knowledge of the capabilities and risks associated with AI.

"(3) Topics.—The AI training program shall include information relating to—

"(A) the science underlying AI, including how AI works;

"(B) introductory concepts relating to the technological features of artificial intelligence systems;

"(C) the ways in which AI can benefit the Federal Government;

"(D) the risks posed by AI, including discrimination and risks to privacy;

"(E) ways to mitigate the risks described in subparagraph (D), including efforts to create and identify AI that is reliable, safe, and trustworthy; and

"(F) future trends in AI, including trends for homeland and national security and innovation.

"(4) Updates.—Not less frequently than once every 2 years, the Director shall update the AI training program to—

"(A) incorporate new information relating to AI; and

"(B) ensure that the AI training program continues to satisfy the requirements under paragraph (3).

"(5) Format.—The Director is encouraged to develop and implement or otherwise include under the AI training program interactive learning with—

"(A) technologists;

"(B) scholars; and

"(C) other experts from the private, public, and nonprofit sectors.

"(6) Metrics.—The Director shall ensure the existence of a means by which to—

"(A) understand and measure the participation of the covered workforce; and

"(B) receive and consider feedback from participants in the AI training program to improve the AI training program.

"(7) Sunset.—Effective 10 years after the date of enactment of this Act, this section shall have no force or effect."

Supply Chain Security Training

Pub. L. 117–145, June 16, 2022, 136 Stat. 1269, provided that:

"SECTION 1. SHORT TITLE.

"This Act may be cited as the 'Supply Chain Security Training Act of 2021'.

"SEC. 2. TRAINING PROGRAM TO MANAGE SUPPLY CHAIN RISK.

"(a) In General.—Not later than 180 days after the date of the enactment of this Act [June 16, 2022], the Administrator of General Services, through the Federal Acquisition Institute, shall develop a training program for officials with supply chain risk management responsibilities at Federal agencies.

"(b) Content.—The training program shall be designed to prepare such personnel to perform supply chain risk management activities and identify and mitigate supply chain security risks that arise throughout the acquisition lifecycle, including for the acquisition of information and communications technology. The training program shall—

"(1) include, considering the protection of classified and other sensitive information, information on current, specific supply chain security threats and vulnerabilities; and

"(2) be updated as determined to be necessary by the Administrator.

"(c) Coordination and Consultation.—In developing and determining updates to the training program, the Administrator shall—

"(1) coordinate with the Federal Acquisition Security Council, the Secretary of Homeland Security, and the Director of the Office of Personnel Management; and

"(2) consult with the Director of the Department of Defense's Defense Acquisition University, the Director of National Intelligence, and the Director of the National Institute of Standards and Technology.

"(d) Guidance.—

"(1) In general.—Not later than 180 days after the training program is developed under subsection (a), the Director of the Office of Management and Budget shall promulgate guidance to Federal agencies requiring executive agency adoption and use of the training program. Such guidance shall—

"(A) allow executive agencies to incorporate the training program into existing agency training programs; and

"(B) provide guidance on how to identify executive agency officials with supply chain risk management responsibilities.

"(2) Availability.—The Director of the Office of Management and Budget shall make the guidance promulgated under paragraph (1) available to Federal agencies of the legislative and judicial branches.

"SEC. 3. REPORTS ON IMPLEMENTATION OF PROGRAM.

"Not later than 180 days after the completion of the first course, and annually thereafter for the next three years, the Administrator of General Services shall submit to the appropriate congressional committees and leadership a report on implementation of the training program required under section 2.

"SEC. 4. DEFINITIONS.

"In this Act:

"(1) Appropriate congressional committees and leadership.—The term 'appropriate congressional committees' means—

"(A) the Committee on Homeland Security and Governmental Affairs and the Committee on Armed Services of the Senate; and

"(B) the Committee on Oversight and Reform [now Committee on Oversight and Accountability] and the Committee on Armed Services of the House of Representatives.

"(2) Information and communications technology.—The term 'information and communications technology' has the meaning given the term in section 4713(k) of title 41, United States Code.

"(3) Executive agency.—The term 'executive agency' has the meaning given the term in section 133 of title 41, United States Code.

"(4) Federal agency.—The term 'Federal agency' means any agency, committee, commission, office, or other establishment in the executive, legislative, or judicial branch of the Federal Government.

"(5) Training program.—The term 'training program' means the training program developed pursuant to section 2(a)."

Effective Communication Between Government and Industry

Pub. L. 114–92, div. A, title VIII, §887, Nov. 25, 2015, 129 Stat. 949, provided that: "Not later than 180 days after the date of the enactment of this Act [Nov. 25, 2015], the Federal Acquisition Regulatory Council shall prescribe a regulation making clear that agency acquisition personnel are permitted and encouraged to engage in responsible and constructive exchanges with industry, so long as those exchanges are consistent with existing law and regulation and do not promote an unfair competitive advantage to particular firms."

Training for Contracting and Enforcement Personnel

Pub. L. 111–240, title I, §1343(a), Sept. 27, 2010, 124 Stat. 2545, provided that: "Not later than 1 year after the date of enactment of this Act [Sept. 27, 2010], the Federal Acquisition Institute, in consultation with the Administrator for Federal Procurement Policy, the Defense Acquisition University, and the Administrator [of the Small Business Administration], shall develop courses for acquisition personnel concerning proper classification of business concerns and small business size and status for purposes of Federal contracts, subcontracts, grants, cooperative agreements, and cooperative research and development agreements."

Defense Acquisition University Funding

Pub. L. 109–163, div. A, title VIII, §821(c), Jan. 6, 2006, 119 Stat. 3386, provided that: "Amounts transferred under section 37(h)(3)(D) of the Office of Federal Procurement Policy Act [now 41 U.S.C. 1703(i)(5)] (as amended by subsection (a)) for use by the Defense Acquisition University shall be in addition to other amounts authorized for the University."

Enhanced System of Performance Incentives

Pub. L. 103–355, title V, §5051(c), Oct. 13, 1994, 108 Stat. 3351, provided that: "Within one year after the date of the enactment of this Act [Oct. 13, 1994], the Deputy Director for Management of the Office of Management and Budget, in consultation with appropriate officials in other departments and agencies of the Federal Government, shall, to the maximum extent consistent with applicable law—

"(1) establish policies and procedures for the heads of such departments and agencies to designate acquisition positions and manage employees (including the accession, education, training and career development of employees) in the designated acquisition positions; and

"(2) review the incentives and personnel actions available to the heads of departments and agencies of the Federal Government for encouraging excellence in the acquisition workforce of the Federal Government and provide an enhanced system of incentives for the encouragement of excellence in such workforce which—

"(A) relates pay to performance (including the extent to which the performance of personnel in such workforce contributes to achieving the cost goals, schedule goals, and performance goals established for acquisition programs pursuant to section 313(b) of the Federal Property and Administrative Services Act of 1949, as added by subsection (a) [now 41 U.S.C. 3103(b)]); and

"(B) provides for consideration, in personnel evaluations and promotion decisions, of the extent to which the performance of personnel in such workforce contributes to achieving such cost goals, schedule goals, and performance goals."

¹ So in original. Probably should be "Procurement".

§1704. Planning and policy-making for acquisition workforce

(a) Definitions.—In this section:

(1) Associate Administrator.—The term "Associate Administrator" means the Associate Administrator for Acquisition Workforce Programs as designated by the Administrator pursuant to subsection (b).

(2) Chief Acquisition Officer.—The term "Chief Acquisition Officer" means a Chief Acquisition Officer for an executive agency appointed pursuant to section 1702 of this title.

(b) Associate Administrator for Acquisition Workforce Programs.—The Administrator shall designate a member of the Senior Executive Service as the Associate Administrator for Acquisition Workforce Programs. The Associate Administrator shall be chosen on the basis of demonstrated knowledge and expertise in acquisition, human capital, and management. The Associate Administrator shall be located in the Office of Federal Procurement Policy. The Associate Administrator shall be responsible for—

(1) supervising the acquisition workforce training fund established under section 1703(i) of this title;

(2) developing, in coordination with Chief Acquisition Officers and Chief Human Capital Officers, a strategic human capital plan for the acquisition workforce of the Federal Government;

(3) reviewing and providing input to individual agency acquisition workforce succession plans;

(4) recommending to the Administrator and other senior government officials appropriate programs, policies, and practices to increase the quantity and quality of the Federal acquisition workforce;

(5) implementing workforce programs under subsections (f) through (l) of section 1703 of this title; and

(6) carrying out other functions that the Administrator may assign.

(c) Acquisition and Contracting Training Programs Within Executive Agencies.—

(1) Chief Acquisition Officer authorities and responsibilities.—Subject to the authority, direction, and control of the head of an executive agency, the Chief Acquisition Officer for that agency shall carry out all powers, functions, and duties of the head of the agency with respect to implementation of this subsection. The Chief Acquisition Officer shall ensure that the policies established by the head of the agency in accordance with this subsection are implemented throughout the agency.

(2) Requirement.—The head of each executive agency, after consultation with the Associate Administrator, shall establish and operate acquisition and contracting training programs. The programs shall—

(A) have curricula covering a broad range of acquisition and contracting disciplines corresponding to the specific acquisition and contracting needs of the agency involved;

(B) be developed and applied according to rigorous standards; and

(C) be designed to maximize efficiency, through the use of self-paced courses, online courses, on-the-job training, and the use of remote instructors, wherever those features can be applied without reducing the effectiveness of the training or negatively affecting academic standards.

(d) Government-wide Policies and Evaluation.—The Administrator shall issue policies to promote the development of performance standards for training and uniform implementation of this section by executive agencies, with due regard for differences in program requirements among agencies that may be appropriate and warranted in view of the agency mission. The Administrator shall evaluate the implementation of the provisions of subsection (c) by executive agencies.

(e) Information on Acquisition and Contracting Training.—The Administrator shall ensure that the heads of executive agencies collect and maintain standardized information on the acquisition and contracting workforce related to the implementation of subsection (c).

(f) Acquisition Workforce Human Capital Succession Plan.—

(1) In general.—Each Chief Acquisition Officer for an executive agency shall develop, in consultation with the Chief Human Capital Officer for the agency and the Associate Administrator, a succession plan consistent with the agency's strategic human capital plan for the recruitment, development, and retention of the agency's acquisition workforce, with a particular focus on warranted contracting officers and program managers of the agency.

(2) Content of plan.—The acquisition workforce succession plan shall address—

(A) recruitment goals for personnel from procurement intern programs;

(B) the agency's acquisition workforce training needs;

(C) actions to retain high performing acquisition professionals who possess critical relevant skills;

(D) recruitment goals for personnel from the Federal Career Intern Program; and

(E) recruitment goals for personnel from the Presidential Management Fellows Program.

(g) Acquisition Workforce Development Strategic Plan.—

(1) Purpose.—The purpose of this subsection is to authorize the preparation and completion of the Acquisition Workforce Development Strategic Plan, which is a plan for Federal agencies other than the Department of Defense to—

(A) develop a specific and actionable 5-year plan to increase the size of the acquisition workforce; and

(B) operate a government-wide acquisition intern program for the Federal agencies.

(2) Establishment of plan.—The Associate Administrator shall be responsible for the management, oversight, and administration of the Acquisition Workforce Development Strategic Plan in cooperation and consultation with the Office of Federal Procurement Policy and with the assistance of the Federal Acquisition Institute.

(3) Criteria.—The Acquisition Workforce Development Strategic Plan shall include an examination of the following matters:

(A) The variety and complexity of acquisitions conducted by each Federal agency covered by the plan, and the workforce needed to effectively carry out the acquisitions.

(B) The development of a sustainable funding model to support efforts to hire, retain, and train an acquisition workforce of appropriate size and skill to effectively carry out the acquisition programs of the Federal agencies covered by the plan, including an examination of interagency funding methods and a discussion of how the model of the Defense Acquisition Workforce Development Fund could be applied to civilian agencies.

(C) Any strategic human capital planning necessary to hire, retain, and train an acquisition workforce of appropriate size and skill at each Federal agency covered by the plan.

(D) Methodologies that Federal agencies covered by the plan can use to project future acquisition workforce personnel hiring requirements, including an appropriate distribution of such personnel across each category of positions designated as acquisition workforce personnel under section 1703(g) of this title.

(E) Government-wide training standards and certification requirements necessary to enhance the mobility and career opportunities of the Federal acquisition workforce within the Federal agencies covered by the plan.

(F) If the Associate Administrator recommends as part of the plan a growth in the acquisition workforce of the Federal agencies covered by the plan below 25 percent over the next 5 years, an examination of each of the matters specified in subparagraphs (A) to (E) in the context of a 5-year plan that increases the size of such acquisition workforce by not less than 25 percent, or an explanation why such a level of growth would not be in the best interest of the Federal Government.

(4) Deadline for completion.—The Acquisition Workforce Development Strategic Plan shall be completed not later than one year after October 14, 2008, and in a fashion that allows for immediate implementation of its recommendations and guidelines.

(5) Funds.—The acquisition workforce development strategic plan shall be funded from the acquisition workforce training fund under section 1703(i) of this title.

(h) Training in the Acquisition of Architect and Engineering Services.—The Administrator shall ensure that a sufficient number of Federal employees are trained in the acquisition of architect and engineering services.

(i) Utilization of Recruitment and Retention Authorities.—The Administrator, in coordination with the Director of the Office of Personnel Management, shall encourage executive agencies to use existing authorities, including direct hire authority and tuition assistance programs, to recruit and retain acquisition personnel and consider recruiting acquisition personnel who may be retiring from the private sector, consistent with existing laws and regulations.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3706; Pub. L. 111–383, div. A, title X, §1075(e)(15), Jan. 7, 2011, 124 Stat. 4375; Pub. L. 112–81, div. A, title VIII, §864(a), Dec. 31, 2011, 125 Stat. 1522; Pub. L. 112–239, div. A, title X, §1076(a)(14), Jan. 2, 2013, 126 Stat. 1948.)

Amendments Not Shown in Text

Subsec. (g) of this section was derived from Pub. L. 110–417, [div. A], title VIII, §869, Oct. 14, 2008, 122 Stat. 4553, which was set out as a note under section 433a of former Title 41, Public Contracts, prior to being repealed and reenacted as subsec. (g) of this section by Pub. L. 111–350, §§3, 7(b), Jan. 4, 2011, 124 Stat. 3677, 3855. Section 869 of Pub. L. 110–417 was amended by Pub. L. 111–383, div. A, title X, §1075(e)(15), Jan. 7, 2011, 124 Stat. 4375. For applicability of that amendment to this section, see section 6(a) of Pub. L. 111–350, set out as a Transitional and Savings Provisions note preceding section 101 of this title. Section 869 of Pub. L. 110–417 was amended as follows:

(1) in subsection (b), by striking "433(a)" and inserting "433a(a)"; and

(2) in subsection (c)(4)—

(A) by striking "37(j)" and inserting "37(g)"; and

(B) by striking "433(j)" and inserting "433(g)".

Such references did not appear in the text of subsec. (g) as enacted. See Historical and Revision Notes below.

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
1704(a)(1)	no source.
1704(a)(2)	41:433a(h).	Pub. L. 110–181, div. A, title VIII, §855, Jan. 28, 2008, 122 Stat. 251.
1704(b)–(f)	41:433a(a)–(e).
1704(g)	41:433a note.	Pub. L. 110–417, [div. A], title VIII, §869, Oct. 14, 2008, 122 Stat. 4553.
1704(h), (i)	41:433a(f), (g).

In subsection (a), the definition of "executive agency" is omitted as unnecessary.

In subsection (f)(1), the words "Not later than 1 year after the date of the enactment of this Act" are omitted as obsolete.

In subsection (g)(2), the words "Associate Administrator" are substituted for "Associate Administrator for Acquisition Workforce Programs designated under section 855(a) of the National Defense Authorization Act for Fiscal Year 2008 (Public Law 110-181; 122 Stat. 251; 41 U.S.C. 433(a))" because of subsection (a)(1).

In subsection (g)(3)(D), the reference to "section 37(j) of the Office of Federal Procurement Policy Act" is changed to "section 1703(g) of this title" to correct an error in the law.

Editorial Notes

Amendments

2013—Subsec. (b). Pub. L. 112–239, §1076(a)(14), made technical amendment to directory language of Pub. L. 112–81, §864(a)(2). See 2011 Amendment note below.

2011—Subsec. (b). Pub. L. 112–81, §864(a)(2), as amended by Pub. L. 112–239, §1076(a)(14), substituted "The Associate Administrator shall be located in the Office of Federal Procurement Policy." for "The Associate Administrator shall be located in the Federal Acquisition Institute (or its successor)." in introductory provisions.

Pub. L. 112–81, §864(a)(1), inserted "The Associate Administrator shall be chosen on the basis of demonstrated knowledge and expertise in acquisition, human capital, and management." after "Programs." in introductory provisions.

Subsec. (b)(5), (6). Pub. L. 112–81, §864(a)(3)–(5), added par. (5) and redesignated former par. (5) as (6).

Statutory Notes and Related Subsidiaries

Effective Date of 2013 Amendment

Pub. L. 112–239, div. A, title X, §1076(a), Jan. 2, 2013, 126 Stat. 1947, provided that the amendment made by section 1076(a)(14) is effective Dec. 31, 2011, and as if included in Pub. L. 112–81 as enacted.

Expansion of Training and Use of Information Technology Cadres

Pub. L. 113–291, div. A, title VIII, §835, Dec. 19, 2014, 128 Stat. 3449, provided that:

"(a) Purpose.—The purpose of this section is to ensure timely progress by Federal agencies toward developing, strengthening, and deploying information technology acquisition cadres consisting of personnel with highly specialized skills in information technology acquisition, including program and project managers.

"(b) Strategic Planning.—

"(1) In general.—The Administrator for Federal Procurement Policy, in consultation with the Administrator for E-Government and Information Technology, shall work with Federal agencies, other than the Department of Defense, to update their acquisition human capital plans that were developed pursuant to the October 27, 2009, guidance issued by the Administrator for Federal Procurement Policy in furtherance of section 1704(g) of title 41, United States Code (originally enacted as section 869 of the Duncan Hunter National Defense Authorization Act for Fiscal Year 2009 (Public Law 110–417; 122 Stat. 4553)), to address how the agencies are meeting their human capital requirements to support the timely and effective acquisition of information technology.

"(2) Elements.—The updates required by paragraph (1) shall be submitted to the Administrator for Federal Procurement Policy and shall address, at a minimum, each Federal agency's consideration or use of the following procedures:

"(A) Development of an information technology acquisition cadre within the agency or use of memoranda of understanding with other agencies that have such cadres or personnel with experience relevant to the agency's information technology acquisition needs.

"(B) Development of personnel assigned to information technology acquisitions, including cross-functional training of acquisition information technology and program personnel.

"(C) Use of the specialized career path for information technology program managers as designated by the Office of Personnel Management and plans for strengthening information technology program management.

"(D) Use of direct hire authority.

"(E) Conduct of peer reviews.

"(F) Piloting of innovative approaches to information technology acquisition workforce development, such as industry-government rotations.

"(c) Federal Agency Defined.—In this section, the term 'Federal agency' means each agency listed in section 901(b) of title 31, United States Code."

§1705. Advocates for competition

(a) Establishment and Designation.—

(1) Establishment.—Each executive agency has an advocate for competition.

(2) Designation.—The head of each executive agency shall—

(A) designate for the executive agency and for each procuring activity of the executive agency one officer or employee serving in a position authorized for the executive agency on July 18, 1984 (other than the senior procurement executive designated pursuant to section 1702(c) of this title) to serve as the advocate for competition;

(B) not assign those officers or employees duties or responsibilities that are inconsistent with the duties and responsibilities of the advocates for competition; and

(C) provide those officers or employees with the staff or assistance necessary to carry out the duties and responsibilities of the advocate for competition, such as individuals who are specialists in engineering, technical operations, contract administration, financial management, supply management, and utilization of small and disadvantaged business concerns.

(b) Duties and Functions.—The advocate for competition of an executive agency shall—

(1) be responsible for challenging barriers to, and promoting full and open competition in, the procurement of property and services by the executive agency;

(2) review the procurement activities of the executive agency;

(3) identify and report to the senior procurement executive of the executive agency—

(A) opportunities and actions taken to achieve full and open competition in the procurement activities of the executive agency; and

(B) any condition or action which has the effect of unnecessarily restricting competition in the procurement actions of the executive agency;

(4) prepare and transmit to the senior procurement executive an annual report describing—

(A) the advocate's activities under this section;

(B) new initiatives required to increase competition; and

(C) remaining barriers to full and open competition;

(5) recommend to the senior procurement executive—

(A) goals and the plans for increasing competition on a fiscal year basis; and

(B) a system of personal and organizational accountability for competition, which may include the use of recognition and awards to motivate program managers, contracting officers, and others in authority to promote competition in procurement programs; and

(6) describe other ways in which the executive agency has emphasized competition in programs for procurement training and research.

(c) Responsibilities.—The advocate for competition for each procuring activity is responsible for promoting full and open competition, promoting the acquisition of commercial products and commercial services, and challenging barriers to acquisition, including unnecessarily restrictive statements of need, unnecessarily detailed specifications, and unnecessarily burdensome contract clauses.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3709; Pub. L. 115–232, div. A, title VIII, §836(b)(2), Aug. 13, 2018, 132 Stat. 1861.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
1705	41:418.	Pub. L. 93–400, §20, as added Pub. L. 98–369, title VII, §2732(a), July 18, 1984, 98 Stat. 1197; Pub. L. 103–355, title VIII, §8303(a), Oct. 13, 1994, 108 Stat. 3398.

Editorial Notes

Amendments

2018—Subsec. (c). Pub. L. 115–232 substituted "commercial products and commercial services" for "commercial items".

Statutory Notes and Related Subsidiaries

Effective Date of 2018 Amendment

Amendment by Pub. L. 115–232 effective Jan. 1, 2020, subject to a savings provision, see section 836(h) of Pub. L. 115–232, set out as an Effective Date of 2018 Amendment; Savings Provision note under section 453b of Title 6, Domestic Security.

§1706. Personnel evaluation

The head of each executive agency subject to division C shall ensure, with respect to the employees of that agency whose primary duties and responsibilities pertain to the award of contracts subject to the provisions of the Small Business and Federal Procurement Competition Enhancement Act of 1984 (Public Law 98–577, 98 Stat. 3066), that the performance appraisal system applicable to those employees affords appropriate recognition to, among other factors, efforts to—

(1) increase competition and achieve cost savings through the elimination of procedures that unnecessarily inhibit full and open competition;

(2) further the purposes of the Small Business and Federal Procurement Competition Enhancement Act of 1984 (Public Law 98–577, 98 Stat. 3066) and the Defense Procurement Reform Act of 1984 (Public Law 98–525, title XII, 98 Stat. 2588); and

(3) further other objectives and purposes of the Federal acquisition system authorized by law.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3710.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
1706	41:414a.	Pub. L. 98–577, title V, §502, Oct. 30, 1984, 98 Stat. 3085.

Editorial Notes

References in Text

The Small Business and Federal Procurement Competition Enhancement Act of 1984, referred to in text, is Pub. L. 98–577, Oct. 30, 1984, 98 Stat. 3066. For complete classification of this Act to the Code, see Short Title of 1984 Act note set out under section 101 of this title and Tables.

The Defense Procurement Reform Act of 1984, referred to in par. (2), is Pub. L. 98–525, title XII, Oct. 19, 1984, 98 Stat. 2588. For complete classification of this Act to the Code, see Short Title of 1984 Amendment note set out under section 2302 of Title 10, Armed Forces, and Tables.

§1707. Publication of proposed regulations

(a) Covered Policies, Regulations, Procedures, and Forms.—

(1) Required comment period.—Except as provided in subsection (d), a procurement policy, regulation, procedure, or form (including an amendment or modification thereto) may not take effect until 60 days after it is published for public comment in the Federal Register pursuant to subsection (b) if it—

(A) relates to the expenditure of appropriated funds; and

(B)(i) has a significant effect beyond the internal operating procedures of the agency issuing the policy, regulation, procedure, or form; or

(ii) has a significant cost or administrative impact on contractors or offerors.

(2) Exception.—A policy, regulation, procedure, or form may take effect earlier than 60 days after the publication date when there are compelling circumstances for the earlier effective date, but the effective date may not be less than 30 days after the publication date.

(b) Publication in Federal Register and Comment Period.—Subject to subsection (c), the head of the agency shall have published in the Federal Register a notice of the proposed procurement policy, regulation, procedure, or form and provide for a public comment period for receiving and considering the views of all interested parties on the proposal. The length of the comment period may not be less than 30 days.

(c) Contents of Notice.—Notice of a proposed procurement policy, regulation, procedure, or form prepared for publication in the Federal Register shall include—

(1) the text of the proposal or, if it is impracticable to publish the full text of the proposal, a summary of the proposal and a statement specifying the name, address, and telephone number of the officer or employee of the executive agency from whom the full text may be obtained; and

(2) a request for interested parties to submit comments on the proposal and the name and address of the officer or employee of the Federal Government designated to receive the comments.

(d) Waiver.—The requirements of subsections (a) and (b) may be waived by the officer authorized to issue a procurement policy, regulation, procedure, or form if urgent and compelling circumstances make compliance with the requirements impracticable.

(e) Effectiveness of Policy, Regulation, Procedure, or Form.—

(1) Temporary basis.—A procurement policy, regulation, procedure, or form for which the requirements of subsections (a) and (b) are waived under subsection (d) is effective on a temporary basis if—

(A) a notice of the policy, regulation, procedure, or form is published in the Federal Register and includes a statement that the policy, regulation, procedure, or form is temporary; and

(B) provision is made for a public comment period of 30 days beginning on the date on which the notice is published.

(2) Final policy, regulation, procedure, or form.—After considering the comments received, the head of the agency waiving the requirements of subsections (a) and (b) under subsection (d) may issue the final procurement policy, regulation, procedure, or form.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3710.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
1707	41:418b.	Pub. L. 93–400, §22, as added Pub. L. 98–577, title III, §302(a), Oct. 30, 1984, 98 Stat. 3076; Pub. L. 103–355, title V, §5092, Oct. 13, 1994, 108 Stat. 3362, as amended Pub. L. 104–106, title XLIII, §4321(a)(9), Feb. 10, 1996, 110 Stat. 671.

In subsection (a)(2), the words "Notwithstanding the preceding sentence" are omitted as unnecessary.

§1708. Procurement notice

(a) Notice Requirement.—Except as provided in subsection (b)—

(1) an executive agency intending to solicit bids or proposals for a contract for property or services for a price expected to exceed $10,000, but not to exceed $25,000, shall post, for not less than 10 days, in a public place at the contracting office issuing the solicitation a notice of solicitation described in subsection (c);

(2) an executive agency shall publish a notice of solicitation described in subsection (c) if the agency intends to—

(A) solicit bids or proposals for a contract for property or services for a price expected to exceed $25,000; or

(B) place an order, expected to exceed $25,000, under a basic agreement, basic ordering agreement, or similar arrangement; and

(3) an executive agency awarding a contract for property or services for a price exceeding $25,000, or placing an order exceeding $25,000 under a basic agreement, basic ordering agreement, or similar arrangement, shall furnish for publication a notice announcing the award or order if there is likely to be a subcontract under the contract or order.

(b) Exemptions.—

(1) In general.—A notice is not required under subsection (a) if—

(A) the proposed procurement is for an amount not greater than the simplified acquisition threshold and is to be conducted by—

(i) using widespread electronic public notice of the solicitation in a form that allows convenient and universal user access through a single, Government-wide point of entry; and

(ii) permitting the public to respond to the solicitation electronically;

(B) the notice would disclose the executive agency's needs and disclosure would compromise national security;

(C) the proposed procurement would result from acceptance of—

(i) an unsolicited proposal that demonstrates a unique and innovative research concept and publication of a notice of the unsolicited research proposal would disclose the originality of thought or innovativeness of the proposal or would disclose proprietary information associated with the proposal; or

(ii) a proposal submitted under section 9 of the Small Business Act (15 U.S.C. 638);

(D) the procurement is made against an order placed under a requirements contract, a task order contract, or a delivery order contract;

(E) the procurement is made for perishable subsistence supplies;

(F) the procurement is for utility services, other than telecommunication services, and only one source is available; or

(G) the procurement is for the services of an expert for use in any litigation or dispute (including any reasonably foreseeable litigation or dispute) involving the Federal Government in a trial, hearing, or proceeding before a court, administrative tribunal, or agency, or in any part of an alternative dispute resolution process, whether or not the expert is expected to testify.

(2) Certain procurements.—The requirements of subsection (a)(2) do not apply to a procurement—

(A) under conditions described in paragraph (2), (3), (4), (5), or (7) of section 3304(a) of this title or paragraph (2), (3), (4), (5), or (7) of section 3204(a) of title 10; or

(B) for which the head of the executive agency makes a determination in writing, after consultation with the Administrator and the Administrator of the Small Business Administration, that it is not appropriate or reasonable to publish a notice before issuing a solicitation.

(3) Implementation consistent with international agreements.—Paragraph (1)(A) shall be implemented in a manner consistent with applicable international agreements.

(c) Contents of Notice.—Each notice of solicitation required by paragraph (1) or (2) of subsection (a) shall include—

(1) an accurate description of the property or services to be contracted for, which description—

(A) shall not be unnecessarily restrictive of competition; and

(B) shall include, as appropriate, the agency nomenclature, National Stock Number or other part number, and a brief description of the item's form, fit, or function, physical dimensions, predominant material of manufacture, or similar information that will assist a prospective contractor to make an informed business judgment as to whether a copy of the solicitation should be requested;

(2) provisions that—

(A)(i) state whether the technical data required to respond to the solicitation will not be furnished as part of the solicitation; and

(ii) identify the source in the Federal Government, if any, from which the technical data may be obtained; and

(B)(i) state whether an offeror or its product or service must meet a qualification requirement in order to be eligible for award; and

(ii) if so, identify the office from which the qualification requirement may be obtained;

(3) the name, business address, and telephone number of the contracting officer;

(4) a statement that all responsible sources may submit a bid, proposal, or quotation (as appropriate) that the agency shall consider;

(5) in the case of a procurement using procedures other than competitive procedures, a statement of the reason justifying the use of those procedures and the identity of the intended source; and

(6) in the case of a contract in an amount estimated to be greater than $25,000 but not greater than the simplified acquisition threshold, or a contract for the procurement of commercial products or commercial services using special simplified procedures—

(A) a description of the procedures to be used in awarding the contract; and

(B) a statement specifying the periods for prospective offerors and the contracting officer to take the necessary preaward and award actions.

(d) Electronic Publication of Notice of Solicitation, Award, or Order.—A notice of solicitation, award, or order required to be published under subsection (a) shall be published by electronic means. The notice must be electronically accessible in a form that allows convenient and universal user access through the single Government-wide point of entry designated in the Federal Acquisition Regulation.

(e) Time Limitations.—

(1) Issuing notice of solicitation and establishing deadline for submitting bids and proposals.—An executive agency required by subsection (a)(2) to publish a notice of solicitation may not—

(A) issue the solicitation earlier than 15 days after the date on which the notice is published; or

(B) in the case of a contract or order expected to be greater than the simplified acquisition threshold, establish a deadline for the submission of all bids or proposals in response to the notice required by subsection (a)(2) that—

(i) in the case of a solicitation for research and development, is earlier than 45 days after the date the notice required for a bid or proposal for a contract described in subsection (a)(2)(A) is published;

(ii) in the case of an order under a basic agreement, basic ordering agreement, or similar arrangement, is earlier than 30 days after the date the notice required for an order described in subsection (a)(2)(B) is published; or

(iii) in any other case, is earlier than 30 days after the date the solicitation is issued.

(2) Establishing deadline when none provided by statute.—An executive agency shall establish a deadline for the submission of all bids or proposals in response to a solicitation for which a deadline is not provided by statute. Each deadline for the submission of offers shall afford potential offerors a reasonable opportunity to respond.

(3) Flexible deadlines.—The Administrator shall prescribe regulations defining limited circumstances in which flexible deadlines can be used under paragraph (1) for the issuance of solicitations and the submission of bids or proposals for the procurement of commercial products or commercial services.

(f) Consideration of Certain Timely Received Offers.—An executive agency intending to solicit offers for a contract for which a notice of solicitation is required to be posted under subsection (a)(1) shall ensure that contracting officers consider each responsive offer timely received from an offeror.

(g) Availability of Complete Solicitation Package and Payment of Fee.—An executive agency shall make available to a business concern, or the authorized representative of a concern, the complete solicitation package for any on-going procurement announced pursuant to a notice of solicitation under subsection (a). An executive agency may require the payment of a fee, not exceeding the actual cost of duplication, for a copy of the package.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3711; Pub. L. 115–232, div. A, title VIII, §836(b)(3), Aug. 13, 2018, 132 Stat. 1861; Pub. L. 117–81, div. A, title XVII, §1702(h)(4), Dec. 27, 2021, 135 Stat. 2158.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
1708(a)	41:416(a)(1).	Pub. L. 93–400, §18, as added Pub. L. 98–369, title VII, §2732(a), July 18, 1984, 98 Stat. 1195; Pub. L. 98–577, title III, §303(a), Oct. 30, 1984, 98 Stat. 3077; Pub. L. 99–500, §101(c) [title X, §922(b), (d)(2)], Oct. 18, 1986, 100 Stat. 1783–151, 1783-152; Pub. L. 99–591, §101(c) [title X, §922(b), (d)(2)], Oct. 30, 1986, 100 Stat. 3341–151, 3341-152; Pub. L. 99–661, title IX, formerly title IV, §922(b), (d)(2), Nov. 14, 1986, 100 Stat. 3931, 3932, renumbered title IX, Pub. L. 100–26, §3(5), Apr. 21, 1987, 101 Stat. 273; Pub. L. 101–510, title VIII, §806(d), Nov. 5, 1990, 104 Stat. 1592; Pub. L. 103–355, title I, §1055(b)(1), title IV, §§4201(b), (c), 4202(a)–(c), title VIII, §8302, title IX, §9001(b), Oct. 13, 1994, 108 Stat. 3265, 3344, 3398, 3402; Pub. L. 104–106, title XLI, §4101(c), title XLII, §4202(d), title XLIII, §§4310, 4321(h)(3), Feb. 10, 1996, 110 Stat. 642, 654, 670, 675; Pub. L. 105–85, title VIII, §850(e)(2), Nov. 18, 1997, 111 Stat. 1849; Pub. L. 105–261, title X, §1069(d)(1), Oct. 17, 1998, 112 Stat. 2136; Pub. L. 106–398, §1 [[div. A], title VIII, §810(a), (b)], Oct. 30, 2000, 114 Stat. 1654A–209; Pub. L 107–296, title VIII, §833(c)(2), Nov. 25, 2002, 116 Stat. 2226.
1708(b)(1), (2)	41:416(c).
1708(b)(3)	no source.
1708(c)	41:416(b).
1708(d)	41:416(a)(2), (7).
1708(e)	41:416(a)(3), (5), (6).
1708(f)	41:416(a)(4).
1708(g)	41:416(d).

In subsection (a)(3), the words "under a basic agreement, basic ordering agreement, or similar arrangement" are substituted for "referred to in clause (A)(ii)" for clarity. The words "by the Secretary of Commerce" are omitted as obsolete. The Secretary of Commerce no longer has responsibility for publishing notices of awards or orders. See revision note for subsection (d).

In subsection (b)(2), the text of 41 U.S.C. 416(C)(1)(H) is omitted because the procurement authority of the Secretary of Homeland Security pursuant to the special procedures provided in section 833(c) of the Homeland Security Act of 2002 (6 U.S.C. 339(c)) expired on September 30, 2007.

Subsection (b)(3) is added because of section 850(e)(3) of the National Defense Authorization Act for Fiscal Year 1998 (Public Law 105–85, 111 Stat. 1849, 15:637 note), which in part provided that the amendments made by section 850(e)(2), which amended 41:416(c)(1), be implemented in a manner consistent with applicable international agreements.

Subsection (d) is substituted for 41:416(a)(2) and (7) to eliminate unnecessary words. Federal Business Opportunities is the designated single point of universal electronic public access for publication of all procurement information and notices previously published by the Secretary of Commerce in the Commerce Business Daily. See 66 Fed. Reg. 27407, May 16, 2001, 68 Fed. Reg. 56678, October 1, 2003, 48 CFR ch. 1, subch. B, part 5, and the special notice posted in CBDNet on December 28, 2001, and printed on January 2, 2002.

In subsection (e)(1)(B)(i), the words "required for a bid or proposal for a contract described in" are substituted for "required by" for clarity.

In subsection (e)(1)(B)(ii), the words "required for an order described in" are substituted for "required by" for clarity.

Editorial Notes

Amendments

2021—Subsec. (b)(2)(A). Pub. L. 117–81 substituted "section 3204(a)" for "section 2304(c)".

2018—Subsecs. (c)(6), (e)(3). Pub. L. 115–232 substituted "commercial products or commercial services" for "commercial items".

Statutory Notes and Related Subsidiaries

Effective Date of 2018 Amendment

Amendment by Pub. L. 115–232 effective Jan. 1, 2020, subject to a savings provision, see section 836(h) of Pub. L. 115–232, set out as an Effective Date of 2018 Amendment; Savings Provision note under section 453b of Title 6, Domestic Security.

Applicability to Tennessee Valley Authority

Pub. L. 98–577, title III, §303(c), Oct. 30, 1984, 98 Stat. 3079, provided that: "The provisions of the amendments made by subsection (a) of this section [see Tables for classification] shall apply to the Tennessee Valley Authority only with respect to procurements to be paid from appropriated funds."

§1709. Contracting functions performed by Federal personnel

(a) Covered Personnel.—Personnel referred to in subsection (b) are—

(1) an employee, as defined in section 2105 of title 5;

(2) a member of the armed forces; and

(3) an individual assigned to a Federal agency pursuant to subchapter VI of chapter 33 of title 5.

(b) Limitation on Payment for Advisory and Assistance Services.—No individual who is not an individual described in subsection (a) may be paid by an executive agency for services to conduct evaluations or analyses of any aspect of a proposal submitted for an acquisition unless personnel described in subsection (a) with adequate training and capabilities to perform the evaluations and analyses are not readily available in the agency or another Federal agency. When administering this subsection, the head of each executive agency shall determine in accordance with standards and procedures prescribed in the Federal Acquisition Regulation whether—

(1) a sufficient number of personnel described in subsection (a) in the agency or another Federal agency are readily available to perform a particular evaluation or analysis for the head of the executive agency making the determination; and

(2) the readily available personnel have the training and capabilities necessary to perform the evaluation or analysis.

(c) Certain Relationship Not Affected.—This section does not affect the relationship between the Federal Government and a Federally funded research and development center.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3714.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
1709(a)	41:419(b).	Pub. L. 93–400, §23, as added Pub. L. 103–355, title VI, §6002(a), Oct. 13, 1994, 108 Stat. 3363.
1709(b)	41:419(a).
1709(c)	41:419(c).

In subsection (a), before paragraph (1), the words "Personnel referred to in subsection (b) are" are substituted for "For purposes of subsection (a) of this section, the personnel described in this subsection are as follows" to eliminate unnecessary words. In paragraph (3), the words "employee from State or local governments" are substituted for "person" for clarity.

Senate Revision Amendment

In subsec. (a)(3), "individual" substituted for "employee from State or local governments" by S. Amdt. 4726 (111th Cong.). See 156 Cong. Rec. 18682 (2010).

Statutory Notes and Related Subsidiaries

Requirement for Guidance and Regulations

Pub. L. 103–355, title VI, §6002(b), Oct. 13, 1994, 108 Stat. 3363, provided that: "The Federal Acquisition Regulatory Council established by section 25(a) of the Office of Federal Procurement Policy Act ([former] 41 U.S.C. 421(a)) [now 41 U.S.C. 1302(a)] shall—

"(1) review part 37 of title 48 of the Code of Federal Regulations as it relates to the use of advisory and assistance services; and

"(2) provide guidance and promulgate regulations regarding—

"(A) what actions Federal agencies are required to take to determine whether expertise is readily available within the Federal Government before contracting for advisory and technical services to conduct acquisitions; and

"(B) the manner in which personnel with expertise may be shared with agencies needing expertise for such acquisitions."

§1710. Public-private competition required before conversion to contractor performance

(a) Public-private competition.—

(1) When conversion to contractor performance is allowed.—A function of an executive agency performed by 10 or more agency civilian employees may not be converted, in whole or in part, to performance by a contractor unless the conversion is based on the results of a public-private competition that—

(A) formally compares the cost of performance of the function by agency civilian employees with the cost of performance by a contractor;

(B) creates an agency tender, including a most efficient organization plan, in accordance with Office of Management and Budget Circular A76, as implemented on May 29, 2003, or any successor circular;

(C) includes the issuance of a solicitation;

(D) determines whether the submitted offers meet the needs of the executive agency with respect to factors other than cost, including quality, reliability, and timeliness;

(E) examines the cost of performance of the function by agency civilian employees and the cost of performance of the function by one or more contractors to demonstrate whether converting to performance by a contractor will result in savings to the Federal Government over the life of the contract, including—

(i) the estimated cost to the Federal Government (based on offers received) for performance of the function by a contractor;

(ii) the estimated cost to the Federal Government for performance of the function by agency civilian employees; and

(iii) an estimate of all other costs and expenditures that the Federal Government would incur because of the award of the contract;

(F) requires continued performance of the function by agency civilian employees unless the difference in the cost of performance of the function by a contractor compared to the cost of performance of the function by agency civilian employees would, over all performance periods required by the solicitation, be equal to or exceed the lesser of—

(i) 10 percent of the personnel-related costs for performance of that function in the agency tender; or

(ii) $10,000,000; and

(G) examines the effect of performance of the function by a contractor on the agency mission associated with the performance of the function.

(2) Not a new requirement.—A function that is performed by the executive agency and is reengineered, reorganized, modernized, upgraded, expanded, or changed to become more efficient, but still essentially provides the same service, shall not be considered a new requirement.

(3) Prohibitions.—In no case may a function being performed by executive agency personnel be—

(A) modified, reorganized, divided, or in any way changed for the purpose of exempting the conversion of the function from the requirements of this section; or

(B) converted to performance by a contractor to circumvent a civilian personnel ceiling.

(b) Consulting With Affected Employees or Their Representatives.—

(1) Consulting with affected employees.—Each civilian employee of an executive agency responsible for determining under Office of Management and Budget Circular A76 whether to convert to contractor performance any function of the executive agency—

(A) shall, at least monthly during the development and preparation of the performance work statement and the management efficiency study used in making that determination, consult with civilian employees who will be affected by that determination and consider the views of the employees on the development and preparation of that statement and that study; and

(B) may consult with the employees on other matters relating to that determination.

(2) Consulting with representatives.—

(A) Employees represented by a labor organization.—In the case of employees represented by a labor organization accorded exclusive recognition under section 7111 of title 5, consultation with representatives of that labor organization shall satisfy the consultation requirement in paragraph (1).

(B) Employees not represented by a labor organization.—In the case of employees other than employees referred to in subparagraph (A), consultation with appropriate representatives of those employees shall satisfy the consultation requirement in paragraph (1).

(3) Regulations.—The head of each executive agency shall prescribe regulations to carry out this subsection. The regulations shall include provisions for the selection or designation of appropriate representatives of employees referred to in paragraph (2)(B) for purposes of consultation required by paragraph (1).

(c) Congressional Notification.—

(1) Report.—Before commencing a public-private competition under subsection (a), the head of an executive agency shall submit to Congress a report containing the following:

(A) The function for which the public-private competition is to be conducted.

(B) The location at which the function is performed by agency civilian employees.

(C) The number of agency civilian employee positions potentially affected.

(D) The anticipated length and cost of the public-private competition, and a specific identification of the budgetary line item from which funds will be used to cover the cost of the public-private competition.

(E) A certification that a proposed performance of the function by a contractor is not a result of a decision by an official of an executive agency to impose predetermined constraints or limitations on agency civilian employees in terms of man years, end strengths, full-time equivalent positions, or maximum number of employees.

(2) Examination of potential economic effect.—The report required under paragraph (1) shall include an examination of the potential economic effect of performance of the function by a contractor on—

(A) agency civilian employees who would be affected by such a conversion in performance; and

(B) the local community and the Federal Government, if more than 50 agency civilian employees perform the function.

(3) Objections to public-private competition.—

(A) Grounds.—A representative individual or entity at a facility where a public-private competition is conducted may submit to the head of the executive agency an objection to the public-private competition on the grounds that—

(i) the report required by paragraph (1) has not been submitted; or

(ii) the certification required by paragraph (1)(E) was not included in the report required by paragraph (1).

(B) Deadlines.—The objection shall be in writing and shall be submitted within 90 days after the following date:

(i) In the case of a failure to submit the report when required, the date on which the representative individual or an official of the representative entity authorized to pose the objection first knew or should have known of that failure.

(ii) In the case of a failure to include the certification in a submitted report, the date on which the report was submitted to Congress.

(C) Report and certification required before solicitation or award of contract.—If the head of the executive agency determines that the report required by paragraph (1) was not submitted or that the required certification was not included in the submitted report, the function for which the public-private competition was conducted for which the objection was submitted may not be the subject of a solicitation of offers for, or award of, a contract until, respectively, the report is submitted or a report containing the certification in full compliance with the certification requirement is submitted.

(d) Exemption for the Purchase of Products and Services of the Blind and Other Severely Disabled People.—This section shall not apply to a commercial or industrial type function of an executive agency that is—

(1) included on the procurement list established pursuant to section 8503 of this title; or

(2) planned to be changed to performance by a qualified nonprofit agency for the blind or by a qualified nonprofit agency for other severely disabled people in accordance with chapter 85 of this title.

(e) Inapplicability During War or Emergency.—The provisions of this section shall not apply during war or during a period of national emergency declared by the President or Congress.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3715.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
1710	41:439.	Pub. L. 93–400, §43, as added Pub. L. 110–181, title III, §327(a), Jan. 28, 2008, 122 Stat. 63.

In the heading for subsection (d) and in subsection (d)(2), the words "disabled people" are substituted for "handicapped persons" for consistency with chapter 85 of the revised title.

§1711. Value engineering

Each executive agency shall establish and maintain cost-effective procedures and processes for analyzing the functions of a program, project, system, product, item of equipment, building, facility, service, or supply of the agency. The analysis shall be—

(1) performed by qualified agency or contractor personnel; and

(2) directed at improving performance, reliability, quality, safety, and life cycle costs.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3718.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
1711	41:432.	Pub. L. 93–400, §36, as added Pub. L. 104–106, title XLIII, §4306(a), Feb. 10, 1996, 110 Stat. 665.

§1712. Record requirements

(a) Maintaining Records on Computer.—Each executive agency shall establish and maintain for 5 years a computer file, by fiscal year, containing unclassified records of all procurements greater than the simplified acquisition threshold in that fiscal year.

(b) Contents.—The record established under subsection (a) shall include, with respect to each procurement carried out using—

(1) competitive procedures—

(A) the date of contract award;

(B) information identifying the source to whom the contract was awarded;

(C) the property or services the Federal Government obtains under the procurement; and

(D) the total cost of the procurement; or

(2) procedures other than competitive procedures—

(A) the information described in paragraph (1);

(B) the reason under section 3304(a) of this title or section 3204(a) of title 10 for using the procedures; and

(C) the identity of the organization or activity that conducted the procurement.

(c) Separate Record Category for Procurements Resulting in One Bid or Proposal.—Information included in a record pursuant to subsection (b)(1) that relates to procurements resulting in the submission of a bid or proposal by only one responsible source shall be separately categorized from the information relating to other procurements included in the record. The record of that information shall be designated "noncompetitive procurements using competitive procedures".

(d) Transmission and Data Entry of Information.—The head of each executive agency shall—

(1) ensure the accuracy of the information included in the record established and maintained by the agency under subsection (a); and

(2) transmit in a timely manner such information to the General Services Administration for entry into the Federal Procurement Data System referred to in section 1122(a)(4) of this title, or any successor system.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3718; Pub. L. 117–81, div. A, title XVII, §1702(h)(5), Dec. 27, 2021, 135 Stat. 2158.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
1712	41:417.	Pub. L. 93–400, §19, as added Pub. L. 98–369, title VII, §2732(a), July 18, 1984, 98 Stat. 1197; Pub. L. 103–355, title IV, §4403, Oct. 13, 1994, 108 Stat. 3349; Pub. L. 110–417, title VIII, §874(b), Oct. 14, 2008, 122 Stat. 4558.

Editorial Notes

Amendments

2021—Subsec. (b)(2)(B). Pub. L. 117–81 substituted "section 3204(a)" for "section 2304(c)".

§1713. Procurement data

(a) Definitions.—In this section:

(1) Qualified hubzone small business concern.—The term "qualified HUBZone small business concern" has the meaning given that term in section 31(b) of the Small Business Act.

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

(3) Small business concern owned and controlled by women.—The term "small business concern owned and controlled by women" has the meaning given that term in section 8(d) of the Small Business Act (15 U.S.C. 637(d)) and section 204 of the Women's Business Ownership Act of 1988 (Public Law 100–533, 102 Stat. 2692).

(b) Reporting.—Each Federal agency shall report to the Office of Federal Procurement Policy the number of qualified HUBZone small business concerns, the number of small businesses owned and controlled by women, and the number of small business concerns owned and controlled by socially and economically disadvantaged individuals, by gender, that are first time recipients of contracts from the agency. The Office shall take appropriate action to ascertain, for each fiscal year, the number of those small businesses that have newly entered the Federal market.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3719; Pub. L. 115–91, div. A, title XVII, §1701(a)(4)(F)(ii), Dec. 12, 2017, 131 Stat. 1796.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
1713(a)	41:417a(b).	Pub. L. 100–533, title V, §502, Oct. 25, 1988, 102 Stat. 2697; Pub. L. 105–135, title VI, §604(f)(2), Dec. 2, 1997, 111 Stat. 2634.
1713(b)	41:417a(a).

In subsection (b), the words "socially and economically disadvantaged individuals" are substituted for "socially and economically disadvantaged businesses" for consistency with the term set out in subsection (a).

Editorial Notes

References in Text

Section 31(b) of the Small Business Act, referred to in subsec. (a)(1), is classified to section 657a(b) of Title 15, Commerce and Trade.

Section 204 of the Women's Business Ownership Act of 1988, referred to in subsec. (a)(3), is section 204 of Pub. L. 100–533, which is set out as a note under section 637 of Title 15, Commerce and Trade.

Amendments

2017—Subsec. (a). Pub. L. 115–91 substituted "section 31(b) of the Small Business Act" for "section 3(p) of the Small Business Act (15 U.S.C. 632(p))".

Statutory Notes and Related Subsidiaries

Effective Date of 2017 Amendment

Amendment by Pub. L. 115–91 effective Jan. 1, 2020, see section 1701(j) of Pub. L. 115–91, set out as a note under section 657a of Title 15, Commerce and Trade.

CHAPTER 19—SIMPLIFIED ACQUISITION PROCEDURES

        

Editorial Notes

Amendments

2018—Pub. L. 115–232, div. A, title VIII, §836(b)(6)(B)(ii), Aug. 13, 2018, 132 Stat. 1861, substituted "List of laws inapplicable to procurements of commercial products and commercial services" for "List of laws inapplicable to procurements of commercial items" in item 1906.

2012—Pub. L. 112–194, §2(a)(2), Oct. 5, 2012, 126 Stat. 1447, added item 1909.

§1901. Simplified acquisition procedures

(a) When Procedures Are To Be Used.—To promote efficiency and economy in contracting and to avoid unnecessary burdens for agencies and contractors, the Federal Acquisition Regulation shall provide for special simplified procedures for purchases of property and services for amounts—

(1) not greater than the simplified acquisition threshold; and

(2) greater than the simplified acquisition threshold but not greater than $5,000,000 for 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.

(b) Prohibition on Dividing Purchases.—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 to use the simplified acquisition procedures required by subsection (a).

(c) Promotion of Competition Required.—When using simplified acquisition procedures, the head of an executive agency shall promote competition to the maximum extent practicable.

(d) Consideration of Offers Timely Received.—The simplified acquisition procedures contained in the Federal Acquisition Regulation shall include a requirement that a contracting officer consider each responsive offer timely received from an eligible offeror.

(e) Special Rules for Commercial Products and Commercial Services.—The Federal Acquisition Regulation shall provide that an executive agency using special simplified procedures to purchase commercial products or commercial services—

(1) shall publish a notice in accordance with section 1708 of this title and, as provided in section 1708(c)(4) of this title, permit all responsible sources to submit a bid, proposal, or quotation (as appropriate) that the agency shall consider;

(2) may not conduct the purchase on a sole source basis unless the need to do so is justified in writing and approved in accordance with section 3204(e) of title 10 or section 3304(e) of this title, as applicable; and

(3) shall include in the contract file a written description of the procedures used in awarding the contract and the number of offers received.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3719; Pub. L. 115–232, div. A, title VIII, §836(b)(4), Aug. 13, 2018, 132 Stat. 1861; Pub. L. 117–81, div. A, title XVII, §1702(h)(6), Dec. 27, 2021, 135 Stat. 2158.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
1901	41:427.	Pub. L. 93–400, §31, as added Pub. L. 103–355, title IV, §4201(a), Oct. 13, 1994, 108 Stat. 3342; Pub. L. 104–106, title XLII, §4202(c), title XLIII, §4302(b), Feb. 10, 1996, 110 Stat. 653, 658, as amended Pub. L. 104–201, title X, §1074(b)(6) (less effective date), Sept. 23, 1996, 110 Stat. 2660; Pub. L. 105–85, title VIII, §850(d), Nov. 18, 1997, 111 Stat. 1848.

Section 31(e) of the Office of Federal Procurement Policy Act (41 U.S.C. 427(e)) is omitted as obsolete.

In subsection (e)(2), the reference to section 253 of this title is limited to section 3303(e) of the revised title for clarity.

Editorial Notes

Amendments

2021—Subsec. (e)(2). Pub. L. 117–81 substituted "section 3204(e)" for "section 2304(f)".

2018—Subsec. (a)(2). Pub. L. 115–232, §836(b)(4)(A), substituted "commercial products or commercial services" for "commercial items".

Subsec. (e). Pub. L. 115–232, §836(b)(4)(B), substituted "Commercial Products and Commercial Services" for "Commercial Items" in heading and, in introductory provisions, substituted "commercial products or commercial services" for "commercial items".

Effective Date of 2018 Amendment

Amendment by Pub. L. 115–232 effective Jan. 1, 2020, subject to a savings provision, see section 836(h) of Pub. L. 115–232, set out as an Effective Date of 2018 Amendment; Savings Provision note under section 453b of Title 6, Domestic Security.

Staturory Notes and Related Subsidiaries

Procurement Through Commercial E-Commerce Portals

Pub. L. 115–91, div. A, title VIII, §846, Dec. 12, 2017, 131 Stat. 1483, as amended by Pub. L. 115–232, div. A, title VIII, §838(a), Aug. 13, 2018, 132 Stat. 1875; Pub. L. 117–81, div. A, title VIII, §853, title XVII, §1702(i)(2), Dec. 27, 2021, 135 Stat. 1848, 2159, provided that:

"(a) Establishment of Program.—The Administrator shall establish a program to procure commercial products through commercial e-commerce portals for purposes of enhancing competition, expediting procurement, enabling market research, and ensuring reasonable pricing of commercial products. The Administrator shall carry out the program in accordance with this section, through multiple contracts with multiple commercial e-commerce portal providers, and shall design the program to be implemented in phases with the objective of enabling Government-wide use of such portals.

"(b) Use of Program.—The head of a department or agency may procure, as appropriate, commercial products for the department or agency using the program established pursuant to subsection (a).

"(c) Implementation and Reporting Requirements.—The Director of the Office of Management and Budget, in consultation with the Administrator and the heads of other relevant departments and agencies, shall carry out the implementation phases set forth in, and submit to the appropriate congressional committees the items of information required by, the following paragraphs:

"(1) Phase i: implementation plan.—Not later than 90 days after the date of the enactment of this Act [Dec. 12, 2017], an implementation plan and schedule for carrying out the program established pursuant to subsection (a), including a discussion and recommendations regarding whether any changes to, or exemptions from, laws that set forth policies, procedures, requirements, or restrictions for the procurement of property or services by the Federal Government are necessary for effective implementation of this section.

"(2) Phase ii: market analysis and consultation.—Not later than one year after the date of the submission of the implementation plan and schedule required under paragraph (1), recommendations for any changes to, or exemptions from, laws necessary for effective implementation of this section, and information on the results of the following actions:

"(A) Market analysis and initial communications with potential commercial e-commerce portal providers on technical considerations of how the portals function (including the use of standard terms and conditions of the portals by the Government), the degree of customization that can occur without creating a Government-unique portal, the measures necessary to address the considerations for supplier and product screening specified in subsection (e), security of data, considerations pertaining to nontraditional Government contractors, and potential fees, if any, to be charged by the Administrator, the portal provider, or the suppliers for participation in the program established pursuant to subsection (a).

"(B) Consultation with affected departments and agencies about their unique procurement needs, such as supply chain risks for health care products, information technology, software, or any other category determined necessary by the Administrator.

"(C) An assessment of the products or product categories that are suitable for purchase on the commercial e-commerce portals.

"(D) An assessment of the precautions necessary to safeguard any information pertaining to the Federal Government, especially precautions necessary to protect against national security or cybersecurity threats.

"(E) A review of standard terms and conditions of commercial e-commerce portals in the context of Government requirements.

"(F) An assessment of the impact on existing programs, including schedules, set-asides for small business concerns, and other preference programs.

"(3) Phase iii: program implementation guidance.—Not later than two years after the date of the submission of the implementation plan and schedule required under paragraph (1), guidance to implement and govern the use of the program established pursuant to subsection (a), including protocols for oversight of procurement through the program, and compliance with laws pertaining to supplier and product screening requirements, data security, and data analytics.

"(4) Additional implementation phases.—A description of additional implementation phases, as determined by the Administrator, that includes a selection of agencies to participate in any such additional implementation phase (which may include the award of contracts to multiple commercial e-commerce portal providers).

"(5) Additional testing.—Not later than 180 days after the date of the enactment of this paragraph [Dec. 27, 2021], the Administrator shall—

"(A) begin testing commercial e-commerce portal models (other than any such model selected for the initial proof of concept) identified pursuant to paragraph (2); and

"(B) submit to the congressional defense committees [Committees on Armed Services and Appropriations of the Senate and the House of Representatives], the Committee on Oversight and Reform [now Committee on Oversight and Accountability] of the House of Representatives, and the Committee on Homeland Security and Governmental Affairs of the Senate a report that includes—

"(i) a summary of the assessments conducted under paragraph (2) with respect to a commercial e-commerce portal model identified pursuant to such paragraph;

"(ii) a list of the types of commercial products that could be procured using models tested pursuant to subparagraph (A);

"(iii) an estimate of the amount that could be spent by the head of a department or agency under the program, disaggregated by type of commercial e-commerce portal model; and

"(iv) an update on the models tested pursuant to subparagraph (A) and a timeline for completion of such testing.

"(6) Report.—Upon completion of testing conducted under paragraph (5) and before taking any action with respect to the commercial e-commerce portal models tested, the Administrator of General Services shall submit to the congressional defense committees [Committees on Armed Services and Appropriations of the Senate and the House of Representatives], the Committee on Oversight and Reform [now Committee on Oversight and Accountability] of the House of Representatives, and the Committee on Homeland Security and Governmental Affairs of the Senate, a report on the results of such testing that includes—

"(A) an assessment and comparison of commercial e-commerce portal models with respect to—

"(i) price and quality of the commercial products supplied by each commercial e-commerce portal model;

"(ii) supplier reliability and service;

"(iii) safeguards for the security of Government information and third-party supplier proprietary information;

"(iv) protections against counterfeit commercial products;

"(v) supply chain risks, particularly with respect to complex commercial products; and

"(vi) overall adherence to Federal procurement rules and policies; and

"(B) an analysis of the costs and benefits of the convenience to the Federal Government of procuring commercial products from each such commercial e-commerce portal model.

"(d) Considerations for Commercial e-commerce Portals.—The Administrator shall consider commercial e-commerce portals for use under the program established pursuant to subsection (a) that are widely used in the private sector and have or can be configured to have features that facilitate the execution of program objectives, including features related to supplier and product selection that are frequently updated, an assortment of product and supplier reviews, invoicing payment, and customer service.

"(e) Information on Suppliers, Products, and Purchases.—

"(1) Supplier participation and product screening.—The Administrator shall provide or ensure electronic availability to a commercial e-commerce portal provider awarded a contract pursuant to subsection (a) on a periodic basis information necessary to ensure compliance with laws pertaining to supplier and product screening as identified during implementation phase III, as described in subsection (c)(3).

"(2) Provision of order information.—The Administrator shall require each commercial e-commerce portal provider awarded a contract pursuant to subsection (a) to provide order information as determined by the Administrator during implementation phase II, as described in subsection (c)(2).

"(f) Relationship to Other Provisions of Law.—

"(1) All laws, including laws that set forth policies, procedures, requirements, or restrictions for the procurement of property or services by the Federal Government, apply to the program established pursuant to subsection (a) unless otherwise provided in this section.

"(2) A procurement of a product made through a commercial e-commerce portal under the program established pursuant to subsection (a) is deemed to be an award of a prime contract for purposes of the goals established under section 15(g) of the Small Business Act (15 U.S.C. 644(g)), if the purchase is from a supplier that is a small business concern.

"(3) Nothing in this section shall be construed as limiting the authority of a department or agency to restrict competition to small business concerns.

"(4) Nothing in this section shall be construed as limiting the applicability of section 1341 of title 31, United States Code (popularly referred to as the Anti-Deficiency Act).

"(5) A procurement of a product made through a commercial e-commerce portal under the program established pursuant to subsection (a) is deemed to satisfy requirements for full and open competition pursuant to sections 3201 through 3205 of title 10, United States Code, and section 3301 of title 41, United States Code, if—

"(A) there are offers from two or more suppliers of such a product or similar product with substantially the same physical, functional, or performance characteristics on the online marketplace; and

"(B) the Administrator establishes procedures to implement subparagraph (A) and notifies Congress at least 30 days before implementing such procedures.

"(g) Use of Commercial Practices and Standard Terms and Conditions.—A procurement of a product through a commercial e-commerce portal used under the program established pursuant to subsection (a) shall be made, to the maximum extent practicable, under the standard terms and conditions of the portal relating to purchasing on the portal.

"(h) Disclosure, Protection, and Use of Information.—In any contract awarded to a commercial e-commerce portal provider pursuant to subsection (a), the Administrator shall require that the provider—

"(1) agree not to sell or otherwise make available to any third party any information pertaining to a product ordered by the Federal Government through the commercial e-commerce portal in a manner that identifies the Federal Government, or any of its departments or agencies, as the purchaser, except if the information is needed to process or deliver an order or the Administrator provides written consent;

"(2) agree to take the necessary precautions to safeguard any information pertaining to the Federal Government, especially precautions necessary to protect against national security or cybersecurity threats; and

"(3) agree not to use, for pricing, marketing, competitive, or other purposes, any information, including any Government-owned data, such as purchasing trends or spending habits, related to a product from a third-party supplier featured on the commercial e-commerce portal or the transaction of such product, except as necessary to comply with the requirements of the program established in subsection (a).

"(i) Simplified Acquisition Threshold.—A procurement through a commercial e-commerce portal used under the program established pursuant to subsection (a) shall not exceed the simplified acquisition threshold in section 134 of title 41, United States Code.

"(j) Comptroller General Assessments.—

"(1) Assessment of implementation plan.—Not later than 90 days after the Director of the Office of Management and Budget submits the implementation plan described in subsection (c)(1) to the appropriate congressional committees, the Comptroller General of the United States shall submit to the appropriate congressional committees an assessment of the plan, including any other matters the Comptroller General considers relevant to the plan.

"(2) Assessment of program implementation.—Not later than three years after the first contract with a commercial e-commerce portal provider is awarded pursuant to subsection (a), the Comptroller General of the United States shall submit to the appropriate congressional committees a report on the challenges and benefits the General Services Administration and participating departments and agencies observe regarding implementation of the program established pursuant to subsection (a). The report shall include the following elements:

"(A) A description of the acquisition of the commercial e-commerce portals (including the extent to which the portals had to be configured or otherwise modified to meet the needs of the program) costs, and the implementation schedule.

"(B) A description of participation by suppliers, with particular attention to those described under subsection (e), that have registered or that have sold goods with at least one commercial e-commerce portal provider, including numbers, categories, and trends.

"(C) The effect, if any, of the program on the ability of agencies to meet goals established for suppliers and products described under subsection (e), including goals established under section 15(g) of the Small Business Act (15 U.S.C. 644(g)).

"(D) A discussion of the limitations, if any, to participation by suppliers in the program.

"(E) Any other matters the Comptroller General considers relevant to report.

"(k) Definitions.—In this section:

"(1) Administrator.—The term 'Administrator' means the Administrator of General Services.

"(2) Appropriate congressional committees.—The term 'appropriate congressional committees' means the following:

"(A) The Committees on Armed Services of the Senate and House of Representatives.

"(B) The Committee on Homeland Security and Governmental Affairs of the Senate and the Committee on Oversight and Government Reform [now Committee on Oversight and Accountability] of the House of Representatives.

"(C) The Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives.

"(3) Commercial e-commerce portal.—The term 'commercial e-commerce portal' means a commercial solution providing for the purchase of commercial products aggregated, distributed, sold, or manufactured via an online portal. The term does not include an online portal managed by the Government for, or predominantly for use by, Government agencies.

"(4) Commercial product.—The term 'commercial product' means a commercially available off-the-shelf item, as defined in section 104 of title 41, United States Code, except the term does not include services.

"(5) Small business concern.—The term 'small business concern' has the meaning given such term under section 3 of the Small Business Act (15 U.S.C. 632)."

§1902. Procedures applicable to purchases below micro-purchase threshold

(a) Definition.—

(1) Except as provided in paragraph (2) of this subsection, for purposes of this section, the micro-purchase threshold is $10,000.

(2) For purposes of this section, the micro-purchase threshold for procurement activities administered under sections 6303 through 6305 of title 31 by institutions of higher education (as defined in section 101(a) of the Higher Education Act of 1965 (20 U.S.C. 1001(a)), or related or affiliated nonprofit entities, or by nonprofit research organizations or independent research institutes is—

(A) $10,000; or

(B) such higher threshold as determined appropriate by the head of the relevant executive agency and consistent with clean audit findings under chapter 75 of title 31, internal institutional risk assessment, or State law.

(b) Compliance With Certain Requirements and Nonapplicability of Certain Authority.—

(1) Compliance with certain requirements.—The head of each executive agency shall ensure that procuring activities of that agency, when awarding a contract with a price exceeding the micro-purchase threshold, comply with the requirements of section 8(a) of the Small Business Act (15 U.S.C. 637(a)) and section 7102 of the Federal Acquisition Streamlining Act of 1994 (Public Law 103–355, 15 U.S.C. 644 note).

(2) Nonapplicability of certain authority.—The authority under part 13.106(a)(1) of the Federal Acquisition Regulation (48 C.F.R. 13.106(a)(1)), as in effect on November 18, 1993, to make purchases without securing competitive quotations does not apply to a purchase with a price exceeding the micro-purchase threshold.

(c) Nonapplicability of Certain Provisions.—An executive agency purchase with an anticipated value of the micro-purchase threshold or less is not subject to section 15(j) of the Small Business Act (15 U.S.C. 644(j)) and chapter 83 of this title.

(d) Purchases Without Competitive Quotations.—A purchase with a price not greater than the micro-purchase threshold may be made without obtaining competitive quotations if an employee of an executive agency or a member of the armed forces, authorized to do so, determines that the price for the purchase is reasonable.

(e) Equitable Distribution.—Purchases with a price not greater than the micro-purchase threshold shall be distributed equitably among qualified suppliers.

(f) Implementation Through Federal Acquisition Regulation.—This section shall be implemented through the Federal Acquisition Regulation.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3720; Pub. L. 114–328, div. A, title II, §217(b), Dec. 23, 2016, 130 Stat. 2051; Pub. L. 115–91, div. A, title VIII, §806(a), Dec. 12, 2017, 131 Stat. 1456; Pub. L. 115–232, div. A, title VIII, §§812(a)(2)(C)(ix), 821(b), Aug. 13, 2018, 132 Stat. 1847, 1853.)

Adjustment of Micro-Purchase Threshold

For adjustment of dollar threshold pursuant to section 1908 of this title, see definition of micro-purchase threshold in Federal Acquisition Regulation 2.101.

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
1902	41:428.	Pub. L. 93–400, §32, as added Pub. L. 103–355, title IV, §4301(a), Oct. 13, 1994, 108 Stat. 3346; Pub. L. 104–106, title XLIII, §§4304(b)(4), (c)(3), 4311, Feb. 10, 1996, 110 Stat. 664, 671.

Senate Revision Amendment

In subsecs. (a), (d), and (e), "$3,000" substituted for "$2,500" by S. Amdt. 4726 (111th Cong.). See 156 Cong. Rec. 18682 (2010).

Editorial Notes

Amendments

2018—Subsec. (a)(1). Pub. L. 115–232, §821(b), struck out "sections 2338 and 2339 of title 10 and" after "Except as provided in".

Subsec. (b)(1). Pub. L. 115–232, §812(a)(2)(C)(ix), struck out ", section 2323 of title 10," after "(15 U.S.C. 637(a))".

2017—Subsec. (a)(1). Pub. L. 115–91 substituted "$10,000" for "$3,000".

2016—Subsec. (a). Pub. L. 114–328, §217(b)(1), designated existing provisions as par. (1), substituted "Except as provided in sections 2338 and 2339 of title 10 and paragraph (2) of this subsection, for purposes" for "For purposes" and added par. (2).

Subsecs. (d), (e). Pub. L. 114–328, §217(b)(2), substituted "with a price not greater than the micro-purchase threshold" for "not greater than $3,000".

Statutory Notes and Related Subsidiaries

Convenience Checks

Pub. L. 115–91, div. A, title VIII, §806(b), Dec. 12, 2017, 131 Stat. 1456, provided that: "A convenience check may not be used for an amount in excess of one half of the micro-purchase threshold under section 1902(a) of title 41, United States Code, or a lower amount established by the head of the agency."

Micro-Purchase Threshold for Procurement Solicitations by Research Institutions

Pub. L. 114–329, div. A, title II, §207, Jan. 6, 2017, 130 Stat. 3001, provided that:

"(a) Micro-purchase Threshold.—The micro-purchase threshold for procurement activities administered under sections 6303 through 6305 of title 31, United States Code, awarded by the Foundation, the National Aeronautics and Space Administration, or the National Institute of Standards and Technology to institutions of higher education, or related or affiliated nonprofit entities, or to nonprofit research organizations or independent research institutes is—

"(1) $10,000 (as adjusted periodically to account for inflation); or

"(2) such higher threshold as determined appropriate by the head of the relevant executive agency and consistent with audit findings under chapter 75 of title 31, United States Code, internal institutional risk assessment, or State law.

"(b) Uniform Guidance.—The Uniform Guidance shall be revised to conform with the requirements of this section. For purposes of the preceding sentence, the term 'Uniform Guidance' means the uniform administrative requirements, cost principles, and audit requirements for Federal awards contained in part 200 of title 2 of the Code of Federal Regulations."

[For definitions of terms used in section 207 of Pub. L. 114–329, set out above, see section 2 of Pub. L. 114–329, set out as a note under section 1862s of Title 42, The Public Health and Welfare.]

Micro-Purchase Guidelines

Pub. L. 111–240, title I, §1332, Sept. 27, 2010, 124 Stat. 2541, provided that: "Not later than 1 year after the date of enactment of this Act [Sept. 27, 2010], the Director of the Office of Management and Budget, in coordination with the Administrator of General Services, shall issue guidelines regarding the analysis of purchase card expenditures to identify opportunities for achieving and accurately measuring fair participation of small business concerns in purchases in an amount not in excess of the micro-purchase threshold, as defined in section 32 of the Office of Federal Procurement Policy Act ([former] 41 U.S.C. 428) [now 41 U.S.C. 1902] (in this section referred to as 'micro-purchases'), consistent with the national policy on small business participation in Federal procurements set forth in sections 2(a) and 15(g) of the Small Business Act (15 U.S.C. 631(a) and 644(g)), and dissemination of best practices for participation of small business concerns in micro-purchases."

[For definition of "small business concern" as used in section 1332 of Pub. L. 111–240, set out above, see section 1001 of Pub. L. 111–240, set out as a note under section 632 of Title 15, Commerce and Trade.]

§1903. Special emergency procurement authority

(a) Applicability.—The authorities provided in subsections (b) and (c) apply with respect to a procurement of property or services by or for an executive agency that the head of the executive agency determines are to be used—

(1) in support of a contingency operation (as defined in section 101(a) of title 10);

(2) to facilitate the defense against or recovery from cyber, nuclear, biological, chemical, or radiological attack against the United States;

(3) in support of a request from the Secretary of State or the Administrator of the United States Agency for International Development to facilitate the provision of international disaster assistance pursuant to chapter 9 of part I of the Foreign Assistance Act of 1961 (22 U.S.C. 2292 et seq.); or

(4) in support of an emergency or major disaster (as those terms are defined in section 102 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5122)).

(b) Increased Thresholds and Limitation.—For a procurement to which this section applies under subsection (a)—

(1) the amount specified in section 1902(a), (d), and (e) of this title shall be deemed to be—

(A) $15,000 in the case of a contract to be awarded and performed, or purchase to be made, in the United States; and

(B) $25,000 in the case of a contract to be awarded and performed, or purchase to be made, outside the United States;

(2) the term "simplified acquisition threshold" means—

(A) $750,000 in the case of a contract to be awarded and performed, or purchase to be made, in the United States; and

(B) $1,500,000 in the case of a contract to be awarded and performed, or purchase to be made, outside the United States; and

(3) the $5,000,000 limitation in sections 1901(a)(2) and 3305(a)(2) of this title and section 3205(a)(2) of title 10 is deemed to be $10,000,000.

(c) Authority To Treat Property or Service as Commercial Product or Commercial Service.—

(1) In general.—The head of an executive agency carrying out a procurement of property or a service to which this section applies under subsection (a)(2) may treat the property or service as a commercial product or a commercial service for the purpose of carrying out the procurement.

(2) Certain contracts not exempt from standards or requirements.—A contract in an amount of more than $15,000,000 that is awarded on a sole source basis for a product or service treated as a commercial product or a commercial service under paragraph (1) is not exempt from—

(A) cost accounting standards prescribed under section 1502 of this title; or

(B) cost or pricing data requirements (commonly referred to as truth in negotiating) under chapter 35 of this title and chapter 271 of title 10.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3721; Pub. L. 114–92, div. A, title VIII, §816, Nov. 25, 2015, 129 Stat. 897; Pub. L. 114–328, div. A, title VIII, §816, title XVI, §1641, Dec. 23, 2016, 130 Stat. 2272, 2600; Pub. L. 115–232, div. A, title VIII, §836(b)(5), Aug. 13, 2018, 132 Stat. 1861; Pub. L. 117–81, div. A, title XVII, §1702(h)(7), Dec. 27, 2021, 135 Stat. 2158.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
1903(a)	41:428a(a), (e).	Pub. L. 93–400, §32A, as added Pub. L. 108–136, title XIV, §1443(a)(1), Nov. 24, 2003, 117 Stat. 1675; Pub. L. 108–375, title VIII, §822, Oct. 28, 2004, 118 Stat. 2016.
1903(b)	41:428a(b), (c).
1903(c)	41:428a(d).

Editorial Notes

References in Text

The Foreign Assistance Act of 1961, referred to in subsec. (a)(3), is Pub. L. 87–195, Sept. 4, 1961, 75 Stat. 424. Chapter 9 of part I of the Act is classified generally to part IX [§2292 et seq.] of subchapter I of chapter 32 of Title 22, Foreign Relations and Intercourse. For complete classification of this Act to the Code, see Short Title note set out under section 2151 of Title 22 and Tables.

Amendments

2021—Subsec. (b)(3). Pub. L. 117–81, §1702(h)(7)(A), substituted "section 3205(a)(2)" for "section 2304(g)(1)(B)".

Subsec. (c)(2)(B). Pub. L. 117–81, §1701(h)(7)(B), substituted "chapter 271" for "section 2306a".

2018—Subsec. (c). Pub. L. 115–232, §836(b)(5)(A), substituted "Commercial Product or Commercial Service" for "Commercial Item" in heading.

Subsec. (c)(1). Pub. L. 115–232, §836(b)(5)(B), substituted "as a commercial product or a commercial service" for "as a commercial item".

Subsec. (c)(2). Pub. L. 115–232, §836(b)(5)(C), substituted "for a product or service treated as a commercial product or a commercial service" for "for an item or service treated as a commercial item" in introductory provisions.

2016—Subsec. (a)(2). Pub. L. 114–328, §1641, inserted "cyber," before "nuclear,".

Subsec. (a)(3), (4). Pub. L. 114–328, §816, added pars. (3) and (4).

2015—Subsec. (b)(2)(A). Pub. L. 114–92, §816(1), substituted "$750,000" for "$250,000".

Subsec. (b)(2)(B). Pub. L. 114–92, §816(2), substituted "$1,500,000" for "$1,000,000".

Statutory Notes and Related Subsidiaries

Effective Date of 2018 Amendment

Amendment by Pub. L. 115–232 effective Jan. 1, 2020, subject to a savings provision, see section 836(h) of Pub. L. 115–232, set out as an Effective Date of 2018 Amendment; Savings Provision note under section 453b of Title 6, Domestic Security.

§1904. Certain transactions for defense against attack

(a) Authority.—

(1) In general.—The head of an executive agency that engages in basic research, applied research, advanced research, and development projects that are necessary to the responsibilities of the executive agency in the field of research and development and have the potential to facilitate defense against or recovery from terrorism or nuclear, biological, chemical, or radiological attack may exercise the same authority (subject to the same restrictions and conditions) with respect to the research and projects as the Secretary of Defense may exercise under section 2371 ¹ of title 10, except for subsections (b) and (f) of section 2371.

(2) Prototype projects.—The head of an executive agency, under the authority of paragraph (1), may carry out prototype projects that meet the requirements of paragraph (1) in accordance with the requirements and conditions provided for carrying out prototype projects under section 845 ¹ of the National Defense Authorization Act for Fiscal Year 1994 (Public Law 103–160, 10 U.S.C. 2371 note), including that, to the maximum extent practicable, competitive procedures shall be used when entering into agreements to carry out projects under section 845(a) of that Act and that the period of authority to carry out projects under section 845(a) of that Act terminates as provided in section 845(i) of that Act.

(3) Application of requirements and conditions.—In applying the requirements and conditions of section 845 of that Act under this subsection—

(A) section 845(c) of that Act shall apply with respect to prototype projects carried out under paragraph (2); and

(B) the Director of the Office of Management and Budget shall perform the functions of the Secretary of Defense under section 845(d) of that Act.

(4) Applicability to selected executive agencies.—

(A) Office of management and budget.—The head of an executive agency may exercise authority under this subsection for a project only if authorized by the Director of the Office of Management and Budget.

(B) Department of homeland security.—Authority under this subsection does not apply to the Secretary of Homeland Security while section 831 of the Homeland Security Act of 2002 (6 U.S.C. 391) is in effect.

(b) Regulations.—The Director of the Office of Management and Budget shall prescribe regulations to carry out this section. No transaction may be conducted under the authority of this section before the regulations take effect.

(c) Annual Report.—The annual report of the head of an executive agency that is required under section 2371(h) ¹ of title 10, as applied to the head of the executive agency by subsection (a), shall be submitted to the Committee on Homeland Security and Governmental Affairs of the Senate and the Committee on Oversight and Government Reform of the House of Representatives.

(d) Termination of Authority.—The authority to carry out transactions under subsection (a) terminates on September 30, 2008.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3721.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
1904	41:428a note.	Pub. L. 108–136, title XIV, §1441, Nov. 24, 2003, 117 Stat. 1673.

In subsection (a)(2), the reference to subsection (g) of section 845 of the National Defense Authorization Act for Fiscal Year 1994 (Public Law 103–160, 10 U.S.C. 2371 note) is changed to subsection (i) because of section 847(c)(1) of the National Defense Authorization Act for Fiscal Year 2004 (Public Law 108–136, 117 Stat. 1554), which redesignated subsection (g) as subsection (h), and section 823(2) of the National Defense Authorization Act for Fiscal Year 2006 (Public Law 109–163, 119 Stat. 3387), which redesignated subsection (h) as subsection (i).

In subsection (a)(3)(A), the words "paragraph (2)" are substituted for "this paragraph" to correct the cross-reference.

In subsection (a)(4)(A), the words "to use the authority for such project" are omitted as unnecessary.

In subsection (c), the words "Committee on Homeland Security and Governmental Affairs" are substituted for "Committee on Governmental Affairs" on authority of Senate Resolution No. 445 (108th Congress, October 9, 2004). The words "Committee on Oversight and Government Reform" are substituted for "Committee on Government Reform" on authority of Rule X(1)(m) of the Rules of the House of Representatives, adopted by House Resolution No. 6 (110th Congress, January 5, 2007).

Editorial Notes

References in Text

Section 2371 of title 10, referred to in subsec. (a)(1), was renumbered section 4021 of title 10 by Pub. L. 116–283, §1841(b)(1), as amended by Pub. L. 117–81, div. A, title XVII, §1701(u)(2)(B), Dec. 27, 2021, 135 Stat. 2151.

Section 845 of the National Defense Authorization Act for Fiscal Year 1994 (Public Law 103–160, 10 U.S.C. 2371 note), referred to in subsec. (a)(2), was repealed by Pub. L. 114–92, div. A, title VIII, §815(c), Nov. 25, 2015, 129 Stat. 896.

Section 2371(h) of title 10, referred to in subsec. (c), was repealed by Pub. L. 113–291, div. A, title X, §1071(f)(20), Dec. 19, 2014, 128 Stat. 3511.

Statutory Notes and Related Subsidiaries

Change of Name

Committee on Oversight and Government Reform of House of Representatives changed to Committee on Oversight and Reform of House of Representatives by House Resolution No. 6, One Hundred Sixteenth Congress, Jan. 9, 2019. Committee on Oversight and Reform of House of Representatives changed to Committee on Oversight and Accountability of House of Representatives by House Resolution No. 5, One Hundred Eighteenth Congress, Jan. 9, 2023.

¹ See References in Text note below.

§1905. List of laws inapplicable to contracts or subcontracts not greater than simplified acquisition threshold

(a) Definition.—In this section, the term "Council" has the meaning given that term in section 1301 of this title.

(b) Inclusion in Federal Acquisition Regulation.—

(1) In general.—The Federal Acquisition Regulation shall include a list of provisions of law that are inapplicable to contracts or subcontracts in amounts not greater than the simplified acquisition threshold. A provision of law properly included on the list pursuant to paragraph (2) does not apply to contracts or subcontracts in amounts not greater than the simplified acquisition threshold that are made by an executive agency. This section does not render a provision of law not included on the list inapplicable to contracts and subcontracts in amounts not greater than the simplified acquisition threshold.

(2) Laws enacted after october 13, 1994.—A provision of law described in subsection (c) that is enacted after October 13, 1994, shall be included on the list of inapplicable provisions of laws required by paragraph (1) unless the Council makes a written determination that it would not be in the best interest of the Federal Government to exempt contracts or subcontracts in amounts not greater than the simplified acquisition threshold from the applicability of the provision.

(c) Covered Law.—A provision of law referred to in subsection (b)(2) is a provision of law that the Council determines sets forth policies, procedures, requirements, or restrictions for the procurement of property or services by the Federal Government, except for a provision of law that—

(1) provides for criminal or civil penalties; or

(2) specifically refers to this section and provides that, notwithstanding this section, it shall be applicable to contracts or subcontracts in amounts not greater than the simplified acquisition threshold.

(d) Petition.—A person may petition the Administrator to take appropriate action when a provision of law described in subsection (c) is not included on the list of inapplicable provisions of law as required by subsection (b) and the Council has not made a written determination pursuant to subsection (b)(2). The Administrator shall revise the Federal Acquisition Regulation to include the provision on the list of inapplicable provisions of law unless the Council makes a determination pursuant to subsection (b)(2) within 60 days after the petition is received.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3722.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
1905(a)	no source.
1905(b)–(d)	41:429.	Pub. L. 93–400, §33, as added Pub. L. 103–355, title IV, §4101, Oct. 13, 1994, 108 Stat. 3339.

§1906. List of laws inapplicable to procurements of commercial products and commercial services

(a) Definition.—In this section, the term "Council" has the meaning given that term in section 1301 of this title.

(b) Contracts.—

(1) Inclusion in federal acquisition regulation.—The Federal Acquisition Regulation shall include a list of provisions of law that are inapplicable to contracts for the procurement of commercial products or commercial services. A provision of law properly included on the list pursuant to paragraph (2) does not apply to purchases of commercial products or commercial services by an executive agency. This section does not render a provision of law not included on the list inapplicable to contracts for the procurement of commercial products or commercial services.

(2) Laws enacted after october 13, 1994.—A provision of law described in subsection (d) that is enacted after October 13, 1994, shall be included on the list of inapplicable provisions of law required by paragraph (1) unless the Council makes a written determination that it would not be in the best interest of the Federal Government to exempt contracts for the procurement of commercial products or commercial services from the applicability of the provision.

(c) Subcontracts.—

(1) Definition.—In this subsection, the term "subcontract" includes a transfer of commercial products or commercial services between divisions, subsidiaries, or affiliates of a contractor or subcontractor. The term does not include agreements entered into by a contractor for the supply of commodities that are intended for use in the performance of multiple contracts with the Federal Government and other parties and are not identifiable to any particular contract.

(2) Inclusion in federal acquisition regulation.—The Federal Acquisition Regulation shall include a list of provisions of law that are inapplicable to subcontracts under a contract or subcontract for the procurement of commercial products or commercial services. A provision of law properly included on the list pursuant to paragraph (3) does not apply to those subcontracts. This section does not render a provision of law not included on the list inapplicable to subcontracts under a contract for the procurement of commercial products or commercial services.

(3) Provisions to be excluded from list.—A provision of law described in subsection (d) shall be included on the list of inapplicable provisions of law required by paragraph (2) unless the Council makes a written determination that it would not be in the best interest of the Federal Government to exempt subcontracts under a contract for the procurement of commercial products or commercial services from the applicability of the provision.

(4) Waiver not authorized.—This subsection does not authorize the waiver of the applicability of any provision of law with respect to any subcontract under a contract with a prime contractor reselling or distributing commercial products or commercial services of another contractor without adding value.

(d) Covered Law.—A provision of law referred to in subsections (b)(2) and (c) is a provision of law that the Council determines sets forth policies, procedures, requirements, or restrictions for the procurement of property or services by the Federal Government, except for a provision of law that—

(1) provides for criminal or civil penalties; or

(2) specifically refers to this section and provides that, notwithstanding this section, it shall be applicable to contracts for the procurement of commercial products or commercial services.

(e) Petition.—A person may petition the Administrator to take appropriate action when a provision of law described in subsection (d) is not included on the list of inapplicable provisions of law as required by subsection (b) or (c) and the Council has not made a written determination pursuant to subsection (b)(2) or (c)(3). The Administrator shall revise the Federal Acquisition Regulation to include the provision on the list of inapplicable provisions of law unless the Council makes a determination pursuant to subsection (b)(2) or (c)(3) within 60 days after the petition is received.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3723; Pub. L. 115–91, div. A, title VIII, §820, Dec. 12, 2017, 131 Stat. 1464; Pub. L. 115–232, div. A, title VIII, §836(b)(6)(A), (B)(i), Aug. 13, 2018, 132 Stat. 1861.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
1906(a)	no source.
1906(b)–(e)	41:430.	Pub. L. 93–400, §34, as added Pub. L. 103–355, title VIII, §8003(a), Oct. 13, 1994, 108 Stat. 3388.

Editorial Notes

Amendments

2018—Pub. L. 115–232, §836(b)(6)(B)(i), substituted "List of laws inapplicable to procurements of commercial products and commercial services" for "List of laws inapplicable to procurements of commercial items" in section catchline.

Subsecs. (b) to (d). Pub. L. 115–232, §836(b)(6)(A), substituted "commercial products or commercial services" for "commercial items" wherever appearing.

2017—Subsec. (c)(1). Pub. L. 115–91 inserted at end "The term does not include agreements entered into by a contractor for the supply of commodities that are intended for use in the performance of multiple contracts with the Federal Government and other parties and are not identifiable to any particular contract."

Statutory Notes and Related Subsidiaries

Effective Date of 2018 Amendment

Amendment by Pub. L. 115–232 effective Jan. 1, 2020, subject to a savings provision, see section 836(h) of Pub. L. 115–232, set out as an Effective Date of 2018 Amendment; Savings Provision note under section 453b of Title 6, Domestic Security.

§1907. List of laws inapplicable to procurements of commercially available off-the-shelf items

(a) Inclusion in Federal Acquisition Regulation.—

(1) In general.—The Federal Acquisition Regulation shall include a list of provisions of law that are inapplicable to contracts for the procurement of commercially available off-the-shelf items. A provision of law properly included on the list pursuant to paragraph (2) does not apply to contracts for the procurement of commercially available off-the-shelf items. This section does not render a provision of law not included on the list inapplicable to contracts for the procurement of commercially available off-the-shelf items.

(2) Laws to be included.—A provision of law described in subsection (b) shall be included on the list of inapplicable provisions of law required by paragraph (1) unless the Administrator makes a written determination that it would not be in the best interest of the Federal Government to exempt contracts for the procurement of commercially available off-the-shelf items from the applicability of the provision.

(3) Other authorities or responsibilities not affected.—This section does not modify, supersede, impair, or restrict authorities or responsibilities under—

(A) section 15 of the Small Business Act (15 U.S.C. 644); or

(B) bid protest procedures developed under the authority of—

(i) subchapter V of chapter 35 of title 31;

(ii) section 3308 of title 10; or

(iii) sections 3706 and 3707 of this title.

(b) Covered Law.—Except as provided in subsection (a)(3), a provision of law referred to in subsection (a)(1) is a provision of law that the Administrator determines imposes Federal Government-unique policies, procedures, requirements, or restrictions for the procurement of property or services on persons whom the Federal Government has awarded contracts for the procurement of commercially available off-the-shelf items, except for a provision of law that—

(1) provides for criminal or civil penalties; or

(2) specifically refers to this section and provides that, notwithstanding this section, it shall be applicable to contracts for the procurement of commercially available off-the-shelf items.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3724;Pub. L. 117–81, div. A, title XVII, §1702(h)(8), Dec. 27, 2021, 135 Stat. 2158.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
1907	41:431(a), (b).	Pub. L. 93–400, §35(a), (b), as added Pub. L. 104–106, title XLII, §4203(a), Feb. 10, 1996, 110 Stat. 654; Pub. L. 105–85, title X, §1073(g)(2)(C), Nov. 18, 1997, 111 Stat. 1906.

Amendments

2021—Subsec. (a)(3)(B)(ii). Pub. L. 117–81 substituted "section 3308" for "section 2305(e) and (f)".

§1908. Inflation adjustment of acquisition-related dollar thresholds

(a) Definition.—In this section, the term "Council" has the meaning given that term in section 1301 of this title.

(b) Application.—

(1) In general.—Except as provided in paragraph (2), the requirement for adjustment under subsection (c) applies to a dollar threshold that is specified in law as a factor in defining the scope of the applicability of a policy, procedure, requirement, or restriction provided in that law to the procurement of property or services by an executive agency, as the Council determines.

(2) Exceptions.—Subsection (c) does not apply to dollar thresholds—

(A) in chapters 67 and 83 of this title;

(B) in sections 3141 to 3144, 3146, and 3147 of title 40;

(C) the United States Trade Representative establishes pursuant to title III of the Trade Agreements Act of 1979 (19 U.S.C. 2511 et seq.); or

(D) in sections 3131 through 3134 of title 40, except any modification of any such dollar threshold made by regulation in effect on the date of the enactment of this subparagraph shall remain in effect.

(3) Relationship to other inflation adjustment authorities.—This section supersedes the applicability of other provisions of law that provide for the adjustment of a dollar threshold that is adjustable under this section.

(c) Requirement for Periodic Adjustment.—

(1) Baseline constant dollar value.—For purposes of paragraph (2), the baseline constant dollar value for a dollar threshold—

(A) in effect on October 1, 2000, that was first specified in a law that took effect on or before October 1, 2000, is the October 1, 2000, constant dollar value of that dollar threshold; and

(B) specified in a law that takes effect after October 1, 2000, is the constant dollar value of that threshold as of the effective date of that dollar threshold pursuant to that law.

(2) Adjustment.—On October 1 of each year evenly divisible by 5, the Council shall adjust each acquisition-related dollar threshold provided by law, as described in subsection (b)(1), to the baseline constant dollar value of that threshold.

(3) Exclusive means of adjustment.—A dollar threshold adjustable under this section shall be adjusted only as provided in this section.

(d) Publication.—The Council shall publish a notice of the adjusted dollar thresholds under this section in the Federal Register. The thresholds take effect on the date of publication and shall apply, in the case of the procurement of property or services by contract, to a contract, and any subcontract at any tier under the contract, in effect on that date without regard to the date of award of the contract or subcontract.

(e) Calculation.—An adjustment under this section shall be—

(1) calculated on the basis of changes in the Consumer Price Index for all-urban consumers published monthly by the Secretary of Labor; and

(2) rounded, in the case of a dollar threshold that as calculated under paragraph (1) is—

(A) less than $10,000, to the nearest $500;

(B) not less than $10,000, but less than $100,000, to the nearest $5,000;

(C) not less than $100,000, but less than $1,000,000, to the nearest $50,000;

(D) not less than $1,000,000, but less than $10,000,000, to the nearest $500,000;

(E) not less than $10,000,000, but less than $100,000,000, to the nearest $5,000,000;

(F) not less than $100,000,000, but less than $1,000,000,000, to the nearest $50,000,000; and

(G) $1,000,000,000 or more, to the nearest $500,000,000.

(f) Petition for Inclusion of Omitted Threshold.—

(1) Petition submitted to administrator.—A person may request adjustment of a dollar threshold adjustable under this section that is not included in a notice of adjustment published under subsection (d) by submitting a petition for adjustment to the Administrator.

(2) Actions of administrator.—On receipt of a petition for adjustment of a dollar threshold under paragraph (1), the Administrator—

(A) shall determine, in writing, whether the dollar threshold is required to be adjusted under this section; and

(B) on determining that it should be adjusted, shall publish in the Federal Register a revised notice of the adjustment dollar thresholds under this section that includes the adjustment of the dollar threshold covered by the petition.

(3) Effective date of adjustment by petition.—The adjustment of a dollar threshold pursuant to a petition under this subsection takes effect on the date the revised notice adding the adjustment under paragraph (2)(B) is published.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3725; Pub. L. 114–92, div. A, title VIII, §817, Nov. 25, 2015, 129 Stat. 897; Pub. L. 115–91, div. A, title VIII, §821, Dec. 12, 2017, 131 Stat. 1464; Pub. L. 117–58, div. G, title IX, §70922(f), Nov. 15, 2021, 135 Stat. 1305; Pub. L. 117–81, div. A, title VIII, §861, Dec. 27, 2021, 135 Stat. 1851.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
1908(a)	no source.
1908(b)(1)	41:431a(c).	Pub. L. 93–400, §35A, as added Pub. L. 108–375, title VIII, §807(a)(1), Oct. 28, 2004, 118 Stat. 2010.
1908(b)(2)	41:431a(d).
1908(b)(3)	41:431a note.	Pub. L. 108–375, title VIII, §807(c)(1), Oct. 28, 2004, 118 Stat. 2011.
1908(c)(1), (2)	41:431a(a).
1908(c)(3)	41:431a note.	Pub. L. 108–375, title VIII, §807(c)(2), Oct. 28, 2004, 118 Stat. 2011.
1908(d)	41:431a(b).
1908(e)	41:431a(e).
1908(f)	41:431a(f).

In subsection (c)(3), the words "After the date of the enactment of this Act" are omitted as obsolete.

In subsection (e)(1), the words "Secretary of Labor" are substituted for "Department of Labor" because of 29:551.

Editorial Notes

References in Text

The Trade Agreements Act of 1979, referred to in subsec. (b)(2)(C), is Pub. L. 96–39, July 26, 1979, 93 Stat. 144. Title III of the Act is classified generally to subchapter I (§2511 et seq.) of chapter 13 of Title 19, Customs Duties. For complete classification of this Act to the Code, see References in Text note set out under section 2501 of Title 19 and Tables.

The date of the enactment of this subparagraph, referred to in subsec. (b)(2)(D), is the date of enactment of Pub. L. 117–81, which was approved Dec. 27, 2021.

Amendments

2021—Subsec. (b)(2)(A). Pub. L. 117–58 substituted "chapters 67 and 83" for "chapter 67".

Subsec. (b)(2)(D). Pub. L. 117–81, §861(a), added subpar. (D).

Subsec. (d). Pub. L. 117–81, §861(b), struck out second period at end.

2017—Subsec. (d). Pub. L. 115–91 inserted before period at end "and shall apply, in the case of the procurement of property or services by contract, to a contract, and any subcontract at any tier under the contract, in effect on that date without regard to the date of award of the contract or subcontract."

2015—Subsec. (e)(2). Pub. L. 114–92, §817(1), substituted "as calculated under paragraph (1)" for "on the day before the adjustment" in introductory provisions.

Subsec. (e)(2)(D) to (G). Pub. L. 114–92, §817(2), (3), added subpars. (D) to (G) and struck out former subpar. (D) which read as follows: "$1,000,000 or more, to the nearest $500,000."

Statutory Notes and Related Subsidiaries

Adjustment for Inflation of Right-Hand Drive Passenger Sedans

Pub. L. 112–81, div. A, title VIII, §814(b), Dec. 31, 2011, 125 Stat. 1491, provided that: "The Department of Defense representative to the Federal Acquisition Regulatory Council established under section 1302 of title 41, United States Code, shall ensure that the threshold established in section 2253 of title 10, United States Code, for the acquisition of right-hand drive passenger sedans is included on the list of dollar thresholds that are subject to adjustment for inflation in accordance with the requirements of section 1908 of title 41, United States Code, and is adjusted pursuant to such provision, as appropriate."

§1909. Management of purchase cards

(a) Required Safeguards and Internal Controls.—The head of each executive agency that issues and uses purchase cards and convenience checks shall establish and maintain safeguards and internal controls to ensure the following:

(1) There is a record in each executive agency of each holder of a purchase card issued by the agency for official use, annotated with the limitations on single transactions and total transactions that are applicable to the use of each such card or check by that purchase card holder.

(2) Each purchase card holder and individual issued a convenience check is assigned an approving official other than the card holder with the authority to approve or disapprove transactions.

(3) The holder of a purchase card and each official with authority to authorize expenditures charged to the purchase card are responsible for—

(A) reconciling the charges appearing on each statement of account for that purchase card with receipts and other supporting documentation; and

(B) forwarding a summary report to the certifying official in a timely manner of information necessary to enable the certifying official to ensure that the Federal Government ultimately pays only for valid charges that are consistent with the terms of the applicable Government-wide purchase card contract entered into by the Administrator of General Services.

(4) Any disputed purchase card charge, and any discrepancy between a receipt and other supporting documentation and the purchase card statement of account, is resolved in the manner prescribed in the applicable Government-wide purchase card contract entered into by the Administrator of General Services.

(5) Payments on purchase card accounts are made promptly within prescribed deadlines to avoid interest penalties.

(6) Rebates and refunds based on prompt payment, sales volume, or other actions by the agency on purchase card accounts are reviewed for accuracy and properly recorded as a receipt to the agency that pays the monthly bill.

(7) Records of each purchase card transaction (including records on associated contracts, reports, accounts, and invoices) are retained in accordance with standard Government policies on the disposition of records.

(8) Periodic reviews are performed to determine whether each purchase card holder has a need for the purchase card.

(9) Appropriate training is provided to each purchase card holder and each official with responsibility for overseeing the use of purchase cards issued by the executive agency.

(10) The executive agency has specific policies regarding the number of purchase cards issued by various component organizations and categories of component organizations, the credit limits authorized for various categories of card holders, and categories of employees eligible to be issued purchase cards, and that those policies are designed to minimize the financial risk to the Federal Government of the issuance of the purchase cards and to ensure the integrity of purchase card holders.

(11) The executive agency uses effective systems, techniques, and technologies to prevent or identify illegal, improper, or erroneous purchases.

(12) The executive agency invalidates the purchase card of each employee who—

(A) ceases to be employed by the agency, immediately upon termination of the employment of the employee; or

(B) transfers to another unit of the agency, immediately upon the transfer of the employee unless the agency determines that the units are covered by the same purchase card authority.

(13) The executive agency takes steps to recover the cost of any illegal, improper, or erroneous purchase made with a purchase card or convenience check by an employee, including, as necessary, through salary offsets.

(b) Guidance.—The Director of the Office of Management and Budget shall review existing guidance and, as necessary, prescribe additional guidance governing the implementation of the requirements of subsection (a) by executive agencies.

(c) Penalties for Violations.—

(1) In general.—The head of each executive agency shall provide for appropriate adverse personnel actions or other punishment to be imposed in cases in which employees of the agency violate agency policies implementing the guidance required by subsection (b) or make illegal, improper, or erroneous purchases with purchase cards or convenience checks.

(2) Dismissal.—Penalties prescribed for employee misuse of purchase cards or convenience checks shall include dismissal of the employee, as appropriate.

(3) Reports on violations.—The guidance prescribed under subsection (b) shall direct each head of an executive agency with more than $10,000,000 in purchase card spending annually, and each Inspector General of such an executive agency, on a semiannual basis, to submit to the Director of the Office of Management and Budget a joint report on violations or other actions covered by paragraph (1) by employees of such executive agency. At a minimum, the report shall set forth the following:

(A) A summary description of confirmed violations involving misuse of a purchase card following completion of a review by the agency or by the Inspector General of the agency.

(B) A summary description of all adverse personnel action, punishment, or other action taken based on each violation.

(d) Risk Assessments and Audits.—The Inspector General of each executive agency shall—

(1) conduct periodic assessments of the agency purchase card or convenience check programs to identify and analyze risks of illegal, improper, or erroneous purchases and payments in order to develop a plan for using such risk assessments to determine the scope, frequency, and number of periodic audits of purchase card or convenience check transactions;

(2) perform analysis or audits, as necessary, of purchase card transactions designed to identify—

(A) potentially illegal, improper, or erroneous uses of purchase cards;

(B) any patterns of such uses; and

(C) categories of purchases that could be made by means other than purchase cards in order to better aggregate purchases and obtain lower prices (excluding transactions made under card-based strategic sourcing arrangements);

(3) report to the head of the executive agency concerned on the results of such analysis or audits; and

(4) report to the Director of the Office of Management and Budget on the implementation of recommendations made to the head of the executive agency to address findings of any analysis or audit of purchase card and convenience check transactions or programs for compilation and transmission by the Director to Congress and the Comptroller General.

(e) Relationship to Department of Defense Purchase Card Regulations.—The requirements of this section shall not apply to the Department of Defense. See section 4754 of title 10 for provisions relating to management of purchase cards in the Department.

(Added Pub. L. 112–194, §2(a)(1), Oct. 5, 2012, 126 Stat. 1445; Pub. L. 117–81, div. A, title XVII, §1702(h)(9), Dec. 27, 2021, 135 Stat. 2158.)

Editorial Notes

Amendments

2021—Subsec. (e). Pub. L. 117–81 substituted "section 4754" for "section 2784".

Statutory Notes and Related Subsidiaries

Deadline for Guidance on Management of Purchase Cards

Pub. L. 112–194, §2(c), Oct. 5, 2012, 126 Stat. 1448, required the Director of the Office of Management and Budget to prescribe the guidance required by subsec. (b) of this section not later than 180 days after Oct. 5, 2012.

CHAPTER 21—RESTRICTIONS ON OBTAINING AND DISCLOSING CERTAIN INFORMATION

        

§2101. Definitions

In this chapter:

(1) Contracting officer.—The term "contracting officer" means an individual who, by appointment in accordance with applicable regulations, has the authority to enter into a Federal agency procurement contract on behalf of the Government and to make determinations and findings with respect to the contract.

(2) Contractor bid or proposal information.—The term "contractor bid or proposal information" means any of the following information submitted to a Federal agency as part of, or in connection with, a bid or proposal to enter into a Federal agency procurement contract, if that information previously has not been made available to the public or disclosed publicly:

(A) Cost or pricing data (as defined in section 3701 of title 10 with respect to procurements subject to that section and section 3501(a) of this title with respect to procurements subject to that section).

(B) Indirect costs and direct labor rates.

(C) Proprietary information about manufacturing processes, operations, or techniques marked by the contractor in accordance with applicable law or regulation.

(D) Information marked by the contractor as "contractor bid or proposal information", in accordance with applicable law or regulation.

(3) Federal agency.—The term "Federal agency" has the meaning given that term in section 102 of title 40.

(4) Federal agency procurement.—The term "Federal agency procurement" means the acquisition (by using competitive procedures and awarding a contract) of goods or services (including construction) from non-Federal sources by a Federal agency using appropriated funds.

(5) Official.—The term "official" means—

(A) an officer, as defined in section 2104 of title 5;

(B) an employee, as defined in section 2105 of title 5; and

(C) a member of the uniformed services, as defined in section 2101(3) of title 5.

(6) Protest.—The term "protest" means a written objection by an interested party to the award or proposed award of a Federal agency procurement contract, pursuant to subchapter V of chapter 35 of title 31.

(7) Source selection information.—The term "source selection information" means any of the following information prepared for use by a Federal agency to evaluate a bid or proposal to enter into a Federal agency procurement contract, if that information previously has not been made available to the public or disclosed publicly:

(A) Bid prices submitted in response to a Federal agency solicitation for sealed bids, or lists of those bid prices before public bid opening.

(B) Proposed costs or prices submitted in response to a Federal agency solicitation, or lists of those proposed costs or prices.

(C) Source selection plans.

(D) Technical evaluation plans.

(E) Technical evaluations of proposals.

(F) Cost or price evaluations of proposals.

(G) Competitive range determinations that identify proposals that have a reasonable chance of being selected for award of a contract.

(H) Rankings of bids, proposals, or competitors.

(I) Reports and evaluations of source selection panels, boards, or advisory councils.

(J) Other information marked as "source selection information" based on a case-by-case determination by the head of the agency, the head's designee, or the contracting officer that its disclosure would jeopardize the integrity or successful completion of the Federal agency procurement to which the information relates.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3727; Pub. L. 117–81, div. A, title XVII, §1702(h)(10), Dec. 27, 2021, 135 Stat. 2158.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
2101(1)	41:423(f)(5).	Pub. L. 93–400, §27(f), as added Pub. L. 100–679, §6(a), Nov. 17, 1988, 102 Stat. 4063; Pub. L. 101–189, title VIII, §814(a)–(d)(1), Nov. 29, 1989, 103 Stat. 1495; Pub. L. 101–510, title XIV, §1484(l)(6), Nov. 5, 1990, 104 Stat. 1720; Pub. L. 102–25, title VII, §705(i), Apr. 6, 1991, 105 Stat. 121; Pub. L. 103–355, title VIII, §8301(e), Oct. 13, 1994, 108 Stat. 3397; Pub. L. 104–106, title XLIII, §4304(a), Feb. 10, 1996, 110 Stat. 662.
2101(2)	41:423(f)(1).
2101(3)	41:423(f)(3).
2101(4)	41:423(f)(4).
2101(5)	41:423(f)(7).
2101(6)	41:423(f)(6).
2101(7)	41:423(f)(2).

Editorial Notes

Amendments

2021—Par. (2)(A). Pub. L. 117–81 substituted "section 3701" for "section 2306a(h)".

§2102. Prohibitions on disclosing and obtaining procurement information

(a) Prohibition on Disclosing Procurement Information.—

(1) In general.—Except as provided by law, a person described in paragraph (3) shall not knowingly disclose contractor bid or proposal information or source selection information before the award of a Federal agency procurement contract to which the information relates.

(2) Employee of private sector organization.—In addition to the restriction in paragraph (1), an employee of a private sector organization assigned to an agency under chapter 37 of title 5 shall not knowingly disclose contractor bid or proposal information or source selection information during the 3-year period after the employee's assignment ends, except as provided by law.

(3) Application.—Paragraph (1) applies to a person that—

(A)(i) is a present or former official of the Federal Government; or

(ii) is acting or has acted for or on behalf of, or who is advising or has advised the Federal Government with respect to, a Federal agency procurement; and

(B) by virtue of that office, employment, or relationship has or had access to contractor bid or proposal information or source selection information.

(b) Prohibition on Obtaining Procurement Information.—Except as provided by law, a person shall not knowingly obtain contractor bid or proposal information or source selection information before the award of a Federal agency procurement contract to which the information relates.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3728.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
2102(a)	41:423(a).	Pub. L. 93–400, §27(a), (b), as added Pub. L. 100–679, §6(a), Nov. 17, 1988, 102 Stat. 4063; Pub. L. 101–189, title VIII, §814(a)–(d)(1), Nov. 29, 1989, 103 Stat. 1495; Pub. L. 101–510, title XIV, §1484(l)(6), Nov. 5, 1990, 104 Stat. 1720; Pub. L. 102–25, title VII, §705(i), Apr. 6, 1991, 105 Stat. 121; Pub. L. 103–355, title VIII, §8301(e), Oct. 13, 1994, 108 Stat. 3397; Pub. L. 104–106, title XLIII, §4304(a), Feb. 10, 1996, 110 Stat. 659; Pub. L. 107–347, title II, §209(d)(4), Dec. 17, 2002, 116 Stat. 2930.
2102(b)	41:423(b).

§2103. Actions required of procurement officers when contacted regarding non-Federal employment

(a) Actions Required.—An agency official participating personally and substantially in a Federal agency procurement for a contract in excess of the simplified acquisition threshold who contacts or is contacted by a person that is a bidder or offeror in that Federal agency procurement regarding possible non-Federal employment for that official shall—

(1) promptly report the contact in writing to the official's supervisor and to the designated agency ethics official (or designee) of the agency in which the official is employed; and

(2)(A) reject the possibility of non-Federal employment; or

(B) disqualify himself or herself from further personal and substantial participation in that Federal agency procurement until the agency authorizes the official to resume participation in the procurement, in accordance with the requirements of section 208 of title 18 and applicable agency regulations on the grounds that—

(i) the person is no longer a bidder or offeror in that Federal agency procurement; or

(ii) all discussions with the bidder or offeror regarding possible non-Federal employment have terminated without an agreement or arrangement for employment.

(b) Retention of Reports.—The agency shall retain each report required by this section for not less than 2 years following the submission of the report. The reports shall be made available to the public on request, except that any part of a report that is exempt from the disclosure requirements of section 552 of title 5 under subsection (b)(1) of that section may be withheld from disclosure to the public.

(c) Persons Subject to Penalties.—The following are subject to the penalties and administrative actions set forth in section 2105 of this title:

(1) An official who knowingly fails to comply with the requirements of this section.

(2) A bidder or offeror that engages in employment discussions with an official who is subject to the restrictions of this section, knowing that the official has not complied with paragraph (1) or (2) of subsection (a).

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3728.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
2103(a)	41:423(c)(1).	Pub. L. 93–400, §27(c), as added Pub. L. 100–679, §6(a), Nov. 17, 1988, 102 Stat. 4063; Pub. L. 101–189, title VIII, §814(a)–(d)(1), Nov. 29, 1989, 103 Stat. 1495; Pub. L. 101–510, title XIV, §1484(l)(6), Nov. 5, 1990, 104 Stat. 1720; Pub. L. 102–25, title VII, §705(i), Apr. 6, 1991, 105 Stat. 121; Pub. L. 103–355, title VIII, §8301(e), Oct. 13, 1994, 108 Stat. 3397; Pub. L. 104–106, title XLIII, §4304(a), Feb. 10, 1996, 110 Stat. 660.
2103(b)	41:423(c)(2).
2103(c)	41:423(c)(3), (4).

§2104. Prohibition on former official's acceptance of compensation from contractor

(a) Prohibition.—A former official of a Federal agency may not accept compensation from a contractor as an employee, officer, director, or consultant of the contractor within one year after the official—

(1) served, when the contractor was selected or awarded a contract, as the procuring contracting officer, the source selection authority, a member of the source selection evaluation board, or the chief of a financial or technical evaluation team in a procurement in which that contractor was selected for award of a contract in excess of $10,000,000;

(2) served as the program manager, deputy program manager, or administrative contracting officer for a contract in excess of $10,000,000 awarded to that contractor; or

(3) personally made for the Federal agency a decision to—

(A) award a contract, subcontract, modification of a contract or subcontract, or a task order or delivery order in excess of $10,000,000 to that contractor;

(B) establish overhead or other rates applicable to one or more contracts for that contractor that are valued in excess of $10,000,000;

(C) approve issuance of one or more contract payments in excess of $10,000,000 to that contractor; or

(D) pay or settle a claim in excess of $10,000,000 with that contractor.

(b) When Compensation May Be Accepted.—Subsection (a) does not prohibit a former official of a Federal agency from accepting compensation from a division or affiliate of a contractor that does not produce the same or similar products or services as the entity of the contractor that is responsible for the contract referred to in paragraph (1), (2), or (3) of subsection (a).

(c) Implementing Regulations.—Regulations implementing this section shall include procedures for an official or former official of a Federal agency to request advice from the appropriate designated agency ethics official regarding whether the official or former official is or would be precluded by this section from accepting compensation from a particular contractor.

(d) Persons Subject to Penalties.—The following are subject to the penalties and administrative actions set forth in section 2105 of this title:

(1) A former official who knowingly accepts compensation in violation of this section.

(2) A contractor that provides compensation to a former official knowing that the official accepts the compensation in violation of this section.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3729.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
2104(a)	41:423(d)(1).	Pub. L. 93–400, §27(d), as added Pub. L. 100–679, §6(a), Nov. 17, 1988, 102 Stat. 4063; Pub. L. 101–189, title VIII, §814(a)–(d)(1), Nov. 29, 1989, 103 Stat. 1495; Pub. L. 101–510, title XIV, §1484(l)(6), Nov. 5, 1990, 104 Stat. 1720; Pub. L. 102–25, title VII, §705(i), Apr. 6, 1991, 105 Stat. 121; Pub. L. 103–355, title VIII, §8301(e), Oct. 13, 1994, 108 Stat. 3397; Pub. L. 104–106, title XLIII, §4304(a), Feb. 10, 1996, 110 Stat. 660.
2104(b)	41:423(d)(2).
2104(c)	41:423(d)(5).
2104(d)	41:423(d)(3), (4).

§2105. Penalties and administrative actions

(a) Criminal Penalties.—A person that violates section 2102 of this title to exchange information covered by section 2102 of this title for anything of value or to obtain or give a person a competitive advantage in the award of a Federal agency procurement contract shall be fined under title 18, imprisoned for not more than 5 years, or both.

(b) Civil Penalties.—The Attorney General may bring a civil action in an appropriate district court of the United States against a person that engages in conduct that violates section 2102, 2103, or 2104 of this title. On proof of that conduct by a preponderance of the evidence—

(1) an individual is liable to the Federal Government for a civil penalty of not more than $50,000 for each violation plus twice the amount of compensation that the individual received or offered for the prohibited conduct; and

(2) an organization is liable to the Federal Government for a civil penalty of not more than $500,000 for each violation plus twice the amount of compensation that the organization received or offered for the prohibited conduct.

(c) Administrative Actions.—

(1) Types of action that federal agency may take.—A Federal agency that receives information that a contractor or a person has violated section 2102, 2103, or 2104 of this title shall consider taking one or more of the following actions, as appropriate:

(A) Canceling the Federal agency procurement, if a contract has not yet been awarded.

(B) Rescinding a contract with respect to which—

(i) the contractor or someone acting for the contractor has been convicted for an offense punishable under subsection (a); or

(ii) the head of the agency that awarded the contract has determined, based on a preponderance of the evidence, that the contractor or a person acting for the contractor has engaged in conduct constituting the offense.

(C) Initiating a suspension or debarment proceeding for the protection of the Federal Government in accordance with procedures in the Federal Acquisition Regulation.

(D) Initiating an adverse personnel action, pursuant to the procedures in chapter 75 of title 5 or other applicable law or regulation.

(2) Amount government entitled to recover.—When a Federal agency rescinds a contract pursuant to paragraph (1)(B), the Federal Government is entitled to recover, in addition to any penalty prescribed by law, the amount expended under the contract.

(3) Present responsibility affected by conduct.—For purposes of a suspension or debarment proceeding initiated pursuant to paragraph (1)(C), engaging in conduct constituting an offense under section 2102, 2103, or 2104 of this title affects the present responsibility of a Federal Government contractor or subcontractor.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3730.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
2105(a)	41:423(e)(1).	Pub. L. 93–400, §27(e), as added Pub. L. 100–679, §6(a), Nov. 17, 1988, 102 Stat. 4063; Pub. L. 101–189, title VIII, §814(a)–(d)(1), Nov. 29, 1989, 103 Stat. 1495; Pub. L. 101–510, title XIV, §1484(l)(6), Nov. 5, 1990, 104 Stat. 1720; Pub. L. 102–25, title VII, §705(i), Apr. 6, 1991, 105 Stat. 121; Pub. L. 103–355, title VIII, §8301(e), Oct. 13, 1994, 108 Stat. 3397; Pub. L. 104–106, title XLIII, §4304(a), Feb. 10, 1996, 110 Stat. 661.
2105(b)	41:423(e)(2).
2105(c)	41:423(e)(3).

In subsection (a), the word "violates" is substituted for "engages in conduct constituting a violation of" to eliminate unnecessary words.

In subsection (b), the words "liable to the Federal Government for" are substituted for "subject to" for consistency in the revised title and with other titles of the United States Code.

In subsection (c)(1), the words "has violated" are substituted for "has engaged in conduct constituting a violation of" to eliminate unnecessary words.

§2106. Reporting information believed to constitute evidence of offense

A person may not file a protest against the award or proposed award of a Federal agency procurement contract alleging a violation of section 2102, 2103, or 2104 of this title, and the Comptroller General may not consider that allegation in deciding a protest, unless the person, no later than 14 days after the person first discovered the possible violation, reported to the Federal agency responsible for the procurement the information that the person believed constitutes evidence of the offense.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3731.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
2106	41:423(g).	Pub. L. 93–400, §27(g), as added Pub. L. 100–679, §6(a), Nov. 17, 1988, 102 Stat. 4063; Pub. L. 101–189, title VIII, §814(a)–(d)(1), Nov. 29, 1989, 103 Stat. 1495; Pub. L. 101–510, title XIV, §1484(l)(6), Nov. 5, 1990, 104 Stat. 1720; Pub. L. 102–25, title VII, §705(i), Apr. 6, 1991, 105 Stat. 121; Pub. L. 103–355, title VIII, §8301(e), Oct. 13, 1994, 108 Stat. 3397; Pub. L. 104–106, title XLIII, §4304(a), Feb. 10, 1996, 110 Stat. 663.

§2107. Savings provisions

This chapter does not—

(1) restrict the disclosure of information to, or its receipt by, a person or class of persons authorized, in accordance with applicable agency regulations or procedures, to receive that information;

(2) restrict a contractor from disclosing its own bid or proposal information or the recipient from receiving that information;

(3) restrict the disclosure or receipt of information relating to a Federal agency procurement after it has been canceled by the Federal agency before contract award unless the Federal agency plans to resume the procurement;

(4) prohibit individual meetings between a Federal agency official and an offeror or potential offeror for, or a recipient of, a contract or subcontract under a Federal agency procurement, provided that unauthorized disclosure or receipt of contractor bid or proposal information or source selection information does not occur;

(5) authorize the withholding of information from, nor restrict its receipt by, Congress, a committee or subcommittee of Congress, the Comptroller General, a Federal agency, or an inspector general of a Federal agency;

(6) authorize the withholding of information from, nor restrict its receipt by, the Comptroller General in the course of a protest against the award or proposed award of a Federal agency procurement contract; or

(7) limit the applicability of a requirement, sanction, contract penalty, or remedy established under another law or regulation.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3731.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
2107	41:423(h).	Pub. L. 93–400, §27(h), as added Pub. L. 100–679, §6(a), Nov. 17, 1988, 102 Stat. 4063; Pub. L. 101–189, title VIII, §814(a)–(d)(1), Nov. 29, 1989, 103 Stat. 1495; Pub. L. 101–510, title XIV, §1484(l)(6), Nov. 5, 1990, 104 Stat. 1720; Pub. L. 102–25, title VII, §705(i), Apr. 6, 1991, 105 Stat. 121; Pub. L. 103–355, title VIII, §8301(e), Oct. 13, 1994, 108 Stat. 3397; Pub. L. 104–106, title XLIII, §4304(a), Feb. 10, 1996, 110 Stat. 663.

CHAPTER 23—MISCELLANEOUS

        

§2301. Use of electronic commerce in Federal procurement

(a) Definition.—For the purposes of this section, the term "electronic commerce" means electronic techniques for accomplishing business transactions, including electronic mail or messaging, World Wide Web technology, electronic bulletin boards, purchase cards, electronic funds transfers, and electronic data interchange.

(b) Establishment, Maintenance, and Use of Electronic Commerce Procedures and Processes.—The head of each executive agency, after consulting with the Administrator, shall establish, maintain, and use, to the maximum extent that is practicable and cost-effective, procedures and processes that employ electronic commerce in the conduct and administration of the procurement system of the agency.

(c) Applicable Standards.—In conducting electronic commerce, the head of an executive agency shall apply nationally and internationally recognized standards that broaden interoperability and ease the electronic interchange of information.

(d) Requirements of Systems, Technologies, Procedures, and Processes.—The head of each executive agency shall ensure that systems, technologies, procedures, and processes established pursuant to this section—

(1) are implemented with uniformity throughout the agency, to the extent practicable;

(2) are implemented only after granting due consideration to the use or partial use, as appropriate, of existing electronic commerce and electronic data interchange systems and infrastructures such as the Federal acquisition computer network architecture known as FACNET;

(3) facilitate access to Federal Government procurement opportunities, including opportunities for small business concerns, socially and economically disadvantaged small business concerns, and business concerns owned predominantly by women; and

(4) ensure that any notice of agency requirements or agency solicitation for contract opportunities is provided in a form that allows convenient and universal user access through a single, Government-wide point of entry.

(e) Implementation.—In carrying out the requirements of this section, the Administrator shall—

(1) issue policies to promote, to the maximum extent practicable, uniform implementation of this section by executive agencies, with due regard for differences in program requirements among agencies that may require departures from uniform procedures and processes in appropriate cases, when warranted because of the agency mission;

(2) ensure that the head of each executive agency complies with the requirements of subsection (d); and

(3) consult with the heads of appropriate Federal agencies with applicable technical and functional expertise, including the Office of Information and Regulatory Affairs, the National Institute of Standards and Technology, the General Services Administration, and the Department of Defense.

(f) Inapplicability to Department of Defense.—In this section, the term "executive agency" does not include the Department of Defense.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3732; Pub. L. 114–328, div. A, title VIII, §833(b)(5)(A)(ii), Dec. 23, 2016, 130 Stat. 2285.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
2301(a)	41:426(f).	Pub. L. 93–400, §30, as added Pub. L. 103–355, title IX, §9001(a), Oct. 13, 1994, 108 Stat. 3399; Pub. L. 105–85, title VIII, §850(a), Nov. 18, 1997, 111 Stat. 1847; Pub. L. 106–398, §1 [[div. A], title VIII, §810(d)], Oct. 30, 2000, 114 Stat. 1654A–210.
2301(b)	41:426(a).
2301(c)	41:426(b).
2301(d)	41:426(c).
2301(e)	41:426(d).

In this section, the text of 41:426(e) is omitted as obsolete because the last report was to be submitted not later than March 1, 2004.

In subsection (c), the word "executive" is added for clarity and for consistency in the revised section.

In subsection (e)(2), the words "with respect to the agency systems, technologies, procedures, and processes established pursuant to this section" are omitted as unnecessary.

Editorial Notes

Amendments

2016—Subsec. (f). Pub. L. 114–328 added subsec. (f).

Executive Documents

Streamlining Procurement Through Electronic Commerce

Memorandum of President of the United States, Oct. 28, 1993, 58 F.R. 58095, provided:

Memorandum for the Heads of Executive Departments and Agencies [and] the President's Management Council

The Federal Government spends $200 billion annually buying goods and services. Unfortunately, the red tape and burdensome paperwork of the current procurement system increases costs, produces unnecessary delays, and reduces Federal work force productivity. Moving to an electronic commerce system to simplify and streamline the purchasing process will promote customer service and cost-effectiveness. The electronic exchange of acquisition information between the private sector and the Federal Government also will increase competition by improving access to Federal contracting opportunities for the more than 300,000 vendors currently doing business with the Government, particularly small businesses, as well as many other vendors who find access to bidding opportunities difficult under the current system. For these reasons, I am committed to fundamentally altering and improving the way the Federal Government buys goods and services by ensuring that electronic commerce is implemented for appropriate Federal purchases as quickly as possible.

1. OBJECTIVES.

The objectives of this electronic commerce initiative are to:

(a) exchange procurement information—such as solicitations, offers, contracts, purchase orders, invoices, payments, and other contractual documents—electronically between the private sector and the Federal Government to the maximum extent practical;

(b) provide businesses, including small, small disadvantaged, and women-owned businesses, with greater access to Federal procurement opportunities;

(c) ensure that potential suppliers are provided simplified access to the Federal Government's electronic commerce system;

(d) employ nationally and internationally recognized data formats that serve to broaden and ease the electronic interchange of data; and

(e) use agency and industry systems and networks to enable the Government and potential suppliers to exchange information and access Federal procurement data.

2. IMPLEMENTATION.

The President's Management Council, in coordination with the Office of Federal Procurement Policy of the Office of Management and Budget, and in consultation with appropriate Federal agencies with applicable technical and functional expertise, as necessary, shall provide overall leadership, management oversight, and policy direction to implement electronic commerce in the executive branch through the following actions:

(a) by March 1994, define the architecture for the Government-wide electronic commerce acquisition system and identify executive departments or agencies responsible for developing, implementing, operating, and maintaining the Federal electronic system;

(b) by September 1994, establish an initial electronic commerce capability to enable the Federal Government and private vendors to electronically exchange standardized requests for quotations, quotes, purchase orders, and notice of awards and begin Government-wide implementation;

(c) by July 1995, implement a full scale Federal electronic commerce system that expands initial capabilities to include electronic payments, document interchange, and supporting databases; and

(d) by January 1997, complete Government-wide implementation of electronic commerce for appropriate Federal purchases, to the maximum extent possible.

This implementation schedule should be accelerated where practicable.

The head of each executive department or agency shall:

(a) ensure that budgetary resources are available, within approved budget levels, for electronic commerce implementation in each respective department or agency;

(b) assist the President's Management Council in implementing the electronic commerce system as quickly as possible in accordance with the schedules established herein; and

(c) designate one or more senior level employees to assist the President's Management Council and serve as a point of contact for the development and implementation of the Federal electronic commerce system within each respective department or agency.

3. NO PRIVATE RIGHTS CREATED.

This directive is for the internal management of the executive branch and does not create any right or benefit, substantive or procedural, enforceable by a party against the United States, its agencies or instrumentalities, its officers or employees, or any other person.

The Director of the Office of Management and Budget is authorized and directed to publish this memorandum in the Federal Register.

William J. Clinton.      

§2302. Rights in technical data

(a) Where Defined.—The legitimate proprietary interest of the Federal Government and of a contractor in technical or other data shall be defined in regulations prescribed as part of the Federal Acquisition Regulation.

(b) General Extent of Regulations.—

(1) Other rights not impaired.—Regulations prescribed under subsection (a) may not impair a right of the Federal Government or of a contractor with respect to a patent or copyright or another right in technical data otherwise established by law.

(2) Limitation on requiring data be provided to the government.—With respect to executive agencies subject to division C, regulations prescribed under subsection (a) shall provide that the Federal Government may not require a person that has developed a product (or process offered or to be offered for sale to the public) to provide to the Federal Government technical data relating to the design (or development or manufacture of the product or process) as a condition of procurement by the Federal Government of the product or process. This paragraph does not apply to data that may be necessary for the Federal Government to operate and maintain the product or use the process if the Federal Government obtains it as an element of performance under the contract.

(c) Technical Data Developed With Federal Funds.—

(1) Use by government and agencies.—Except as otherwise expressly provided by Federal statute, with respect to executive agencies subject to division C, regulations prescribed under subsection (a) shall provide that—

(A) the Federal Government has unlimited rights in technical data developed exclusively with Federal funds if delivery of the data—

(i) was required as an element of performance under a contract; and

(ii) is needed to ensure the competitive acquisition of supplies or services that will be required in substantial quantities in the future; and

(B) the Federal Government and each agency of the Federal Government has an unrestricted, royalty-free right to use, or to have its contractors use, for governmental purposes (excluding publication outside the Federal Government) technical data developed exclusively with Federal funds.

(2) Requirements in addition to other rights of the government.—The requirements of paragraph (1) are in addition to and not in lieu of any other rights the Federal Government may have pursuant to law.

(d) Factors To Be Considered in Prescribing Regulations.—The following factors shall be considered in prescribing regulations under subsection (a):

(1) Whether the item or process to which the technical data pertains was developed—

(A) exclusively with Federal funds;

(B) exclusively at private expense; or

(C) in part with Federal funds and in part at private expense.

(2) 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 (Public Law 97–219, 15 U.S.C. 638 note), and the declaration of policy in section 2 of the Small Business Act (15 U.S.C. 631).

(3) The interest of the Federal Government in increasing competition and lowering costs by developing and locating alternative sources of supply and manufacture.

(e) Provisions Required in Contracts.—Regulations prescribed under subsection (a) shall require that a contract for property or services entered into by an executive agency contain appropriate provisions relating to technical data, including provisions—

(1) defining the respective rights of the Federal Government and the contractor or subcontractor (at any tier) regarding technical data to be delivered under the contract;

(2) specifying technical data to be delivered under the contract and schedules for 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 technical data 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 Federal Government to use the 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 the revised technical data to an agency within a time specified in the contract;

(7) requiring the contractor to furnish written assurance, when technical data is delivered or is made available, that the technical data is complete and accurate and satisfies the requirements of the contract concerning technical data;

(8) establishing remedies to be available to the Federal Government when technical data required to be delivered or made available under the contract is found to be incomplete or inadequate or to not satisfy the requirements of the contract concerning technical data; and

(9) authorizing the head of the agency to withhold payments under the contract (or exercise another remedy 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.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3733.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
2302(a)	41:418a(a) (1st sentence).	Pub. L. 93–400, §21, as added Pub. L. 98–577, title III, §301(a), Oct. 30, 1984, 98 Stat. 3074; Pub. L. 99–145, title IX, §961(d)(2), Nov. 8, 1985, 99 Stat. 704.
2302(b)	41:418a(a) (2d, last sentences).
2302(c)	41:418a(b).
2302(d)	41:418a(c).
2302(e)	41:418a(d).

In subsection (a), the words "Federal Acquisition Regulation" are substituted for "single system of Government-wide procurement regulations as defined in section 403(4) of this title" because section 3(a)(1) of the Office of Federal Procurement Policy Act Amendments of 1988 (Public Law 100–679, 102 Stat. 4055) substituted "Federal Acquisition Regulation" for "single system of Government-wide procurement regulations" in section 6 of the Office of Federal Procurement Policy Act (Public Law 93–400, 88 Stat. 797, 41:406) and because section 3(c) of the Office of Federal Procurement Policy Act Amendments of 1988 (102 Stat. 4056) struck section 4(4) of the Office of Federal Procurement Policy Act (88 Stat. 797, 41:403(4)), as amended by section 4 of the Office of Federal Procurement Policy Act Amendments of 1983 (Public Law 98–191, 97 Stat. 1326), which had defined "single system of Government-wide procurement regulations".

§2303. Ethics safeguards related to contractor conflicts of interest

(a) Definition.—In this section, the term "relevant acquisition function" means an acquisition function closely associated with inherently governmental functions.

(b) Policy on Personal Conflicts of Interest by Contractor Employees.—

(1) Development and issuance of policy.—The Administrator shall develop and issue a standard policy to prevent personal conflicts of interest by contractor employees performing relevant acquisition functions (including the development, award, and administration of Federal Government contracts) for or on behalf of a Federal agency or department.

(2) Elements of policy.—The policy shall—

(A) define "personal conflict of interest" as it relates to contractor employees performing relevant acquisition functions; and

(B) require each contractor whose employees perform relevant acquisition functions to—

(i) identify and prevent personal conflicts of interest for the employees;

(ii) prohibit contractor employees who have access to non-public government information obtained while performing relevant acquisition functions from using the information for personal gain;

(iii) report any personal conflict-of-interest violation by an employee to the applicable contracting officer or contracting officer's representative as soon as it is identified;

(iv) maintain effective oversight to verify compliance with personal conflict-of-interest safeguards;

(v) have procedures in place to screen for potential conflicts of interest for all employees performing relevant acquisition functions; and

(vi) take appropriate disciplinary action in the case of employees who fail to comply with policies established pursuant to this section.

(3) Contract clause.—

(A) Contents.—The Administrator shall develop a personal conflicts-of-interest clause or a set of clauses for inclusion in solicitations and contracts (and task or delivery orders) for the performance of relevant acquisition functions that sets forth—

(i) the personal conflicts-of-interest policy developed under this subsection; and

(ii) the contractor's responsibilities under the policy.

(B) Effective date.—Subparagraph (A) shall take effect 300 days after October 14, 2008, and shall apply to—

(i) contracts entered into on or after that effective date; and

(ii) task or delivery orders awarded on or after that effective date, regardless of whether the contracts pursuant to which the task or delivery orders are awarded are entered before, on, or after October 14, 2008.

(4) Applicability.—

(A) Contracts in excess of the simplified acquisition threshold.—This subsection shall apply to any contract for an amount in excess of the simplified acquisition threshold (as defined in section 134 of this title) if the contract is for the performance of relevant acquisition functions.

(B) Partial applicability.—If only a portion of a contract described in subparagraph (A) is for the performance of relevant acquisition functions, then this subsection applies only to that portion of the contract.

(c) Best Practices.—The Administrator shall, in consultation with the Director of the Office of Government Ethics, develop and maintain a repository of best practices relating to the prevention and mitigation of organizational and personal conflicts of interest in Federal contracting.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3735.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
2303(a)	no source.
2303(b), (c)	41:405c(a), (c).	Pub. L. 110–417, [div. A], title VIII, §841(a), (c), Oct. 14, 2008, 122 Stat. 4537, 4539.

In this section, the words "relevant acquisition functions" are substituted for "acquisition functions closely associated with inherently governmental functions" because of subsection (a).

In subsection (b), the words "Not later than 270 days after the date of the enactment of this Act" are omitted because of section 6(f) of the bill.

In subsection (b)(4)(A), the words "Except as provided in subparagraph (B)" are omitted as unnecessary.

Statutory Notes and Related Subsidiaries

Preventing Organizational Conflicts of Interest in Federal Acquisition

Pub. L. 117–324, Dec. 27, 2022, 136 Stat. 4439, provided that:

"SECTION 1. SHORT TITLE.

"This Act may be cited as the 'Preventing Organizational Conflicts of Interest in Federal Acquisition Act'.

"SEC. 2. PREVENTING ORGANIZATIONAL CONFLICTS OF INTEREST IN FEDERAL ACQUISITION.

"(a) In General.—Not later than 18 months after the date of the enactment of this Act [Dec. 27, 2022], the Federal Acquisition Regulatory Council shall revise the Federal Acquisition Regulation—

"(1) to provide and update—

"(A) definitions related to specific types of organizational conflicts of interest, including unequal access to information, impaired objectivity, and biased ground rules;

"(B) definitions, guidance, and illustrative examples related to relationships of contractors with public, private, domestic, and foreign entities that may cause contract support to be subject to potential organizational conflicts of interest, including undue influence; and

"(C) illustrative examples of situations related to the potential organizational conflicts of interest identified under this paragraph, including an example of the awarding by a Federal regulatory agency of a contract for consulting services to a contractor if employees of the contractor performing work under such contract are permitted by the contractor to simultaneously perform work under a contract for a private sector client under the regulatory purview of such agency;

"(2) to provide executive agencies with solicitation provisions and contract clauses to avoid or mitigate organizational conflicts of interest, for agency use as needed, that require contractors to disclose information relevant to potential organizational conflicts of interest and limit future contracting with respect to potential conflicts of interest with the work to be performed under awarded contracts;

"(3) to allow executive agencies to tailor such solicitation provisions and contract clauses as necessary to address risks associated with conflicts of interest and other considerations that may be unique to the executive agency;

"(4) to require executive agencies—

"(A) to establish or update as needed agency conflict of interest procedures to implement the revisions to the Federal Acquisition Regulation made under this section; and

"(B) to periodically assess and update such procedures as needed to address agency-specific conflict of interest issues; and

"(5) to update the procedures set forth in section 9.506 of the Federal Acquisition Regulation to permit contracting officers to take into consideration professional standards and procedures to prevent organizational conflicts of interest to which an offeror or contractor is subject.

"(b) Executive Agency Defined.—In this section, the term 'executive agency' has the meaning given the term in section 133 of title 41, United States Code."

Deadline for Issuance of Standard Policy

Pub. L. 111–350, §6(f)(1), Jan. 4, 2011, 124 Stat. 3854, provided that: "The requirement in section 2303(b)(1) of title 41, United States Code, to issue a policy shall be done not later than 270 days after October 14, 2008."

Review of Federal Acquisition Regulation Relating to Conflicts of Interest

Pub. L. 110–417, [div. A], title VIII, §841(b), Oct. 14, 2008, 122 Stat. 4539, provided that:

"(1) Review.—Not later than 12 months after the date of the enactment of this Act [Oct. 14, 2008], the Administrator for Federal Procurement Policy, in consultation with the Director of the Office of Government Ethics, shall review the Federal Acquisition Regulation to—

"(A) identify contracting methods, types and services that raise heightened concerns for potential personal and organizational conflicts of interest; and

"(B) determine whether revisions to the Federal Acquisition Regulation are necessary to—

"(i) address personal conflicts of interest by contractor employees with respect to functions other than those described in subsection (a) [now 41 U.S.C. 2303(b)]; or

"(ii) achieve sufficiently rigorous, comprehensive, and uniform government-wide policies to prevent and mitigate organizational conflicts of interest in Federal contracting.

"(2) Regulatory revisions.—If the Administrator determines pursuant to the review under paragraph (1)(B) that revisions to the Federal Acquisition Regulation are necessary, the Administrator shall work with the Federal Acquisition Regulatory Council to prescribe appropriate revisions to the regulations, including the development of appropriate contract clauses.

"(3) Report.—Not later than March 1, 2010, the Administrator shall submit to the Committees on Armed Services of the Senate and House of Representatives, the Committee on Homeland Security and Governmental Affairs in the Senate, and the Committee on Oversight and Government Reform [now Committee on Oversight and Accountability] of the House of Representatives a report setting forth such findings and determinations under subparagraphs (A) and (B) of paragraph (1), together with an assessment of any revisions to the Federal Acquisition Regulation that may be necessary."

§2304. Conflict of interest standards for consultants

(a) Content of Regulations.—The Administrator shall prescribe under this division Government-wide regulations that set forth—

(1) conflict of interest standards for persons who provide consulting services described in subsection (b); and

(2) procedures, including registration, certification, and enforcement requirements as may be appropriate, to promote compliance with the standards.

(b) Services Subject to Regulations.—Regulations required by subsection (a) apply to—

(1) advisory and assistance services provided to the Federal Government to the extent necessary to identify and evaluate the potential for conflicts of interest that could be prejudicial to the interests of the United States;

(2) services related to support of the preparation or submission of bids and proposals for Federal contracts to the extent that inclusion of the services in the regulations is necessary to identify and evaluate the potential for conflicts of interest that could be prejudicial to the interests of the United States; and

(3) other services related to Federal contracts as specified in the regulations prescribed under subsection (a) to the extent necessary to identify and evaluate the potential for conflicts of interest that could be prejudicial to the interests of the United States.

(c) Intelligence Activities Exemption.—

(1) Activities that may be exempt.—Intelligence activities as defined in section 3.4(e) of Executive Order No. 12333 or a comparable definitional section in any successor order may be exempt from the regulations required by subsection (a).

(2) Report.—The Director of National Intelligence shall report to the Intelligence and Appropriations Committees of Congress each January 1, delineating the activities and organizations that have been exempted under paragraph (1).

(d) Presidential Determination.—Before the regulations required by subsection (a) are prescribed, the President shall determine if prescribing the regulations will have a significantly adverse effect on the accomplishment of the mission of the Defense Department or another Federal agency. If the President determines that the regulations will have such an adverse effect, the President shall so report to the appropriate committees of the Senate and the House of Representatives, stating in full the reasons for the determination. If such a report is submitted, the requirement for the regulations shall be null and void.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3736.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
2304(a)	41:405b(a).	Pub. L. 100–463, title VIII, §8141, Oct. 1, 1988, 102 Stat. 2270–47.
2304(b)	41:405b(b).
2304(c)	41:405b(d).
2304(d)	41:405b(e).

In this section, the text of 41:405b(c) is omitted as obsolete.

In subsection (a), before paragraph (1), the words "The Administrator shall prescribe under this division Government-wide regulations" are substituted for "Not later than 90 days after October 1, 1988, the Administrator of the Office of Federal Procurement Policy shall issue a policy, and not later than 180 days thereafter Government-wide regulations shall be issued under the Office of Federal Procurement Policy Act (41 U.S.C. 401 et seq.)" to eliminate obsolete words.

In subsection (b), before paragraph (1), the words "the following types of consulting services" are omitted as unnecessary.

In subsection (c)(2), the words "Director of National Intelligence" are substituted for "Director of Central Intelligence" because of section 1081(a) of the Intelligence Reform and Terrorism Prevention Act of 2004 (Public Law 108–458, 50 U.S.C. 401 note). The words "each January 1" are substituted for "no later than January 1, 1990, and annually thereafter to eliminate obsolete and unnecessary words. The words "exempted under paragraph (1)" are substituted for "exempted from the regulations required by subsection (a) of this section in accordance with the provisions of this subsection" to eliminate unnecessary words.

Editorial Notes

References in Text

Executive Order 12333, referred to in subsec. (c)(1), is set out as a note under section 3001 of Title 50, War and National Defense.

§2305. Authority of Director of Office of Management and Budget not affected

This division does not limit the authorities and responsibilities of the Director of the Office of Management and Budget in effect on December 1, 1983.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3737.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
2305	41:405(h)(2).	Pub. L. 93–400, §6(h)(2), Aug. 30, 1974, 88 Stat. 797; Pub. L. 96–83, §4, Oct. 10, 1979, 93 Stat. 649; Pub. L. 98–191, §5, Dec. 1, 1983, 97 Stat. 1328.

The words "in effect on December 1, 1983" are substituted for "current" for clarity.

§2306. Openness of meetings

The Administrator by regulation shall require that—

(1) formal meetings of the Office of Federal Procurement Policy, as designated by the Administrator, for developing procurement policies and regulations be open to the public; and

(2) public notice of each meeting be given not less than 10 days prior to the meeting.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3737.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
2306	41:412(b).	Pub. L. 93–400, §14(b), Aug. 30, 1974, 88 Stat. 800; Pub. L. 96–83, §9, Oct. 10, 1979, 93 Stat. 652.

§2307. Comptroller General's access to information

The Administrator and personnel in the Office of Federal Procurement Policy shall furnish information the Comptroller General may require to discharge the responsibilities of the Comptroller General. For this purpose, the Comptroller General or representatives of the Comptroller General shall have access to all books, documents, papers, and records of the Office of Federal Procurement Policy.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3737.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
2307	41:412(a).	Pub. L. 93–400, §14(a), Aug. 30, 1974, 88 Stat. 800.

Senate Revision Amendment

In text, "representatives of the Comptroller General" substituted for "his representatives" by S. Amdt. 4726 (111th Cong.). See 156 Cong. Rec. 18682 (2010).

§2308. Modular contracting for information technology

(a) Use.—To the maximum extent practicable, the head of an executive agency should use modular contracting for an acquisition of a major system of information technology.

(b) Modular Contracting Described.—Under modular contracting, an executive agency's need for a system is satisfied in successive acquisitions of interoperable increments. Each increment complies with common or commercially accepted standards applicable to information technology so that the increments are compatible with other increments of information technology comprising the system.

(c) Provisions in Federal Acquisition Regulation.—The Federal Acquisition Regulation shall provide that—

(1) under the modular contracting process, an acquisition of a major system of information technology may be divided into several smaller acquisition increments that—

(A) are easier to manage individually than would be one comprehensive acquisition;

(B) address complex information technology objectives incrementally in order to enhance the likelihood of achieving workable solutions for attaining those objectives;

(C) provide for delivery, implementation, and testing of workable systems or solutions in discrete increments, each of which comprises a system or solution that is not dependent on a subsequent increment in order to perform its principal functions; and

(D) provide an opportunity for subsequent increments of the acquisition to take advantage of any evolution in technology or needs that occurs during conduct of the earlier increments;

(2) to the maximum extent practicable, a contract for an increment of an information technology acquisition should be awarded within 180 days after the solicitation is issued and, if the contract for that increment cannot be awarded within that period, the increment should be considered for cancellation; and

(3) the information technology provided for in a contract for acquisition of information technology should be delivered within 18 months after the solicitation resulting in award of the contract was issued.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3737.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
2308	41:434.	Pub. L. 93–400, §38, formerly §35, as added Pub. L. 104–106, title LII, §5202(a), Feb. 10, 1996, 110 Stat. 690; renumbered §38, Pub. L. 104–201, title X, §1074(d)(1), Sept. 23, 1996, 110 Stat. 2660.

§2309. Protection of constitutional rights of contractors

(a) Prohibition on Requiring Waiver of Rights.—A contractor may not be required, as a condition for entering into a contract with the Federal Government, to waive a right under the Constitution for a purpose relating to the Chemical Weapons Convention Implementation Act of 1998 (22 U.S.C. 6701 et seq.) or the Chemical Weapons Convention (as defined in section 3 of that Act (22 U.S.C. 6701)).

(b) Permissible Contract Clauses.—Subsection (a) does not prohibit an executive agency from including in a contract a clause that requires the contractor to permit inspections to ensure that the contractor is performing the contract in accordance with the provisions of the contract.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3738.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
2309	41:436.	Pub. L. 93–400, §40, formerly §39, as added Pub. L. 105–277, title III, §308(a), Oct. 21, 1998, 112 Stat. 2681–879; renumbered §40, Pub. L. 108–136, title XIV, §1431(d)(2), Nov. 24, 2003, 117 Stat. 1672.

In subsection (a), the reference is to the Chemical Weapons Convention Implementation Act of 1998 rather than the Chemical Weapons Convention Implementation Act of 1997 to correct an error in the source provision.

Editorial Notes

References in Text

The Chemical Weapons Convention Implementation Act of 1998, referred to in subsec. (a), is Pub. L. 105–277, div. I, Oct. 21, 1998, 112 Stat. 2681–856, which is classified principally to chapter 75 (§6701 et seq.) of Title 22, Foreign Relations and Intercourse. For complete classification of this Act to the Code, see Short Title note set out under section 6701 of Title 22 and Tables.

§2310. Performance-based contracts or task orders for services to be treated as contracts for the procurement of commercial items

(a) Criteria.—A performance-based contract for the procurement of services entered into by an executive agency or a performance-based task order for services issued by an executive agency may be treated as a contract for the procurement of commercial items if—

(1) the value of the contract or task order is estimated not to exceed $25,000,000;

(2) the contract or task order sets forth specifically each task to be performed and, for each task—

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

(B) identifies the specific end products or output to be achieved; and

(C) contains firm, fixed prices for specific tasks to be performed or outcomes to be achieved; and

(3) the source of the services provides similar services to the general public under terms and conditions similar to those offered to the Federal Government.

(b) Regulations.—Regulations implementing this section shall require agencies to collect and maintain reliable data sufficient to identify the contracts or task orders treated as contracts for commercial items using the authority of this section. The data may be collected using the Federal Procurement Data System or other reporting mechanism.

(c) Report.—Not later than 2 years after November 24, 2003, the Director of the Office of Management and Budget shall prepare and submit to the Committees on Homeland Security and Governmental Affairs and on Armed Services of the Senate and the Committees on Oversight and Government Reform and on Armed Services of the House of Representatives a report on the contracts or task orders treated as contracts for commercial items using the authority of this section. The report shall include data on the use of the authority, both government-wide and for each department and agency.

(d) Expiration.—The authority under this section expires 10 years after November 24, 2003.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3738.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
2310	41:437.	Pub. L. 93–400, §41, as added Pub. L. 108–136, title XIV, §1431(a), Nov. 24, 2003, 117 Stat. 1671.

In subsection (c), the words "Committees on Homeland Security and Governmental Affairs" are substituted for "Committees on Governmental Affairs" on authority of Senate Resolution No. 445 (108th Congress, October 9, 2004). The words "Committees on Oversight and Government Reform" are substituted for "Committees on Government Reform" on authority of Rule X(1)(m) of the Rules of the House of Representatives, adopted by House Resolution No. 6 (110th Congress, January 5, 2007).

Statutory Notes and Related Subsidiaries

Change of Name

Committee on Oversight and Government Reform of House of Representatives changed to Committee on Oversight and Reform of House of Representatives by House Resolution No. 6, One Hundred Sixteenth Congress, Jan. 9, 2019. Committee on Oversight and Reform of House of Representatives changed to Committee on Oversight and Accountability of House of Representatives by House Resolution No. 5, One Hundred Eighteenth Congress, Jan. 9, 2023.

§2311. Enhanced transparency on interagency contracting and other transactions

The Director of the Office of Management and Budget shall direct appropriate revisions to the Federal Procurement Data System or any successor system to facilitate the collection of complete, timely, and reliable data on interagency contracting actions and on transactions other than contracts, grants, and cooperative agreements issued pursuant to section 4021 of title 10 or similar authorities. The Director of the Office of Management and Budget shall ensure that data, consistent with what is collected for contract actions, is obtained on—

(1) interagency contracting actions, including data at the task or delivery-order level; and

(2) other transactions, including the initial award and any subsequent modifications awarded or orders issued (other than transactions that are reported through the Federal Assistance Awards Data System).

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3739; Pub. L. 117–81, div. A, title XVII, §1702(h)(11), Dec. 27, 2021, 135 Stat. 2158.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
2311	41:405 note.	Pub. L. 110–417, [div. A], title VIII, §874(a), Oct. 14, 2008, 122 Stat. 4558.

In the first sentence, the words "Not later than one year after the date of enactment of this Act" are omitted because of section 6(f) of the bill.

Editorial Notes

Amendments

2021—Pub. L. 117–81 substituted "section 4021" for "section 2371" in introductory provisions.

Statutory Notes and Related Subsidiaries

Deadline for Revisions in Federal Procurement Data System or Successor System

Pub. L. 111–350, §6(f)(2), Jan. 4, 2011, 124 Stat. 3855, provided that: "The requirement in section 2311 of title 41, United States Code, to direct appropriate revisions in the Federal Procurement Data System or any successor system shall be done not later than one year after October 14, 2008."

§2312. Contingency Contracting Corps

(a) Definition.—In this section, the term "Corps" means the Contingency Contracting Corps established in subsection (b).

(b) Establishment.—The Administrator of General Services, pursuant to policies established by the Office of Management and Budget, and in consultation with the Secretary of Defense and the Secretary of Homeland Security, shall establish a Government-wide Contingency Contracting Corps.

(c) Function.—The members of the Corps shall be available for deployment in responding to an emergency or major disaster, or a contingency operation, both within or outside the continental United States.

(d) Applicability.—The authorities provided in this section apply with respect to any procurement of property or services by or for an executive agency that, as determined by the head of the executive agency, are to be used—

(1) in support of a contingency operation as defined in section 101(a)(13) of title 10; or

(2) to respond to an emergency or major disaster as defined in section 102 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5122).

(e) Membership.—Membership in the Corps shall be voluntary and open to all Federal employees and members of the Armed Forces who are members of the Federal acquisition workforce.

(f) Education and Training.—The Administrator of General Services may, in consultation with the Director of the Federal Acquisition Institute and the Chief Acquisition Officers Council, establish educational and training requirements for members of the Corps. Education and training carried out pursuant to the requirements shall be paid for from funds available in the acquisition workforce training fund established pursuant to section 1703(i) of this title.

(g) Salary.—The salary for a member of the Corps shall be paid—

(1) in the case of a member of the Armed Forces, out of funds available to the Armed Force concerned; and

(2) in the case of a Federal employee, out of funds available to the employing agency.

(h) Authority to Deploy the Corps.—

(1) Director of the Office of Management and Budget.—The Director of the Office of Management and Budget shall have the authority, upon request by an executive agency, to determine when members of the Corps shall be deployed, with the concurrence of the head of the agency or agencies employing the members to be deployed.

(2) Secretary of Defense.—Nothing in this section shall preclude the Secretary of Defense or the Secretary's designee from deploying members of the Armed Forces or civilian personnel of the Department of Defense in support of a contingency operation as defined in section 101(a)(13) of title 10.

(i) Annual Report.—

(1) In general.—The Administrator of General Services shall provide to the Committee on Homeland Security and Governmental Affairs and the Committee on Armed Services of the Senate and the Committee on Oversight and Government Reform and the Committee on Armed Services of the House of Representatives an annual report on the status of the Corps as of September 30 of each fiscal year.

(2) Content.—Each report under paragraph (1) shall include the number of members of the Corps, the total cost of operating the program, the number of deployments of members of the program, and the performance of members of the program in deployment.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3739.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
2312 (except subsection (a))	41:440.	Pub. L. 93–400, §44, as added Pub. L. 110–417, [div. A], title VIII, §870(a), Oct. 14, 2008, 122 Stat. 4554.
2312(a)	no source.

Statutory Notes and Related Subsidiaries

Change of Name

Committee on Oversight and Government Reform of House of Representatives changed to Committee on Oversight and Reform of House of Representatives by House Resolution No. 6, One Hundred Sixteenth Congress, Jan. 9, 2019. Committee on Oversight and Reform of House of Representatives changed to Committee on Oversight and Accountability of House of Representatives by House Resolution No. 5, One Hundred Eighteenth Congress, Jan. 9, 2023.

§2313. Database for Federal agency contract and grant officers and suspension and debarment officials

(a) In General.—Subject to the authority, direction, and control of the Director of the Office of Management and Budget, the Administrator of General Services shall establish and maintain a database of information regarding the integrity and performance of certain persons awarded Federal agency contracts and grants for use by Federal agency officials having authority over contracts and grants.

(b) Persons Covered.—The database shall cover the following:

(1) Any person awarded a Federal agency contract or grant in excess of $500,000, if any information described in subsection (c) exists with respect to the person.

(2) Any person awarded such other category or categories of Federal agency contract as the Federal Acquisition Regulation may provide, if any information described in subsection (c) exists with respect to the person.

(c) Information Included.—With respect to a covered person, the database shall include information (in the form of a brief description) for the most recent 5-year period regarding the following:

(1) Each civil or criminal proceeding, or any administrative proceeding, in connection with the award or performance of a contract or grant with the Federal Government with respect to the person during the period to the extent that the proceeding results in the following dispositions:

(A) In a criminal proceeding, a conviction.

(B) In a civil proceeding, a finding of fault and liability that results in the payment of a monetary fine, penalty, reimbursement, restitution, or damages of $5,000 or more.

(C) In an administrative proceeding, a finding of fault and liability that results in—

(i) the payment of a monetary fine or penalty of $5,000 or more; or

(ii) the payment of a reimbursement, restitution, or damages in excess of $100,000.

(D) To the maximum extent practicable and consistent with applicable laws and regulations, in a criminal, civil, or administrative proceeding, a disposition of the matter by consent or compromise with an acknowledgment of fault by the person if the proceeding could have led to any of the outcomes specified in subparagraph (A), (B), or (C).

(E) In an administrative proceeding—

(i) a final determination of contractor fault by the Secretary of Defense pursuant to section 823(d) of the National Defense Authorization Act for Fiscal Year 2010 (10 U.S.C. 2302 note; Public Law 111–84); or

(ii) a substantiated allegation, pursuant to section 1704(b) of the National Defense Authorization Act for Fiscal Year 2013, that the contractor, a subcontractor, or an agent of the contractor or subcontractor engaged in any of the activities described in section 106(g) of the Trafficking Victims Protection Act of 2000 (22 U.S.C. 7104(g)).

(2) Each Federal contract and grant awarded to the person that was terminated in the period due to default.

(3) Each Federal suspension and debarment of the person.

(4) Each Federal administrative agreement entered into by the person and the Federal Government in the period to resolve a suspension or debarment proceeding.

(5) Each final finding by a Federal official in the period that the person has been determined not to be a responsible source under paragraph (3) or (4) of section 113 of this title.

(6) Other information that shall be provided for purposes of this section in the Federal Acquisition Regulation.

(7) To the maximum extent practicable, information similar to the information covered by paragraphs (1) to (4) in connection with the award or performance of a contract or grant with a State government.

(8) Whether the person is included on any of the following lists maintained by the Office of Foreign Assets Control of the Department of the Treasury:

(A) The specially designated nationals and blocked persons list (commonly known as the "SDN list").

(B) The sectoral sanctions identification list.

(C) The foreign sanctions evaders list.

(D) The list of persons sanctioned under the Iran Sanctions Act of 1996 (Public Law 104–172; 50 U.S.C. 1701 note) that do not appear on the SDN list (commonly known as the "Non-SDN Iranian Sanctions Act list").

(E) The list of foreign financial institutions subject to part 561 of title 31, Code of Federal Regulations.

(d) Requirements Relating to Database Information.—

(1) Direct input and update.—The Administrator of General Services shall design and maintain the database in a manner that allows the appropriate Federal agency officials to directly input and update information in the database relating to actions that the officials have taken with regard to contractors or grant recipients.

(2) Timeliness and accuracy.—The Administrator of General Services shall develop policies to require—

(A) the timely and accurate input of information into the database;

(B) the timely notification of any covered person when information relevant to the person is entered into the database; and

(C) opportunities for any covered person to submit comments pertaining to information about the person for inclusion in the database.

(3) Information on corporations.—The information in the database on a person that is a corporation shall, to the extent practicable, include information on any parent, subsidiary, or successor entities to the corporation, and an identification of any beneficial owner of such corporation, in a manner designed to give the acquisition officials using the database a comprehensive understanding of the performance and integrity of the corporation in carrying out Federal contracts and grants.

(4) Definitions.—In this subsection:

(A) Beneficial ownership.—The term "beneficial ownership" has the meaning given under section 847 of the National Defense Authorization Act for Fiscal Year 2020 (Public Law 116–92; 133 Stat. 1505; 10 U.S.C. 2509 note).

(B) Corporation.—The term "corporation" means any corporation, company, limited liability company, limited partnership, business trust, business association, or other similar entity.

(e) Use of Database.—

(1) Availability to government officials.—The Administrator of General Services shall ensure that the information in the database is available to appropriate acquisition officials of Federal agencies, other government officials as the Administrator of General Services determines appropriate, and, on request, the Chairman and Ranking Member of the committees of Congress having jurisdiction.

(2) Review and assessment of data.—

(A) In general.—Before awarding a contract or grant in excess of the simplified acquisition threshold under section 134 of this title, the Federal agency official responsible for awarding the contract or grant shall review the database and consider all information in the database with regard to any offer or proposal, and in the case of a contract, shall consider other past performance information available with respect to the offeror in making any responsibility determination or past performance evaluation for the offeror.

(B) Documentation in contract file.—The contract file for each contract of a Federal agency in excess of the simplified acquisition threshold shall document the manner in which the material in the database was considered in any responsibility determination or past performance evaluation.

(f) Disclosure in Applications.—The Federal Acquisition Regulation shall require that persons with Federal agency contracts and grants valued in total greater than $10,000,000 shall—

(1) submit to the Administrator of General Services, in a manner determined appropriate by the Administrator of General Services, the information subject to inclusion in the database as listed in subsection (c) current as of the date of submittal of the information under this subsection; and

(2) update the information submitted under paragraph (1) on a semiannual basis.

(g) Rulemaking.—The Administrator of General Services shall prescribe regulations that may be necessary to carry out this section.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3740; Pub. L. 111–212, title III, §3010, July 29, 2010, 124 Stat. 2340; Pub. L. 111–383, div. A, title VIII, §834(d), Jan. 7, 2011, 124 Stat. 4279; Pub. L. 112–239, div. A, title VIII, §852, title XVII, §1704(d)(2), Jan. 2, 2013, 126 Stat. 1856, 2096; Pub. L. 113–291, div. A, title XII, §1270, Dec. 19, 2014, 128 Stat. 3587; Pub. L. 116–283, div. A, title VIII, §885, Jan. 1, 2021, 134 Stat. 3791.)

Amendments Not Shown in Text

This section was derived from section 417b of former Title 41, Public Contracts, which was amended by Pub. L. 111–212, title III, §3010, July 29, 2010, 124 Stat. 2340, and Pub. L. 111–383, div. A, title VIII, §834(d), Jan. 7, 2011, 124 Stat. 4279, prior to being repealed and reenacted as this section by Pub. L. 111–350, §§3, 7(b), Jan. 4, 2011, 124 Stat. 3677, 3855. For applicability of those amendments to this section, see section 6(a) of Pub. L. 111–350, set out as a Transitional and Savings Provisions note preceding section 101 of this title. Section 417b of former Title 41 was amended by adding at the end of subsec. (e)(1) the following: "In addition, the Administrator shall post all such information, excluding past performance reviews, on a publicly available Internet website." and by adding at the end of subsec. (c)(1) the following new subparagraph:

"(E) In an administrative proceeding, a final determination of contractor fault by the Secretary of Defense pursuant to section 823(d) of the National Defense Authorization Act for Fiscal Year 2010 (10 U.S.C. 2302 note)."

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
2313	41:417b.	Pub. L. 110–417, [div. A], title VIII, §872, Oct. 14, 2008, 122 Stat. 4555.

In subsection (a), the words "not later than one year after the date of the enactment of this Act" are omitted because of section 6(f) of the bill.

In subsection (c)(7), the word "practicable" is substituted for "practical" to correct an error in the law.

In subsection (f), the words "Not later than one year after the date of the enactment of this Act" are omitted because of section 6(f) of the bill. The words "shall require" are substituted for "shall be amended to require" to reflect the permanence of the provision.

In subsection (f)(2), the words "the information submitted under paragraph (1)" are substituted for "such information" for clarity.

Editorial Notes

References in Text

Section 1704(b) of the National Defense Authorization Act for Fiscal Year 2013, referred to in subsec. (c)(1)(E)(ii), is section 1704(b) of Pub. L. 112–239, which is classified to section 7104b(b) of Title 22, Foreign Relations and Intercourse.

Amendments

2021—Subsec. (d)(3). Pub. L. 116–283, §885(1), inserted ", and an identification of any beneficial owner of such corporation," after "to the corporation".

Subsec. (d)(4). Pub. L. 116–283, §885(2), added par. (4).

2014—Subsec. (c)(8). Pub. L. 113–291 added par. (8).

2013—Subsec. (c)(1)(E). Pub. L. 112–239, §1704(d)(2), amended subpar. (E) generally. Prior to amendment, subpar. (E), as added by Pub. L. 111–383, §834(d), read as follows: "(E) In an administrative proceeding, a final determination of contractor fault by the Secretary of Defense pursuant to section 823(d) of the National Defense Authorization Act for Fiscal Year 2010 (10 U.S.C. 2302 note)." See Amendments Not Shown in Text note above.

Subsec. (d)(3). Pub. L. 112–239, §852, added par. (3).

Statutory Notes and Related Subsidiaries

Deadline for Establishing Database

Pub. L. 111–350, §6(f)(3), Jan. 4, 2011, 124 Stat. 3855, provided that: "The requirement in section 2313(a) of title 41, United States Code, to establish a database shall be done not later than one year after October 14, 2008."

Deadline for Amending Federal Acquisition Regulation

Pub. L. 111–350, §6(f)(4), Jan. 4, 2011, 124 Stat. 3855, provided that: "The Federal Acquisition Regulation shall be amended to meet the requirements of sections 2313(f), 3302(b) and (d), 4710(b), and 4711(b) of title 41, United States Code, not later than one year after October 14, 2008."

Division C—Procurement

Definitions

For additional definitions of terms used in this division, with certain exceptions, see section 102 of Title 40, Public Buildings, Property, and Works.

CHAPTER 31—GENERAL

        

Statutory Notes and Related Subsidiaries

Cost-Effectiveness Analysis of Equipment Rental

Pub. L. 115–254, div. B, title V, §555, Oct. 5, 2018, 132 Stat. 3381, as amended by Pub. L. 117–81, div. A, title XVII, §1702(i)(1), Dec. 27, 2021, 135 Stat. 2159, provided that:

"(a) Agency Analysis of Equipment Acquisition.—

"(1) In general.—Except as provided for under subsection (d), the head of each executive agency shall acquire equipment using the method of acquisition most advantageous to the Federal Government based on a case-by-case analysis of comparative costs and other factors, including those factors listed in section 7.401 of the Federal Acquisition Regulation.

"(2) Methods of acquisition.—The methods of acquisition to be compared in the analysis under paragraph (1) shall include, at a minimum, purchase, short-term rental or lease, long-term rental or lease, interagency acquisition, and acquisition agreements with a State or a local government as described in subsection (c).

"(3) Amendment of federal acquisition regulation.—Not later than 180 days after the date of the enactment of this Act [Oct. 5, 2018], the Federal Acquisition Regulatory Council shall amend the Federal Acquisition Regulation to implement the requirement of this subsection, including a determination of the factors for executive agencies to consider for purposes of performing the analysis under paragraph (1).

"(4) Rule of construction.—Nothing in this subsection shall be construed to affect the requirements of chapter 37 of title 41, United States Code, sections 3206 through 3208 and sections 3301 through 3309 of title 10, United States Code, or section 1535 of title 31, United States Code.

"(b) Date of Implementation.—The analysis described in subsection (a) shall be applied to contracts for the acquisition of equipment entered into on or after the date that the Federal Acquisition Regulation is amended pursuant to paragraph (3) of such subsection.

"(c) Acquisition Agreements With States or Local Governments.—

"(1) In general.—Notwithstanding any other provision of law, including chapter 37 of title 41, United States Code, the Small Business Act (15 U.S.C. 631 et seq.), and sections 3206 through 3208 and sections 3301 through 3309 of title 10, United States Code, the head of an executive agency may enter into an acquisition agreement authorized by this section directly with a State or a local government if the agency head determines that the agreement otherwise satisfies the requirements of subsection (a)(1).

"(2) Terms and conditions.—Any agreement under paragraph (1) shall contain such terms and conditions as the head of the agency deems necessary or appropriate to protect the interests of the United States.

"(d) Exceptions.—The analysis otherwise required under subsection (a) is not required—

"(1) when the President has issued an emergency declaration or a major disaster declaration pursuant to the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121 et seq.);

"(2) in other emergency situations if the agency head makes a determination that obtaining such equipment is necessary in order to protect human life or property; or

"(3) when otherwise authorized by law.

"(e) Study of Agency Analyses.—Not later than 2 years after the date of the enactment of this Act, the Comptroller General of the United States shall submit to the Committee on Oversight and Government Reform [now Committee on Oversight and Accountability] of the House of Representatives and the Committee on Homeland Security and Governmental Affairs of the Senate a comprehensive report on the decisions made by the executive agencies with the highest levels of acquisition spending, and a sample of executive agencies with lower levels of acquisition spending, to acquire high-value equipment by lease, rental, or purchase pursuant to subpart 7.4 of the Federal Acquisition Regulation.

"(f) Definitions.—In this section:

"(1) Executive agency.—The term 'executive agency' has the meaning given that term in section 102 of title 40, United States Code.

"(2) Interagency acquisition.—The term 'interagency acquisition' has the meaning given that term in section 2.101 of the Federal Acquisition Regulation.

"(3) State.—The term 'State' has the meaning given the term in section 6501 of title 31, United States Code.

"(4) Local government.—The term 'local government' means any unit of local government within a State, including a county, municipality, city, borough, town, township, parish, local public authority, school district, special district, intrastate district, council of governments, or regional or interstate government entity, and any agency or instrumentality of a local government."

Uniform Contract Writing System Requirements

Pub. L. 112–239, div. A, title VIII, §862, Jan. 2, 2013, 126 Stat. 1859, provided that:

"(a) Uniform Standards and Controls Required.—Not later than 180 days after the date of the enactment of this Act [Jan. 2, 2013], the officials specified in subsection (b) shall—

"(1) establish uniform data standards, internal control requirements, independent verification and validation requirements, and business process rules for processing procurement requests, contracts, receipts, and invoices by the Department of Defense or other executive agencies, as applicable;

"(2) establish and maintain one or more approved electronic contract writing systems that conform with the standards, requirements, and rules established pursuant to paragraph (1); and

"(3) require the use of electronic contract writing systems approved in accordance with paragraph (2) for all contracts entered into by the Department of Defense or other executive agencies, as applicable.

"(b) Covered Officials.—The officials specified in this subsection are the following:

"(1) The Secretary of Defense, with respect to the Department of Defense and the military departments.

"(2) The Administrator for Federal Procurement Policy, with respect to the executive agencies other than the Department of Defense and the military departments.

"(c) Electronic Writing Systems for Department of State and USAID.—Notwithstanding subsection (b)(2), the Secretary of State and the Administrator of the United States Agency for International Development may meet the requirements of subsection (a)(2) with respect to approved electronic contract writing systems for the Department of State and the United States Agency for International Development, respectively, if the Secretary and the Administrator, as the case may be, demonstrate to the Administrator for Federal Procurement Policy that prior investment of resources in existing contract writing systems will result in the most cost effective and efficient means to satisfy such requirements.

"(d) Phase-in of Implementation of Requirement for Approved Systems.—The officials specified in subsection (b) may phase in the implementation of the requirement to use approved electronic contract writing systems in accordance with subsection (a)(3) over a period of up to five years beginning with the date of the enactment of this Act [Jan. 2, 2013].

"(e) Reports.—Not later than 180 days after the date of the enactment of this Act [Jan. 2, 2013], the officials specified in subsection (b) shall each submit to the appropriate committees of Congress a report on the implementation of the requirements of this section. Each report shall, at a minimum—

"(1) describe the standards, requirements, and rules established pursuant to subsection (a)(1);

"(2) identify the electronic contract writing systems approved pursuant to subsection (a)(2) and, if multiple systems are approved, explain why the use of such multiple systems is the most efficient and effective approach to meet the contract writing needs of the Federal Government; and

"(3) provide the schedule for phasing in the use of approved electronic contract writing systems in accordance with subsections (a)(3) and (d).

"(f) Definitions.—In this section:

"(1) The term 'appropriate committees of Congress' means—

"(A) the Committee on Armed Services, the Committee on Foreign Relations, the Committee on Homeland Security and Governmental Affairs, and the Committee on Appropriations of the Senate; and

"(B) the Committee on Armed Services, the Committee on Foreign Affairs, the Committee on Oversight and Government Reform [now Committee on Oversight and Accountability], and the Committee on Appropriations of the House of Representatives.

"(2) The term 'executive agency' has the meaning given that term in section 133 of title 41, United States Code."

§3101. Applicability

(a) In General.—An executive agency shall make purchases and contracts for property and services in accordance with this division and implementing regulations of the Administrator of General Services.

(b) Simplified Acquisition Threshold and Procedures.—

(1) Simplified acquisition threshold.—

(A) Definition.—For purposes of an acquisition by an executive agency, the simplified acquisition threshold is as specified in section 134 of this title.

(B) Inapplicable laws.—A law properly listed in the Federal Acquisition Regulation pursuant to section 1905 of this title does not apply to or with respect to a contract or subcontract that is not greater than the simplified acquisition threshold.

(2) Simplified acquisition procedures.—Simplified acquisition procedures contained in the Federal Acquisition Regulation pursuant to section 1901 of this title apply in executive agencies as provided in section 1901.

(c) Exceptions.—

(1) In general.—This division does not apply—

(A) to the Department of Defense, the Coast Guard, and the National Aeronautics and Space Administration; or

(B) except as provided in paragraph (2), when this division is made inapplicable pursuant to law.

(2) Applicability of certain laws related to advertising, opening of bids, and length of contract.—Sections 6101, 6103, and 6304 of this title do not apply to the procurement of property or services made by an executive agency pursuant to this division. However, when this division is made inapplicable by any law, sections 6101 and 6103 of this title apply in the absence of authority conferred by statute to procure without advertising or without regard to section 6101 of this title. A law that authorizes an executive agency (other than an executive agency exempted from this division by this subsection) to procure property or services without advertising or without regard to section 6101 of this title is deemed to authorize the procurement pursuant to the provisions of this division relating to procedures other than sealed-bid procedures.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3742.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
3101(a)	41:252(a) (words before 1st semicolon).	June 30, 1949, ch. 288, title III, §302(a), 63 Stat. 393; July 12, 1952, ch. 703, §1(m), 66 Stat. 594; Pub. L. 85–800, §1, Aug. 28, 1958, 72 Stat. 966; Pub. L. 89–343, §1, Nov. 8, 1965, 79 Stat. 1303.
3101(b)(1)	41:252a.	June 30, 1949, ch. 288, title III, §302A, as added Pub. L. 103–355, title IV, §§4003, 4103(a), Oct. 13, 1994, 108 Stat. 3338, 3341.
3101(b)(2)	41:252b.	June 30, 1949, ch. 288, title III, §302B, as added Pub. L. 103–355, title IV, §4203(b), Oct. 13, 1994, 108 Stat. 3346.
3101(c)(1)	41:252(a) (words after 1st semicolon and before "but when").
3101(c)(2)	41:252(a) (words after "other law").
	41:260.	June 30, 1949, ch. 288, title III, §310, 63 Stat. 397; July 12, 1952, ch. 703, §1(m), (n), 66 Stat. 594; Pub. L. 85–800, §6, Aug. 28, 1958, 72 Stat. 967; Pub. L. 89–343, §5, Nov. 8, 1965, 79 Stat. 1303; Pub. L. 98–369, div. B, title VII, §2714(a)(6), July 18, 1984, 98 Stat. 1185.

In subsection (c)(1)(B), the words "except as provided in paragraph (2)" are added for clarity. The words "section 113(e) of title 40 or any other" are omitted as unnecessary.

Executive Documents

Ex. Ord. No. 13005. Empowerment Contracting

Ex. Ord. No. 13005, May 21, 1996, 61 F.R. 26069, provided:

In order to promote economy and efficiency in Federal procurement, it is necessary to secure broad-based competition for Federal contracts. This broad competition is best achieved where there is an expansive pool of potential contractors capable of producing quality goods and services at competitive prices. A great and largely untapped opportunity for expanding the pool of such contractors can be found in this Nation's economically distressed communities.

Fostering growth of Federal contractors in economically distressed communities and ensuring that those contractors become viable businesses for the long term will promote economy and efficiency in Federal procurement and help to empower those communities. Fostering growth of long-term viable contractors will be promoted by offering appropriate incentives to qualified businesses.

Accordingly, by the authority vested in me as President by the Constitution and the laws of the United States, including section 486(a) [now 121(a)] of title 40, United States Code, and section 301 of title 3, United States Code, it is hereby ordered as follows:

Section 1. Policy. The purpose of this order is to strengthen the economy and to improve the efficiency of the Federal procurement system by encouraging business development that expands the industrial base and increases competition.

Sec. 2. Empowerment Contracting Program. In consultation with the Secretaries of the Departments of Housing and Urban Development, Labor, and Defense; the Administrator of General Services; the Administrator of the National Aeronautics and Space Administration; the Administrator of the Small Business Administration; and the Administrator for Federal Procurement Policy, the Secretary of the Department of Commerce shall develop policies and procedures to ensure that agencies, to the extent permitted by law, grant qualified large businesses and qualified small businesses appropriate incentives to encourage business activity in areas of general economic distress, including a price or an evaluation credit, when assessing offers for government contracts in unrestricted competitions, where the incentives would promote the policy set forth in this order. In developing such policies and procedures, the Secretary shall consider the size of the qualified businesses.

Sec. 3. Monitoring and Evaluation. The Secretary shall:

(a) monitor the implementation and operation of the policies and procedures developed in accordance with this order;

(b) develop a process to ensure the proper administration of the program and to reduce the potential for fraud by the intended beneficiaries of the program;

(c) develop principles and a process to evaluate the effectiveness of the policies and procedures developed in accordance with this order; and

(d) by December 1 of each year, issue a report to the President on the status and effectiveness of the program.

Sec. 4. Implementation Guidelines. In implementing this order, the Secretary shall:

(a) issue rules, regulations, and guidelines necessary to implement this order, including a requirement for the periodic review of the eligibility of qualified businesses and distressed areas;

(b) draft all rules, regulations, and guidelines necessary to implement this order within 90 days of the date of this order; and

(c) ensure that all policies and procedures and all rules, regulations, and guidelines adopted and implemented in accordance with this order minimize the administrative burden on affected agencies and the procurement process.

Sec. 5. Definitions. For purposes of this Executive order:

(a) "Agency" means any authority of the United States that is an "agency" under 44 U.S.C. 3502(1), other than those considered to be independent regulatory agencies, as defined in 44 U.S.C. 3502(10).

(b) "Area of general economic distress" shall be defined, for all urban and rural communities, as any census tract that has a poverty rate of at least 20 percent or any designated Federal Empowerment Zone, Supplemental Empowerment Zone, Enhanced Enterprise Community, or Enterprise Community. In addition, the Secretary may designate as an area of general economic distress any additional rural or Indian reservation area after considering the following factors:

(1) Unemployment rate;

(2) Degree of poverty;

(3) Extent of outmigration; and

(4) Rate of business formation and rate of business growth.

(c) "Qualified large business" means a large for-profit or not-for-profit trade or business that (1) employs a significant number of residents from the area of general economic distress; and (2) either has a significant physical presence in the area of general economic distress or has a direct impact on generating significant economic activity in the area of general economic distress.

(d) "Qualified small business" means a small for-profit or not-for-profit trade or business that (1) employs a significant number of residents from the area of general economic distress; (2) has a significant physical presence in the area of general economic distress; or (3) has a direct impact on generating significant economic activity in the area of general economic distress.

(e) "Secretary" means the Secretary of Commerce.

Sec. 6. Agency Authority. Nothing in this Executive order shall be construed as displacing the agencies' authority or responsibilities, as authorized by law, including specifically other programs designed to promote the development of small or disadvantaged businesses.

Sec. 7. Judicial Review. This Executive order does not create any right or benefit, substantive or procedural, enforceable at law or equity by a party against the United States, its agencies or instrumentalities, its officers or employees, or any other person.

William J. Clinton.      

Ex. Ord. No. 13627. Strengthening Protections Against Trafficking in Persons in Federal Contracts

Ex. Ord. No. 13627, Sept. 25, 2012, 77 F.R. 60029, provided:

By the authority vested in me as President by the Constitution and the laws of the United States of America, including the Federal Property and Administrative Services Act (40 U.S.C. 101 et seq.) and the Trafficking Victims Protection Act of 2000, as amended (TVPA) (Public Law 106–386, Division A), and in order to strengthen protections against trafficking in persons in Federal contracting, it is hereby ordered as follows:

Section 1. Policy. More than 20 million men, women, and children throughout the world are victims of severe forms of trafficking in persons ("trafficking" or "trafficking in persons")—defined in section 103 of the TVPA, 22 U.S.C. 7102(8) [now 7102(11)], to include sex trafficking in which a commercial sex act is induced by force, fraud, or coercion, or in which the person induced to perform such act has not attained 18 years of age, or the recruitment, harboring, transportation, provision, or obtaining of a person for labor or services, through the use of force, fraud, or coercion, for the purpose of subjection to involuntary servitude, peonage, debt bondage, or slavery.

The United States has long had a zero-tolerance policy regarding Government employees and contractor personnel engaging in any form of this criminal behavior. As the largest single purchaser of goods and services in the world, the United States Government bears a responsibility to ensure that taxpayer dollars do not contribute to trafficking in persons. By providing our Government workforce with additional tools and training to apply and enforce existing policy, and by providing additional clarity to Government contractors and subcontractors on the steps necessary to fully comply with that policy, this order will help to protect vulnerable individuals as contractors and subcontractors perform vital services and manufacture the goods procured by the United States.

In addition, the improved safeguards provided by this order to strengthen compliance with anti-trafficking laws will promote economy and efficiency in Government procurement. These safeguards, which have been largely modeled on successful practices in the private sector, will increase stability, productivity, and certainty in Federal contracting by avoiding the disruption and disarray caused by the use of trafficked labor and resulting investigative and enforcement actions.

Sec. 2. Anti-Trafficking Provisions. (a) Within 180 days of the date of this order, the Federal Acquisition Regulatory (FAR) Council, in consultation with the Secretary of State, the Attorney General, the Secretary of Labor, the Secretary of Homeland Security, the Administrator for the United States Agency for International Development, and the heads of such other executive departments and agencies (agencies) as the FAR Council determines to be appropriate, shall take steps necessary to amend the Federal Acquisition Regulation to:

(1) strengthen the efficacy of the Government's zero-tolerance policy on trafficking in persons by Federal contractors and subcontractors in solicitations, contracts, and subcontracts for supplies or services (including construction and commercial items), by:

(A) expressly prohibiting Federal contractors, contractor employees, subcontractors, and subcontractor employees from engaging in any of the following types of trafficking-related activities:

(i) using misleading or fraudulent recruitment practices during the recruitment of employees, such as failing to disclose basic information or making material misrepresentations regarding the key terms and conditions of employment, including wages and fringe benefits, the location of work, living conditions and housing (if employer provided or arranged), any significant costs to be charged to the employee, and, if applicable, the hazardous nature of the work;

(ii) charging employees recruitment fees;

(iii) destroying, concealing, confiscating, or otherwise denying access by an employee to the employee's identity documents, such as passports or drivers' licenses; and

(iv) for portions of contracts and subcontracts:

(I) performed outside the United States, failing to pay return transportation costs upon the end of employment, for an employee who is not a national of the country in which the work is taking place and who was brought into that country for the purpose of working on a U.S. Government contract or subcontract;

(II) not covered by subsection (a)(1)(A)(iv)(I) of this section, failing to pay return transportation costs upon the end of employment, for an employee who is not a national of the country in which the work is taking place and who was brought into that country for the purpose of working on a U.S. Government contract or subcontract, if the payment of such costs is required under existing temporary worker programs or pursuant to a written agreement with the employee; provided, however

(III) that the requirements of subsections (a)(1)(A)(iv)(I) and (II) shall not apply to:

(aa) an employee who is legally permitted to remain in the country of employment and who chooses to do so; or

(bb) an employee who is a victim of trafficking and is seeking victim services or legal redress in the country of employment, or an employee who is a witness in a trafficking-related enforcement action;

(v) other specific activities that the FAR Council identifies as directly supporting or promoting trafficking in persons, the procurement of commercial sex acts, or the use of forced labor in the performance of the contract or subcontract;

(B) requiring contractors and their subcontractors, by contract clause, to agree to cooperate fully in providing reasonable access to allow contracting agencies and other responsible enforcement agencies to conduct audits, investigations, or other actions to ascertain compliance with the TVPA, this order, or any other applicable law or regulation establishing restrictions on trafficking in persons, the procurement of commercial sex acts, or the use of forced labor; and

(C) requiring contracting officers to notify, in accordance with agency procedures, the agency's Inspector General, the agency official responsible for initiating suspension or debarment actions, and law enforcement, if appropriate, if they become aware of any activities that would justify termination under section 106(g) of the TVPA, 22 U.S.C. 7104(g), or are inconsistent with the requirements of this order or any other applicable law or regulation establishing restrictions on trafficking in persons, the procurement of commercial sex acts, or the use of forced labor, and further requiring that the agency official responsible for initiating suspension and debarment actions consider whether suspension or debarment is necessary in order to protect the Government's interest;

(2) except as provided in subsection (a)(3) of this section, ensure that provisions in solicitations and clauses in contracts and subcontracts, where the estimated value of the supplies acquired or services required to be performed outside the United States exceeds $500,000, include the following requirements pertaining to the portion of the contract or subcontract performed outside the United States:

(A) that each such contractor and subcontractor maintain a compliance plan during the performance of the contract or subcontract that is appropriate for the size and complexity of the contract or subcontract and the nature and scope of the activities performed, including the risk that the contract or subcontract will involve services or supplies susceptible to trafficking. The compliance plan shall be provided to the contracting officer upon request, and relevant contents of the plan shall be posted no later than the initiation of contract performance at the workplace and on the contractor or subcontractor's Web site (if one is maintained), and shall, at a minimum, include:

(i) an awareness program to inform employees about:

(I) the policy of ensuring that employees do not engage in trafficking in persons or related activities, including those specified in subsection (a)(1)(A) of this section, the procurement of commercial sex acts, or the use of forced labor; and

(II) the actions that will be taken against employees for violation of such policy;

(ii) a process for employees to report, without fear of retaliation, any activity that would justify termination under section 106(g) of the TVPA, or is inconsistent with the requirements of this order, or any other applicable law or regulation establishing restrictions on trafficking in persons, the procurement of commercial sex acts, or the use of forced labor;

(iii) a recruitment and wage plan that only permits the use of recruitment companies with trained employees, prohibits charging recruitment fees to the employee, and ensures that wages meet applicable host country legal requirements or explains any variance;

(iv) a housing plan, if the contractor or subcontractor intends to provide or arrange housing, that ensures that the housing meets host country housing and safety standards or explains any variance; and

(v) procedures to prevent subcontractors at any tier from engaging in trafficking in persons, including those trafficking-related activities described in subsection (a)(1)(A) of this section, and to monitor, detect, and terminate any subcontractors or subcontractor employees that have engaged in such activities; and

(B) that each such contractor and subcontractor shall certify, prior to receiving an award and annually thereafter during the term of the contract or subcontract, that:

(i) it has the compliance plan referred to in subsection (a)(2)(A) of this section in place to prevent trafficking-related activities described in section 106(g) of the TVPA and this order; and

(ii) either, to the best of its knowledge and belief, neither it nor any of its subcontractors has engaged in any such activities; or, if abuses have been found, the contractor or subcontractor has taken the appropriate remedial and referral actions;

(3) specify that the requirements in subsections (a)(2)(A) and (B) of this section shall not apply with respect to contracts or subcontracts for commercially available off-the-shelf items.

(b) Not later than 1 year after the date of this order, the member agencies of the President's Interagency Task Force to Monitor and Combat Trafficking in Persons (PITF), established pursuant to section 105 of the TVPA, 22 U.S.C. 7103, shall jointly establish a process for evaluating and identifying, for Federal contracts and subcontracts performed substantially within the United States, whether there are industries or sectors with a history (or where there is current evidence) of trafficking-related or forced labor activities described in section 106(g) of the TVPA, in subsection (a)(1)(A) of this section, or any other applicable law or regulation establishing restrictions on trafficking in persons, the procurement of commercial sex acts, or the use of forced labor. Where the PITF has identified such industries or sectors, it shall notify agencies of these designations, and individual agencies shall, in consultation with the Office of Federal Procurement Policy of the Office of Management and Budget, adopt and publish appropriate safeguards, guidance, and compliance assistance to prevent trafficking and forced labor in Federal contracting in these identified areas.

Sec. 3. Guidance and Training. (a) The Administrator for Federal Procurement Policy shall:

(1) in consultation with appropriate management councils, such as the Chief Acquisition Officers Council, provide guidance to agencies on developing appropriate internal procedures and controls for awarding and administering Federal contracts to improve monitoring of and compliance with actions to prevent trafficking in persons, consistent with section 106 of the TVPA, including the development of methods to track the number of trafficking violations reported and remedies applied; and

(2) in consultation with the Federal Acquisition Institute and appropriate management councils, such as the Chief Acquisition Officers Council:

(A) develop methods to track the number of Federal employees trained; and

(B) implement training requirements to ensure that the Federal acquisition workforce is trained on the policies and responsibilities for combating trafficking, including on:

(i) applicable laws, regulations, and policies; and

(ii) internal controls and oversight procedures implemented by the agency, including enforcement procedures available to the agency to investigate, manage, and mitigate contractor and subcontractor trafficking violations.

(b) The member agencies of PITF shall jointly facilitate the sharing of information that may be used by acquisition, program, and other offices within agencies to evaluate where the risk of trafficking in persons may be heightened based on the nature of the work to be performed, the place of performance, and any other relevant considerations.

Sec. 4. Effective Date. This order shall become effective immediately and shall apply to solicitations issued on or after the effective date for the action taken by the FAR Council under subsection 2(a) of this order.

Sec. 5. General Provisions. (a) Nothing in this order shall be construed to impair or otherwise affect:

(1) the authority granted by law to an executive department, agency, or the head thereof; or

(2) the functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals.

(b) This order shall be implemented consistent with applicable law and subject to the availability of appropriations.

(c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.

Barack Obama.      

Executive Order No. 13673

Ex. Ord. No. 13673, July 31, 2014, 79 F.R. 45309, as amended by Ex. Ord. No. 13683, §3, Dec. 11, 2014, 79 F.R. 75042; Ex. Ord. No. 13738, Aug. 23, 2016, 81 F.R. 58807, which related to compliance with labor laws by Federal contractors, was revoked by Ex. Ord. No. 13782, §1, Mar. 27, 2017, 82 F.R. 15607, set out below.

Ex. Ord. No. 13782. Revocation of Federal Contracting Executive Orders

Ex. Ord. No. 13782, Mar. 27, 2017, 82 F.R. 15607, provided:

By the authority vested in me as President by the Constitution and the laws of the United States of America, it is hereby ordered as follows:

Section 1. Revocation. Executive Order 13673 of July 31, 2014, section 3 of Executive Order 13683 of December 11, 2014, and Executive Order 13738 of August 23, 2016, are revoked.

Sec. 2. Reconsideration of Existing Rules. All executive departments and agencies shall, as appropriate and to the extent consistent with law, consider promptly rescinding any orders, rules, regulations, guidance, guidelines, or policies implementing or enforcing the revoked Executive Orders and revoked provision listed in section 1 of this order.

Sec. 3. General Provisions. (a) Nothing in this order shall be construed to impair or otherwise affect:

(i) the authority granted by law to an executive department or agency, or the head thereof; or

(ii) the functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals.

(b) This order shall be implemented consistent with applicable law and subject to the availability of appropriations.

(c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.

Donald J. Trump.      

Government Contracting

Memorandum of President of the United States, Mar. 4, 2009, 74 F.R. 9755, provided:

Memorandum for the Heads of Executive Departments and Agencies

The Federal Government has an overriding obligation to American taxpayers. It should perform its functions efficiently and effectively while ensuring that its actions result in the best value for the taxpayers.

Since 2001, spending on Government contracts has more than doubled, reaching over $500 billion in 2008. During this same period, there has been a significant increase in the dollars awarded without full and open competition and an increase in the dollars obligated through cost-reimbursement contracts. Between fiscal years 2000 and 2008, for example, dollars obligated under cost-reimbursement contracts nearly doubled, from $71 billion in 2000 to $135 billion in 2008. Reversing these trends away from full and open competition and toward cost-reimbursement contracts could result in savings of billions of dollars each year for the American taxpayer.

Excessive reliance by executive agencies on sole-source contracts (or contracts with a limited number of sources) and cost-reimbursement contracts creates a risk that taxpayer funds will be spent on contracts that are wasteful, inefficient, subject to misuse, or otherwise not well designed to serve the needs of the Federal Government or the interests of the American taxpayer. Reports by agency Inspectors General, the Government Accountability Office (GAO), and other independent reviewing bodies have shown that noncompetitive and cost-reimbursement contracts have been misused, resulting in wasted taxpayer resources, poor contractor performance, and inadequate accountability for results.

When awarding Government contracts, the Federal Government must strive for an open and competitive process. However, executive agencies must have the flexibility to tailor contracts to carry out their missions and achieve the policy goals of the Government. In certain exigent circumstances, agencies may need to consider whether a competitive process will not accomplish the agency's mission. In such cases, the agency must ensure that the risks associated with noncompetitive contracts are minimized.

Moreover, it is essential that the Federal Government have the capacity to carry out robust and thorough management and oversight of its contracts in order to achieve programmatic goals, avoid significant overcharges, and curb wasteful spending. A GAO study last year of 95 major defense acquisitions projects found cost overruns of 26 percent, totaling $295 billion over the life of the projects. Improved contract oversight could reduce such sums significantly.

Government outsourcing for services also raises special concerns. For decades, the Federal Government has relied on the private sector for necessary commercial services used by the Government, such as transportation, food, and maintenance. Office of Management and Budget Circular A–76, first issued in 1966, was based on the reasonable premise that while inherently governmental activities should be performed by Government employees, taxpayers may receive more value for their dollars if non-inherently governmental activities that can be provided commercially are subject to the forces of competition.

However, the line between inherently governmental activities that should not be outsourced and commercial activities that may be subject to private sector competition has been blurred and inadequately defined. As a result, contractors may be performing inherently governmental functions. Agencies and departments must operate under clear rules prescribing when outsourcing is and is not appropriate.

It is the policy of the Federal Government that executive agencies shall not engage in noncompetitive contracts except in those circumstances where their use can be fully justified and where appropriate safeguards have been put in place to protect the taxpayer. In addition, there shall be a preference for fixed-price type contracts. Cost-reimbursement contracts shall be used only when circumstances do not allow the agency to define its requirements sufficiently to allow for a fixed-price type contract. Moreover, the Federal Government shall ensure that taxpayer dollars are not spent on contracts that are wasteful, inefficient, subject to misuse, or otherwise not well designed to serve the Federal Government's needs and to manage the risk associated with the goods and services being procured. The Federal Government must have sufficient capacity to manage and oversee the contracting process from start to finish, so as to ensure that taxpayer funds are spent wisely and are not subject to excessive risk. Finally, the Federal Government must ensure that those functions that are inherently governmental in nature are performed by executive agencies and are not outsourced.

I hereby direct the Director of the Office of Management and Budget (OMB), in collaboration with the Secretary of Defense, the Administrator of the National Aeronautics and Space Administration, the Administrator of General Services, the Director of the Office of Personnel Management, and the heads of such other agencies as the Director of OMB determines to be appropriate, and with the participation of appropriate management councils and program management officials, to develop and issue by July 1, 2009, Government-wide guidance to assist agencies in reviewing, and creating processes for ongoing review of, existing contracts in order to identify contracts that are wasteful, inefficient, or not otherwise likely to meet the agency's needs, and to formulate appropriate corrective action in a timely manner. Such corrective action may include modifying or canceling such contracts in a manner and to the extent consistent with applicable laws, regulations, and policy.

I further direct the Director of OMB, in collaboration with the aforementioned officials and councils, and with input from the public, to develop and issue by September 30, 2009, Government-wide guidance to:

(1) govern the appropriate use and oversight of sole-source and other types of noncompetitive contracts and to maximize the use of full and open competition and other competitive procurement processes;

(2) govern the appropriate use and oversight of all contract types, in full consideration of the agency's needs, and to minimize risk and maximize the value of Government contracts generally, consistent with the regulations to be promulgated pursuant to section 864 of Public Law 110–417;

(3) assist agencies in assessing the capacity and ability of the Federal acquisition workforce to develop, manage, and oversee acquisitions appropriately; and

(4) clarify when governmental outsourcing for services is and is not appropriate, consistent with section 321 of Public Law 110–417 (31 U.S.C. 501 note).

Executive departments and agencies shall carry out the provisions of this memorandum to the extent permitted by law. This memorandum is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.

The Director of OMB is hereby authorized and directed to publish this memorandum in the Federal Register.

Barack Obama.      

§3102. Delegation and assignment of powers, functions, and responsibilities

(a) In General.—Except to the extent expressly prohibited by another law, the head of an executive agency may delegate to another officer or official of that agency any power under this division.

(b) Procurements For or With Another Agency.—Subject to subsection (a), to facilitate the procurement of property and services covered by this division by an executive agency for another executive agency, and to facilitate joint procurement by executive agencies—

(1) the head of an executive agency may delegate functions and assign responsibilities relating to procurement to any officer or employee within the agency;

(2) the heads of 2 or more executive agencies, consistent with section 1535 of title 31 and regulations prescribed under section 1074 of the Federal Acquisition Streamlining Act of 1994 (Public Law 103–355, 31 U.S.C. 1535 note), may by agreement delegate procurement functions and assign procurement responsibilities from one executive agency to another of those executive agencies or to an officer or civilian employee of another of those executive agencies; and

(3) the heads of 2 or more executive agencies may establish joint or combined offices to exercise procurement functions and responsibilities.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3743.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
3102	41:261.	June 30, 1949, ch. 288, title III, §311, as added Pub. L. 103–355, title I, §1552, Oct. 13, 1994, 108 Stat. 3299.

§3103. Acquisition programs

(a) Congressional Policy.—It is the policy of Congress that the head of each executive agency should achieve, on average, 90 percent of the cost, performance, and schedule goals established for major acquisition programs of the agency.

(b) Establishment of Goals.—

(1) By head of executive agency.—The head of each executive agency shall approve or define the cost, performance, and schedule goals for major acquisition programs of the agency.

(2) By chief financial officer.—The chief financial officer of an executive agency shall evaluate the cost goals proposed for each major acquisition program of the agency.

(c) Identification of Noncompliant Programs.—When it is necessary to implement the policy set out in subsection (a), the head of an executive agency shall—

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

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

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3743.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
3103	41:263.	June 30, 1949, ch. 288, title III, §313, as added Pub. L. 103–355, title V, §5051(a), Oct. 13, 1994, 108 Stat. 3351; Pub. L. 105–85, div. A, title VIII, §851(a), Nov. 18, 1997, 111 Stat. 1851.

§3104. Small business concerns

It is the policy of Congress that a fair proportion of the total purchases and contracts for property and services for the Federal Government shall be placed with small business concerns.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3744.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
3104	41:252(b).	June 30, 1949, ch. 288, title III, §302(b), 63 Stat. 393; July 12, 1952, ch. 703, §1(m), 66 Stat. 594; Pub. L. 98–369, div. B, title VII, §2714(a)(1)(A), July 18, 1984, 98 Stat. 1184.

The word "declared" is omitted as unnecessary.

§3105. New contracts and grants and merit-based selection procedures

(a) Congressional Policy.—It is the policy of Congress that—

(1) an executive agency should not be required by legislation to award—

(A) a new contract to a specific non-Federal Government entity; or

(B) a new grant for research, development, test, or evaluation to a non-Federal Government entity; and

(2) a program, project, or technology identified in legislation be procured or awarded through merit-based selection procedures.

(b) New Contract and New Grant Described.—For purposes of this section—

(1) 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 prior contract; and

(2) a grant is a new grant unless the work provided for in the grant is a continuation of the work performed by the specified entity under a prior grant.

(c) Requirements for Awarding New Contract or New Grant.—A provision of law may not be construed as requiring a new contract or a new grant to be awarded to a specified non-Federal Government entity unless the provision of law specifically—

(1) refers to this section;

(2) identifies the particular non-Federal Government entity involved; and

(3) states that the award to that entity is required by the provision of law in contravention of the policy set forth in subsection (a).

(d) Exception.—This section does not apply to a contract or grant that calls on the National Academy of Sciences to investigate, examine, or experiment on a subject of science or art of significance to an executive agency and to report on those matters to Congress or an agency of the Federal Government.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3744.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
3105(a)	41:253(i)(1).	June 30, 1949, ch. 288, title III, §303(i), as added Pub. L. 103–355, title VII, §7203(b)(1)(B), Oct. 13, 1994, 108 Stat. 3380; Pub. L. 104–106, title XLI, §4101(b)(1), Feb. 10, 1996, 110 Stat. 642.
	41:266(a).	June 30, 1949, ch. 288, title III, §316, as added Pub. L. 103–355, title VII, §7203(b)(2), Oct. 13, 1994, 108 Stat. 3381; Pub. L. 104–106, title XLIII, §4321(e)(9), Feb. 10, 1996, 110 Stat. 675.
3105(b)	41:253(i)(3).
	41:266(c).
3105(c)	41:253(i)(2).
	41:266(b).
3105(d)	41:253(i)(4).
	41:266(d).

§3106. Erection, repair, or furnishing of public buildings and improvements not authorized, and certain contracts not permitted, by this division

This division does not—

(1) authorize the erection, repair, or furnishing of a public building or public improvement; or

(2) permit a contract for the construction or repair of a building, road, sidewalk, sewer, main, or similar item using procedures other than sealed-bid procedures under section 3301(b)(1)(A) of this title if the conditions set forth in section 3301(b)(1)(A) of this title apply or the contract is to be performed outside the United States.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3745.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
3106	41:252(c)(1).	June 30, 1949, ch. 288, title III, §302(c)(1), 63 Stat. 393; July 12, 1952, ch. 703, §1(m), 66 Stat. 594; Pub. L. 85–800, §§2, 3, Aug. 28, 1958, 72 Stat. 966; Pub. L. 89–343, §2, Nov. 8, 1965, 79 Stat. 1303; Pub. L. 89–348, §1(2), Nov. 8, 1965, 79 Stat. 1310; Pub. L. 90–268, §4, Mar. 16, 1968, 82 Stat. 50; Pub. L. 93–356, §3, July 25, 1974, 88 Stat. 390; Pub. L. 98–191, §9(a)(1), Dec. 1, 1983, 97 Stat. 1331; Pub. L. 98–369, div. B, title VII, §2714(a)(1)(B), July 18, 1984, 98 Stat. 1184.

In paragraph (1), the words "but such authorization shall be required in the same manner as heretofore" are omitted as unnecessary.

CHAPTER 33—PLANNING AND SOLICITATION

        

Editorial Notes

Amendments

2018—Pub. L. 115–232, div. A, title VIII, §836(b)(10)(B)(ii), Aug. 13, 2018, 132 Stat. 1863, substituted "Preference for commercial products and commercial services" for "Preference for commercial items" in item 3307.

2013—Pub. L. 112–239, div. A, title VIII, §851(a)(2), Jan. 2, 2013, 126 Stat. 1855, added item 3312.

§3301. Full and open competition

(a) In General.—Except as provided in sections 3303, 3304(a), and 3305 of this title and except in the case of procurement procedures otherwise expressly authorized by statute, an executive agency in conducting a procurement for property or services shall—

(1) obtain full and open competition through the use of competitive procedures in accordance with the requirements of this division and the Federal Acquisition Regulation; and

(2) use the competitive procedure or combination of competitive procedures that is best suited under the circumstances of the procurement.

(b) Appropriate Competitive Procedures.—

(1) Use of sealed bids.—In determining the competitive procedures appropriate under the circumstance, an executive agency shall—

(A) 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; or

(B) request competitive proposals if sealed bids are not appropriate under subparagraph (A).

(2) Sealed bid not required.—Paragraph (1)(A) does not require the use of sealed-bid procedures in cases in which section 204(e) ¹ of title 23 applies.

(c) Efficient Fulfillment of Government Requirements.—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 Federal Government's requirements.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3745.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
3301(a)	41:253(a)(1).	June 30, 1949, ch. 288, title III, §303(a), 63 Stat. 395; July 12, 1952, ch. 703, §1(m), 66 Stat. 594; Pub. L. 90–268, §2, Mar. 16, 1968, 82 Stat. 49; Pub. L. 98–369, title VII, §2711(a)(1), July 18, 1984, 98 Stat. 1175; Pub. L. 103–355, title I, §1051(1), Oct. 13, 1994, 108 Stat. 3260.
3301(b)(1)	41:253(a)(2).
3301(b)(2)	41:252(c)(2).	June 30, 1949, ch. 288, title III, §302(c)(2), as added Pub. L. 98–369, title VII, §2714(a)(1)(B), July 18, 1984, 98 Stat. 1184.
3301(c)	41:253(h).	June 30, 1949, ch. 288, title III, §303(h), as added Pub. L. 104–106, title XLI, §4101(b)(2), Feb. 10, 1996, 110 Stat. 642.

Editorial Notes

References in Text

Section 204 of title 23, referred to in subsec. (b)(2), was repealed and a new section 204 enacted by Pub. L. 112–141, div. A, title I, §1119(a), July 6, 2012, 126 Stat. 473, 489.

Statutory Notes and Related Subsidiaries

Regulations

Pub. L. 113–291, div. A, title VIII, §836, Dec. 19, 2014, 128 Stat. 3449, provided that: "Not later than 180 days after the date of the enactment of this Act [Dec. 19, 2014], the Administrator for Federal Procurement Policy shall prescribe regulations providing that when the Federal Government makes a purchase of services and supplies offered under the Federal Strategic Sourcing Initiative (managed by the Office of Federal Procurement Policy) but such Initiative is not used, the contract file for the purchase shall include a brief analysis of the comparative value, including price and nonprice factors, between the services and supplies offered under such Initiative and services and supplies offered under the source or sources used for the purchase."

Construction

Pub. L. 98–369, div. B, title VII, §2711(c), July 18, 1984, 98 Stat. 1181, provided that: "The amendments made by this section [see Tables for classification] do not supersede or affect the provisions of section 8(a) of the Small Business Act (15 U.S.C. 637(a))."

Pilot Programs for Authority To Acquire Innovative Commercial Items Using General Solicitation Competitive Procedures

Pub. L. 114–328, div. A, title VIII, §880, Dec. 23, 2016, 130 Stat. 2313, as amended by Pub. L. 115–232, div. A, title VIII, §836(f)(10), Aug. 13, 2018, 132 Stat. 1872; Pub. L. 117–263, div. G, title LXXII, §7227(a), Dec. 23, 2022, 136 Stat. 3675, provided that:

"(a) Authority.—

"(1) In general.—The head of an agency may carry out a pilot program, to be known as a 'commercial solutions opening pilot program', under which innovative commercial products may be acquired through a competitive selection of proposals resulting from a general solicitation and the peer review of such proposals.

"(2) Head of an agency.—In this section, the term 'head of an agency' means the following:

"(A) The Secretary of Homeland Security.

"(B) The Administrator of General Services.

"(3) Applicability of section.—This section applies to the following agencies:

"(A) The Department of Homeland Security.

"(B) The General Services Administration.

"(b) Treatment as Competitive Procedures.—Use of general solicitation competitive procedures for the pilot program under subsection (a) shall be considered, in the case of the Department of Homeland Security and the General Services Administration, to be use of competitive procedures for purposes of division C of [subtitle I of] title 41, United States Code (as defined in section 152 of such title).

"(c) Limitation.—The head of an agency may not enter into a contract under the pilot program for an amount in excess of $25,000,000.

"(d) Guidance.—The head of an agency shall issue guidance for the implementation of the pilot program under this section within that agency. Such guidance shall be issued in consultation with the Office of Management and Budget and shall be posted for access by the public.

"(e) Report Required.—

"(1) In general.—Not later than three years after the date of the enactment of this Act [Dec. 23, 2016], the head of an agency shall submit to the congressional committees specified in paragraph (3) a report on the activities the agency carried out under the pilot program.

"(2) Elements of report.—Each report under this subsection shall include the following:

"(A) An assessment of the impact of the pilot program on competition.

"(B) A comparison of acquisition timelines for—

"(i) procurements made using the pilot program; and

"(ii) procurements made using other competitive procedures that do not use general solicitations.

"(C) A recommendation on whether the authority for the pilot program should be made permanent.

"(3) Specified congressional committees.—The congressional committees specified in this paragraph are the Committee on Homeland Security and Governmental Affairs of the Senate and the Committee on Oversight and Government Reform [now Committee on Oversight and Accountability] of the House of Representatives.

"(f) Definitions.—In this section—

"(1) the term 'commercial product'—

"(A) has the meaning given the term 'commercial item' in section 2.101 of the Federal Acquisition Regulation; and

"(B) includes a commercial product or a commercial service, as defined in sections 103 and 103a, respectively, of title 41, United States Code; and

"(2) the term 'innovative' means—

"(A) any new technology, process, or method, including research and development; or

"(B) any new application of an existing technology, process, or method.

"(g) Termination.—The authority to enter into a contract under a pilot program under this section terminates on September 30, 2027."

Governmentwide Software Purchasing Program

Pub. L. 113–291, div. A, title VIII, §837, Dec. 19, 2014, 128 Stat. 3450, provided that:

"(a) In General.—The Administrator of General Services shall identify and develop a strategic sourcing initiative to enhance Governmentwide acquisition, shared use, and dissemination of software, as well as compliance with end user license agreements.

"(b) Governmentwide User License Agreement.—The Administrator, in developing the initiative under subsection (a), shall allow for the purchase of a license agreement that is available for use by all Executive agencies (as defined in section 105 of title 5, United States Code) as one user to the maximum extent practicable and as appropriate."

¹ See References in Text note below.

§3302. Requirements for purchase of property and services pursuant to multiple award contracts

(a) Definitions.—In this section:

(1) Executive agency.— The term "executive agency" has the same meaning given in section 133 of this title.

(2) Individual purchase.—The term "individual purchase" means a task order, delivery order, or other purchase.

(3) Multiple award contract.—The term "multiple award contract" means—

(A) a contract that is entered into by the Administrator of General Services under the multiple award schedule program referred to in section 3012(3) of title 10;

(B) a multiple award task order contract that is entered into under the authority of chapter 245 of title 10 or chapter 41 of this title; and

(C) any other indefinite delivery, indefinite quantity contract that is entered into by the head of an executive agency with 2 or more sources pursuant to the same solicitation.

(4) Sole source task or delivery order.—The term "sole source task or delivery order" means any order that does not follow the competitive procedures in paragraph (2) or (3) of subsection (c).

(b) Regulations Required.—The Federal Acquisition Regulation shall require enhanced competition in the purchase of property and services by all executive agencies pursuant to multiple award contracts.

(c) Content of Regulations.—

(1) In general.—The regulations required by subsection (b) shall provide that each individual purchase of property or services in excess of the simplified acquisition threshold that is made under a multiple award contract shall be made on a competitive basis unless a contracting officer—

(A) waives the requirement on the basis of a determination that—

(i) one of the circumstances described in paragraphs (1) to (4) of section 4106(c) of this title or section 3406(c) of title 10 applies to the individual purchase; or

(ii) a law expressly authorizes or requires that the purchase be made from a specified source; and

(B) justifies the determination in writing.

(2) Competitive basis procedures.—For purposes of this subsection, an individual purchase of property or services is made on a competitive basis only if it is made pursuant to procedures that—

(A) require fair notice of the intent to make that purchase (including a description of the work to be performed and the basis on which the selection will be made) to be provided to all contractors offering the property or services under the multiple award contract; and

(B) afford all contractors responding to the notice a fair opportunity to make an offer and have that offer fairly considered by the official making the purchase.

(3) Exception to notice requirement.—

(A) In general.—Notwithstanding paragraph (2), and subject to subparagraph (B), notice may be provided to fewer than all contractors offering the property or services under a multiple award contract as described in subsection (a)(3)(A) if notice is provided to as many contractors as practicable.

(B) Limitation on exception.—A purchase may not be made pursuant to a notice that is provided to fewer than all contractors under subparagraph (A) unless—

(i) offers were received from at least 3 qualified contractors; or

(ii) a contracting officer of the executive agency determines in writing that no additional qualified contractors were able to be identified despite reasonable efforts to do so.

(d) Public Notice Requirements Related to Sole Source Task or Delivery Orders.—

(1) Public notice required.—The Federal Acquisition Regulation shall require the head of each executive agency to—

(A) publish on FedBizOpps notice of all sole source task or delivery orders in excess of the simplified acquisition threshold that are placed against multiple award contracts not later than 14 days after the orders are placed, except in the event of extraordinary circumstances or classified orders; and

(B) disclose the determination required by subsection (c)(1) related to sole source task or delivery orders in excess of the simplified acquisition threshold placed against multiple award contracts through the same mechanism and to the same extent as the disclosure of documents containing a justification and approval required by section 3204(e)(1) of title 10 and section 3304(e)(1) of this title, except in the event of extraordinary circumstances or classified orders.

(2) Exemption.—This subsection does not require the public availability of information that is exempt from public disclosure under section 552(b) of title 5.

(e) Applicability.—The regulations required by subsection (b) shall apply to all individual purchases of property or services that are made under multiple award contracts on or after the effective date of the regulations, without regard to whether the multiple award contracts were entered into before, on, or after the effective date.

(f) Commercial Leasing Services.—The regulations required by subsection (b) shall not apply to individual purchases for commercial leasing services that are made on a no cost basis and made under a multiple award contract awarded in accordance with the requirements for full and open competition.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3746; Pub. L. 111–383, div. A, title X, §1075(e)(14), Jan. 7, 2011, 124 Stat. 4375; Pub. L. 116–92, div. A, title VIII, §893(b), Dec. 20, 2019, 133 Stat. 1540; Pub. L. 117–81, div. A, title XVII, §1702(h)(12), Dec. 27, 2021, 135 Stat. 2158.)

Amendment Not Shown in Text

This section was derived from Pub. L. 110–417, [div. A], title VIII, §863(a)–(e), Oct. 14, 2008, 122 Stat. 4547, which was set out as a note under section 253h of former Title 41, Public Contracts, prior to being repealed and reenacted by Pub. L. 111–350, §§3, 7(b), Jan. 4, 2011, 124 Stat. 3677, 3855. Section 863(b)(3)(A) of Pub. L. 110–417 was restated as subsec. (c)(3)(A) of this section and subsequently amended by Pub. L. 111–383, div. A, title X, §1075(e)(14), Jan. 7, 2011, 124 Stat. 4375. For applicability of that amendment to this section, see section 6(a) of Pub. L. 111–350, set out as a Transitional and Savings Provisions note preceding section 101 of this title. Section 863(b)(3)(A) of Pub. L. 110–417 was amended by striking "subsection (d)(2)(A)" and inserting "subsection (d)(3)(A)". Such reference did not appear in the text of subsec. (c)(3)(A) as enacted. See Historical and Revision Notes below.

Repeal of Subsection (f)

Pub. L. 116–92, div. A, title VIII, §893(b)(2), Dec. 20, 2019, 133 Stat. 1540 provided that, effective Dec. 31, 2025, subsection (f) of this section is repealed. See 2019 Amendment note below.

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
3302	41:253h note.	Pub. L. 110–417, [div. A], title VIII, §863(a)–(e), Oct. 14, 2008, 122 Stat. 4547.

In subsection (b), the words "Not later than one year after the date of the enactment of this Act" are omitted because of section 6(f) of the bill. The words "shall require" are substituted for "shall be amended to require" to reflect the permanence of the provision.

In subsection (c)(2)(A), the words "except as provided in paragraph (3)" are omitted as unnecessary.

In subsection (c)(3)(A), "subsection (a)(3)(A)" is substituted for "subsection (d)(2)(A)" for consistency in the revised title and to correct an error in the law.

In subsection (d)(1), the words "Not later than one year after the date of the enactment of this Act" are omitted because of section 6(f) of the bill. The words "shall require" are substituted for "shall be amended to require" to reflect the permanence of the provision.

Editorial Notes

Amendments

2021—Subsec. (a)(3). Pub. L. 117–81, §1702(h)(12)(A), substituted "section 3012(3)" for "section 2302(2)(C)" in subpar. (A) and "chapter 245 of title 10" for "sections 2304a to 2304d of title 10," in subpar. (B).

Subsec. (c)(1)(A)(i). Pub. L. 117–81, §1702(h)(12)(B), substituted "section 3406(c)" for "section 2304c(b)".

Subsec. (d)(1)(B). Pub. L. 117–81, §1702(h)(12)(C), substituted "section 3204(e)(1)" for "section 2304(f)(1)".

2019—Subsec. (f). Pub. L. 116–92, §893(b)(2), struck out subsec. (f). Text read as follows: "The regulations required by subsection (b) shall not apply to individual purchases for commercial leasing services that are made on a no cost basis and made under a multiple award contract awarded in accordance with the requirements for full and open competition."

Pub. L. 116–92, §893(b)(1), added subsec. (f).

Statutory Notes and Related Subsidiaries

Effective Date of 2019 Amendment

Pub. L. 116–92, div. A, title VIII, §893(b)(2), Dec. 20, 2019, 133 Stat. 1540, provided that the amendment made by section 893(b)(2) is effective Dec. 31, 2025.

Individual Acquisition for Commercial Leasing Services

Pub. L. 115–232, div. A, title VIII, §877, Aug. 13, 2018, 132 Stat. 1907, which related to individual acquisition for commercial leasing services not construed as purchase of property or services under certain conditions, was repealed by Pub. L. 116–92, div. A, title VIII, §893(a), Dec. 20, 2019, 133 Stat. 1540.

§3303. Exclusion of particular source or restriction of solicitation to small business concerns

(a) Exclusion of Particular Source.—

(1) Criteria for exclusion.—An executive agency may provide for the procurement of property or services covered by section 3301 of this title using competitive procedures but excluding a particular source to establish or maintain an alternative source of supply for that property or service if the agency head determines that to do so would—

(A) increase or maintain competition and likely result in reduced overall cost for the procurement, or for an anticipated procurement, of the property or services;

(B) 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) 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) ensure the continuous availability of a reliable source of supply of the property or service;

(E) satisfy projected needs for the property or service determined on the basis of a history of high demand for the property or service; or

(F) satisfy a critical need for medical, safety, or emergency supplies.

(2) Determination for class disallowed.—A determination under paragraph (1) may not be made for a class of purchases or contracts.

(b) Exclusion of Other Than Small Business Concerns.—An executive agency may provide for the procurement of property or services covered by section 3301 of this title using competitive procedures, but excluding other than small business concerns in furtherance of sections 9 and 15 of the Small Business Act (15 U.S.C. 638, 644).

(c) Nonapplication of Justification and Approval Requirements.—A contract awarded pursuant to the competitive procedures referred to in subsections (a) and (b) is not subject to the justification and approval required by section 3304(e)(1) of this title.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3747.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
3303	41:253(b).	June 30, 1949, ch. 288, title III, §303(b), 63 Stat. 395; July 12, 1952, ch. 703, §1(m), 66 Stat. 594; Pub. L. 90–268, §2, Mar. 16, 1968, 82 Stat. 49; Pub. L. 98–369, title VII, §2711(a)(1), July 18, 1984, 98 Stat. 1175; Pub. L. 98–577, title V, §504(a)(1), Oct. 30, 1984, 98 Stat. 3086; Pub. L. 103–355, title I, §1052, Oct. 13, 1994, 108 Stat. 3260.

§3304. Use of noncompetitive procedures

(a) When Noncompetitive Procedures May Be Used.—An executive agency may use procedures other than competitive procedures only when—

(1) the property or services needed by the executive agency are available from only one responsible source and no other type of property or services will satisfy the needs of the executive agency;

(2) the executive agency's need for the property or services is of such an unusual and compelling urgency that the Federal Government would be seriously injured unless the executive 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—

(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;

(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 a court, administrative tribunal, or agency, whether or not the expert is expected to testify; or

(D) 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 treaty between the Federal Government and a foreign government or an international organization, or the written directions of a foreign government reimbursing the executive agency for the cost of the procurement of the property or services for that government, have the effect of requiring the use of procedures other than competitive procedures;

(5) subject to section 3105 of this title, a statute expressly authorizes or requires that the procurement be made through another executive 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 executive 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 executive agency (who may not delegate the authority under this paragraph)—

(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 Congress in writing of that determination not less than 30 days before the award of the contract.

(b) Property or Services Deemed Available From Only One Source.—For the purposes of subsection (a)(1), in the case of—

(1) a contract for property or services to be awarded on the basis of acceptance of an unsolicited research proposal, the property or services are deemed to be available from only one source if the source has submitted an unsolicited research proposal that demonstrates a unique and innovative concept, the substance of which is not otherwise available to the Federal Government and does not resemble the substance of a pending competitive procurement; or

(2) a follow-on contract for the continued development or production of a major system or highly specialized equipment, the property 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—

(A) substantial duplication of cost to the Federal Government that is not expected to be recovered through competition; or

(B) unacceptable delay in fulfilling the executive agency's needs.

(c) Property or Services Needed With Unusual and Compelling Urgency.—

(1) Allowable contract period.—The contract period of a contract described in paragraph (2) that is entered into by an executive agency pursuant to the authority provided under subsection (a)(2)—

(A) 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 executive agency to enter into another contract for the required goods or services through the use of competitive procedures; and

(B) may not exceed one year unless the head of the executive agency entering into the contract determines that exceptional circumstances apply.

(2) Applicability of allowable contract period.—This subsection applies to any contract in an amount greater than the simplified acquisition threshold.

(d) Offer Requests to Potential Sources.—An executive agency using procedures other than competitive procedures to procure property or services by reason of the application of paragraph (2) or (6) of subsection (a) shall request offers from as many potential sources as is practicable under the circumstances.

(e) Justification for Use of Noncompetitive Procedures.—

(1) Prerequisites for awarding contract.—Except as provided in paragraphs (3) and (4), an executive agency may not award a contract using procedures other than competitive procedures unless—

(A) the contracting officer for the contract justifies the use of those procedures in writing and certifies the accuracy and completeness of the justification;

(B) the justification is approved, in the case of a contract for an amount—

(i) exceeding $500,000 but equal to or less than $10,000,000, by the advocate for competition for the procuring activity (without further delegation) or by an official referred to in clause (ii) or (iii);

(ii) exceeding $10,000,000 but equal to or less than $50,000,000, by the head of the procuring activity or by a delegate who, if a member of the armed forces, is a general or flag officer or, if a civilian, is serving in a position in which the individual is entitled to receive the daily equivalent of the maximum annual rate of basic pay payable for level IV of the Executive Schedule (or in a comparable or higher position under another schedule); or

(iii) exceeding $50,000,000, by the senior procurement executive of the agency designated pursuant to section 1702(c) of this title (without further delegation); and

(C) any required notice has been published with respect to the contract pursuant to section 1708 of this title and the executive agency has considered all bids or proposals received in response to that notice.

(2) Elements of justification.—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 any sources that expressed in writing an interest in the procurement; and

(F) a statement of any actions the agency may take to remove or overcome a barrier to competition before a subsequent procurement for those needs.

(3) Justification allowed after contract awarded.—In the case of a procurement permitted by subsection (a)(2), the justification and approval required by paragraph (1) may be made after the contract is awarded.

(4) Justification not required.—The justification and approval required by paragraph (1) are not required if—

(A) a statute expressly requires that the procurement be made from a specified source;

(B) the agency's need is for a brand-name commercial product for authorized resale;

(C) the procurement is permitted by subsection (a)(7); or

(D) the procurement is conducted under chapter 85 of this title or section 8(a) of the Small Business Act (15 U.S.C. 637(a)).

(5) Restrictions on executive agencies.—

(A) Contracts and procurement of property or services.—In no case may an executive agency—

(i) 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 available to the agency for procurement functions; or

(ii) procure property or services from another executive agency unless the other executive agency complies fully with the requirements of this division in its procurement of the property or services.

(B) Additional restriction.—The restriction set out in subparagraph (A)(ii) is in addition to any other restriction provided by law.

(f) Public Availability of Justification and Approval Required for Using Noncompetitive Procedures.—

(1) Time requirement.—

(A) Within 14 days after contract award.—Except as provided in subparagraph (B), in the case of a procurement permitted by subsection (a), the head of an executive agency shall make publicly available, within 14 days after the award of the contract, the documents containing the justification and approval required by subsection (e)(1) with respect to the procurement.

(B) Within 30 days after contract award.—In the case of a procurement permitted by subsection (a)(2), subparagraph (A) shall be applied by substituting "30 days" for "14 days".

(2) Availability on websites.—The documents referred to in subparagraph (A) of paragraph (1) shall be made available on the website of the agency and through a Government-wide website selected by the Administrator.

(3) Exception to availability and approval requirement.—This subsection does not require the public availability of information that is exempt from public disclosure under section 552(b) of title 5.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3748; Pub. L. 115–232, div. A, title VIII, §836(b)(7), Aug. 13, 2018, 132 Stat. 1861.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
3304(a)	41:253(c), (d)(2).	June 30, 1949, ch. 288, title III, §303(c)–(f), (j), 63 Stat. 395; July 12, 1952, ch. 703, §1(m), 66 Stat. 594; Pub. L. 90–268, §2, Mar. 16, 1968, 82 Stat. 49; Pub. L. 98–369, title VII, §2711(a)(1), July 18, 1984, 98 Stat. 1176; Pub. L. 98–577, title V, §504(a)(2), Oct. 30, 1984, 98 Stat. 3086; Pub. L. 99–145, title IX, §961(a)(2), title XIII, §1304(c)(2), Nov. 8, 1985, 99 Stat. 703, 742; Pub. L. 103–355, title I, §§1053, 1055(a), title VII, §7203(b)(1)(A), Oct. 13, 1994, 108 Stat. 3261, 3265, 3380; Pub. L. 104–106, title XLI, §4102(b), title XLIII, §4321(e)(2), Feb. 10, 1996, 110 Stat. 643, 674; Pub. L. 104–320, §§7(a)(2), 11(c)(2), Oct. 19, 1996, 110 Stat. 3871, 3873; Pub. L. 110–181, div. A, title VIII, §844(a), Jan. 28, 2008, 122 Stat. 239; Pub. L. 110–417, [div. A], title VIII, §862(a), Oct. 14, 2008, 122 Stat. 4546.
3304(b)	41:253(d)(1).
3304(c)	41:253(d)(3).
3304(d)	41:253(e).
3304(e)(1)	41:253(f)(1).
3304(e)(2)	41:253(f)(3).
3304(e)(3), (4)	41:253(f)(2).
3304(e)(5)	41:253(f)(4).
3304(f)	41:253(j).

In subsection (a)(7), the words "(who may not delegate the authority under this paragraph)" are substituted for 41:253(d)(2) to move the restriction closer to where it applies.

In subsection (e)(1)(B)(i), the words "advocate for competition" are substituted for "competition advocate" for consistency with section 1705 of the revised title.

In subsection (e)(1)(B)(ii), the reference to section 5376 of title 5 is substituted for the reference to grade GS–16 or above under the General Schedule because of section 529 [title I, §101(c)(1)] of the Treasury, Postal Service and General Government Appropriations Act, 1991 (Public Law 101–509, 104 Stat. 1442, 5 U.S.C. 5376 note).

In subsection (e)(5)(B), the words "and not in lieu of" are omitted as unnecessary.

In subsection (f)(2), the words "referred to in subparagraph (A) of paragraph (1)" are added for clarity.

Senate Revision Amendment

In subsec. (e)(1)(B)(ii), "for level IV of the Executive Schedule" substituted for "under section 5376 of title 5" by S. Amdt. 4726 (111th Cong.). See 156 Cong. Rec. 18682 (2010).

Editorial Notes

Amendments

2018—Subsecs. (a)(5), (e)(4)(B). Pub. L. 115–232 substituted "commercial product" for "commercial item".

Statutory Notes and Related Subsidiaries

Effective Date of 2018 Amendment

Amendment by Pub. L. 115–232 effective Jan. 1, 2020, subject to a savings provision, see section 836(h) of Pub. L. 115–232, set out as an Effective Date of 2018 Amendment; Savings Provision note under section 453b of Title 6, Domestic Security.

General Services Administration: Notification of Use of Noncompetitive Procedures in Response to Public Health Emergency Declaration

Pub. L. 116–136, div. B, title V, §15003, Mar. 27, 2020, 134 Stat. 532, provided that: "Notwithstanding 41 U.S.C. 3304(a)(7)(B), the Administrator, when making a determination that use of noncompetitive procedures is necessary for public interest in accordance with 41 U.S.C. 3304(a)(7)(A) in response to a public health emergency declaration by the Secretary of Health and Human Services under section 319 of the Public Health Service Act (42 U.S.C. 247(d) [247d]), is required to notify Congress in writing of that determination not less than 3 days prior to the award of the contract."

Justification and Approval of Sole-Source Contracts

Pub. L. 111–84, div. A, title VIII, §811, Oct. 28, 2009, 123 Stat. 2405, as amended by Pub. L. 117–81, div. A, title XVII, §1702(i)(3), Dec. 27, 2021, 135 Stat. 2159, provided that:

"(a) In General.—Not later than 180 days after the date of the enactment of this Act [Oct. 28, 2009], the Federal Acquisition Regulation shall be revised to provide that the head of an agency may not award a sole-source contract in a covered procurement for an amount exceeding $20,000,000 unless—

"(1) the contracting officer for the contract justifies the use of a sole-source contract in writing;

"(2) the justification is approved by the appropriate official designated to approve contract awards for dollar amounts that are comparable to the amount of the sole-source contract; and

"(3) the justification and related information are made public as provided in sections 3204(e)(1)(C) and 3204(f) of title 10, United States Code, or sections 303(f)(1)(C) and 303(j) of the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 253(f)(1)(C) and 253(j)) [now 41 U.S.C. 3304(e)(1)(C) and 3304(f)], as applicable.

"(b) Elements of Justification.—The justification of a sole-source contract required pursuant to subsection (a) shall include the following:

"(1) A description of the needs of the agency concerned for the matters covered by the contract.

"(2) A specification of the statutory provision providing the exception from the requirement to use competitive procedures in entering into the contract.

"(3) A determination that the use of a sole-source contract is in the best interest of the agency concerned.

"(4) A determination that the anticipated cost of the contract will be fair and reasonable.

"(5) Such other matters as the head of the agency concerned shall specify for purposes of this section.

"(c) Definitions.—In this section:

"(1) Covered procurement.—The term 'covered procurement' means either of the following:

"(A) A procurement described in section 3204(e)(4)(D)(ii) of title 10, United States Code.

"(B) A procurement described in section 303(f)(2)(D)(ii) of the Federal Property and Administrative Services Act of 1949 ([former] 41 U.S.C. 253(f)(2)(D)(ii)) [see 41 U.S.C. 3304(e)(4)(D)].

"(2) Head of an agency.—The term 'head of an agency'—

"(A) in the case of a covered procurement as defined in paragraph (1)(A), has the meaning provided in section 3004 of title 10, United States Code; and

"(B) in the case of a covered procurement as defined in paragraph (1)(B), has the meaning provided the term 'agency head' in section 309(a) of the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 259(a)) [now 41 U.S.C. 151].

"(3) Appropriate official.—The term 'appropriate official' means—

"(A) in the case of a covered procurement as defined in paragraph (1)(A), an official designated in section 3204(e)(1)(B) of title 10, United States Code; and

"(B) in the case of a covered procurement as defined in paragraph (1)(B), an official designated in section 303(f)(1)(B) of the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 253(f)(1)(B)) [now 41 U.S.C. 3304(e)(1)(B)]."

§3305. Simplified procedures for small purchases

(a) Authorization.—To promote efficiency and economy in contracting and to avoid unnecessary burdens for agencies and contractors, the Federal Acquisition Regulation shall provide for special simplified procedures for purchases of property and services for amounts—

(1) not greater than the simplified acquisition threshold; and

(2) greater than the simplified acquisition threshold but not greater than $5,000,000 for 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.

(b) Leasehold Interests in Real Property.—The Administrator of General Services shall prescribe regulations that provide special simplified procedures for acquisitions of leasehold interests in real property at rental rates that do not exceed the simplified acquisition threshold. The rental rate under a multiyear lease does not exceed the simplified acquisition threshold if the average annual amount of the rent payable for the period of the lease does not exceed the simplified acquisition threshold.

(c) Prohibition on Dividing Contracts.—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 to use the simplified procedures required by subsection (a).

(d) Promotion of Competition.—In using the simplified procedures, an executive agency shall promote competition to the maximum extent practicable.

(e) Compliance With Special Requirements of Federal Acquisition Regulation.—An executive agency shall comply with the Federal Acquisition Regulation provisions referred to in section 1901(e) of this title.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3752; Pub. L. 115–232, div. A, title VIII, §836(b)(8), Aug. 13, 2018, 132 Stat. 1861.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
3305	41:253(g).	June 30, 1949, ch. 288, title III, §303(g), 63 Stat. 395; July 12, 1952, ch. 703, §1(m), 66 Stat. 594; Pub. L. 90–268, §2, Mar. 16, 1968, 82 Stat. 49; Pub. L. 98–369, title VII, §2711(a)(1), July 18, 1984, 98 Stat. 1178; Pub. L. 99–145, title XIII, §1304(c)(3), Nov. 8, 1985, 99 Stat. 742; Pub. L. 101–510, title VIII, §806(c), Nov. 5, 1990, 104 Stat. 1592; Pub. L. 103–355, title I, §1051(2), title IV, §4402(a), Oct. 13, 1994, 108 Stat. 3260, 3348; Pub. L. 104–106, title XLII, §4202(b)(1), Feb. 10, 1996, 110 Stat. 653; Pub. L. 105–85, title VIII, §850(f)(4)(B), Nov. 18, 1997, 111 Stat. 1850.

Editorial Notes

Amendments

2018—Subsec. (a)(2). Pub. L. 115–232 substituted "commercial products or commercial services" for "commercial items".

Statutory Notes and Related Subsidiaries

Effective Date of 2018 Amendment

Amendment by Pub. L. 115–232 effective Jan. 1, 2020, subject to a savings provision, see section 836(h) of Pub. L. 115–232, set out as an Effective Date of 2018 Amendment; Savings Provision note under section 453b of Title 6, Domestic Security.

§3306. Planning and solicitation requirements

(a) Planning and Specifications.—

(1) Preparing for procurement.—In preparing for the procurement of property or services, an executive agency shall—

(A) specify its needs and solicit bids or proposals in a manner designed to achieve full and open competition for the procurement;

(B) use advance procurement planning and market research; and

(C) develop specifications in the manner necessary to obtain full and open competition with due regard to the nature of the property or services to be acquired.

(2) Requirements of specifications.—Each solicitation under this division shall include specifications that—

(A) consistent with this division, permit full and open competition; and

(B) include restrictive provisions or conditions only to the extent necessary to satisfy the needs of the executive agency or as authorized by law.

(3) Types of specifications.—For the purposes of paragraphs (1) and (2), the type of specification included in a solicitation shall depend on the nature of the needs of the executive agency and the market available to satisfy those needs. Subject to those needs, specifications may be stated in terms of—

(A) function, so that a variety of products or services may qualify;

(B) performance, including specifications of the range of acceptable characteristics or of the minimum acceptable standards; or

(C) design requirements.

(b) Contents of Solicitation.—In addition to the specifications described in subsection (a), each 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—

(1) a statement of—

(A) all significant factors and significant subfactors that the executive 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

(B) the relative importance assigned to each of those factors and subfactors; and

(2)(A) 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

(B) in the case of competitive proposals—

(i) either a statement that the proposals are intended to be evaluated with, and the award made after, discussions with the offerors, or a statement that the proposals are intended to be evaluated, and the 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.

(c) Evaluation Factors.—

(1) In general.—In prescribing the evaluation factors to be included in each solicitation for competitive proposals, an executive agency shall—

(A) establish clearly 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);

(B) except as provided in paragraph (3), include cost or price to the Federal Government as an evaluation factor that must be considered in the evaluation of proposals; and

(C) except as provided in paragraph (3), 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.

(2) Restriction on implementing regulations.—Regulations implementing paragraph (1)(C) 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.

(3) Exceptions for certain indefinite delivery, indefinite quantity multiple-award contracts and certain federal supply schedule contracts for services acquired on an hourly rate.—If an executive agency issues a solicitation for one or more contracts for services to be acquired on an hourly rate basis under the authority of sections 4103 and 4106 of this title or section 152(3) of this title and section 501(b) of title 40 and the executive agency intends to make a contract award to each qualifying offeror and the contract or contracts will feature individually competed task or delivery orders based on hourly rates—

(A) the contracting officer need not consider price as an evaluation factor for contract award; and

(B) if, pursuant to subparagraph (A), price is not considered as an evaluation factor for contract award, cost or price to the Federal Government shall be considered in conjunction with the issuance pursuant to sections 4106(c) and 152(3) of this title of any task or delivery order under any contract resulting from the solicitation.

(4) Definition.—In paragraph (3), the term "qualifying offeror" means an offeror that—

(A) is determined to be a responsible source;

(B) submits a proposal that conforms to the requirements of the solicitation;

(C) meets all technical requirements; and

(D) is otherwise eligible for award.

(d) Additional Information in Solicitation.—This section does not prohibit an executive agency from—

(1) providing additional information in a solicitation, including numeric weights for all evaluation factors and subfactors on a case-by-case basis; or

(2) 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.

(e) Limitation on Evaluation of Purchase Options.—An executive agency, in issuing a solicitation for a contract to be awarded using sealed bid procedures, may not include in the solicitation a clause providing for the evaluation of prices for options to purchase additional property or services under the contract unless the executive agency has determined that there is a reasonable likelihood that the options will be exercised.

(f) Authorization of Telecommuting for Federal Contractors.—

(1) Definition.—In this subsection, the term "executive agency" has the meaning given that term in section 133 of this title.

(2) Federal acquisition regulation to allow telecommuting.—The Federal Acquisition Regulation issued in accordance with sections 1121(b) and 1303(a)(1) of this title shall permit telecommuting by employees of Federal Government contractors in the performance of contracts entered into with executive agencies.

(3) Scope of allowance.—The Federal Acquisition Regulation at a minimum shall provide that a solicitation for the acquisition of property or services may not set forth any requirement or evaluation criteria that would—

(A) render an offeror ineligible to enter into a contract on the basis of the inclusion of a plan of the offeror to allow the offeror's employees to telecommute, unless the contracting officer concerned first determines that the requirements of the agency, including security requirements, cannot be met if telecommuting is allowed and documents in writing the basis for the determination; or

(B) reduce the scoring of an offer on the basis of the inclusion in the offer of a plan of the offeror to allow the offeror's employees to telecommute, unless the contracting officer concerned first determines that the requirements of the agency, including security requirements, would be adversely impacted if telecommuting is allowed and documents in writing the basis for the determination.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3752; Pub. L. 115–232, div. A, title VIII, §§836(b)(9), 876, Aug. 13, 2018, 132 Stat. 1861, 1907.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
3306(a)–(e)	41:253a.	June 30, 1949, ch. 288, title III, §303A, as added Pub. L. 98–369, title VII, §2711(a)(2), July 18, 1984, 98 Stat. 1178; Pub. L. 103–355, title I, §§1061(a), (b), 1062, title IV, §4402(b), Oct. 13, 1994, 108 Stat. 3266, 3267, 3348; Pub. L. 104–106, title XLII, §4202(b)(2), Feb. 10, 1996, 110 Stat. 653.
3306(f)	41:253a note.	Pub. L. 108–136, title XIV, §1428, Nov. 24, 2003, 117 Stat. 1670.

In subsection (f)(2), the words "Not later than 180 days after the date of the enactment of this Act, the Federal Acquisition Regulatory Council shall amend" are omitted as obsolete.

Editorial Notes

Amendments

2018—Subsec. (b). Pub. L. 115–232, §836(b)(9), substituted "commercial products or commercial services" for "commercial items" in introductory provisions.

Subsec. (c)(1)(B), (C). Pub. L. 115–232, §876(1), inserted "except as provided in paragraph (3)," after subpar. designation.

Subsec. (c)(3), (4). Pub. L. 115–232, §876(2), added pars. (3) and (4).

Statutory Notes and Related Subsidiaries

Effective Date of 2018 Amendment

Amendment by section 836(b)(9) of Pub. L. 115–232 effective Jan. 1, 2020, subject to a savings provision, see section 836(h) of Pub. L. 115–232, set out as an Effective Date of 2018 Amendment; Savings Provision note under section 453b of Title 6, Domestic Security.

§3307. Preference for commercial products and commercial services

(a) Relationship of Provisions of Law to Procurement of Commercial Products and Commercial Services.—

(1) This division.—Unless otherwise specifically provided, all other provisions in this division also apply to the procurement of commercial products and commercial services.

(2) Laws listed in federal acquisition regulation.—A contract for the procurement of a commercial product or commercial service entered into by the head of an executive agency is not subject to a law properly listed in the Federal Acquisition Regulation pursuant to section 1906 of this title.

(b) Preference.—The head of each executive agency shall ensure that, to the maximum extent practicable—

(1) requirements of the executive agency with respect to a procurement of supplies or services are stated in terms of—

(A) functions to be performed;

(B) performance required; or

(C) essential physical characteristics;

(2) those requirements are defined so that commercial services or commercial products or, to the extent that commercial products suitable to meet the executive agency's needs are not available, nondevelopmental items other than commercial products may be procured to fulfill those requirements; and

(3) offerors of commercial services, commercial products, and nondevelopmental items other than commercial products are provided an opportunity to compete in any procurement to fill those requirements.

(c) Implementation.—The head of each executive agency shall ensure that procurement officials in that executive agency, to the maximum extent practicable—

(1) acquire commercial services or commercial products or nondevelopmental items other than commercial products to meet the needs of the executive agency;

(2) require that prime contractors and subcontractors at all levels under contracts of the executive agency incorporate commercial services or commercial products or nondevelopmental items other than commercial products as components of items supplied to the executive agency;

(3) modify requirements in appropriate cases to ensure that the requirements can be met by commercial services or commercial products or, to the extent that commercial products suitable to meet the executive agency's needs are not available, nondevelopmental items other than commercial products;

(4) state specifications in terms that enable and encourage bidders and offerors to supply commercial services or commercial products or, to the extent that commercial products suitable to meet the executive agency's needs are not available, nondevelopmental items other than commercial products in response to the executive agency solicitations;

(5) revise the executive agency's procurement policies, practices, and procedures not required by law to reduce any impediments in those policies, practices, and procedures to the acquisition of commercial products and commercial services; and

(6) require training of appropriate personnel in the acquisition of commercial products and commercial services.

(d) Market Research.—

(1) When to be used.—The head of an executive agency shall conduct market research appropriate to the circumstances—

(A) before developing new specifications for a procurement by that executive agency; and

(B) before soliciting bids or proposals for a contract in excess of the simplified acquisition threshold.

(2) Use of results.—The head of an executive agency shall use the results of market research to determine whether commercial services or commercial products or, to the extent that commercial products suitable to meet the executive agency's needs are not available, nondevelopmental items other than commercial products are available that—

(A) meet the executive agency's requirements;

(B) could be modified to meet the executive agency's requirements; or

(C) could meet the executive agency's requirements if those requirements were modified to a reasonable extent.

(3) Only minimum information required to be submitted.—In conducting market research, the head of an executive agency should not require potential sources to submit more than the minimum information that is necessary to make the determinations required in paragraph (2).

(4) Documentation.—The head of the agency shall document the results of market research in a manner appropriate to the size and complexity of the acquisition.

(e) Regulations.—

(1) In general.—The Federal Acquisition Regulation shall provide regulations to implement this section, sections 102, 103, 103a, 104, 105, and 110 of this title, and chapter 247 of title 10.

(2) Contract clauses.—

(A) Definition.—In this paragraph, the term "subcontract" includes a transfer of commercial products or commercial services between divisions, subsidiaries, or affiliates of a contractor or subcontractor.

(B) List of clauses to be included.—The regulations prescribed under paragraph (1) shall contain a list of contract clauses to be included in contracts for the acquisition of end items that are commercial products. To the maximum extent practicable, the list shall include only those contract clauses that are—

(i) required to implement provisions of law or executive orders applicable to acquisitions of commercial products, commercial components, or commercial services; or

(ii) determined to be consistent with standard commercial practice.

(C) Requirements of prime contractor.—The regulations shall provide that the Federal Government shall not require a prime contractor to apply to any of its divisions, subsidiaries, affiliates, subcontractors, or suppliers that are furnishing commercial products or commercial services any contract clause except those that are—

(i) required to implement provisions of law or executive orders applicable to subcontractors furnishing commercial products, commercial components, or commercial services; or

(ii) determined to be consistent with standard commercial practice.

(D) Clauses that may be used in a contract.—To the maximum extent practicable, only the contract clauses listed pursuant to subparagraph (B) may be used in a contract, and only the contract clauses referred to in subparagraph (C) may be required to be used in a subcontract, for the acquisition of commercial products, commercial components, or commercial services by or for an executive agency.

(E) Waiver of contract clauses.—The Federal Acquisition Regulation shall provide standards and procedures for waiving the use of contract clauses required pursuant to subparagraph (B), other than those required by law, including standards for determining the cases in which a waiver is appropriate.

(3) Market acceptance.—

(A) Requirement of offerors.—The Federal Acquisition Regulation shall provide that under appropriate conditions the head of an executive agency may require offerors to demonstrate that the items offered—

(i) have achieved commercial market acceptance or been satisfactorily supplied to an executive agency under current or recent contracts for the same or similar requirements; and

(ii) otherwise meet the item description, specifications, or other criteria prescribed in the public notice and solicitation relating to the contract.

(B) Regulation to provide guidance on criteria.—The Federal Acquisition Regulation shall provide guidance to ensure that the criteria for determining commercial market acceptance include the consideration of—

(i) the minimum needs of the executive agency concerned; and

(ii) the entire relevant commercial market, including small businesses.

(4) Provisions relating to types of contracts.—

(A) Types of contracts that may be used.—The Federal Acquisition Regulation shall include, for acquisitions of commercial products or commercial services—

(i) a requirement that firm, fixed price contracts or fixed price with economic price adjustment contracts be used to the maximum extent practicable;

(ii) a prohibition on use of cost type contracts; and

(iii) subject to subparagraph (B), authority for use of a time-and-materials or labor-hour contract for the procurement of commercial services that are commonly sold to the general public through those contracts and are purchased by the procuring agency on a competitive basis.

(B) When time-and-materials or labor-hour contract may be used.—A time-and-materials or labor-hour contract may be used pursuant to the authority referred to in subparagraph (A)(iii)—

(i) only for a procurement of commercial services in a category of commercial services described in subparagraph (C); and

(ii) only if the contracting officer for the procurement—

(I) executes a determination and findings that no other contract type is suitable;

(II) includes in the contract a ceiling price that the contractor exceeds at its own risk; and

(III) authorizes a subsequent change in the ceiling price only on a determination, documented in the contract file, that it is in the best interest of the procuring agency to change the ceiling price.

(C) Categories of commercial services.—The categories of commercial services referred to in subparagraph (B) are as follows:

(i) Commercial services procured for support of a commercial product, as described in section 103a(1) of this title.

(ii) Any other category of commercial services that the Administrator for Federal Procurement Policy designates in the Federal Acquisition Regulation for the purposes of this subparagraph on the basis that—

(I) the commercial services in the category are of a type of commercial services that are commonly sold to the general public through use of time-and-materials or labor-hour contracts; and

(II) it would be in the best interests of the Federal Government to authorize use of time-and-materials or labor-hour contracts for purchases of the commercial services in the category.

(5) Contract quality requirements.—Regulations prescribed under paragraph (1) shall include provisions that—

(A) allow, to the maximum extent practicable, a contractor under a commercial products acquisition to use the existing quality assurance system of the contractor as a substitute for compliance with an otherwise applicable requirement for the Federal Government to inspect or test the commercial products before the contractor's tender of those products for acceptance by the Federal Government;

(B) require that, to the maximum extent practicable, the executive agency take advantage of warranties (including extended warranties) offered by offerors of commercial products and use those warranties for the repair and replacement of commercial products; and

(C) set forth guidance regarding the use of past performance of commercial products and sources as a factor in contract award decisions.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3754; Pub. L. 115–232, div. A, title VIII, §836(b)(10)(A), (B)(i), Aug. 13, 2018, 132 Stat. 1861–1863; Pub. L. 116–92, div. A, title VIII, §818(b), Dec. 20, 2019, 133 Stat. 1488; Pub. L. 117–81, div. A, title XVII, §1702(h)(13), Dec. 27, 2021, 135 Stat. 2158.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
3307(a)	41:264.	June 30, 1949, ch. 288, title III, §§314, 314B, as added Pub. L. 103–355, title VIII, §§8201, 8203, Oct. 13, 1994, 108 Stat. 3394.
3307(b)	41:264b(a).
3307(c)	41:264b(b).
3307(d)	41:264b(c).
3307(e)	41:264 note.	Pub. L. 103–355, title VIII, §8002, Oct. 13, 1994, 108 Stat. 3386; Pub. L. 108–136, title XIV, 1432, Nov. 24, 2003, 117 Stat. 1672.

Subsection (a)(1) is substituted for 41 U.S.C. 264(a) for clarity.

In subsection (e), the text of section 8002(f) of the Federal Acquisition Streamlining Act of 1994 (Public Law 103–355, 41 U.S.C. 264 note) is omitted as obsolete.

In subsection (e)(2)(B)(i) and (C)(i), the words "as the case may be" are omitted as unnecessary.

Editorial Notes

Amendments

2021—Subsec. (e)(1). Pub. L. 117–81 substituted "chapter 247" for "chapter 140".

2019—Subsec. (d)(4). Pub. L. 116–92 added par. (4).

2018—Pub. L. 115–232, §836(b)(10)(B)(i), substituted "Preference for commercial products and commercial services" for "Preference for commercial items" in section catchline.

Subsec. (a). Pub. L. 115–232, §836(b)(10)(A)(i)(I), substituted "Commercial Products and Commercial Services" for "Commercial Items" in heading.

Subsec. (a)(1). Pub. L. 115–232, §836(b)(10)(A)(i)(II), substituted "commercial products and commercial services" for "commercial items".

Subsec. (a)(2). Pub. L. 115–232, §836(b)(10)(A)(i)(III), substituted "a commercial product or commercial service" for "a commercial item".

Subsec. (b)(2). Pub. L. 115–232, §836(b)(10)(A)(ii)(I), substituted "commercial services or commercial products or, to the extent that commercial products suitable to meet the executive agency's needs are not available, nondevelopmental items other than commercial products" for "commercial items or, to the extent that commercial items suitable to meet the executive agency's needs are not available, nondevelopmental items other than commercial items".

Subsec. (b)(3). Pub. L. 115–232, §836(b)(10)(A)(ii)(II), substituted "commercial services, commercial products, and nondevelopmental items other than commercial products" for "commercial items and nondevelopmental items other than commercial items".

Subsec. (c)(1), (2). Pub. L. 115–232, §836(b)(10)(A)(iii)(I), substituted "commercial services or commercial products or nondevelopmental items other than commercial products" for "commercial items or nondevelopmental items other than commercial items".

Subsec. (c)(3), (4). Pub. L. 115–232, §836(b)(10)(A)(iii)(II), substituted "commercial services or commercial products or, to the extent that commercial products suitable to meet the executive agency's needs are not available, nondevelopmental items other than commercial products" for "commercial items or, to the extent that commercial items suitable to meet the executive agency's needs are not available, nondevelopmental items other than commercial items".

Subsec. (c)(5), (6). Pub. L. 115–232, §836(b)(10)(A)(iii)(III), substituted "commercial products and commercial services" for "commercial items".

Subsec. (d)(2). Pub. L. 115–232, §836(b)(10)(A)(iv), in introductory provisions, substituted "commercial services or commercial products or, to the extent that commercial products suitable to meet the executive agency's needs are not available, nondevelopmental items other than commercial products" for "commercial items or, to the extent that commercial items suitable to meet the executive agency's needs are not available, nondevelopmental items other than commercial items".

Subsec. (e)(1). Pub. L. 115–232, §836(b)(10)(A)(v)(I), inserted "103a, 104," after "sections 102, 103,".

Subsec. (e)(2)(A). Pub. L. 115–232, §836(b)(10)(A)(v)(II), substituted "commercial products or commercial services" for "commercial items".

Subsec. (e)(2)(B). Pub. L. 115–232, §836(b)(10)(A)(v)(III), (IV), in introductory provisions, substituted "end items that are commercial products" for "commercial end items" and, in cl. (i), substituted "commercial products, commercial components, or commercial services" for "commercial items or commercial components".

Subsec. (e)(2)(C). Pub. L. 115–232, §836(b)(10)(A)(v)(IV), (V), in introductory provisions, substituted "commercial products or commercial services" for "commercial items" and, in cl. (i), substituted "commercial products, commercial components, or commercial services" for "commercial items or commercial components".

Subsec. (e)(2)(D). Pub. L. 115–232, §836(b)(10)(A)(v)(IV), substituted "commercial products, commercial components, or commercial services" for "commercial items or commercial components".

Subsec. (e)(4)(A). Pub. L. 115–232, §836(b)(10)(A)(v)(VI), substituted "commercial products or commercial services" for "commercial items" in introductory provisions.

Subsec. (e)(4)(C)(i). Pub. L. 115–232, §836(b)(10)(A)(v)(VII), substituted "commercial product, as described in section 103a(1)" for "commercial item, as described in section 103(5)".

Subsec. (e)(5). Pub. L. 115–232, §836(b)(10)(A)(v)(VIII), substituted "products" for "items" wherever appearing.

Statutory Notes and Related Subsidiaries

Effective Date of 2018 Amendment

Amendment by Pub. L. 115–232 effective Jan. 1, 2020, subject to a savings provision, see section 836(h) of Pub. L. 115–232, set out as an Effective Date of 2018 Amendment; Savings Provision note under section 453b of Title 6, Domestic Security.

§3308. Planning for future competition in contracts for major systems

(a) Development Contract.—

(1) Determining whether proposals are necessary.—In preparing a solicitation for the award of a development contract for a major system, the head of an agency shall consider requiring in the solicitation that an offeror include in its offer proposals described in paragraph (2). In determining whether to require the proposals, the head of the agency shall consider the purposes for which the system is being procured and the technology necessary to meet the system's required capabilities. If the proposals are required, the head of the agency shall consider them in evaluating the offeror's price.

(2) Contents of proposals.—The proposals that the head of an agency is to consider requiring in a solicitation for the award of a development contract are the following:

(A) Proposals to incorporate in the design of the major system items that 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.

(B) 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 that the Federal Government will be able to acquire competitively in the future.

(b) Production Contract.—

(1) Determining whether proposals are necessary.—In preparing a solicitation for the award of a production contract for a major system, the head of an agency shall consider requiring in the solicitation that an offeror include in its offer proposals described in paragraph (2). In determining whether to require the proposals, the head of the agency shall consider the purposes for which the system is being procured and the technology necessary to meet the system's required capabilities. If the proposals are required, the head of the agency shall consider them in evaluating the offeror's price.

(2) Content of proposals.—The proposals that the head of an agency is to consider requiring in a solicitation for the award of a production contract are proposals identifying opportunities to ensure that the Federal Government 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 this requirement may include the following:

(A) Proposals to provide to the Federal Government the right to use technical data to be provided under the contract for competitive reprocurement of the item, together with the cost to the Federal Government of acquiring the data and the right to use the data.

(B) Proposals for the qualification or development of multiple sources of supply for the item.

(c) Consideration of Factors as Objectives in Negotiations.—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 subsections (a) and (b) to be considered in evaluating an offer for a contract may be considered as objectives in negotiating the contract to be awarded.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3758.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
3308	41:253b(j).	June 30, 1949, ch. 288, title III, §303B(j), formerly §303B(f), as added Pub. L. 98–577, title II, §201(a), Oct. 30, 1984, 98 Stat. 3068; redesignated as §303B(g), Pub. L. 103–355, title I, §1064(1), Oct. 13, 1994, 108 Stat. 3268; redesignated as §303B(j), Pub. L. 104–106, title XLI, §4104(b)(2), Feb. 10, 1996, 110 Stat. 645.

§3309. Design-build selection procedures

(a) Authorization.—Unless the traditional acquisition approach of design-bid-build established under sections 1101 to 1104 of title 40 or another acquisition procedure authorized by law is used, the head of an executive 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—

(1) the contracting officer anticipates that 3 or more offers will be received for the contract;

(2) design work must be performed before an offeror can develop a price or cost proposal for the contract;

(3) the offeror will incur a substantial amount of expense in preparing the offer; and

(4) the contracting officer has considered information such as the following:

(A) The extent to which the project requirements have been adequately defined.

(B) The time constraints for delivery of the project.

(C) The capability and experience of potential contractors.

(D) The suitability of the project for use of the two-phase selection procedures.

(E) The capability of the agency to manage the two-phase selection process.

(F) Other criteria established by the agency.

(c) Procedures Described.—Two-phase selection procedures consist of the following:

(1) Development of scope of work statement.—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 Federal Government's requirements (which may include criteria and preliminary design, budget parameters, and schedule or delivery requirements) to enable the offerors to submit proposals that meet the Federal 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 sections 1101 to 1104 of title 40.

(2) Solicitation of phase-one proposals.—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) Evaluation factors.—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) Selection by contracting officer.—

(A) Number of offerors selected and what is to be evaluated.—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—

(i) the technical submission for the proposal, including design concepts or proposed solutions to requirements addressed within the scope of work, or both; and

(ii) the evaluation factors and subfactors, including cost or price, that must be considered in the evaluations of proposals in accordance with subsections (b) to (d) of section 3306 of this title.

(B) Separate evaluations.—The contracting officer separately evaluates the submissions described in clauses (i) and (ii) of subparagraph (A).

(5) Awarding of contract.—The agency awards the contract in accordance with chapter 37 of this title.

(d) Solicitation To State Number of Offerors To Be Selected for Phase-Two Requests for Competitive Proposals.—A solicitation issued pursuant to the procedures described in subsection (c) shall state the maximum number of offerors that are to be selected to submit competitive proposals pursuant to subsection (c)(4). The maximum number specified in the solicitation shall not exceed 5 unless the agency determines with respect to an individual solicitation that a specified number greater than 5 is in the Federal Government's interest and is consistent with the purposes and objectives of the two-phase selection process.

(e) Requirement for Guidance and Regulations.—The Federal Acquisition Regulation shall include guidance—

(1) regarding the factors that may be considered in determining whether the two-phase contracting procedures authorized by subsection (a) are appropriate for use in individual contracting situations;

(2) regarding the factors that may be used in selecting contractors; and

(3) providing for a uniform approach to be used Government-wide.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3759.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
3309	41:253m.	June 30, 1949, ch. 288, title III, §303M, as added Pub. L. 104–106, div. D, title XLI, §4105(b)(1), Feb. 10, 1996, 110 Stat. 647.

In subsections (a) and (c)(1), the words "sections 1101 to 1104 of title 40" are substituted for "the Brooks Architect-Engineers Act (title IX of this Act)" and "the Brooks Architect-Engineers Act (40 U.S.C. 541 et seq.)", respectively, because of section 5(c) of Public Law 107–217 (40 U.S.C. note prec. 101) and for consistency with title 40.

In subsection (c)(5), the reference to section 253b of this title is limited to chapter 37 of the revised title for clarity.

Statutory Notes and Related Subsidiaries

Prohibition on Use of a Reverse Auction for the Award of a Contract for Complex, Specialized, or Substantial Design and Construction Services

Pub. L. 116–260, div. U, title IV, §402, Dec. 27, 2020, 134 Stat. 2292, as amended by Pub. L. 117–28, §2, July 26, 2021, 135 Stat. 304, provided that:

"(a) Findings.—Congress makes the following findings:

"(1) In contrast to a traditional auction in which the buyers bid up the price, sellers bid down the price in a reverse auction.

"(2) Reverse auctions, while providing value for the vast majority of Federal acquisitions, including certain construction-related acquisitions, are limited in value for complex, specialized, or substantial design and construction services.

"(b) Reverse Auction Defined.—In this section, the term 'reverse auction' means, with respect to any procurement by an executive agency, a real-time auction generally conducted through an electronic medium among two or more offerors who compete by submitting bids for a supply or service contract, or a delivery order, task order, or purchase order under the contract, with the ability to submit revised lower bids at any time before the closing of the auction.

"(c) Prohibition.—

"(1) In general.—Not later than 270 days after the date of the enactment of this section [July 26, 2021], the Federal Acquisition Regulation shall be amended to prohibit the use of reverse auctions for awarding contracts for complex, specialized, or substantial design and construction services.

"(2) Applicability to acquisitions above the simplified acquisition threshold.—The prohibition on reverse auctions for complex, specialized, or substantial design and construction services shall apply only to acquisitions above the simplified acquisition threshold (SAT) for construction and design services pursuant to part 36 of the Federal Acquisition Regulation.

"(d) Rulemaking for Complex, Specialized, or Substantial Services.—Not later than 180 days after the date of the enactment of this section, the Federal Acquisition Regulatory Council shall promulgate a definition of complex, specialized, or substantial design and construction services, which shall include—

"(1) site planning and landscape design;

"(2) architectural and engineering services (as defined in section 1102 of title 40, United States Code);

"(3) interior design;

"(4) performance of substantial construction work for facility, infrastructure, and environmental restoration projects; and

"(5) construction or substantial alteration of public buildings or public works.

"(e) Rule of Construction.—Nothing in this section shall be construed to restrict the use of reverse auctions for the procurement of other goods and services except as specifically provided for under this section.

"(f) Report.—Not later than two years after the date of the enactment of this section, the Administrator of General Services shall submit to the Committee on Homeland Security and Governmental Affairs of the Senate and the Committee on Oversight and Reform [now Committee on Oversight and Accountability] of the House of Representatives a report on the effectiveness of this section in delivering complex, specialized, or substantial design and construction services to the United States Government."

§3310. Quantities to order

(a) Factors Affecting Quantity To Order.—Each executive agency shall procure supplies in a quantity that—

(1) will result in the total cost and unit cost most advantageous to the Federal Government, where practicable; and

(2) does not exceed the quantity reasonably expected to be required by the agency.

(b) Offeror's Opinion of Quantity.—Each solicitation for a contract for supplies shall, if practicable, include a provision inviting each offeror responding to the solicitation to state an opinion on whether the quantity of supplies proposed to be procured is economically advantageous to the Federal Government and, if applicable, to recommend a quantity that would be more economically advantageous to the Federal Government. Each recommendation shall include a quotation of the total price and the unit price for supplies procured in each recommended quantity.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3761.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
3310	41:253f.	June 30, 1949, ch. 288, title III, §303F, formerly §303G, as added Pub. L. 98–577, title II, §205(a), Oct. 30, 1984, 98 Stat. 3073; renumbered §303F, Pub. L. 99–145, title XIII, §1304(c)(4)(A), Nov. 8, 1985, 99 Stat. 742.

In subsection (b), the words "or quantities" are omitted because of 1:1.

§3311. Qualification requirement

(a) Definition.—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) Actions Before Enforcing Qualification Requirement.—Except as provided in subsection (c), the head of an agency, before enforcing any qualification requirement, shall—

(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 on request all requirements that a prospective offeror, or its product, must satisfy to become qualified, with those 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 cost of testing and evaluation likely to be incurred by a potential offeror to become qualified;

(4) ensure that a potential offeror is provided, on request, a prompt opportunity to demonstrate at its own expense (except as provided in subsection (d)) its ability to meet the standards specified for qualification using—

(A) qualified personnel and facilities—

(i) of the agency concerned;

(ii) of another agency obtained through interagency agreement; or

(iii) under contract; or

(B) 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 paragraph (4), provide to the extent possible that those services be provided by a contractor that—

(A) is not expected to benefit from an absence of additional qualified sources; and

(B) is required in the 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 whether qualification is attained and, if not attained, is promptly furnished specific information about why qualification was not attained.

(c) Applicability, Waiver Authority, and Referral of Offers.—

(1) Applicability.—Subsection (b) does not apply to a qualification requirement established by statute prior to October 30, 1984.

(2) Waiver authority.—

(A) Submission of determination of unreasonableness.—Except as provided in subparagraph (C), if it is unreasonable to specify the standards for qualification that 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.

(B) Authority to grant waiver.—After considering any comments of the advocate for competition reviewing the determination, the head of the procuring activity may waive the requirements of paragraphs (2) to (5) of subsection (b) for up to 2 years with respect to the item subject to the qualification requirement.

(C) Nonapplicability to qualified products list.—Waiver authority under this paragraph does not apply with respect to a qualified products list.

(3) Submission and consideration of offer not to be denied.—A potential offeror may not be denied the opportunity to submit and have considered an offer for a contract solely because the potential offeror has not been identified as meeting a qualification requirement if the potential offeror can demonstrate to the satisfaction of the contracting officer that the potential offeror or its product meets the standards established for qualification or can meet those standards before the date specified for award of the contract.

(4) Referral to small business administration not required.—This subsection does not require 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 that requirement.

(5) Delay of procurement not required.—The head of an agency need not delay a proposed procurement to comply with subsection (b) or to provide a potential offeror with an opportunity to demonstrate its ability to meet the standards specified for qualification.

(d) Fewer Than 2 Actual Manufacturers.—

(1) Solicitation and testing of additional sources or products.—If the number of qualified sources or qualified products available to compete actively for an anticipated future requirement is fewer than 2 actual manufacturers or the products of 2 actual manufacturers, respectively, the head of the agency concerned shall—

(A) publish notice periodically soliciting additional sources or products to seek qualification, unless the contracting officer determines that doing so would compromise national security; and

(B) subject to paragraph (2), bear the cost of conducting the specified testing and evaluation (excluding the cost 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 that has met the standards specified for qualification and that could reasonably be expected to compete for a contract for that requirement.

(2) When agency may bear cost.—The head of the agency concerned may bear the cost under paragraph (1)(B) only if the head of the agency determines that the additional qualified sources or products are likely to result in cost savings from increased competition for future requirements sufficient to offset (within a reasonable period of time considering the duration and dollar value of anticipated future requirements) the cost incurred by the agency.

(3) Certification required.—The head of the agency shall require a prospective contractor requesting the Federal Government to bear testing and evaluation costs under paragraph (1)(B) to certify its status as a small business concern under section 3 of the Small Business Act (15 U.S.C. 632).

(e) Examination and Revalidation of Qualification Requirement.—Within 7 years after the establishment of a qualification requirement, the need for the requirement shall be examined and the standards of the requirement revalidated in accordance with the requirements of subsection (b). This subsection does not apply in the case of a qualification requirement for which a waiver is in effect under subsection (c)(2).

(f) When Enforcement of Qualification Requirement Not Allowed.—Except in an emergency as determined by the head of the agency, after the head of the agency determines not to enforce a qualification requirement for a solicitation, the agency may not enforce the requirement unless the agency complies with the requirements of subsection (b).

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3761.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
3311	41:253c.	June 30, 1949, ch. 288, title III, §303C, formerly §303D, as added Pub. L. 98–577, title II, §202(a), Oct. 30, 1984, 98 Stat. 3069; renumbered §303C, Pub. L. 99–145, title XIII, §1304(c)(4)(A), Nov. 8, 1985, 99 Stat. 742.

In subsection (d)(1)(A), the words "in the Commerce Business Daily" are omitted as obsolete. See revision note for section 1708(d) of the revised title.

§3312. Database on price trends of items and services under Federal contracts

(a) Database Required.—The Administrator shall establish and maintain a database of information on price trends for items and services under contracts with the Federal Government. The information in the database shall be designed to assist Federal acquisition officials in the following:

(1) Monitoring developments in price trends for items and services under contracts with the Federal Government.

(2) Conducting price or cost analyses for items and services under offers for contracts with the Federal Government, or otherwise conducting determinations of the reasonableness of prices for items and services under such offers, and addressing unjustified escalation in prices being paid by the Federal Government for items and services under contracts with the Federal Government.

(b) Use.—(1) The database under subsection (a) shall be available to executive agencies in the evaluation of offers for contracts with the Federal Government for items and services.

(2) The Secretary of Defense may satisfy the requirements of this section by complying with the requirements of section 892 ¹ of the Ike Skelton National Defense Authorization Act for Fiscal Year 2011 (10 U.S.C. 2306a note).

(Added Pub. L. 112–239, div. A, title VIII, §851(a)(1), Jan. 2, 2013, 126 Stat. 1855.)

Editorial Notes

References in Text

Section 892 of the Ike Skelton National Defense Authorization Act for Fiscal Year 2011, referred to in subsec. (b)(2), is section 892 of Pub. L. 111–383, which was formerly set out as a note under section 2306a of Title 10, Armed Forces, prior to repeal by Pub. L. 114–92, div. A, title X, §1073(f), Nov. 25, 2015, 129 Stat. 996.

Statutory Notes and Related Subsidiaries

Use of Elements of Department of Defense Pilot Project

Pub. L. 112–239, div. A, title VIII, §851(b), Jan. 2, 2013, 126 Stat. 1855, provided that: "In establishing the database required by section 3312 of title 41, United States Code (as added by subsection (a)), the Administrator for Federal Procurement Policy shall use and incorporate appropriate elements of the pilot project on pricing being carried out by the Under Secretary of Defense for Acquisition, Technology, and Logistics pursuant to section 892 of the Ike Skelton National Defense Authorization Act for Fiscal Year 2011 [Pub. L. 111–383] (10 U.S.C. 2306a note) and the Better Buying Power initiative of the Secretary of Defense."

¹ See References in Text note below.

CHAPTER 35—TRUTHFUL COST OR PRICING DATA

        

Senate Revision Amendment

In chapter 35 heading, "OR" substituted for "AND" by S. Amdt. 4726 (111th Cong.). See 156 Cong. Rec. 18683 (2010).

§3501. General

(a) Definitions.—In this chapter:

(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 section 3506(a)(2) of this title, another date agreed upon between the parties, a prudent buyer or seller would reasonably expect to affect price negotiations significantly. The term does not include information that is judgmental, but does include 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.

(b) Regulations.—

(1) Minimizing abuse of commercial services authority.—The Federal Acquisition Regulation shall ensure that services that are not offered and sold competitively in substantial quantities in the commercial marketplace, but are of a type offered and sold competitively in substantial quantities in the commercial marketplace, may be treated as commercial services for purposes of this chapter only if the contracting officer determines in writing that the offeror has submitted sufficient information to evaluate, through price analysis, the reasonableness of the price for the services.

(2) Information to submit.—To the extent necessary to make a determination under paragraph (1), the contracting officer may request the offeror to submit—

(A) prices paid for the same or similar commercial services under comparable terms and conditions by both government and commercial customers; and

(B) if the contracting officer determines that the information described in subparagraph (A) is not sufficient to determine the reasonableness of price, other relevant information regarding the basis for price or cost, including information on labor costs, material costs, and overhead rates.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3764; Pub. L. 115–232, div. A, title VIII, §836(b)(11), Aug. 13, 2018, 132 Stat. 1863.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
3501(a)	41:254b(h).	June 30, 1949, ch. 288, title III, §304A(h), formerly §304A(i), as added Pub. L. 103–355, title I, §1251(a)(2), Oct. 13, 1994, 108 Stat. 3284; redesignated as §304A(h), Pub. L. 104–106, title XLII, §4201(b)(2)(B), Feb. 10, 1996, 110 Stat. 652.
3501(b)	41:254b note.	Pub. L. 110–417, [div. A], title VIII, §868, Oct. 14, 2008, 122 Stat. 4552.

Subsection (a) of Pub. L. 110–417, §868 is omitted as unnecessary.

In subsection (b)(1), the words "The Federal Acquisition Regulation" are substituted for "The regulations modified pursuant to subsection (a)" for clarity and conformity with the revised title.

Editorial Notes

Amendments

2018—Subsec. (a). Pub. L. 115–232, §836(b)(11)(A), redesignated pars. (2) and (3) as (1) and (2), respectively, substituted "commercial products or commercial services" for "commercial items" in par. (2), as redesignated, and struck out former par. (1), which defined "commercial item".

Subsec. (b)(1). Pub. L. 115–232, §836(b)(11)(B), in heading, struck out "item" before "authority" and, in text, substituted "commercial services" for "commercial items".

Subsec. (b)(2)(A). Pub. L. 115–232, §836(b)(11)(B)(ii), substituted "commercial services" for "commercial items".

Statutory Notes and Related Subsidiaries

Effective Date of 2018 Amendment

Amendment by Pub. L. 115–232 effective Jan. 1, 2020, subject to a savings provision, see section 836(h) of Pub. L. 115–232, set out as an Effective Date of 2018 Amendment; Savings Provision note under section 453b of Title 6, Domestic Security.

§3502. Required cost or pricing data and certification

(a) When Required.—The head of an executive agency shall require offerors, contractors, and subcontractors to make cost or pricing data available as follows:

(1) Offeror for prime contract.—An offeror for a prime contract under this division to be entered into using procedures other than sealed-bid procedures shall be required to submit cost or pricing data before the award of a contract if—

(A) in the case of a prime contract entered into after June 30, 2018, the price of the contract to the Federal Government is expected to exceed $2,000,000; and

(B) in the case of a prime contract entered into on or before June 30, 2018, the price of the contract to the Federal Government is expected to exceed $750,000.

(2) Contractor.—The contractor for a prime contract under this division shall be required to submit cost or pricing data before the pricing of a change or modification to the contract if—

(A) in the case of a change or modification made to a prime contract referred to in paragraph (1)(A), the price adjustment is expected to exceed $2,000,000;

(B) in the case of a change or modification made to a prime contract that was entered into on or before June 30, 2018, and that has been modified pursuant to subsection (f), the price adjustment is expected to exceed $750,000; and

(C) in the case of a change or modification not covered by subparagraph (A) or (B), the price adjustment is expected to exceed $750,000.

(3) Offeror for subcontract.—An offeror for a subcontract (at any tier) of a contract under this division 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 chapter and—

(A) in the case of a subcontract under a prime contract referred to in paragraph (1)(A), the price of the subcontract is expected to exceed $2,000,000;

(B) in the case of a subcontract entered into under a prime contract that was entered into on or before June 30, 2018, and that has been modified pursuant to subsection (f), the price of the subcontract is expected to exceed $2,000,000; and

(C) in the case of a subcontract not covered by subparagraph (A) or (B), the price of the subcontract is expected to exceed $750,000.

(4) Subcontractor.—The subcontractor for a subcontract covered by paragraph (3) shall be required to submit cost or pricing data before the pricing of a change or modification to the subcontract if—

(A) in the case of a change or modification to a subcontract referred to in paragraph (3)(A) or (B), the price adjustment is expected to exceed $2,000,000; and

(B) in the case of a change or modification to a subcontract referred to in paragraph (3)(C), the price adjustment is expected to exceed $750,000.

(b) Certification.—A person required, as an offeror, contractor, or subcontractor, to submit cost or pricing data under subsection (a) (or required by the head of the procuring activity concerned to submit the data under section 3504 of this title) 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.

(c) To Whom Submitted.—Cost or pricing data required to be submitted under subsection (a) (or under section 3504 of this title), and a certification required to be submitted under subsection (b), shall be submitted—

(1) 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 a designated representative of the contracting officer); or

(2) in the case of a submission by a subcontractor (or an offeror for a subcontract), to the prime contractor.

(d) Application of Chapter.—Except as provided under section 3503 of this title, this chapter applies to contracts entered into by the head of an executive agency on behalf of a foreign government.

(e) Subcontracts Not Affected by Waiver.—A waiver of requirements for submission of certified cost or pricing data that is granted under section 3503(a)(3) of this title in the case of a contract or subcontract does not waive the requirement under subsection (a)(3) of this section 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 subsection (a)(3) of this section should be waived in the case of those subcontracts and justifies in writing the reason for the determination.

(f) Modifications to Prior Contracts.—On the request of a contractor that was required to submit cost or pricing data under subsection (a) in connection with a prime contract entered into on or before June 30, 2018, the head of the executive agency that entered into the contract shall modify the contract to reflect paragraphs (2)(B) and (3)(B) of subsection (a). All those modifications shall be made without requiring consideration.

(g) Adjustment of Amounts.—Effective on October 1 of each year that is divisible by 5, each amount set forth in subsection (a) shall be adjusted in accordance with section 1908.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3765; Pub. L. 115–91, div. A, title VIII, §811(a)(2), Dec. 12, 2017, 131 Stat. 1459.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
3502	41:254b(a).	June 30, 1949, ch. 288, title III, §304A(a), as added Pub. L. 103–355, title I, §1251(a)(2), Oct. 13, 1994, 108 Stat. 3278; Pub. L. 105–261, div. A, title VIII, §805(b), Oct. 17, 1998, 112 Stat. 2083.

Editorial Notes

Amendments

2017—Subsec. (a). Pub. L. 115–91, §811(a)(2)(A)(i), (ii), substituted "June 30, 2018" for "October 13, 1994" and "$750,000" for "$100,000" wherever appearing.

Subsec. (a)(1)(A), (2)(A). Pub. L. 115–91, §811(a)(2)(A)(iii), substituted "$2,000,000" for "$500,000".

Subsec. (a)(2)(B). Pub. L. 115–91, §811(a)(2)(A)(iv), substituted "$750,000" for "$500,000".

Subsec. (a)(3)(A), (B), (4)(A). Pub. L. 115–91, §811(a)(2)(A)(iii), substituted "$2,000,000" for "$500,000".

Subsec. (f). Pub. L. 115–91, §811(a)(2)(B), substituted "June 30, 2018" for "October 13, 1994".

Subsec. (g). Pub. L. 115–91, §811(a)(2)(C), substituted "in accordance with section 1908." for "to the amount that is equal to the fiscal year 1994 constant dollar value of the amount set forth. Any amount, as so adjusted, that is not evenly divisible by $50,000 shall be rounded to the nearest multiple of $50,000. In the case of an amount that is evenly divisible by $25,000 but not evenly divisible by $50,000, the amount shall be rounded to the next higher multiple of $50,000."

§3503. Exceptions

(a) In General.—Submission of certified cost or pricing data shall not be required under section 3502 of this title in the case of a contract, a subcontract, or a modification of a contract or subcontract—

(1) for which the price agreed on is based on—

(A) adequate price competition; or

(B) prices set by law or regulation;

(2) for the acquisition of a commercial product or a commercial service; or

(3) in an exceptional case when the head of the procuring activity, without delegation, determines that the requirements of this chapter may be waived and justifies in writing the reasons for the determination.

(b) 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 a commercial service that is not covered by the exception to the submission of certified cost or pricing data in paragraph (1) or (2) of subsection (a), submission of certified cost or pricing data shall not be required under section 3502 of this title if—

(1) 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) or (2) of subsection (a); and

(2) the modification would not change the contract or subcontract from a contract or subcontract for the acquisition of a commercial product or a commercial service to a contract or subcontract for the acquisition of an item other than a commercial product or a commercial service.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3766; Pub. L. 115–232, div. A, title VIII, §836(b)(12), Aug. 13, 2018, 132 Stat. 1863.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
3503	41:254b(b).	June 30, 1949, ch. 288, title III, §304A(b), as added Pub. L. 103–355, title I, §1251(a)(2), Oct. 13, 1994, 108 Stat. 3279; Pub. L. 104–106, title XLII, §4201(b)(1), Feb. 10, 1996, 110 Stat. 651.

In subsection (b)(2), the words "as the case may be" are omitted as unnecessary.

Editorial Notes

Amendments

2018—Subsec. (a)(2). Pub. L. 115–232, §836(b)(12)(A), substituted "a commercial product or a commercial service" for "a commercial item".

Subsec. (b). Pub. L. 115–232, §836(b)(12)(B), in heading, substituted "Commercial Products or Commercial Services" for "Commercial Items" and, in text, substituted "a commercial product or a commercial service" for "a commercial item" wherever appearing.

Statutory Notes and Related Subsidiaries

Effective Date of 2018 Amendment

Amendment by Pub. L. 115–232 effective Jan. 1, 2020, subject to a savings provision, see section 836(h) of Pub. L. 115–232, set out as an Effective Date of 2018 Amendment; Savings Provision note under section 453b of Title 6, Domestic Security.

§3504. Cost or pricing data on below-threshold contracts

(a) Authority To Require Submission.—Subject to subsection (b), when certified cost or pricing data are not required to be submitted by section 3502 of this title for a contract, subcontract, or modification of a contract or subcontract, the 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 the 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 the data to be submitted under this section, the head of the procuring activity shall justify in writing the reason for the requirement.

(b) Exception.—The head of the procuring activity may not require certified cost or pricing data to be submitted under this section for any contract or subcontract, or modification of a contract or subcontract, covered by the exceptions in section 3503(a)(1) or (2) of this title.

(c) Delegation of Authority Prohibited.—The head of a procuring activity may not delegate the functions under this section.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3767.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
3504	41:254b(c).	June 30, 1949, ch. 288, title III, §304A(c), as added Pub. L. 103–355, title I, §1251(a)(2), Oct. 13, 1994, 108 Stat. 3280; Pub. L. 104–106, title XLII, §§4201(b)(1), 4321(e)(3), Feb. 10, 1996, 110 Stat. 651, 675.

§3505. Submission of other information

(a) Authority To Require Submission.—When certified cost or pricing data are not required to be submitted under this chapter for a contract, subcontract, or modification of a contract or subcontract, the contracting officer shall require submission of data other than certified cost or pricing data to the extent necessary to determine the reasonableness of the price of the contract, subcontract, or modification of the contract or subcontract. Except in the case of a contract or subcontract covered by the exceptions in section 3503(a)(1) of this title, 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.

(b) Limitations on Authority.—The Federal Acquisition Regulation shall include the following provisions regarding the types of information that contracting officers may require under subsection (a):

(1) Reasonable limitations.—Reasonable limitations on requests for sales data relating to commercial products or commercial services.

(2) Limitation on scope of request.—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.

(3) Information not to be disclosed.—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.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3767; Pub. L. 115–232, div. A, title VIII, §836(b)(13), Aug. 13, 2018, 132 Stat. 1863.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
3505	41:254b(d).	June 30, 1949, ch. 288, title III, §304A(d), as added Pub. L. 103–355, title I, §1251(a)(2), Oct. 13, 1994, 108 Stat. 3281; Pub. L. 104–106, title XLII, §§4201(b)(1), 4321(e)(4), Feb. 10, 1996, 110 Stat. 652, 675; Pub. L. 105–261, div. A, title VIII, §808(b), Oct. 17, 1998, 112 Stat. 2085.

Editorial Notes

Amendments

2018—Subsec. (b). Pub. L. 115–232 substituted "commercial products or commercial services" for "commercial items" wherever appearing.

Statutory Notes and Related Subsidiaries

Effective Date of 2018 Amendment

Amendment by Pub. L. 115–232 effective Jan. 1, 2020, subject to a savings provision, see section 836(h) of Pub. L. 115–232, set out as an Effective Date of 2018 Amendment; Savings Provision note under section 453b of Title 6, Domestic Security.

§3506. Price reductions for defective cost or pricing data

(a) Provision Requiring Adjustment.—

(1) In general.—A prime contract (or change or modification to a prime contract) under which a certificate under section 3502(b) of this title is required shall contain a provision that the price of the contract to the Federal Government, including profit or fee, shall be adjusted to exclude any significant amount by which it may be determined by the head of the executive agency that the price was increased because the contractor (or any subcontractor required to make the certificate available) submitted defective cost or pricing data.

(2) What constitutes defective cost or pricing data.—For the purposes of this chapter, defective cost or pricing data are cost or pricing data that, as of the date of agreement on the price of the contract (or another date agreed on between the parties), were inaccurate, incomplete, or noncurrent. If for purposes of the preceding sentence the parties agree on a date other than the date of agreement on the price of the contract, the date agreed on by the parties shall be as close to the date of agreement on the price of the contract as is practicable.

(b) Valid Defense.—In determining for purposes of a contract price adjustment under a contract provision required by subsection (a) whether, and to what extent, a contract price was increased because the contractor (or a subcontractor) submitted defective cost or pricing data, it is a defense that the Federal Government did not rely on the defective data submitted by the contractor or subcontractor.

(c) Invalid Defenses.—It is not a defense to an adjustment of the price of a contract under a contract provision required by subsection (a) that—

(1) 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—

(A) was the sole source of the property or services procured; or

(B) otherwise was in a superior bargaining position with respect to the property or services procured;

(2) the contracting officer should have known that the cost or 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;

(3) the contract was based on an agreement between the contractor and the Federal Government about the total cost of the contract and there was no agreement about the cost of each item procured under the contract; or

(4) the prime contractor or subcontractor did not submit a certification of cost or pricing data relating to the contract as required by section 3502(b) of this title.

(d) Offsets.—

(1) When allowed.—A contractor shall be allowed to offset an amount against the amount of a contract price adjustment under a contract provision required by subsection (a) if—

(A) 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

(B) 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 subsection (a)(2), another date agreed on by the parties, and that the data were not submitted as specified in section 3502(c) of this title before that date.

(2) When not allowed.—A contractor shall not be allowed to offset an amount otherwise authorized to be offset under paragraph (1) if—

(A) the certification under section 3502(b) of this title with respect to the cost or pricing data involved was known to be false when signed; or

(B) the Federal Government proves that, had the cost or pricing data referred to in paragraph (1)(B) been submitted to the Federal Government before date of agreement on the price of the contract (or price of the modification), or, if applicable, under subsection (a)(2), another date agreed on by the parties, the submission of the cost or pricing data would not have resulted in an increase in that price in the amount to be offset.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3768.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
3506	41:254b(e).	June 30, 1949, ch. 288, title III, §304A(e), as added Pub. L. 103–355, title I, §1251(a)(2), Oct. 13, 1994, 108 Stat. 3282.

§3507. Interest and penalties for certain overpayments

(a) In General.—If the Federal Government makes an overpayment to a contractor under a contract with an executive agency subject to this chapter and the overpayment was due to the submission by the contractor of defective cost or pricing data, the contractor shall be liable to the Federal Government—

(1) for interest on the amount of the overpayment, to be computed—

(A) 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 the overpayment to the Federal Government; and

(B) at the current rate prescribed by the Secretary of the Treasury under section 6621 of the Internal Revenue Code of 1986 (26 U.S.C. 6621); and

(2) if the submission of the defective data was a knowing submission, for an additional amount equal to the amount of the overpayment.

(b) Liability Not Affected by Refusal To Submit Certification.—Any liability under this section of a contractor that submits cost or pricing data but refuses to submit the certification required by section 3502(b) of this title with respect to the cost or pricing data is not affected by the refusal to submit the certification.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3769.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
3507	41:254b(f).	June 30, 1949, ch. 288, title III, §304A(f), as added Pub. L. 103–355, title I, §1251(a)(2), Oct. 13, 1994, 108 Stat. 3283.

§3508. Right 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 chapter, an executive agency shall have the authority provided by section 4706(b)(2) of this title.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3770.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
3508	41:254b(g).	June 30, 1949, ch. 288, title III, §304A(g), as added Pub. L. 103–355, title I, §1251(a)(2), Oct. 13, 1994, 108 Stat. 3283.

§3509. Notification of violations of Federal criminal law or overpayments

(a) Definition.—In this section, the term "covered contract" means any contract in an amount greater than $5,000,000 and more than 120 days in duration.

(b) Federal Acquisition Regulation.—The Federal Acquisition Regulation shall include, pursuant to FAR Case 2007–006 (as published at 72 Fed. Reg. 64019, November 14, 2007) or any follow-on FAR case, provisions that require timely notification by Federal contractors of violations of Federal criminal law or overpayments in connection with the award or performance of covered contracts or subcontracts, including those performed outside the United States and those for commercial products or commercial services.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3770; Pub. L. 115–232, div. A, title VIII, §836(b)(14), Aug. 13, 2018, 132 Stat. 1864.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
3509	41:251 note.	Pub. L. 110–252, title VI, §§6102, 6103, June 30, 2008, 122 Stat. 2386, 2387.

In subsection (b), the words "shall include" are substituted for "shall be amended" and "to include" to reflect the permanence of the provision. The words "within 180 days after the date of the enactment of this Act" are omitted as obsolete.

Editorial Notes

Amendments

2018—Subsec. (b). Pub. L. 115–232 substituted "commercial products or commercial services" for "commercial items".

Statutory Notes and Related Subsidiaries

Effective Date of 2018 Amendment

Amendment by Pub. L. 115–232 effective Jan. 1, 2020, subject to a savings provision, see section 836(h) of Pub. L. 115–232, set out as an Effective Date of 2018 Amendment; Savings Provision note under section 453b of Title 6, Domestic Security.

CHAPTER 37—AWARDING OF CONTRACTS

        

§3701. Basis of award and rejection

(a) Award.—An executive agency shall evaluate sealed bids and competitive proposals, and award a contract, based solely on the factors specified in the solicitation.

(b) Rejection.—All sealed bids or competitive proposals received in response to a solicitation may be rejected if the agency head determines that rejection is in the public interest.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3770.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
3701(a)	41:253b(a).	June 30, 1949, ch. 288, title III, §303B(a), (b), as added Pub. L. 98–369, title VII, §2711(a)(2), July 18, 1984, 98 Stat. 1179; Pub. L. 103–355, title I, §1061(c)(1), Oct. 13, 1994, 108 Stat. 3267.
3701(b)	41:253b(b).

Statutory Notes and Related Subsidiaries

Use of Lowest Price Technically Acceptable Source Selection Process

Pub. L. 115–232, div. A, title VIII, §880, Aug. 13, 2018, 132 Stat. 1909, as amended by Pub. L. 116–92, div. A, title VIII, §806(a)(2), Dec. 20, 2019, 133 Stat. 1485, provided that:

"(a) Statement of Policy.—It shall be the policy of the United States Government to avoid using lowest price technically acceptable source selection criteria in circumstances that would deny the Government the benefits of cost and technical tradeoffs in the source selection process.

"(b) Revision of Federal Acquisition Regulation.—Not later than 120 days after the date of the enactment of this Act [Aug. 13, 2018], the Federal Acquisition Regulation shall be revised to require that, for solicitations issued on or after the date that is 120 days after the date of the enactment of this Act, lowest price technically acceptable source selection criteria are used only in situations in which—

"(1) an executive agency is able to comprehensively and clearly describe the minimum requirements expressed in terms of performance objectives, measures, and standards that will be used to determine acceptability of offers;

"(2) the executive agency would realize no, or minimal, value from a contract proposal exceeding the minimum technical or performance requirements set forth in the request for proposal;

"(3) the proposed technical approaches will require no, or minimal, subjective judgment by the source selection authority as to the desirability of one offeror's proposal versus a competing proposal;

"(4) the executive agency has a high degree of confidence that a review of technical proposals of offerors other than the lowest bidder would not result in the identification of factors that could provide value or benefit to the executive agency;

"(5) the contracting officer has included a justification for the use of a lowest price technically acceptable evaluation methodology in the contract file; and

"(6) the executive agency has determined that the lowest price reflects full life-cycle costs, including for operations and support.

"(c) Avoidance of Use of Lowest Price Technically Acceptable Source Selection Criteria in Certain Procurements.—To the maximum extent practicable, the use of lowest price technically acceptable source selection criteria shall be avoided in the case of a procurement that is predominately for the acquisition of—

"(1) information technology services, cybersecurity services, systems engineering and technical assistance services, advanced electronic testing, audit or audit readiness services, health care services and records, telecommunications devices and services, or other knowledge-based professional services;

"(2) personal protective equipment; or

"(3) knowledge-based training or logistics services in contingency operations or other operations outside the United States, including in Afghanistan or Iraq.

"(d) Definitions.—In this section:

"(1) Executive agency.—The term 'executive agency' has the meaning given that term in section 102 of title 40, United States Code, except that the term does not include the Department of Defense.

"(2) Contingency operation.—The term 'contingency operation' has the meaning given that term in section 101 of title 10, United States Code.

"(3) Appropriate congressional committees.—The term 'appropriate congressional committees' means the Committee on Oversight and Government Reform [now Committee on Oversight and Accountability] of the House of Representatives and the Committee on Homeland Security and Governmental Affairs of the Senate."

Congressional Statement of Purpose

Pub. L. 98–577, title I, §101, Oct. 30, 1984, 98 Stat. 3066, provided that: "The purposes of this Act [see Tables for classification] are to—

"(1) eliminate procurement procedures and practices that unnecessarily inhibit full and open competition for contracts;

"(2) promote the use of contracting opportunities as a means to expand the industrial base of the United States in order to ensure adequate responsive capability of the economy to the increased demands of the Government in times of national emergency; and

"(3) foster opportunities for the increased participation in the competitive procurement process of small business concerns and small business concerns owned and controlled by socially and economically disadvantaged individuals."

Executive Documents

Ex. Ord. No. 12979. Agency Procurement Protests

Ex. Ord. No. 12979, Oct. 25, 1995, 60 F.R. 55171, provided:

By the authority vested in me as President by the Constitution and the laws of the United States of America, and in order to ensure effective and efficient expenditure of public funds and fair and expeditious resolution of protests to the award of Federal procurement contracts, it is hereby ordered as follows:

Section 1. Heads of executive departments and agencies ("agencies") engaged in the procurement of supplies and services shall prescribe administrative procedures for the resolution of protests to the award of their procurement contracts as an alternative to protests in fora outside the procuring agencies. Procedures prescribed pursuant to this order shall:

(a) emphasize that whenever conduct of a procurement is contested, all parties should use their best efforts to resolve the matter with agency contracting officers;

(b) to the maximum extent practicable, provide for inexpensive, informal, procedurally simple, and expeditious resolution of protests, including, where appropriate and as permitted by law, the use of alternative dispute resolution techniques, third party neutrals, and another agency's personnel;

(c) allow actual or prospective bidders or offerors whose direct economic interests would be affected by the award or failure to award the contract to request a review, at a level above the contracting officer, of any decision by a contracting officer that is alleged to have violated a statute or regulation and, thereby, caused prejudice to the protester; and

(d) except where immediate contract award or performance is justified for urgent and compelling reasons or is determined to be in the best interest of the United States, prohibit award or performance of the contract while a timely filed protest is pending before the agency. To allow for the withholding of a contract award or performance, the agency must have received notice of the protest within either 10 calendar days after the contract award or 5 calendar days after the bidder or offeror who is protesting the contract award was given the opportunity to be debriefed by the agency, whichever date is later.

Sec. 2. The Administrator for Federal Procurement Policy shall: (a) work with the heads of executive agencies to provide policy guidance and leadership necessary to implement provisions of this order; and

(b) review and evaluate agency experience and performance under this order, and report on any findings to the President within 2 years from the date of this order.

Sec. 3. The Administrator of General Services, the Secretary of Defense, and the Administrator of the National Aeronautics and Space Administration, in coordination with the Office of Federal Procurement Policy, shall amend the Federal Acquisition Regulation, 48 C.F.R. 1, within 180 days of the date of this order to further the purposes of this order.

William J. Clinton.      

§3702. Sealed bids

(a) Opening of Bids.—Sealed bids shall be opened publicly at the time and place stated in the solicitation.

(b) Criteria for Awarding Contract.—The executive agency shall evaluate the bids in accordance with section 3701(a) of this title without discussions with the bidders and, except as provided in section 3701(b) of this title, shall award a contract with reasonable promptness to the responsible source whose bid conforms to the solicitation and is most advantageous to the Federal Government, considering only price and the other price-related factors included in the solicitation.

(c) Notice of Award.—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 3 days after the date of contract award, the executive agency shall notify, in writing or by electronic means, each bidder not awarded the contract that the contract has been awarded.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3770.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
3702(a)	41:253b(c) (1st sentence).	June 30, 1949, ch. 288, title III, §303B(c), as added Pub. L. 98–369, title VII, §2711(a)(2), July 18, 1984, 98 Stat. 1179; Pub. L. 103–355, title I, §§1061(c)(2), 1063(a), Oct. 13, 1994, 108 Stat. 3267, 3268.
3702(b)	41:253b(c) (2d sentence).
3702(a)	41:253b(c) (3d, last sentences).

§3703. Competitive proposals

(a) Evaluation and Award.—An executive agency shall evaluate competitive proposals in accordance with section 3701(a) of this title and may award a contract—

(1) 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

(2) based on the proposals received and without discussions with the offerors (other than discussions conducted for the purpose of minor clarification), if, as required by section 3306(b)(2)(B)(i) of this title, 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) Limit on Number of Proposals.—If the contracting officer determines that the number of offerors that would otherwise be included in the competitive range under subsection (a)(1) 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 those criteria.

(c) Criteria for Awarding Contract.—Except as otherwise provided in section 3701(b) of this title, the executive agency shall award a contract with reasonable promptness to the responsible source whose proposal is most advantageous to the Federal Government, considering only cost or price and the other factors included in the solicitation.

(d) Notice of Award.—The executive agency shall award the contract by transmitting, in writing or by electronic means, notice of the award to that source and, within 3 days after the date of contract award, shall notify, in writing or by electronic means, all other offerors of the rejection of their proposals.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3771.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
3703(a)	41:253b(d)(1).	June 30, 1949, ch. 288, title III, §303B(d), as added Pub. L. 98–369, title VII, §2711(a)(2), July 18, 1984, 98 Stat. 1180; Pub. L. 103–355, title I, §§1061(c)(3), 1063(b), Oct. 13, 1994, 108 Stat. 3267, 3268; Pub. L. 104–106, title XLI, §4103(b), Feb. 10, 1996, 110 Stat. 644.
3703(b)	41:253b(d)(2).
3703(c)	41:253b(d)(3) (1st sentence).
3703(d)	41:253b(d)(3) (last sentence).

§3704. Post-award debriefings

(a) Request for Debriefing.—When a contract is awarded by the head of an executive agency on the basis of competitive proposals, an unsuccessful offeror, on 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.

(b) When Debriefing To Be Conducted.—The executive agency shall debrief the offeror within, to the maximum extent practicable, 5 days after receipt of the request by the executive agency.

(c) Information To Be Provided.—The debriefing shall include, at a minimum—

(1) the executive agency's evaluation of the significant weak or deficient factors in the offeror's offer;

(2) 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;

(3) the overall ranking of all offers;

(4) a summary of the rationale for the award;

(5) 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; and

(6) 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) Information Not To Be Included.—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) Inclusion of Statement in Solicitation.—Each solicitation for competitive proposals shall include a statement that information described in subsection (c) may be disclosed in post-award debriefings.

(f) After Successful Protest.—If, within one year after the date of the contract award and as a result of a successful procurement protest, the executive 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 head of the executive agency shall make available to all offerors—

(1) the information provided in debriefings under this section regarding the offer of the contractor awarded the contract; and

(2) the same information that would have been provided to the original offerors.

(g) Summary To Be Included in File.—The contracting officer shall include a summary of the debriefing in the contract file.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3771; Pub. L. 115–232, div. A, title VIII, §836(b)(15), Aug. 13, 2018, 132 Stat. 1864.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
3704(a)	41:253b(e)(1) (1st sentence).	June 30, 1949, ch. 288, title III, §303B(e), as added Pub. L. 103–355, title I, §1064(2), Oct. 13, 1994, 108 Stat. 3268; Pub. L. 104–106, title XLI, §4104(b)(1), Feb. 10, 1996, 110 Stat. 645.
3704(b)	41:253b(e)(1) (last sentence).
3704(c)	41:253b(e)(2).
3704(d)	41:253b(e)(3).
3704(e)	41:253b(e)(4).
3704(f)	41:253b(e)(5).
3704(g)	41:253b(g) (related to 41:253b(e)).	June 30, 1949, ch. 288, title III, §303B(g) (related to §303B(e)), as added Pub. L. 104–106, title XLI, §4104(b)(3), Feb. 10, 1996, 110 Stat. 645.

Editorial Notes

Amendments

2018—Subsec. (c)(5). Pub. L. 115–232 substituted "commercial product" for "commercial item".

Statutory Notes and Related Subsidiaries

Effective Date of 2018 Amendment

Amendment by Pub. L. 115–232 effective Jan. 1, 2020, subject to a savings provision, see section 836(h) of Pub. L. 115–232, set out as an Effective Date of 2018 Amendment; Savings Provision note under section 453b of Title 6, Domestic Security.

§3705. Pre-award debriefings

(a) Request for Debriefing.—When the contracting officer excludes an offeror submitting a competitive proposal from the competitive range (or otherwise excludes that offeror from further consideration prior to the final source selection decision), the excluded offeror may request in writing, within 3 days after the date on which the excluded offeror receives notice of its exclusion, a debriefing prior to award.

(b) When Debriefing To Be Conducted.—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 Federal Government to conduct a debriefing at that time.

(c) Precondition for Post-Award Debriefing.—The contracting officer is required to debrief an excluded offeror in accordance with section 3704 of this title only if that offeror requested and was refused a pre-award debriefing under subsections (a) and (b).

(d) Information To Be Provided.—The debriefing conducted under this section shall include—

(1) the executive agency's evaluation of the significant elements in the offeror's offer;

(2) a summary of the rationale for the offeror's exclusion; and

(3) 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.

(e) Information Not To Be Disclosed.—The debriefing conducted pursuant to this section 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.

(f) Summary To Be Included in File.—The contracting officer shall include a summary of the debriefing in the contract file.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3772.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
3705(a)	41:253b(f)(1) (1st sentence).	June 30, 1949, ch. 288, title III, §303B(f), (g) (related to §303B(f)), as added Pub. L. 104–106, title XLI, §4104(b)(3), Feb. 10, 1996, 110 Stat. 645.
3705(b)	41:253b(f)(1) (last sentence).
3705(c)	41:253b(f)(2).
3705(d)	41:253b(f)(3).
3705(e)	41:253b(f)(4).
3705(f)	41:253b(g) (related to 41:253b(f)).

§3706. Encouragement of alternative dispute resolution

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.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3773.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
3706	41:253b(h).	June 30, 1949, ch. 288, title III, §303B(h), as added Pub. L. 104–106, title XLI, §4104(b)(3), Feb. 10, 1996, 110 Stat. 645.

§3707. Antitrust violations

If the agency head considers that a bid or proposal evidences a violation of the antitrust laws, the agency head shall refer the bid or proposal to the Attorney General for appropriate action.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3773.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
3707	41:253b(i).	June 30, 1949, ch. 288, title III, §303B(i), formerly §303B(e), as added Pub. L. 98–369, title VII, §2711(a)(2), July 18, 1984, 98 Stat. 1180; redesignated as §303B(f), Pub. L. 103–355, title I, §1064(1), Oct. 13, 1994, 108 Stat. 3268; redesignated as §303B(i), Pub. L. 104–106, title XLI, §4104(b)(2), Feb. 10, 1996, 110 Stat. 645.

§3708. Protests

(a) Protest File.—

(1) Establishment and access.—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 executive agency, a protest is filed pursuant to the procedures in subchapter V of chapter 35 of title 31, and an actual or prospective offeror 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) Redacted information.—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.

(b) Agency Actions on Protests.—If, in connection with a protest, the head of an executive agency determines that a solicitation, proposed award, or award does not comply with the requirements of law or regulation, the head of the executive agency may—

(1) take any action set out in subparagraphs (A) to (F) of subsection (b)(1) of section 3554 of title 31; and

(2) pay costs described in paragraph (1) of section 3554(c) of title 31 within the limits referred to in paragraph (2) of section 3554(c).

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3773.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
3708(a)	41:253b(k).	June 30, 1949, ch. 288, title III, §303B(k), formerly §303B(h), as added Pub. L. 103–355, title I, §1065, Oct. 13, 1994, 108 Stat. 3269; redesignated as §303B(k), Pub. L. 104–106, title XLI, §4104(b)(2), Feb. 10, 1996, 110 Stat. 645; Pub. L. 104–106, title XLI, §5607(c), Feb. 10, 1996, 110 Stat. 701, as amended Pub. L. 104–201, title X, §1074(b)(7) (less effective date), Sept. 23, 1996, 110 Stat. 2660.
3708(b)	41:253b(l).	June 30, 1949, ch. 288, title III, §303B(l), formerly §303B(i), as added Pub. L. 103–355, title I, §1066, Oct. 13, 1994, 108 Stat. 3269; redesignated as §303B(l), Pub. L. 104–106, title XLI, §4104(b)(2), Feb. 10, 1996, 110 Stat. 645.

CHAPTER 39—SPECIFIC TYPES OF CONTRACTS

        

Statutory Notes and Related Subsidiaries

Separability

Act June 30, 1949, ch. 288, title VI, §604, formerly title V, §504, 63 Stat. 403, renumbered by act Sept. 5, 1950, ch. 849, §6(a), (b), 64 Stat. 583, provided that: "If any provision of this Act [see Tables for classification], or the application thereof to any person or circumstances, is held invalid, the remainder of this Act, and the application of such provision to other persons or circumstances, shall not be affected thereby."

American Security Drones

Pub. L. 118–31, div. A, title XVIII, subtitle B, Dec. 22, 2023, 137 Stat. 691, provided that:

"SEC. 1821. SHORT TITLE.

"This subtitle may be cited as the 'American Security Drone Act of 2023'.

"SEC. 1822. DEFINITIONS.

"In this subtitle:

"(1) Covered foreign entity.—The term 'covered foreign entity' means an entity included on a list developed and maintained by the Federal Acquisition Security Council and published in the System for Award Management (SAM). This list will include entities in the following categories:

"(A) An entity included on the Consolidated Screening List.

"(B) Any entity that is subject to extrajudicial direction from a foreign government, as determined by the Secretary of Homeland Security.

"(C) Any entity the Secretary of Homeland Security, in coordination with the Attorney General, Director of National Intelligence, and the Secretary of Defense, determines poses a national security risk.

"(D) Any entity domiciled in the People's Republic of China or subject to influence or control by the Government of the People's Republic of China or the Communist Party of the People's Republic of China, as determined by the Secretary of Homeland Security.

"(E) Any subsidiary or affiliate of an entity described in subparagraphs (A) through (D).

"(2) Covered unmanned aircraft system.—The term 'covered unmanned aircraft system' has the meaning given the term 'unmanned aircraft system' in section 44801 of title 49, United States Code.

"(3) Intelligence; intelligence community.—The terms 'intelligence' and 'intelligence community' have the meanings given those terms in section 3 of the National Security Act of 1947 (50 U.S.C. 3003).

"SEC. 1823. PROHIBITION ON PROCUREMENT OF COVERED UNMANNED AIRCRAFT SYSTEMS FROM COVERED FOREIGN ENTITIES.

"(a) In General.—Except as provided under subsections (b) through (f), the head of an executive agency may not procure any covered unmanned aircraft system that is manufactured or assembled by a covered foreign entity, which includes associated elements related to the collection and transmission of sensitive information (consisting of communication links and the components that control the unmanned aircraft) that enable the operator to operate the aircraft in the National Airspace System. The Federal Acquisition Security Council, in coordination with the Secretary of Transportation, shall develop and update a list of associated elements.

"(b) Exemption.—The Secretary of Homeland Security, the Secretary of Defense, the Secretary of State, and the Attorney General are exempt from the restriction under subsection (a) if the procurement is required in the national interest of the United States and—

"(1) is for the sole purposes of research, evaluation, training, testing, or analysis for electronic warfare, information warfare operations, cybersecurity, or development of unmanned aircraft system or counter-unmanned aircraft system technology;

"(2) is for the sole purposes of conducting counterterrorism or counterintelligence activities, protective missions, or Federal criminal or national security investigations, including forensic examinations, or for electronic warfare, information warfare operations, cybersecurity, or development of an unmanned aircraft system or counter-unmanned aircraft system technology; or

"(3) is an unmanned aircraft system that, as procured or as modified after procurement but before operational use, can no longer transfer to, or download data from, a covered foreign entity and otherwise poses no national security cybersecurity risks as determined by the exempting official.

"(c) Department of Transportation and Federal Aviation Administration Exemption.—The Secretary of Transportation is exempt from the restriction under subsection (a) if the operation or procurement is deemed to support the safe, secure, or efficient operation of the National Airspace System or maintenance of public safety, including activities carried out under the Federal Aviation Administration's Alliance for System Safety of UAS through Research Excellence (ASSURE) Center of Excellence (COE) and any other activity deemed to support the safe, secure, or efficient operation of the National Airspace System or maintenance of public safety, as determined by the Secretary or the Secretary's designee.

"(d) National Transportation Safety Board Exemption.—The National Transportation Safety Board, in consultation with the Secretary of Homeland Security, is exempt from the restriction under subsection (a) if the operation or procurement is necessary for the sole purpose of conducting safety investigations.

"(e) National Oceanic and Atmospheric Administration Exemption.—The Administrator of the National Oceanic and Atmospheric Administration (NOAA), in consultation with the Secretary of Homeland Security, is exempt from the restriction under subsection (a) if the procurement is necessary for the purpose of meeting NOAA's science or management objectives or operational mission.

"(f) Waiver.—The head of an executive agency may waive the prohibition under subsection (a) on a case-by-case basis—

"(1) with the approval of the Director of the Office of Management and Budget, after consultation with the Federal Acquisition Security Council; and

"(2) upon notification to—

"(A) the Committee on Homeland Security and Governmental Affairs of the Senate;

"(B) the Committee on Oversight and Accountability in the House of Representatives; and

"(C) other appropriate congressional committees of jurisdiction.

"SEC. 1824. PROHIBITION ON OPERATION OF COVERED UNMANNED AIRCRAFT SYSTEMS FROM COVERED FOREIGN ENTITIES.

"(a) Prohibition.—

"(1) In general.—Beginning on the date that is two years after the date of the enactment of this Act [Dec. 22, 2023], no Federal department or agency may operate a covered unmanned aircraft system manufactured or assembled by a covered foreign entity.

"(2) Applicability to contracted services.—The prohibition under paragraph (1) applies to any covered unmanned aircraft systems that are being used by any executive agency through the method of contracting for the services of covered unmanned aircraft systems.

"(b) Exemption.—The Secretary of Homeland Security, the Secretary of Defense, the Secretary of State, and the Attorney General are exempt from the restriction under subsection (a) if the operation is required in the national interest of the United States and—

"(1) is for the sole purposes of research, evaluation, training, testing, or analysis for electronic warfare, information warfare operations, cybersecurity, or development of unmanned aircraft system or counter-unmanned aircraft system technology;

"(2) is for the sole purposes of conducting counterterrorism or counterintelligence activities, protective missions, or Federal criminal or national security investigations, including forensic examinations, or for electronic warfare, information warfare operations, cybersecurity, or development of an unmanned aircraft system or counter-unmanned aircraft system technology; or

"(3) is an unmanned aircraft system that, as procured or as modified after procurement but before operational use, can no longer transfer to, or download data from, a covered foreign entity and otherwise poses no national security cybersecurity risks as determined by the exempting official.

"(c) Department of Transportation and Federal Aviation Administration Exemption.—The Secretary of Transportation is exempt from the restriction under subsection (a) if the operation is deemed to support the safe, secure, or efficient operation of the National Airspace System or maintenance of public safety, including activities carried out under the Federal Aviation Administration's Alliance for System Safety of UAS through Research Excellence (ASSURE) Center of Excellence (COE) and any other activity deemed to support the safe, secure, or efficient operation of the National Airspace System or maintenance of public safety, as determined by the Secretary or the Secretary's designee.

"(d) National Transportation Safety Board Exemption.—The National Transportation Safety Board, in consultation with the Secretary of Homeland Security, is exempt from the restriction under subsection (a) if the operation is necessary for the sole purpose of conducting safety investigations.

"(e) National Oceanic and Atmospheric Administration Exemption.—The Administrator of the National Oceanic and Atmospheric Administration (NOAA), in consultation with the Secretary of Homeland Security, is exempt from the restriction under subsection (a) if the procurement is necessary for the purpose of meeting NOAA's science or management objectives or operational mission.

"(f) Waiver.—The head of an executive agency may waive the prohibition under subsection (a) on a case-by-case basis—

"(1) with the approval of the Director of the Office of Management and Budget, after consultation with the Federal Acquisition Security Council; and

"(2) upon notification to—

"(A) the Committee on Homeland Security and Governmental Affairs of the Senate;

"(B) the Committee on Oversight and Accountability in the House of Representatives; and

"(C) other appropriate congressional committees of jurisdiction.

"(g) Regulations and Guidance.—Not later than 180 days after the date of the enactment of this Act [Dec. 22, 2023], the Secretary of Homeland Security, in consultation with the Attorney General and the Secretary of Transportation, shall prescribe regulations or guidance to implement this section.

"SEC. 1825. PROHIBITION ON USE OF FEDERAL FUNDS FOR PROCUREMENT AND OPERATION OF COVERED UNMANNED AIRCRAFT SYSTEMS FROM COVERED FOREIGN ENTITIES.

"(a) In General.—Beginning on the date that is two years after the date of the enactment of this Act [Dec. 22, 2023], except as provided in subsection (b), no Federal funds awarded through a contract, grant, or cooperative agreement, or otherwise made available may be used—

"(1) to procure a covered unmanned aircraft system that is manufactured or assembled by a covered foreign entity; or

"(2) in connection with the operation of such a drone or unmanned aircraft system.

"(b) Exemption.—The Secretary of Homeland Security, the Secretary of Defense, the Secretary of State, and the Attorney General are exempt from the restriction under subsection (a) if the procurement or operation is required in the national interest of the United States and—

"(1) is for the sole purposes of research, evaluation, training, testing, or analysis for electronic warfare, information warfare operations, cybersecurity, or development of unmanned aircraft system or counter-unmanned aircraft system technology;

"(2) is for the sole purposes of conducting counterterrorism or counterintelligence activities, protective missions, or Federal criminal or national security investigations, including forensic examinations, or for electronic warfare, information warfare operations, cybersecurity, or development of an unmanned aircraft system or counter-unmanned aircraft system technology; or

"(3) is an unmanned aircraft system that, as procured or as modified after procurement but before operational use, can no longer transfer to, or download data from, a covered foreign entity and otherwise poses no national security cybersecurity risks as determined by the exempting official.

"(c) Department of Transportation and Federal Aviation Administration Exemption.—The Secretary of Transportation is exempt from the restriction under subsection (a) if the operation or procurement is deemed to support the safe, secure, or efficient operation of the National Airspace System or maintenance of public safety, including activities carried out under the Federal Aviation Administration's Alliance for System Safety of UAS through Research Excellence (ASSURE) Center of Excellence (COE) and any other activity deemed to support the safe, secure, or efficient operation of the National Airspace System or maintenance of public safety, as determined by the Secretary or the Secretary's designee.

"(d) National Oceanic and Atmospheric Administration Exemption.—The Administrator of the National Oceanic and Atmospheric Administration (NOAA), in consultation with the Secretary of Homeland Security, is exempt from the restriction under subsection (a) if the operation or procurement is necessary for the purpose of meeting NOAA's science or management objectives or operational mission.

"(e) Waiver.—The head of an executive agency may waive the prohibition under subsection (a) on a case-by-case basis—

"(1) with the approval of the Director of the Office of Management and Budget, after consultation with the Federal Acquisition Security Council; and

"(2) upon notification to—

"(A) the Committee on Homeland Security and Governmental Affairs of the Senate;

"(B) the Committee on Oversight and Accountability in the House of Representatives; and

"(C) other appropriate congressional committees of jurisdiction.

"(f) Regulations.—Not later than 180 days after the date of the enactment of this Act, the Federal Acquisition Regulatory Council shall prescribe regulations or guidance, as necessary, to implement the requirements of this section pertaining to Federal contracts.

"SEC. 1826. PROHIBITION ON USE OF GOVERNMENT-ISSUED PURCHASE CARDS TO PURCHASE COVERED UNMANNED AIRCRAFT SYSTEMS FROM COVERED FOREIGN ENTITIES.

"Effective immediately, Government-issued Purchase Cards may not be used to procure any covered unmanned aircraft system from a covered foreign entity.

"SEC. 1827. MANAGEMENT OF EXISTING INVENTORIES OF COVERED UNMANNED AIRCRAFT SYSTEMS FROM COVERED FOREIGN ENTITIES.

"(a) In General.—All executive agencies must account for existing inventories of covered unmanned aircraft systems manufactured or assembled by a covered foreign entity in their personal property accounting systems, within one year of the date of enactment of this Act [Dec. 22, 2023], regardless of the original procurement cost, or the purpose of procurement due to the special monitoring and accounting measures necessary to track the items' capabilities.

"(b) Classified Tracking.—Due to the sensitive nature of missions and operations conducted by the United States Government, inventory data related to covered unmanned aircraft systems manufactured or assembled by a covered foreign entity may be tracked at a classified level, as determined by the Secretary of Homeland Security or the Secretary's designee.

"(c) Exceptions.—The Department of Defense, the Department of Homeland Security, the Department of Justice, the Department of Transportation, and the National Oceanic and Atmospheric Administration may exclude from the full inventory process, covered unmanned aircraft systems that are deemed expendable due to mission risk such as recovery issues, or that are one-time-use covered unmanned aircraft due to requirements and low cost.

"(d) Intelligence Community Exception.—Nothing in this section shall apply to any element of the intelligence community.

"SEC. 1828. COMPTROLLER GENERAL REPORT.

"Not later than 275 days after the date of the enactment of this Act [Dec. 22, 2023], the Comptroller General of the United States shall submit to Congress a report on the amount of commercial off-the-shelf drones and covered unmanned aircraft systems procured by Federal departments and agencies from covered foreign entities, except that nothing in this section shall apply to any element of the intelligence community.

"SEC. 1829. GOVERNMENT-WIDE POLICY FOR PROCUREMENT OF UNMANNED AIRCRAFT SYSTEMS.

"(a) In General.—Not later than 180 days after the date of the enactment of this Act, the Director of the Office of Management and Budget, in coordination with the Department of Homeland Security, Department of Transportation, the Department of Justice, and other Departments as determined by the Director of the Office of Management and Budget, and in consultation with the National Institute of Standards and Technology, shall establish a government-wide policy for the procurement of an unmanned aircraft system—

"(1) for non-Department of Defense and non-intelligence community operations; and

"(2) through grants and cooperative agreements entered into with non-Federal entities.

"(b) Information Security.—The policy developed under subsection (a) shall include the following specifications, which to the extent practicable, shall be based on industry standards and technical guidance from the National Institute of Standards and Technology, to address the risks associated with processing, storing, and transmitting Federal information in an unmanned aircraft system:

"(1) Protections to ensure controlled access to an unmanned aircraft system.

"(2) Protecting software, firmware, and hardware by ensuring changes to an unmanned aircraft system are properly managed, including by ensuring an unmanned aircraft system can be updated using a secure, controlled, and configurable mechanism.

"(3) Cryptographically securing sensitive collected, stored, and transmitted data, including proper handling of privacy data and other controlled unclassified information.

"(4) Appropriate safeguards necessary to protect sensitive information, including during and after use of an unmanned aircraft system.

"(5) Appropriate data security to ensure that data is not transmitted to or stored in non-approved locations.

"(6) The ability to opt out of the uploading, downloading, or transmitting of data that is not required by law or regulation and an ability to choose with whom and where information is shared when it is required.

"(c) Requirement.—The policy developed under subsection (a) shall reflect an appropriate risk-based approach to information security related to use of an unmanned aircraft system.

"(d) Revision of Acquisition Regulations.—Not later than 180 days after the date on which the policy required under subsection (a) is issued—

"(1) the Federal Acquisition Regulatory Council shall revise the Federal Acquisition Regulation, as necessary, to implement the policy; and

"(2) any Federal department or agency or other Federal entity not subject to, or not subject solely to, the Federal Acquisition Regulation shall revise applicable policy, guidance, or regulations, as necessary, to implement the policy.

"(e) Exemption.—In developing the policy required under subsection (a), the Director of the Office of Management and Budget shall—

"(1) incorporate policies to implement the exemptions contained in this subtitle; and

"(2) incorporate an exemption to the policy in the case of a head of the procuring department or agency determining, in writing, that no product that complies with the information security requirements described in subsection (b) is capable of fulfilling mission critical performance requirements, and such determination—

"(A) may not be delegated below the level of the Deputy Secretary, or Administrator, of the procuring department or agency;

"(B) shall specify—

"(i) the quantity of end items to which the waiver applies and the procurement value of those items; and

"(ii) the time period over which the waiver applies, which shall not exceed three years;

"(C) shall be reported to the Office of Management and Budget following issuance of such a determination; and

"(D) not later than 30 days after the date on which the determination is made, shall be provided to the Committee on Homeland Security and Governmental Affairs of the Senate and the Committee on Oversight and Accountability of the House of Representatives.

"SEC. 1830. STATE, LOCAL, AND TERRITORIAL LAW ENFORCEMENT AND EMERGENCY SERVICE EXEMPTION.

"(a) Rule of Construction.—Nothing in this subtitle shall prevent a State, local, or territorial law enforcement or emergency service agency from procuring or operating a covered unmanned aircraft system purchased with non-Federal dollars.

"(b) Continuity of Arrangements.—The Federal Government may continue entering into contracts, grants, and cooperative agreements or other Federal funding instruments with State, local, or territorial law enforcement or emergency service agencies under which a covered unmanned aircraft system will be purchased or operated if the agency has received approval or waiver to purchase or operate a covered unmanned aircraft system pursuant to section 1825.

"SEC. 1831. STUDY.

"(a) Study on the Supply Chain for Unmanned Aircraft Systems and Components.—

"(1) Report required.—Not later than one year after the date of the enactment of this Act [Dec. 22, 2023], the Under Secretary of Defense for Acquisition and Sustainment shall provide to the appropriate congressional committees a report on the supply chain for covered unmanned aircraft systems, including a discussion of current and projected future demand for covered unmanned aircraft systems.

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

"(A) A description of the current and future global and domestic market for covered unmanned aircraft systems that are not widely commercially available except from a covered foreign entity.

"(B) A description of the sustainability, availability, cost, and quality of secure sources of covered unmanned aircraft systems domestically and from sources in allied and partner countries.

"(C) The plan of the Secretary of Defense to address any gaps or deficiencies identified in subparagraph (B), including through the use of funds available under the Defense Production Act of 1950 (50 U.S.C. 4501 et seq.) and partnerships with the National Aeronautics and Space Administration and other interested persons.

"(D) Such other information as the Under Secretary of Defense for Acquisition and Sustainment determines to be appropriate.

"(3) Appropriate congressional committees defined.—In this section, the term 'appropriate congressional committees' means the following:

"(A) The Committees on Armed Services of the Senate and the House of Representatives.

"(B) The Committee on Homeland Security and Governmental Affairs of the Senate and the Committee on Oversight and Accountability of the House of Representatives.

"(C) The Committee on Commerce, Science, and Transportation of the Senate and the Committee on Science, Space, and Technology of the House of Representatives.

"(D) The Select Committee on Intelligence of the Senate and the Permanent Select Committee on Intelligence of the House of Representatives.

"(E) The Committee on Transportation and Infrastructure of the House of Representatives.

"(F) The Committee on Homeland Security of the House of Representatives.

"(G) The Committee on Foreign Relations of the Senate and the Committee on Foreign Affairs of the House of Representatives.

"SEC. 1832. EXCEPTIONS.

"(a) Exception for Wildfire Management Operations and Search and Rescue Operations.—The appropriate Federal agencies, in consultation with the Secretary of Homeland Security, are exempt from the procurement and operation restrictions under sections 1823, 1824, and 1825 to the extent the procurement or operation is necessary for the purpose of supporting the full range of wildfire management operations or search and rescue operations.

"(b) Exception for Intelligence Activities.—Sections 1823, 1824, and 1825 shall not apply to any activity subject to the reporting requirements under title V of the National Security Act of 1947 (50 U.S.C. 3091 et seq.), any authorized intelligence activities of the United States, or any activity or procurement that supports an authorized intelligence activity.

"(c) Exception for Tribal Law Enforcement or Emergency Service Agency.—Tribal law enforcement or Tribal emergency service agencies, in consultation with the Secretary of Homeland Security, are exempt from the procurement, operation, and purchase restrictions under sections 1823, 1824, and 1825 to the extent the procurement or operation is necessary for the purpose of supporting the full range of law enforcement operations or search and rescue operations on Indian lands.

"SEC. 1833. SUNSET.

"Sections 1823, 1824, and 1825 shall cease to have effect on the date that is five years after the date of the enactment of this Act [Dec. 22, 2023]."

Prohibition on Certain Telecommunications and Video Surveillance Services or Equipment

Pub. L. 115–232, div. A, title VIII, §889, Aug. 13, 2018, 132 Stat. 1917, as amended by Pub. L. 116–283, div. A, title X, §1081(d)(5), Jan. 1, 2021, 134 Stat. 3874, provided that:

"(a) Prohibition on Use or Procurement.—(1) The head of an executive agency may not—

"(A) procure or obtain or extend or renew a contract to procure or obtain any equipment, system, or service that uses covered telecommunications equipment or services as a substantial or essential component of any system, or as critical technology as part of any system; or

"(B) enter into a contract (or extend or renew a contract) with an entity that uses any equipment, system, or service that uses covered telecommunications equipment or services as a substantial or essential component of any system, or as critical technology as part of any system.

"(2) Nothing in paragraph (1) shall be construed to—

"(A) prohibit the head of an executive agency from procuring with an entity to provide a service that connects to the facilities of a third-party, such as backhaul, roaming, or interconnection arrangements; or

"(B) cover telecommunications equipment that cannot route or redirect user data traffic or permit visibility into any user data or packets that such equipment transmits or otherwise handles.

"(b) Prohibition on Loan and Grant Funds.—(1) The head of an executive agency may not obligate or expend loan or grant funds to procure or obtain, extend or renew a contract to procure or obtain, or enter into a contract (or extend or renew a contract) to procure or obtain the equipment, services, or systems described in subsection (a).

"(2) In implementing the prohibition in paragraph (1), heads of executive agencies administering loan, grant, or subsidy programs, including the heads of the Federal Communications Commission, the Department of Agriculture, the Department of Homeland Security, the Small Business Administration, and the Department of Commerce, shall prioritize available funding and technical support to assist affected businesses, institutions and organizations as is reasonably necessary for those affected entities to transition from covered communications equipment and services, to procure replacement equipment and services, and to ensure that communications service to users and customers is sustained.

"(3) Nothing in this subsection shall be construed to—

"(A) prohibit the head of an executive agency from procuring with an entity to provide a service that connects to the facilities of a third-party, such as backhaul, roaming, or interconnection arrangements; or

"(B) cover telecommunications equipment that cannot route or redirect user data traffic or permit visibility into any user data or packets that such equipment transmits or otherwise handles.

"(c) Effective Dates.—The prohibition under subsection (a)(1)(A) shall take effect one year after the date of the enactment of this Act [Aug. 13, 2018], and the prohibitions under subsections (a)(1)(B) and (b)(1) shall take effect two years after the date of the enactment of this Act.

"(d) Waiver Authority.—

"(1) Executive agencies.—The head of an executive agency may, on a one-time basis, waive the requirements under subsection (a) with respect to an entity that requests such a waiver. The waiver may be provided, for a period of not more than two years after the effective dates described in subsection (c), if the entity seeking the waiver—

"(A) provides a compelling justification for the additional time to implement the requirements under such subsection, as determined by the head of the executive agency; and

"(B) submits to the head of the executive agency, who shall not later than 30 days thereafter submit to the appropriate congressional committees, a full and complete laydown of the presences of covered telecommunications or video surveillance equipment or services in the entity's supply chain and a phase-out plan to eliminate such covered telecommunications or video surveillance equipment or services from the entity's systems.

"(2) Director of national intelligence.—The Director of National Intelligence may provide a waiver on a date later than the effective dates described in subsection (c) if the Director determines the waiver is in the national security interests of the United States.

"(f) Definitions.—In this section:

"(1) Appropriate congressional committees.—The term 'appropriate congressional committees' means—

"(A) the Committee on Banking, Housing, and Urban Affairs, the Committee on Foreign Relations, and the Committee on Homeland Security and Governmental Affairs of the Senate; and

"(B) the Committee on Financial Services, the Committee on Foreign Affairs, and the Committee on Oversight and Government Reform [now Committee on Oversight and Accountability] of the House of Representatives.

"(2) Covered foreign country.—The term 'covered foreign country' means the People's Republic of China.

"(3) Covered telecommunications equipment or services.—The term 'covered telecommunications equipment or services' means any of the following:

"(A) Telecommunications equipment produced by Huawei Technologies Company or ZTE Corporation (or any subsidiary or affiliate of such entities).

"(B) For the purpose of public safety, security of government facilities, physical security surveillance of critical infrastructure, and other national security purposes, video surveillance and telecommunications equipment produced by Hytera Communications Corporation, Hangzhou Hikvision Digital Technology Company, or Dahua Technology Company (or any subsidiary or affiliate of such entities).

"(C) Telecommunications or video surveillance services provided by such entities or using such equipment.

"(D) Telecommunications or video surveillance equipment or services produced or provided by an entity that the Secretary of Defense, in consultation with the Director of the National Intelligence or the Director of the Federal Bureau of Investigation, reasonably believes to be an entity owned or controlled by, or otherwise connected to, the government of a covered foreign country.

"(4) Executive agency.—The term 'executive agency' has the meaning given the term in section 133 of title 41, United States Code."

[Pub. L. 116–283, div. A, title X, §1081(d), Jan. 1, 2021, 134 Stat. 3873, provided that the amendment made by section 1081(d)(5) of Pub. L. 116–283 to section 889 of Pub. L. 115–232, set out above, is effective as of Aug. 13, 2018, and as if included in Pub. L. 115–232.]

Share-in-Savings Contracts

Act June 30, 1949, ch. 288, title III, §317, as added Pub. L. 107–347, title II, §210(b), Dec. 17, 2002, 116 Stat. 2934, provided that:

"(a) Authority To Enter Into Share-in-Savings Contracts.—(1) The head of an executive agency may enter into a share-in-savings contract for information technology (as defined in section 11101(6) of title 40, United States Code) in which the Government awards a contract to improve mission-related or administrative processes or to accelerate the achievement of its mission and share with the contractor in savings achieved through contract performance.

"(2)(A) Except as provided in subparagraph (B), a share-in-savings contract shall be awarded for a period of not more than five years.

"(B) A share-in-savings contract may be awarded for a period greater than five years, but not more than 10 years, if the head of the agency determines in writing prior to award of the contract that—

"(i) the level of risk to be assumed and the investment to be undertaken by the contractor is likely to inhibit the government from obtaining the needed information technology competitively at a fair and reasonable price if the contract is limited in duration to a period of five years or less; and

"(ii) usage of the information technology to be acquired is likely to continue for a period of time sufficient to generate reasonable benefit for the government.

"(3) Contracts awarded pursuant to the authority of this section shall, to the maximum extent practicable, be performance-based contracts that identify objective outcomes and contain performance standards that will be used to measure achievement and milestones that must be met before payment is made.

"(4) Contracts awarded pursuant to the authority of this section shall include a provision containing a quantifiable baseline that is to be the basis upon which a savings share ratio is established that governs the amount of payment a contractor is to receive under the contract. Before commencement of performance of such a contract, the senior procurement executive of the agency shall determine in writing that the terms of the provision are quantifiable and will likely yield value to the Government.

"(5)(A) The head of the agency may retain savings realized through the use of a share-in-savings contract under this section that are in excess of the total amount of savings paid to the contractor under the contract, but may not retain any portion of such savings that is attributable to a decrease in the number of civilian employees of the Federal Government performing the function. Except as provided in subparagraph (B), savings shall be credited to the appropriation or fund against which charges were made to carry out the contract and shall be used for information technology.

"(B) Amounts retained by the agency under this subsection shall—

"(i) without further appropriation, remain available until expended; and

"(ii) be applied first to fund any contingent liabilities associated with share-in-savings procurements that are not fully funded.

"(b) Cancellation and Termination.—(1) If funds are not made available for the continuation of a share-in-savings contract entered into under this section in a subsequent fiscal year, the contract shall be canceled or terminated. The costs of cancellation or termination may be paid out of—

"(A) appropriations available for the performance of the contract;

"(B) appropriations available for acquisition of the information technology procured under the contract, and not otherwise obligated; or

"(C) funds subsequently appropriated for payments of costs of cancellation or termination, subject to the limitations in paragraph (3).

"(2) The amount payable in the event of cancellation or termination of a share-in-savings contract shall be negotiated with the contractor at the time the contract is entered into.

"(3)(A) Subject to subparagraph (B), the head of an executive agency may enter into share-in-savings contracts under this section in any given fiscal year even if funds are not made specifically available for the full costs of cancellation or termination of the contract if funds are available and sufficient to make payments with respect to the first fiscal year of the contract and the following conditions are met regarding the funding of cancellation and termination liability:

"(i) The amount of unfunded contingent liability for the contract does not exceed the lesser of—

"(I) 25 percent of the estimated costs of a cancellation or termination; or

"(II) $5,000,000.

"(ii) Unfunded contingent liability in excess of $1,000,000 has been approved by the Director of the Office of Management and Budget or the Director's designee.

"(B) The aggregate number of share-in-savings contracts that may be entered into under subparagraph (A) by all executive agencies to which this chapter applies in a fiscal year may not exceed 5 in each of fiscal years 2003, 2004, and 2005.

"(c) Definitions.—In this section:

"(1) The term 'contractor' means a private entity that enters into a contract with an agency.

"(2) The term 'savings' means—

"(A) monetary savings to an agency; or

"(B) savings in time or other benefits realized by the agency, including enhanced revenues (other than enhanced revenues from the collection of fees, taxes, debts, claims, or other amounts owed the Federal Government).

"(3) The term 'share-in-savings contract' means a contract under which—

"(A) a contractor provides solutions for—

"(i) improving the agency's mission-related or administrative processes; or

"(ii) accelerating the achievement of agency missions; and

"(B) the head of the agency pays the contractor an amount equal to a portion of the savings derived by the agency from—

"(i) any improvements in mission-related or administrative processes that result from implementation of the solution; or

"(ii) acceleration of achievement of agency missions.

"(d) Termination.—No share-in-savings contracts may be entered into under this section after September 30, 2005."

Executive Documents

Ex. Ord. No. 13496. Notification of Employee Rights Under Federal Labor Laws

Ex. Ord. No. 13496, Jan. 30, 2009, 74 F.R. 6107, provided:

By the authority vested in me as President by the Constitution and the laws of the United States of America, including the Federal Property and Administrative Services Act, 40 U.S.C. 101 et seq., and in order to ensure the economical and efficient administration and completion of Government contracts, it is hereby ordered that:

Section 1. Policy. This order is designed to promote economy and efficiency in Government procurement. When the Federal Government contracts for goods or services, it has a proprietary interest in ensuring that those contracts will be performed by contractors whose work will not be interrupted by labor unrest. The attainment of industrial peace is most easily achieved and workers' productivity is enhanced when workers are well informed of their rights under Federal labor laws, including the National Labor Relations Act (Act), 29 U.S.C. 151 et seq. As the Act recognizes, "encouraging the practice and procedure of collective bargaining and . . . protecting the exercise by workers of full freedom of association, self-organization, and designation of representatives of their own choosing, for the purpose of negotiating the terms and conditions of their employment or other mutual aid or protection" will "eliminate the causes of certain substantial obstructions to the free flow of commerce" and "mitigate and eliminate these obstructions when they have occurred." 29 U.S.C. 151. Relying on contractors whose employees are informed of such rights under Federal labor laws facilitates the efficient and economical completion of the Federal Government's contracts.

Sec. 2. Contract Clause. Except in contracts exempted in accordance with section 3 of this order, all Government contracting departments and agencies shall, to the extent consistent with law, include the following provisions in every Government contract, other than collective bargaining agreements as defined in 5 U.S.C. 7103(a)(8) and purchases under the simplified acquisition threshold as defined in the Office of Federal Procurement Policy Act, 41 U.S.C. 403.

"1. During the term of this contract, the contractor agrees to post a notice, of such size and in such form, and containing such content as the Secretary of Labor shall prescribe, in conspicuous places in and about its plants and offices where employees covered by the National Labor Relations Act engage in activities relating to the performance of the contract, including all places where notices to employees are customarily posted both physically and electronically. The notice shall include the information contained in the notice published by the Secretary of Labor in the Federal Register (Secretary's Notice).

"2. The contractor will comply with all provisions of the Secretary's Notice, and related rules, regulations, and orders of the Secretary of Labor.

"3. In the event that the contractor does not comply with any of the requirements set forth in paragraphs (1) or (2) above, this contract may be cancelled, terminated, or suspended in whole or in part, and the contractor may be declared ineligible for further Government contracts in accordance with procedures authorized in or adopted pursuant to Executive Order [number as provided by the Federal Register [13496]] of [insert new date [Jan. 30, 2009]]. Such other sanctions or remedies may be imposed as are provided in Executive Order [number as provided by the Federal Register [13496]] of [insert new date [Jan. 30, 2009]], or by rule, regulation, or order of the Secretary of Labor, or as are otherwise provided by law.

"4. The contractor will include the provisions of paragraphs (1) through (3) above in every subcontract entered into in connection with this contract (unless exempted by rules, regulations, or orders of the Secretary of Labor issued pursuant to section 3 of Executive Order [number as provided by the Federal Register [13496]] of [insert new date [Jan. 30, 2009]]) so that such provisions will be binding upon each subcontractor. The contractor will take such action with respect to any such subcontract as may be directed by the Secretary of Labor as a means of enforcing such provisions, including the imposition of sanctions for non-compliance: Provided, however, that if the contractor becomes involved in litigation with a subcontractor, or is threatened with such involvement, as a result of such direction, the contractor may request the United States to enter into such litigation to protect the interests of the United States."

Sec. 3. Administration.

(a) The Secretary of Labor (Secretary) shall be responsible for the administration and enforcement of this order. The Secretary shall adopt such rules and regulations and issue such orders as are necessary and appropriate to achieve the purposes of this order.

(b) Within 120 days of the effective date of this order, the Secretary shall initiate a rulemaking to prescribe the size, form, and content of the notice to be posted by a contractor under paragraph 1 of the contract clause described in section 2 of this order. Such notice shall describe the rights of employees under Federal labor laws, consistent with the policy set forth in section 1 of this order.

(c) Whenever the Secretary finds that an act of Congress, clarification of existing law by the courts or the National Labor Relations Board, or other circumstances make modification of the contractual provisions set out in subsection (a) of this section necessary to achieve the purposes of this order, the Secretary promptly shall issue such rules, regulations, or orders as are needed to cause the substitution or addition of appropriate contractual provisions in Government contracts thereafter entered into.

Sec. 4. Exemptions. (a) If the Secretary finds that the application of any of the requirements of this order would not serve the purposes of this order or would impair the ability of the Government to procure goods or services on an economical and efficient basis, the Secretary may exempt a contracting department or agency or group of departments or agencies from the requirements of any or all of the provisions of this order with respect to a particular contract or subcontract or any class of contracts or subcontracts.

(b) The Secretary may, if the Secretary finds that special circumstances require an exemption in order to serve the national interest, exempt a contracting department or agency from the requirements of any or all of the provisions of section 2 of this order with respect to a particular contract or subcontract or class of contracts or subcontracts.

Sec. 5. Investigation.

(a) The Secretary may investigate any Government contractor, subcontractor, or vendor to determine whether the contractual provisions required by section 2 of this order have been violated.

Such investigations shall be conducted in accordance with procedures established by the Secretary.

(b) The Secretary shall receive and investigate complaints by employees of a Government contractor or subcontractor, where such complaints allege a failure to perform or a violation of the contractual provisions required by section 2 of this order.

Sec. 6. Compliance.

(a) The Secretary, or any agency or officer in the executive branch lawfully designated by rule, regulation, or order of the Secretary, may hold such hearings, public or private, regarding compliance with this order as the Secretary may deem advisable.

(b) The Secretary may hold hearings, or cause hearings to be held, in accordance with subsection (a) of this section, prior to imposing, ordering, or recommending the imposition of sanctions under this order. Neither an order for cancellation, termination, or suspension of any contract or debarment of any contractor from further Government contracts under section 7(b) of this order nor the inclusion of a contractor on a published list of noncomplying contractors under section 7(c) of this order shall be carried out without affording the contractor an opportunity for a hearing.

Sec. 7. Remedies. In accordance with such rules, regulations, or orders as the Secretary may issue or adopt, the Secretary may:

(a) after consulting with the contracting department or agency, direct that department or agency to cancel, terminate, suspend, or cause to be cancelled, terminated, or suspended, any contract, or any portion or portions thereof, for failure of the contractor to comply with the contractual provisions required by section 2 of this order; contracts may be cancelled, terminated, or suspended absolutely, or continuance of contracts may be conditioned upon future compliance: Provided, that before issuing a directive under this subsection, the Secretary shall provide the head of the contracting department or agency an opportunity to offer written objections to the issuance of such a directive, which objections shall include a complete statement of reasons for the objections, among which reasons shall be a finding that completion of the contract is essential to the agency's mission: And provided further, that no directive shall be issued by the Secretary under this subsection so long as the head of the contracting department or agency, or his or her designee, continues to object to the issuance of such directive;

(b) after consulting with each affected contracting department or agency, provide that one or more contracting departments or agencies shall refrain from entering into further contracts, or extensions or other modifications of existing contracts, with any noncomplying contractor, until such contractor has satisfied the Secretary that such contractor has complied with and will carry out the provisions of this order: Provided, that before issuing a directive under this subsection, the Secretary shall provide the head of each contracting department or agency an opportunity to offer written objections to the issuance of such a directive, which objections shall include a complete statement of reasons for the objections, among which reasons shall be a finding that further contracts or extensions or other modifications of existing contracts with the noncomplying contractor are essential to the agency's mission: And provided further, that no directive shall be issued by the Secretary under this subsection so long as the head of a contracting department or agency, or his or her designee, continues to object to the issuance of such directive; and

(c) publish, or cause to be published, the names of contractors that have, in the judgment of the Secretary, failed to comply with the provisions of this order or of related rules, regulations, and orders of the Secretary.

Sec. 8. Reports. Whenever the Secretary invokes section 7(a) or 7(b) of this order, the contracting department or agency shall report to the Secretary the results of the action it has taken within such time as the Secretary shall specify.

Sec. 9. Cooperation. Each contracting department and agency shall cooperate with the Secretary and provide such information and assistance as the Secretary may require in the performance of the Secretary's functions under this order.

Sec. 10. Sufficiency of Remedies. If the Secretary finds that the authority vested in the Secretary by sections 5 through 9 of this order is not sufficient to effectuate the purposes of this order, the Secretary shall develop recommendations on how better to effectuate those purposes.

Sec. 11. Delegation. The Secretary may, in accordance with law, delegate any function or duty of the Secretary under this order to any officer in the Department of Labor or to any other officer in the executive branch of the Government, with the consent of the head of the department or agency in which that officer serves.

Sec. 12. Implementation. To the extent permitted by law, the Federal Acquisition Regulatory Council (FAR Council) shall take whatever action is required to implement in the Federal Acquisition Regulation (FAR) the provisions of this order and any related rules, regulations, or orders issued by the Secretary under this order and shall amend the FAR to require each solicitation of offers for a contract to include a provision that implements section 2 of this order.

Sec. 13. Revocation of Prior Order and Actions. Executive Order 13201 of February 17, 2001, is revoked. The heads of executive departments and agencies shall, to the extent permitted by law, revoke expeditiously any orders, rules, regulations, guidelines, or policies implementing or enforcing Executive Order 13201.

Sec. 14. Severability. If any provision of this order, or the application of such provision to any person or circumstance, is held to be invalid, the remainder of this order and the application of the provisions of such to any person or circumstances shall not be affected thereby.

Sec. 15. General Provisions.

(a) Nothing in this order shall be construed to impair or otherwise affect:

(i) authority granted by law to a department, agency, or the head thereof; or

(ii) functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals.

(b) This order shall be implemented consistent with applicable law and subject to the availability of appropriations.

(c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.

Sec. 16. Effective Date. This order shall become effective immediately, and shall apply to contracts resulting from solicitations issued on or after the effective date of the rule promulgated by the Secretary pursuant to section 3(b) of this order.

Barack Obama.      

Ex. Ord. No. 13502. Use of Project Labor Agreements for Federal Construction Projects

Ex. Ord. No. 13502, Feb. 6, 2009, 74 F.R. 6985, provided:

By the authority vested in me as President by the Constitution and the laws of the United States of America, including the Federal Property and Administrative Services Act, 40 U.S.C. 101 et seq., and in order to promote the efficient administration and completion of Federal construction projects, it is hereby ordered that:

Section 1. Policy. (a) Large-scale construction projects pose special challenges to efficient and timely procurement by the Federal Government. Construction employers typically do not have a permanent workforce, which makes it difficult for them to predict labor costs when bidding on contracts and to ensure a steady supply of labor on contracts being performed. Challenges also arise due to the fact that construction projects typically involve multiple employers at a single location. A labor dispute involving one employer can delay the entire project. A lack of coordination among various employers, or uncertainty about the terms and conditions of employment of various groups of workers, can create frictions and disputes in the absence of an agreed-upon resolution mechanism. These problems threaten the efficient and timely completion of construction projects undertaken by Federal contractors. On larger projects, which are generally more complex and of longer duration, these problems tend to be more pronounced.

(b) The use of a project labor agreement may prevent these problems from developing by providing structure and stability to large-scale construction projects, thereby promoting the efficient and expeditious completion of Federal construction contracts. Accordingly, it is the policy of the Federal Government to encourage executive agencies to consider requiring the use of project labor agreements in connection with large-scale construction projects in order to promote economy and efficiency in Federal procurement.

Sec. 2. Definitions.

(a) The term "labor organization" as used in this order means a labor organization as defined in 29 U.S.C. 152(5).

(b) The term "construction" as used in this order means construction, rehabilitation, alteration, conversion, extension, repair, or improvement of buildings, highways, or other real property.

(c) The term "large-scale construction project" as used in this order means a construction project where the total cost to the Federal Government is $25 million or more.

(d) The term "executive agency" as used in this order has the same meaning as in 5 U.S.C. 105, but excludes the Government Accountability Office.

(e) The term "project labor agreement" as used in this order means a pre-hire collective bargaining agreement with one or more labor organizations that establishes the terms and conditions of employment for a specific construction project and is an agreement described in 29 U.S.C. 158(f).

Sec. 3. (a) In awarding any contract in connection with a large-scale construction project, or obligating funds pursuant to such a contract, executive agencies may, on a project-by-project basis, require the use of a project labor agreement by a contractor where use of such an agreement will (i) advance the Federal Government's interest in achieving economy and efficiency in Federal procurement, producing labor-management stability, and ensuring compliance with laws and regulations governing safety and health, equal employment opportunity, labor and employment standards, and other matters, and (ii) be consistent with law.

(b) If an executive agency determines under subsection (a) that the use of a project labor agreement will satisfy the criteria in clauses (i) and (ii) of that subsection, the agency may, if appropriate, require that every contractor or subcontractor on the project agree, for that project, to negotiate or become a party to a project labor agreement with one or more appropriate labor organizations.

Sec. 4. Any project labor agreement reached pursuant to this order shall:

(a) bind all contractors and subcontractors on the Construction project through the inclusion of appropriate specifications in all relevant solicitation provisions and contract documents;

(b) allow all contractors and subcontractors to compete for contracts and subcontracts without regard to whether they are otherwise parties to collective bargaining agreements;

(c) contain guarantees against strikes, lockouts, and similar job disruptions;

(d) set forth effective, prompt, and mutually binding procedures for resolving labor disputes arising during the project labor agreement;

(e) provide other mechanisms for labor-management cooperation on matters of mutual interest and concern, including productivity, quality of work, safety, and health; and

(f) fully conform to all statutes, regulations, and Executive Orders.

Sec. 5. This order does not require an executive agency to use a project labor agreement on any construction project, nor does it preclude the use of a project labor agreement in circumstances not covered by this order, including leasehold arrangements and projects receiving Federal financial assistance. This order also does not require contractors or subcontractors to enter into a project labor agreement with any particular labor organization.

Sec. 6. Within 120 days of the date of this order, the Federal Acquisition Regulatory Council (FAR Council), to the extent permitted by law, shall take whatever action is required to amend the Federal Acquisition Regulation to implement the provisions of this order.

Sec. 7. The Director of OMB, in consultation with the Secretary of Labor and with other officials as appropriate, shall provide the President within 180 days of this order, recommendations about whether broader use of project labor agreements, with respect to both construction projects undertaken under Federal contracts and construction projects receiving Federal financial assistance, would help to promote the economical, efficient, and timely completion of such projects.

Sec. 8. Revocation of Prior Orders, Rules, and Regulations. Executive Order 13202 of February 17, 2001, and Executive Order 13208 of April 6, 2001, are revoked. The heads of executive agencies shall, to the extent permitted by law, revoke expeditiously any orders, rules, or regulations implementing Executive Orders 13202 and 13208.

Sec. 9. Severability. If any provision of this order, or the application of such provision to any person or circumstance, is held to be invalid, the remainder of this order and the application of the provisions of such to any person or circumstance shall not be affected thereby.

Sec. 10. General. (a) Nothing in this order shall be construed to impair or otherwise affect:

(i) authority granted by law to an executive department, agency, or the head thereof; or

(ii) functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals.

(b) This order shall be implemented consistent with applicable law and subject to the availability of appropriations.

(c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.

Sec. 11. Effective Date. This order shall be effective immediately and shall apply to all solicitations for contracts issued on or after the effective date of the action taken by the FAR Council under section 6 of this order.

Barack Obama.      

Ex. Ord. No. 13981. Protecting the United States From Certain Unmanned Aircraft Systems

Ex. Ord. No. 13981, Jan. 18, 2021, 86 F.R. 6821, provided:

By the authority vested in me as President by the Constitution and the laws of the United States of America,

I, DONALD J. TRUMP, President of the United States of America, find that additional actions are necessary to ensure the security of Unmanned Aircraft Systems (UAS) owned, operated, and controlled by the Federal Government; to secure the integrity of American infrastructure, including America's National Airspace System (NAS); to protect our law enforcement and warfighters; and to maintain and expand our domestic industrial base capabilities.

Accordingly, I hereby order:

Section 1. Policy. UAS have tremendous potential to support public safety and national security missions and are increasingly being used by Federal, State, and local governments. UAS are used, for example, to assist law enforcement and support natural disaster relief efforts. Reliance on UAS and components manufactured by our adversaries, however, threatens our national and economic security.

United States Government operations involving UAS require accessing, collecting, and maintaining data, which could reveal sensitive information. The use of UAS and critical components manufactured and developed by foreign adversaries, or by persons under their control, may allow this sensitive information to be accessed by or transferred to foreign adversaries. Furthermore, the manufacturing of UAS involves combining several critical components, including advanced manufacturing techniques, artificial intelligence, microelectronic components, and multi-spectral sensors. The Nation's capability to produce UAS and certain critical UAS components domestically is critical for national defense and the security and strength of our defense industrial base.

It is the policy of the United States, therefore, to prevent the use of taxpayer dollars to procure UAS that present unacceptable risks and are manufactured by, or contain software or critical electronic components from, foreign adversaries, and to encourage the use of domestically produced UAS.

Sec. 2. Reviewing Federal Government Authority to Limit Government Procurement of Covered UAS. (a) The heads of all executive departments and agencies (agencies) shall review their respective authorities to determine whether, and to what extent consistent with applicable law, they could cease:

(i) directly procuring or indirectly procuring through a third party, such as a contractor, a covered UAS;

(ii) providing Federal financial assistance (e.g., through award of a grant) that may be used to procure a covered UAS;

(iii) entering into, or renewing, a contract, order, or other commitment for the procurement of a covered UAS; or

(iv) otherwise providing Federal funding for the procurement of a covered UAS.

(b) After conducting the review described in subsection (a) of this section, the heads of all agencies shall each submit a report to the Director of the Office of Management and Budget identifying any authority to take the actions outlined in subsections (a)(i) through (iv) of this section.

Sec. 3. Reviewing Federal Government Use of UAS. (a) Within 60 days of the date of this order [Jan. 18, 2021], the heads of all agencies shall each submit a report to the Director of National Intelligence and the Director of the Office of Science and Technology Policy describing the manufacturer, model, and any relevant security protocols for all UAS currently owned or operated by their respective agency, or controlled by their agency through a third party, such as a contractor, that are manufactured by foreign adversaries or have significant components that are manufactured by foreign adversaries.

(b) Within 180 days of the date of this order, the Director of National Intelligence, in consultation with the Secretary of Defense, the Attorney General, the Secretary of Homeland Security, the Director of the Office of Science and Technology Policy, and the heads of other agencies, as appropriate, shall review the reports required by subsection (a) of this section and submit a report to the President assessing the security risks posed by the existing Federal UAS fleet and outlining potential steps that could be taken to mitigate these risks, including, if warranted, discontinuing all Federal use of covered UAS and the expeditious removal of UAS from Federal service.

Sec. 4. Restricting Use of UAS On or Over Critical Infrastructure or Other Sensitive Sites. Within 270 days of the date of this order, the Administrator of the Federal Aviation Administration (FAA) shall propose regulations pursuant to section 2209 of the FAA Extension, Safety, and Security Act of 2016 (Public Law 114–190) [49 U.S.C. 44802 note].

Sec. 5. Budget. (a) The heads of all agencies shall consider the replacement of covered UAS to be a priority when developing budget proposals and planning for the use of funds.

(b) The Director of the Office of Management and Budget shall work with the heads of all agencies to identify possible sources of funding to replace covered UAS in the Federal fleet in future submissions of the President's Budget request.

Sec. 6. Definitions. For purposes of this order, the following definitions shall apply:

(a) The term "adversary country" means the Democratic People's Republic of Korea, the Islamic Republic of Iran, the People's Republic of China, the Russian Federation, or, as determined by the Secretary of Commerce, any other foreign nation, foreign area, or foreign non-government entity engaging in long-term patterns or serious instances of conduct significantly adverse to the national or economic security of the United States.

(b) The term "covered UAS" means any UAS that:

(i) is manufactured, in whole or in part, by an entity domiciled in an adversary country;

(ii) uses critical electronic components installed in flight controllers, ground control system processors, radios, digital transmission devices, cameras, or gimbals manufactured, in whole or in part, in an adversary country;

(iii) uses operating software (including cell phone or tablet applications, but not cell phone or tablet operating systems) developed, in whole or in part, by an entity domiciled in an adversary country;

(iv) uses network connectivity or data storage located outside the United States, or administered by any entity domiciled in an adversary country; or

(v) contains hardware and software components used for transmitting photographs, videos, location information, flight paths, or any other data collected by the UAS manufactured by an entity domiciled in an adversary country.

(c) The term "critical electronic component" means any electronic device that stores, manipulates, or transfers digital data. The term critical electronic component does not include, for example, passive electronics such as resistors, and non-data transmitting motors, batteries, and wiring.

(d) The term "entity" means a partnership, association, trust, joint venture, corporation, government, group, subgroup, other organization, or person.

(e) The term "Intelligence Community" has the same meaning set forth for that term in section 3003(4) of title 50, United States Code.

(f) The term "National Airspace System" (NAS) means the common network of United States airspace; air navigation facilities, equipment, and services; airports or landing areas; aeronautical charts, information, and services; related rules, regulations, and procedures; technical information; and manpower and material. The term also includes system components shared jointly by the Departments of Defense, Transportation, and Homeland Security.

(g) The term "Unmanned Aircraft Systems" (UAS) means any unmanned aircraft, and the associated elements that are required for the pilot or system operator to operate safely and efficiently in the NAS, including communication links, the components that control the unmanned aircraft, and all critical electronic components. The term UAS does not include any separate communication device, such as a cellular phone or tablet, designed to perform independently of a UAS system, which may be incorporated into the operation of a UAS.

Sec. 7. General Provisions. (a) Nothing in this order shall be construed to impair or otherwise affect:

(i) the authority granted by law to an executive department or agency, or the head thereof; or

(ii) the functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals.

(b) This order shall be implemented consistent with applicable law and subject to the availability of appropriations.

(c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.

Donald J. Trump.      

Ex. Ord. No. 14063. Use of Project Labor Agreements for Federal Construction Projects

Ex. Ord. No. 14063, Feb. 4, 2022, 87 F.R. 7363, provided:

By the authority vested in me as President by the Constitution and the laws of the United States of America, including the Federal Property and Administrative Services Act, 40 U.S.C. 101 et seq., and in order to promote economy and efficiency in the administration and completion of Federal construction projects, it is hereby ordered that:

Section 1. Policy. (a) Large-scale construction projects pose special challenges to efficient and timely procurement by the Federal Government. Construction employers typically do not have a permanent workforce, which makes it difficult to predict labor costs when bidding on contracts and to ensure a steady supply of labor on contracts being performed. Challenges also arise because construction projects typically involve multiple employers at a single location, and a labor dispute involving one employer can delay the entire project. A lack of coordination among various employers, or uncertainty about the terms and conditions of employment of various groups of workers, can create friction and disputes in the absence of an agreed-upon resolution mechanism. These problems threaten the efficient and timely completion of construction projects undertaken by Federal contractors. On large-scale projects, which are generally more complex and of longer duration, these problems tend to be more pronounced.

(b) Project labor agreements are often effective in preventing these problems from developing because they provide structure and stability to large-scale construction projects. Such agreements avoid labor-related disruptions on projects by using dispute-resolution processes to resolve worksite disputes and by prohibiting work stoppages, including strikes and lockouts. They secure the commitment of all stakeholders on a construction site that the project will proceed efficiently without unnecessary interruptions. They also advance the interests of project owners, contractors, and subcontractors, including small businesses. For these reasons, owners and contractors in both the public and private sector routinely use project labor agreements, thereby reducing uncertainties in large-scale construction projects. The use of project labor agreements is fully consistent with the promotion of small business interests.

(c) Accordingly, it is the policy of the Federal Government for agencies to use project labor agreements in connection with large-scale construction projects to promote economy and efficiency in Federal procurement.

Sec. 2. Definitions. For purposes of this order:

(a) "Labor organization" means a labor organization as defined in 29 U.S.C. 152(5) of which building and construction employees are members, as described in 29 U.S.C. 158(f).

(b) "Construction" means construction, reconstruction, rehabilitation, modernization, alteration, conversion, extension, repair, or improvement of buildings, structures, highways, or other real property.

(c) "Large-scale construction project" means a Federal construction project within the United States for which the total estimated cost of the construction contract to the Federal Government is $35 million or more. The Federal Acquisition Regulatory Council (FAR Council), in consultation with the Council of Economic Advisers, may adjust this threshold based on inflation using the process at 41 U.S.C. 1908.

(d) "Agency" means an executive department or agency, including an independent establishment subject to the Federal Property and Administrative Services Act, 40 U.S.C. 102(4)(A).

(e) "Project labor agreement" means a pre-hire collective bargaining agreement with one or more labor organizations that establishes the terms and conditions of employment for a specific construction project and is an agreement described in 29 U.S.C. 158(f).

Sec. 3. Project Labor Agreement Presumption. Subject to sections 5 and 6 of this order, in awarding any contract in connection with a large-scale construction project, or obligating funds pursuant to such a contract, agencies shall require every contractor or subcontractor engaged in construction on the project to agree, for that project, to negotiate or become a party to a project labor agreement with one or more appropriate labor organizations.

Sec. 4. Requirements of Project Labor Agreements. Any project labor agreement reached pursuant to this order shall:

(a) bind all contractors and subcontractors on the construction project through the inclusion of appropriate specifications in all relevant solicitation provisions and contract documents;

(b) allow all contractors and subcontractors on the construction project to compete for contracts and subcontracts without regard to whether they are otherwise parties to collective bargaining agreements;

(c) contain guarantees against strikes, lockouts, and similar job disruptions;

(d) set forth effective, prompt, and mutually binding procedures for resolving labor disputes arising during the term of the project labor agreement;

(e) provide other mechanisms for labor-management cooperation on matters of mutual interest and concern, including productivity, quality of work, safety, and health; and

(f) fully conform to all statutes, regulations, Executive Orders, and Presidential Memoranda.

Sec. 5. Exceptions Authorized by Agencies. A senior official within an agency may grant an exception from the requirements of section 3 of this order for a particular contract by, no later than the solicitation date, providing a specific written explanation of why at least one of the following circumstances exists with respect to that contract:

(a) Requiring a project labor agreement on the project would not advance the Federal Government's interests in achieving economy and efficiency in Federal procurement. Such a finding shall be based on the following factors:

(i) The project is of short duration and lacks operational complexity;

(ii) The project will involve only one craft or trade;

(iii) The project will involve specialized construction work that is available from only a limited number of contractors or subcontractors;

(iv) The agency's need for the project is of such an unusual and compelling urgency that a project labor agreement would be impracticable; or

(v) The project implicates other similar factors deemed appropriate in regulations or guidance issued pursuant to section 8 of this order.

(b) Based on an inclusive market analysis, requiring a project labor agreement on the project would substantially reduce the number of potential bidders so as to frustrate full and open competition.

(c) Requiring a project labor agreement on the project would otherwise be inconsistent with statutes, regulations, Executive Orders, or Presidential Memoranda.

Sec. 6. Reporting. (a) To the extent permitted by law and consistent with national security and executive branch confidentiality interests, agencies shall publish, on a centralized public website, data showing the use of project labor agreements on large-scale construction projects, as well as descriptions of the exceptions granted under section 5 of this order.

(b) On a quarterly basis, agencies shall report to the Office of Management and Budget (OMB) on their use of project labor agreements on large-scale construction projects and on the exceptions granted under section 5 of this order.

Sec. 7. Nothing in this order precludes an agency from requiring the use of a project labor agreement in circumstances not covered by this order, including projects where the total cost to the Federal Government is less than that for a large-scale construction project, or projects receiving any form of Federal financial assistance (including loans, loan guarantees, revolving funds, tax credits, tax credit bonds, and cooperative agreements). This order also does not require contractors or subcontractors to enter into a project labor agreement with any particular labor organization.

Sec. 8. Regulations and Implementation. (a) Within 120 days of the date of this order [Feb. 4, 2022], the FAR Council, to the extent permitted by law, shall propose regulations implementing the provisions of this order. The FAR Council shall consider and evaluate public comments on the proposed regulations and shall promptly issue a final rule, to the extent permitted by law.

(b) The Director of OMB shall, to the extent permitted by law, issue guidance to implement the requirements of sections 5 and 6 of this order.

Sec. 9. Contracting Officer Training. Within 90 days of the date of this order, the Secretary of Defense, the Secretary of Labor, and the Director of OMB shall coordinate in designing a training strategy for agency contracting officers to enable those officers to effectively implement this order. Within 180 days of the date of the publication of proposed regulations, the Secretary of Defense, the Secretary of Labor, and the Director of OMB shall provide a report to the Assistant to the President for Economic Policy and Director of the National Economic Council on the contents of the training strategy.

Sec. 10. Revocation of Prior Orders, Rules, and Regulations. Executive Order 13502 of February 6, 2009 (Use of Project Labor Agreements for Federal Construction Projects) [set out above], is revoked as of the effective date of the final regulations issued by the FAR Council under section 8(a) of this order. Upon Executive Order 13502's revocation, the heads of agencies shall consider, to the extent permitted by law, revoking any orders, rules, or regulations implementing Executive Order 13502.

Sec. 11. Severability. If any provision of this order, or the application of such provision to any person or circumstance, is held to be invalid, the remainder of this order and its application to any other person or circumstance shall not be affected thereby.

Sec. 12. Effective Date. This order shall be effective immediately and shall apply to all solicitations for contracts issued on or after the effective date of the final regulations issued by the FAR Council under section 8(a) of this order [Jan. 22, 2024, see 88 F.R. 88707]. For solicitations issued between the date of this order and the effective date of the final regulations issued by the FAR Council under section 8(a) of this order, or solicitations that have already been issued and are outstanding as of the date of this order, agencies are strongly encouraged, to the extent permitted by law, to comply with this order.

Sec. 13. General Provisions. (a) Nothing in this order shall be construed to impair or otherwise affect:

(i) the authority granted by law to an executive department or agency, or the head thereof; or

(ii) the functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals.

(b) This order shall be implemented consistent with applicable law and subject to the availability of appropriations.

(c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.

J.R. Biden, Jr.      

§3901. Contracts awarded using procedures other than sealed-bid procedures

(a) Authorized Types.—Except as provided in section 3905 of this title, contracts awarded after using procedures other than sealed-bid procedures may be of any type which in the opinion of the agency head will promote the best interests of the Federal Government.

(b) Required Warranty.—

(1) Content.—Every contract awarded after using procedures other than sealed-bid procedures shall contain a suitable warranty, as determined by the agency head, by the contractor that no person or selling agency has been employed or retained to solicit or secure the contract on an agreement or understanding for a commission, percentage, brokerage, or contingent fee, except for bona fide employees or bona fide established commercial or selling agencies the contractor maintains to secure business.

(2) Remedy for breach or violation.—For the breach or violation of the warranty, the Federal Government may annul the contract without liability or deduct from the contract price or consideration the full amount of the commission, percentage, brokerage, or contingent fee.

(3) Nonapplication.—Paragraph (1) does not apply to a contract for an amount that is not greater than the simplified acquisition threshold or to a contract for the acquisition of commercial products or commercial services.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3774; Pub. L. 115–232, div. A, title VIII, §836(b)(16), Aug. 13, 2018, 132 Stat. 1864.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
3901	41:254(a).	June 30, 1949, ch. 288, title III, §304(a), 63 Stat. 395; Pub. L. 98–369, div. B, title VII, §2714(a)(3)(A), (B), July 18, 1984, 98 Stat. 1184; Pub. L. 103–355, title IV, §4103(c), title VIII, §8204(b), Oct. 13, 1994, 108 Stat. 3341, 3396.

In subsection (b)(2), the words "in its discretion" are omitted as unnecessary.

Editorial Notes

Amendments

2018—Subsec. (b)(3). Pub. L. 115–232 substituted "commercial products or commercial services" for "commercial items".

Statutory Notes and Related Subsidiaries

Effective Date of 2018 Amendment

Amendment by Pub. L. 115–232 effective Jan. 1, 2020, subject to a savings provision, see section 836(h) of Pub. L. 115–232, set out as an Effective Date of 2018 Amendment; Savings Provision note under section 453b of Title 6, Domestic Security.

§3902. Severable services contracts for periods crossing fiscal years

(a) Authority To Enter Into Contract.—The head of an executive agency may enter into a contract for the procurement of severable services for a period that begins in one fiscal year and ends in the next fiscal year if (without regard to any option to extend the period of the contract) the contract period does not exceed one year.

(b) Obligation of Funds.—Funds made available for a fiscal year may be obligated for the total amount of a contract entered into under the authority of this section.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3774.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
3902	41:253l.	June 30, 1949, ch. 288, title III, §303L, as added Pub. L. 103–355, title I, §1073, Oct. 13, 1994, 108 Stat. 3271, as amended Pub. L. 104–106, title XLIII, §4321(a)(1), Feb. 10, 1996, 110 Stat. 671.

Statutory Notes and Related Subsidiaries

Severable Services and Multiyear Contract Authority of Judicial Entities

Pub. L. 113–76, div. E, title III, §306, Jan. 17, 2014, 128 Stat. 203, provided that: "The Supreme Court of the United States, the Federal Judicial Center, and the United States Sentencing Commission are hereby authorized, now and hereafter, to enter into contracts for the acquisition of severable services for a period that begins in one fiscal year and ends in the next fiscal year and to enter into contracts for multiple years for the acquisition of property and services, to the same extent as executive agencies under the authority of 41 U.S.C. sections 3902 and 3903, respectively."

§3903. Multiyear contracts

(a) Definition.—In this section, a multiyear contract is a contract for the purchase of property or services for more than one, but not more than 5, program years.

(b) Authority To Enter Into Contract.—An executive agency may enter into a multiyear contract for the acquisition of property or services if—

(1) funds are available and obligated for the contract, for the full period of the contract or for the first fiscal year in which the contract is in effect, and for the estimated costs associated with a necessary termination of the contract; and

(2) the executive agency determines that—

(A) the need for the property or services is reasonably firm and continuing over the period of the contract; and

(B) a multiyear contract will serve the best interests of the Federal Government by encouraging full and open competition or promoting economy in administration, performance, and operation of the agency's programs.

(c) Termination Clause.—A multiyear contract entered into under the authority of this section shall include a clause that provides that the contract shall be terminated if funds are not made available for the continuation of the contract in a fiscal year covered by the contract. Funds available for paying termination costs shall remain available for that purpose until the costs associated with termination of the contract are paid.

(d) Cancellation Ceiling Notice.—Before a contract described in subsection (b) that contains a clause setting forth a cancellation ceiling in excess of $10,000,000 may be awarded, the executive agency shall give written notification of the proposed contract and of the proposed cancellation ceiling for that contract to Congress. The contract may not be awarded until the end of the 30-day period beginning on the date of the notification.

(e) Contingency Clause for Appropriation of Funds.—A multiyear contract may provide that performance under the contract after the first year of the contract is contingent on the appropriation of funds and (if the contract does so provide) that a cancellation payment shall be made to the contractor if the funds are not appropriated.

(f) Other Law Not Affected.—This section does not modify or affect any other provision of law that authorizes multiyear contracts.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3774.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
3903(a)	41:254c(d) (1st sentence).	June 30, 1949, ch. 288, title III, §304B, as added Pub. L. 103–355, title I, §1072, Oct. 13, 1994, 108 Stat. 3270.
3903(b)	41:254c(a).
3903(c)	41:254c(b).
3903(d)	41:254c(c).
3903(e)	41:254c(d) (last sentence).
3903(f)	41:254c(e).

§3904. Contract authority for severable services contracts and multiyear contracts

(a) Comptroller General.—The Comptroller General may use available funds to enter into contracts for the procurement of severable services for a period that begins in one fiscal year and ends in the next fiscal year and to enter into multiyear contracts for the acquisition of property and nonaudit-related services to the same extent as executive agencies under sections 3902 and 3903 of this title.

(b) Library of Congress.—The Library of Congress may use available funds to enter into contracts for the lease or procurement of severable services for a period that begins in one fiscal year and ends in the next fiscal year and to enter into multiyear contracts for the acquisition of property and services pursuant to sections 3902 and 3903 of this title.

(c) Chief Administrative Officer of the House of Representatives.—The Chief Administrative Officer of the House of Representatives may enter into—

(1) contracts for the procurement of severable services for a period that begins in one fiscal year and ends in the next fiscal year to the same extent as the head of an executive agency under the authority of section 3902 of this title; and

(2) multiyear contracts for the acquisitions of property and nonaudit-related services to the same extent as executive agencies under the authority of section 3903 of this title.

(d) Congressional Budget Office.—The Congressional Budget Office may use available funds to enter into contracts for the procurement of severable services for a period that begins in one fiscal year and ends in the next fiscal year and may enter into multiyear contracts for the acquisition of property and services to the same extent as executive agencies under the authority of sections 3902 and 3903 of this title.

(e) Secretary and Sergeant at Arms and Doorkeeper of the Senate.—Subject to regulations prescribed by the Committee on Rules and Administration of the Senate, the Secretary and the Sergeant at Arms and Doorkeeper of the Senate may enter into—

(1) contracts for the procurement of severable services for a period that begins in one fiscal year and ends in the next fiscal year to the same extent and under the same conditions as the head of an executive agency under the authority of section 3902 of this title; and

(2) multiyear contracts for the acquisition of property and services to the same extent and under the same conditions as executive agencies under the authority of section 3903 of this title.

(f) Capitol Police.—The United States Capitol Police may enter into—

(1) contracts for the procurement of severable services for a period that begins in one fiscal year and ends in the next fiscal year to the same extent as the head of an executive agency under the authority of section 3902 of this title; and

(2) multiyear contracts for the acquisitions of property and nonaudit-related services to the same extent as executive agencies under the authority of section 3903 of this title.

(g) Architect of the Capitol.—The Architect of the Capitol may enter into—

(1) contracts for the procurement of severable services for a period that begins in one fiscal year and ends in the next fiscal year to the same extent as the head of an executive agency under the authority of section 3902 of this title; and

(2) multiyear contracts for the acquisitions of property and nonaudit-related services to the same extent as executive agencies under the authority of section 3903 of this title.

(h) Secretary of the Smithsonian Institution.—The Secretary of the Smithsonian Institution may enter into—

(1) contracts for the procurement of severable services for a period that begins in one fiscal year and ends in the next fiscal year under the authority of section 3902 of this title; and

(2) multiyear contracts for the acquisition of property and services under the authority of section 3903 of this title.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3775.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
3904(a)	41:253l–1.	Pub. L. 105–18, title II, §7004, June 12, 1997, 111 Stat. 192.
3904(b)	41:253l–2.	Pub. L. 106–57, title II, §207, Sept. 29, 1999, 113 Stat. 423.
3904(c)	41:253l–3.	Pub. L. 106–554, §1(a)(2) [title I, §§101, 110], Dec. 21, 2000, 114 Stat. 2763A–100, 2763A–108.
3904(d)	41:253l–4.
3904(e)	41:253l–5.	Pub. L. 108–7, div. H, title I, §§5, 1002, 1202, Feb. 20, 2003, 117 Stat. 350, 357, 373.
3904(f)	41:253l–6.
3904(g)	41:253l–7.
3904(h)	41:253l–8.	Pub. L. 108–72, §4, Aug. 15, 2003, 117 Stat. 889.

In subsections (a)–(c) and (e)–(h), the words "procurement of severable services" are substituted for "acquisition of severable services" for consistency with 41:253l, restated as section 3902 of the revised title.

In subsection (c), the words "During fiscal year 2001 and any succeeding fiscal year" are omitted as obsolete.

In subsection (d), the words "Beginning on December 21, 2000, and hereafter" are omitted as obsolete.

In subsection (e), the text of 41:253l–5(b) is omitted as obsolete.

In subsection (f), the text of 41:253l–6(b) is omitted as obsolete.

In subsection (g), the text of 41:253l–7(b) is omitted as obsolete.

In subsection (h), the text of 41:253l–8(b) is omitted as obsolete.

§3905. Cost contracts

(a) Cost-Plus-A-Percentage-Of-Cost Contracts Disallowed.—The cost-plus-a-percentage-of-cost system of contracting shall not be used.

(b) Cost-Plus-A-Fixed-Fee Contracts.—

(1) In general.—Except as provided in paragraphs (2) and (3), the fee in a cost-plus-a-fixed-fee contract shall not exceed 10 percent of the estimated cost of the contract, not including the fee, as determined by the agency head at the time of entering into the contract.

(2) Experimental, developmental, or research work.—The fee in a cost-plus-a-fixed-fee contract for experimental, developmental, or research work shall not exceed 15 percent of the estimated cost of the contract, not including the fee.

(3) Architectural or engineering services.—The fee in a cost-plus-a-fixed-fee contract for architectural or engineering services relating to any public works or utility project may include the contractor's costs and shall not exceed 6 percent of the estimated cost, not including the fee, as determined by the agency head at the time of entering into the contract, of the project to which the fee applies.

(c) Notification.—All cost and cost-plus-a-fixed-fee contracts shall provide for advance notification by the contractor to the procuring agency of any subcontract on a cost-plus-a-fixed-fee basis and of any fixed-price subcontract or purchase order which exceeds in dollar amount either the simplified acquisition threshold or 5 percent of the total estimated cost of the prime contract.

(d) Right To Audit.—A procuring agency, through any authorized representative thereof, has the right to inspect the plans and to audit the books and records of a prime contractor or subcontractor engaged in the performance of a cost or cost-plus-a-fixed-fee contract.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3776.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
3905(a)	41:254(b) (1st sentence words before 1st comma).	June 30, 1949, ch. 288, title III, §304(b), 63 Stat. 395; July 12, 1952, ch. 703, §1(m), 66 Stat. 594; Pub. L. 103–355, title I, §1071, title IV, §4402(c), title X, §10005(e), Oct. 13, 1994, 108 Stat. 3270, 3349, 3408.
3905(b)	41:254(b) (1st sentence words after 1st comma).
3905(c)	41:254(b) (last sentence words before semicolon).
3905(d)	41:254(b) (last sentence words after semicolon).

§3906. Cost-reimbursement contracts

(a) Definition.—In this section, the term "executive agency" has the same meaning given in section 133 of this title.

(b) Regulations on the Use of Cost-Reimbursement Contracts.—The Federal Acquisition Regulation shall address the use of cost-reimbursement contracts.

(c) Content.—The regulations promulgated under subsection (b) shall include guidance regarding—

(1) when and under what circumstances cost-reimbursement contracts are appropriate;

(2) the acquisition plan findings necessary to support a decision to use cost-reimbursement contracts; and

(3) the acquisition workforce resources necessary to award and manage cost-reimbursement contracts.

(d) Annual Report.—

(1) In general.—The Director of the Office of Management and Budget shall submit an annual report to Congressional committees identified in subsection (e) on the use of cost-reimbursement contracts and task or delivery orders by all executive agencies.

(2) Contents.—The report shall include—

(A) the total number and value of contracts awarded and orders issued during the covered fiscal year;

(B) the total number and value of cost-reimbursement contracts awarded and orders issued during the covered fiscal year; and

(C) an assessment of the effectiveness of the regulations promulgated pursuant to subsection (b) in ensuring the appropriate use of cost-reimbursement contracts.

(3) Time requirements.—

(A) Deadline.—The report shall be submitted no later than March 1 and shall cover the fiscal year ending September 30 of the prior year.

(B) Limitation.—The report shall be submitted from March 1, 2009, until March 1, 2014.

(e) Congressional Committees.—The report required by subsection (d) shall be submitted to—

(1) the Committee on Oversight and Government Reform of the House of Representatives;

(2) the Committee on Homeland Security and Governmental Affairs of the Senate;

(3) the Committees on Appropriations of the House of Representatives and the Senate; and

(4) in the case of the Department of Defense and the Department of Energy, the Committees on Armed Services of the Senate and the House of Representatives.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3777.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
3906	41:254 note.	Pub. L. 110–417, [div. A], title VIII, §864(a), (b), (d), (e), (f)(2), (g), Oct. 14, 2008, 122 Stat. 4549.

In subsection (b), the words "Not later than 270 days after the date of the enactment of this Act" are omitted because of section 6(f) of the bill. The words "shall address" are substituted for "shall be revised to address" to reflect the permanence of the provision.

In subsection (d), the words "Subject to subsection (f)" are omitted as unnecessary.

Statutory Notes and Related Subsidiaries

Change of Name

Committee on Oversight and Government Reform of House of Representatives changed to Committee on Oversight and Reform of House of Representatives by House Resolution No. 6, One Hundred Sixteenth Congress, Jan. 9, 2019. Committee on Oversight and Reform of House of Representatives changed to Committee on Oversight and Accountability of House of Representatives by House Resolution No. 5, One Hundred Eighteenth Congress, Jan. 9, 2023.

Amendment of Federal Acquisition Regulation

Pub. L. 111–350, §6(f)(5), Jan. 4, 2011, 124 Stat. 3855, provided that: "The Federal Acquisition Regulation shall be amended to meet the requirements of section 3906(b) of title 41, United States Code, not later than 270 days after October 14, 2008."

CHAPTER 41—TASK AND DELIVERY ORDER CONTRACTS

        

§4101. Definitions

In this chapter:

(1) Delivery order contract.—The term "delivery order contract" means a contract for property that—

(A) does not procure or specify a firm quantity of property (other than a minimum or maximum quantity); and

(B) provides for the issuance of orders for the delivery of property during the period of the contract.

(2) Task order contract.—The term "task order contract" means a contract for services that—

(A) does not procure or specify a firm quantity of services (other than a minimum or maximum quantity); and

(B) provides for the issuance of orders for the performance of tasks during the period of the contract.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3778.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
4101	41:253k.	June 30, 1949, ch. 288, title III, §303K, as added Pub. L. 103–355, title I, §1054(a), Oct. 13, 1994, 108 Stat. 3265.

§4102. Authorities or responsibilities not affected

This chapter does not modify or supersede, and is not intended to impair or restrict, authorities or responsibilities under sections 1101 to 1104 of title 40.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3778.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
4102	41:253h note.	Pub. L. 103–355, §1054(b), Oct. 13, 1994, 108 Stat. 3265.

The text of section 1054(b)(1) of the Federal Acquisition Streamlining Act of 1994 (Pub. L. 103–355, 41:253h note) is omitted as obsolete.

§4103. General authority

(a) Authority To Award.—Subject to the requirements of this section, section 4106 of this title, and other applicable law, the head of an executive agency may enter into a task or delivery order contract for procurement of services or property.

(b) Solicitation.—The solicitation for a task or delivery order contract shall include—

(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;

(2) the maximum quantity or dollar value of the services or property to be procured under the contract; and

(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 executive 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 section 3304(a) of this title applies to the contract and the use of those procedures is approved in accordance with section 3304(e) of this title.

(d) Single and Multiple Contract Awards.—

(1) Exercise of authority.—The head of an executive 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 executive agency has the option to do so, to award separate task or delivery order contracts for the same or similar services or property to 2 or more sources.

(2) Determination not required.—No determination under section 3303 of this title is required for an award of multiple task or delivery order contracts under paragraph (1)(B).

(3) Single source award for task or delivery order contracts exceeding $100,000,000.—

(A) When single awards are allowed.—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 executive 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 reasonably 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 Federal Government; or

(iv) because of exceptional circumstances, it is necessary in the public interest to award the contract to a single source.

(B) Notification of Congress.—The head of the executive agency shall notify Congress within 30 days after any determination under subparagraph (A)(iv).

(4) Regulations.—Regulations implementing this subsection shall establish—

(A) a preference for awarding, to the maximum extent practicable, multiple task or delivery order contracts for the same or similar services or property under paragraph (1)(B); and

(B) criteria for determining when award of multiple task or delivery order contracts would not be in the best interest of the Federal Government.

(e) Contract Modifications.—A task or delivery order may not increase the scope, period, or maximum value of the task or delivery order contract under which the order is issued. The scope, period, or maximum value of the contract may be increased only by modification of the contract.

(f) Inapplicability to Contracts for Advisory and Assistance Services.—Except as otherwise specifically provided in section 4105 of this title, this section does not apply to a task or delivery order contract for the acquisition of advisory and assistance services (as defined in section 1105(g) of title 31).

(g) Relationship to Other Contracting Authority.—Nothing in this section may be construed to limit or expand any authority of the head of an executive 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.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3778.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
4103	41:253h.	June 30, 1949, ch. 288, title III, §303H, as added Pub. L. 103–355, title I, §1054(a), Oct. 13, 1994, 108 Stat. 3261; Pub. L. 110–181, title VIII, §843(b)(1), Jan. 28, 2008, 122 Stat. 238.

In subsection (a), the words "(as defined in section 253k of this title)" are omitted as unnecessary.

§4104. Guidance on use of task and delivery order contracts

(a) Guidance in Federal Acquisition Regulation.—The Federal Acquisition Regulation issued in accordance with sections 1121(b) and 1303(a)(1) of this title shall provide guidance to agencies on the appropriate use of task and delivery order contracts in accordance with this chapter and chapter 245 of title 10.

(b) Content of Regulations.—The regulations issued pursuant to subsection (a) at a minimum shall provide specific guidance on—

(1) the appropriate use of Government-wide and other multiagency contracts entered into in accordance with this chapter and chapter 245 of title 10; and

(2) steps that agencies should take in entering into and administering multiple award task and delivery order contracts to ensure compliance with the requirement in—

(A) section 11312 of title 40 for capital planning and investment control in purchases of information technology products and services;

(B) section 4106(c) of this title and section 3406(c) of title 10 to ensure that all contractors are afforded a fair opportunity to be considered for the award of task and delivery orders; and

(C) section 4106(e) of this title and section 3406(e) of title 10 for a statement of work in each task or delivery order issued that clearly specifies all tasks to be performed or property to be delivered under the order.

(c) Federal Supply Schedules Program.—The Administrator for Federal Procurement Policy shall consult with the Administrator of General Services to assess the effectiveness of the multiple awards schedule program of the General Services Administration referred to in section 152(3) of this title that is administered as the Federal Supply Schedules program. The assessment shall include examination of—

(1) the administration of the program by the Administrator of General Services; and

(2) the ordering and program practices followed by Federal customer agencies in using schedules established under the program.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3780; Pub. L. 117–81, div. A, title XVII, §1702(h)(14), Dec. 27, 2021, 135 Stat. 2158.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
4104	41:253h note.	Pub. L. 106–65, div. A, title VIII, §804, Oct. 5, 1999, 113 Stat. 704.

In this section, the text of section 804(d) of the National Defense Authorization Act for Fiscal Year 2000 (Pub. L. 106–65, 41:253h note) is omitted as obsolete.

In subsection (a), the words "Not later than 180 days after the date of the enactment of this Act" and "be revised to" are omitted as obsolete.

In subsection (b)(1), the words "this chapter and sections 2304a to 2304d of title 10" are substituted for "the provisions of law referred to in that subsection" for clarity.

Editorial Notes

Amendments

2021—Subsecs. (a), (b)(1). Pub. L. 117–81, §1702(h)(14)(A), (B)(i), substituted "chapter 245" for "sections 2304a to 2304d".

Subsec. (b)(2)(B). Pub. L. 117–81, §1702(h)(14)(B)(ii), substituted "section 3406(c)" for "section 2304c(b)".

Subsec. (b)(2)(C). Pub. L. 117–81, §1702(h)(14)(B)(iii), substituted "section 3406(e)" for "section 2304c(c)".

§4105. Advisory and assistance services

(a) Definition.—In this section, the term "advisory and assistance services" has the same meaning given that term in section 1105(g) of title 31.

(b) Authority To Award.—

(1) In general.—Subject to the requirements of this section, section 4106 of this title, and other applicable law, the head of an executive agency may enter into a task order contract for procurement of advisory and assistance services.

(2) Only under this section.—The head of an executive agency may enter into a task order contract for advisory and assistance services only under this section.

(c) 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 5 years unless a longer period is specifically authorized in a law that is applicable to the contract.

(d) Content of Notice.—The notice required by section 1708 of this title 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.

(e) Required Content of Solicitation and Contract.—

(1) Solicitation.—The solicitation shall include the information (regarding services) described in section 4103(b) of this title.

(2) Contract.—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.

(f) Multiple Awards.—

(1) Authority to make multiple awards.—On the basis of one solicitation, the head of an executive agency may award separate task order contracts under this section for the same or similar services to 2 or more sources if the solicitation states that the head of the executive agency has the option to do so.

(2) Content of solicitation.—In the case of a task order contract for advisory and assistance services to be entered into under this section, if the contract period is to exceed 3 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 executive agency may also elect to award only one task order contract if the head of the executive agency determines in writing that only one of the offerors is capable of providing the services required at the level of quality required.

(3) Nonapplication.—Paragraph (2) does not apply in the case of a solicitation for which the head of the executive agency concerned determines in writing that, because the services required under the contract are unique or highly specialized, it is not practicable to award more than one contract.

(g) Contract Modifications.—

(1) Increase in scope, period, or maximum value of contract only by modification of contract.—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) Use of competitive procedures.—Unless use of procedures other than competitive procedures is authorized by an exception in section 3304(a) of this title and approved in accordance with section 3304(e) of this title, competitive procedures shall be used for making such a modification.

(3) Notice.—Notice regarding the modification shall be provided in accordance with section 1708 of this title and section 8(e) of the Small Business Act (15 U.S.C. 637(e)).

(h) Contract Extensions.—

(1) When contract may be extended.—Notwithstanding the limitation on the contract period set forth in subsection (c) or in a solicitation or contract pursuant to subsection (f), a contract entered into by the head of an executive agency under this section may be extended on a sole-source basis for a period not exceeding 6 months if the head of the executive 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 to ensure continuity of the receipt of services pending the award of, and commencement of performance under, the follow-on contract.

(2) Limit of one extension.—A task order contract may be extended under paragraph (1) only once and only in accordance with the limitations and requirements of this subsection.

(i) 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 the executive agency entering into the contract determines that, under the contract, advisory and assistance services are necessarily incident to, and not a significant component of, the contract.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3780.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
4105(a)	41:253i(i).	June 30, 1949, ch. 288, title III, §303I, as added Pub. L. 103–355, title I, §1054(a), Oct. 13, 1994, 108 Stat. 3262.
4105(b)	41:253i(a).
4105(c)(1)	41:253i(b).
4105(c)(2)	41:253i note.	Pub. L. 109–364, div. A, title VIII, §834(b), (c) (related to (b)), Oct. 17, 2006, 120 Stat. 2333.
4105(d)	41:253i(c).
4105(e)	41:253i(d).
4105(f)	41:253i(e).
4105(g)	41:253i(f).
4105(h)	41:253i(g).
4105(i)	41:253i(h).

In subsection (b)(1), the words "(as defined in section 253k of this title)" are omitted as unnecessary.

In subsection (c)(2)(C), the words "Committee on Oversight and Government Reform" are substituted for "Committee on Government Reform" on authority of Rule X(1)(m) of the Rules of the House of Representatives, adopted by House Resolution No. 6 (110th Congress, January 5, 2007).

Senate Revision Amendment

Senate amendment to the bill effectively struck out subsec. (c)(2) and redesignated subsec. (c)(1) as (c). See S. Amdt. 4726 (111th Cong.), 156 Cong. Rec. 18683 (2010).

§4106. Orders

(a) Application.—This section applies to task and delivery order contracts entered into under sections 4103 and 4105 of this title.

(b) Actions Not Required for 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 the order under section 1708 of this title or section 8(e) of the Small Business Act (15 U.S.C. 637(e)).

(2) Except as provided in subsection (c), a competition (or a waiver of competition approved in accordance with section 3304(e) of this title) that is separate from that used for entering into the contract.

(c) Multiple Award Contracts.—When multiple contracts are awarded under section 4103(d)(1)(B) or 4105(f) of this title, all contractors awarded the 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 the micro-purchase threshold under section 1902 of this title that is to be issued under any of the contracts, unless—

(1) the executive agency's need for the services or property ordered is of such unusual urgency that providing the opportunity to all of those contractors would result in unacceptable delays in fulfilling that need;

(2) only one of those contractors is capable of providing the services or property required at the level of quality required because the services or property ordered are unique or highly specialized;

(3) the task or delivery order should be issued on a sole-source basis in the interest of economy and efficiency because it is a logical follow-on to a task or delivery order already issued on a competitive basis; or

(4) it is necessary to place the order with a particular contractor to satisfy a minimum guarantee.

(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 (c) 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 executive 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 executive 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—

(A) the basis for the award; and

(B) 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 3704 of this title.

(e) 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.

(f) Protests.—

(1) Protest not authorized.—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 $10,000,000.

(2) Jurisdiction over protests.—Notwithstanding section 3556 of title 31, the Comptroller General shall have exclusive jurisdiction of a protest authorized under paragraph (1)(B).

(g) Task and Delivery Order Ombudsman.—

(1) Appointment or designation and responsibilities.—The head of each executive agency who awards multiple task or delivery order contracts under section 4103(d)(1)(B) or 4105(f) of this title shall appoint or designate a task and delivery order ombudsman who shall be responsible for reviewing complaints from the contractors on those 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 (c).

(2) Who is eligible.—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 executive agency's advocate for competition.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3782; Pub. L. 111–383, div. A, title X, §1075(f)(5)(B), Jan. 7, 2011, 124 Stat. 4376; Pub. L. 112–81, div. A, title VIII, §813, Dec. 31, 2011, 125 Stat. 1491; Pub. L. 114–260, §2, Dec. 14, 2016, 130 Stat. 1361; Pub. L. 114–328, div. A, title VIII, §835(b), Dec. 23, 2016, 130 Stat. 2285; Pub. L. 116–92, div. A, title VIII, §826, Dec. 20, 2019, 133 Stat. 1491.)

Amendment Not Shown in Text

This section was derived from section 253j of former Title 41, Public Contracts, which was amended by Pub. L. 110–181, div. A, title VIII, §843(b)(2)(C), Jan. 28, 2008, 122 Stat. 239, to add subsec. (e), from which subsec. (f) of this section was derived, prior to being repealed and reenacted as this section by Pub. L. 111–350, §§3, 7(b), Jan. 4, 2011, 124 Stat. 3677, 3855. The directory language of section 843(b)(2)(C) of Pub. L. 110–181 was amended by Pub. L. 111–383, div. A, title X, §1075(f)(5)(B), Jan. 7, 2011, 124 Stat. 4376. For applicability of that amendment to this section, see section 6(a) of Pub. L. 111–350, set out as a Transitional and Savings Provisions note preceding section 101 of this title. Section 843(b)(2)(C) of Pub. L. 110–181 was amended by striking "paragraph (1)" and inserting "subparagraph (A)".

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
4106(a)	41:253j(g).	June 30, 1949, ch. 288, title III, §303J, as added Pub. L. 103–355, title I, §1054(a), Oct. 13, 1994, 108 Stat. 3264; Pub. L. 110–181, div. A, title VIII, §843(b)(2), Jan. 28, 2008, 122 Stat. 238.
4106(b)	41:253j(a).
4106(c)	41:253j(b).
4106(d)	41:253j(d).
4106(e)	41:253j(c).
4106(f)	41:253j(e).
4106(g)	41:253j(f).

In subsection (g)(2), the words "advocate for competition" are substituted for "competition advocate" for consistency with section 1705 of the revised title.

Editorial Notes

Amendments

2019—Subsec. (c). Pub. L. 116–92 substituted "the micro-purchase threshold under section 1902 of this title" for "$2,500" in introductory provisions.

2016—Subsec. (f)(3). Pub. L. 114–260 and Pub. L. 114–328 amended subsec. (f) identically by striking out par. (3). Text read as follows: "Paragraph (1)(B) and paragraph (2) of this subsection shall not be in effect after September 30, 2016."

2011—Subsec. (f)(3). Pub. L. 112–81 amended par. (3) generally. Prior to amendment, text read as follows: "This subsection shall be in effect for three years, beginning on the date that is 120 days after January 28, 2008."

Statutory Notes and Related Subsidiaries

Postaward Explanations for Unsuccessful Offerors for Certain Contracts

Pub. L. 116–92, div. A, title VIII, §874, Dec. 20, 2019, 133 Stat. 1527, provided that: "Not later than 180 days after the date of the enactment of this Act [Dec. 20, 2019], the Federal Acquisition Regulation shall be revised to require that with respect to an offer for a task order or delivery order in an amount greater than the simplified acquisition threshold (as defined in section 134 of title 41, United States Code) and less than or equal to $5,500,000 issued under an indefinite delivery-indefinite quantity contract, the contracting officer for such contract shall, upon written request from an unsuccessful offeror, provide a brief explanation as to why such offeror was unsuccessful that includes a summary of the rationale for the award and an evaluation of the significant weak or deficient factors in the offeror's offer."

CHAPTER 43—ALLOWABLE COSTS

        

§4301. Definitions

In this chapter:

(1) Compensation.—The term "compensation", for a fiscal year, means the total amount of wages, salary, bonuses, and deferred compensation for the fiscal year, whether paid, earned, or otherwise accruing, as recorded in an employer's cost accounting records for the fiscal year.

(2) Covered contract.—The term "covered contract" means a contract for an amount in excess of $500,000 that is entered into by an executive agency, except that the 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.

(3) Fiscal year.—The term "fiscal year" means a fiscal year established by a contractor for accounting purposes.

(4) Senior executive.—The term "senior executive", with respect to a contractor, means the 5 most highly compensated employees in management positions at each home office and each segment of the contractor.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3784; Pub. L. 115–232, div. A, title VIII, §836(b)(17), Aug. 13, 2018, 132 Stat. 1864.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
4301(1)	41:256(m)(1).	June 30, 1949, ch. 288, title III, §306(m), as added Pub. L. 105–85, title VIII, §808(b)(2), Nov. 18, 1997, 111 Stat. 1836; Pub. L. 105–261, title VIII, §804(b), Oct. 17, 1998, 112 Stat. 2083.
4301(2)	41:256(l)(1).	June 30, 1949, ch. 288, title III, §306(l)(1), as added Pub. L. 100–700, §8(a)(1), Nov. 19, 1988, 102 Stat. 4634; Pub. L. 103–355, title II, §2151, Oct. 13, 1994, 108 Stat. 3315.
4301(3)	41:256(m)(3).
4301(4)	41:256(m)(2).

Editorial Notes

Amendments

2018—Par. (2). Pub. L. 115–232 substituted "commercial products or commercial services" for "commercial items".

Statutory Notes and Related Subsidiaries

Effective Date of 2018 Amendment

Amendment by Pub. L. 115–232 effective Jan. 1, 2020, subject to a savings provision, see section 836(h) of Pub. L. 115–232, set out as an Effective Date of 2018 Amendment; Savings Provision note under section 453b of Title 6, Domestic Security.

§4302. Adjustment of threshold amount of covered contract

Effective on October 1 of each year that is divisible by 5, the amount set forth in section 4301(2) of this title shall be adjusted to the equivalent amount in constant fiscal year 1994 dollars. An adjusted amount that is not evenly divisible by $50,000 shall be rounded to the nearest multiple of $50,000. If an amount is evenly divisible by $25,000 but is not evenly divisible by $50,000, the amount shall be rounded to the next higher multiple of $50,000.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3784.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
4302	41:256(l)(2).	June 30, 1949, ch. 288, title III, §306(l)(2), as added Pub. L. 100–700, §8(a)(1), Nov. 19, 1988, 102 Stat. 4634; Pub. L. 103–355, title II, §2151, Oct. 13, 1994, 108 Stat. 3315.

§4303. Effect of submission of unallowable costs

(a) Indirect Cost That Violates Federal Acquisition Regulation Cost Principle.—An executive agency shall require that a covered contract provide that if the contractor submits to the executive agency a proposal for settlement of indirect costs incurred by the contractor for any period after those costs have been accrued and if that proposal includes the submission of a cost that is unallowable because the cost violates a cost principle in the Federal Acquisition Regulation or an executive agency supplement to the Federal Acquisition Regulation, the cost shall be disallowed.

(b) Penalty for Violation of Cost Principle.—

(1) Unallowable cost in proposal.—If the executive 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 executive 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 Federal Government for the use of the amount which a contractor has been paid in excess of the amount to which the contractor was entitled.

(2) Cost determined to be unallowable before proposal submitted.—If the executive 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 that contractor before the submission of that proposal, the executive agency shall assess a penalty against the contractor in an amount equal to 2 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.—An action of an executive agency under subsection (a) or (b)—

(1) shall be considered a final decision for the purposes of section 7103 of this title; and

(2) is appealable in the manner provided in section 7104(a) of this title.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3784.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
4303(a)	41:256(a).	June 30, 1949, ch. 288, title III, §306(a)–(d), as added Pub. L. 100–700, §8(a)(1), Nov. 19, 1988, 102 Stat. 4634; Pub. L. 103–355, title II, §2151, Oct. 13, 1994, 108 Stat. 3309.
4303(b)	41:256(b).
4303(c)	41:256(c).
4303(d)	41:256(d).

In subsection (a), the words "(referred to in section 421(c)(1) of this title)" are omitted as unnecessary.

§4304. Specific costs not allowable

(a) Specific Costs.—The following costs are not allowable under a covered contract:

(1) Costs of entertainment, including amusement, diversion, and social activities, and any costs directly associated with those costs (such as tickets to shows or sports events, meals, lodging, rentals, transportation, and gratuities).

(2) 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.

(3) Costs incurred in defense of any civil or criminal fraud proceeding or similar proceeding (including filing of any false certification) brought by the Federal Government where the contractor is found liable or had pleaded nolo contendere to a charge of fraud or similar proceeding (including filing of a false certification).

(4) 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 those payments in accordance with applicable provisions of the Federal Acquisition Regulation.

(5) Costs of membership in any social, dining, or country club or organization.

(6) Costs of alcoholic beverages.

(7) Contributions or donations, regardless of the recipient.

(8) Costs of advertising designed to promote the contractor or its products.

(9) Costs of promotional items and memorabilia, including models, gifts, and souvenirs.

(10) Costs for travel by commercial aircraft that exceed the amount of the standard commercial fare.

(11) Costs incurred in making any payment (commonly known as a "golden parachute payment") that is—

(A) in an amount in excess of the normal severance pay paid by the contractor to an employee on termination of employment; and

(B) paid to the employee contingent on, and following, a change in management control over, or ownership of, the contractor or a substantial portion of the contractor's assets.

(12) Costs of commercial insurance that protects against the costs of the contractor for correction of the contractor's own defects in materials or workmanship.

(13) 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.

(14) 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 Federal Government facility in that country at the request of the government of that country.

(15) Costs incurred by a contractor or subcontractor, or personal service ¹ contractor in connection with any criminal, civil, or administrative proceeding commenced by the Federal Government or a State, to the extent provided in section 4310 of this title.

(16) ² 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 executive agency 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 executive agency has continued access to needed skills and capabilities.

(16) ² 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.

(b) Waiver of Severance Pay Restrictions for Foreign Nationals.—

(1) Executive agency determination.—Pursuant to the Federal Acquisition Regulation and subject to the availability of appropriations, an executive agency, in awarding a covered contract, may waive the application of paragraphs (13) and (14) of subsection (a) to that contract if the executive agency determines that—

(A) the application of those provisions to that contract would adversely affect the continuation of a program, project, or activity that provides significant support services for employees of the executive agency posted outside the United States;

(B) 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

(C) the payment of severance pay is necessary 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.

(2) Solicitation to include statement about waiver.—An executive agency shall include in the solicitation for a covered contract a statement indicating—

(A) that a waiver has been granted under paragraph (1) for the contract; or

(B) whether the executive agency will consider granting a waiver and, if the executive agency will consider granting a waiver, the criteria to be used in granting the waiver.

(3) Determination to be made before contract awarded.—An executive agency shall make the final determination whether to grant a waiver under paragraph (1) with respect to a covered contract before award of the contract.

(c) Establishment of Definitions, Exclusions, Limitations, and Qualifications.—The provisions of the Federal Acquisition Regulation implementing this chapter may establish appropriate definitions, exclusions, limitations, and qualifications. A submission by a contractor of costs that are incurred by the contractor and that are claimed to be allowable under Department of Energy management and operating contracts shall be considered a proposal for settlement of indirect costs incurred by the contractor for any period after those costs have been accrued.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3785; Pub. L. 113–66, div. A, title VIII, §811(b), Dec. 26, 2013, 127 Stat. 806; Pub. L. 113–67, div. A, title VII, §702(a)(1), Dec. 26, 2013, 127 Stat. 1189; Pub. L. 114–261, §1(b)(2)(B), Dec. 14, 2016, 130 Stat. 1363.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
4304	41:256(e).	June 30, 1949, ch. 288, title III, §306(e), as added Pub. L. 100–700, §8(a)(1), Nov. 19, 1988, 102 Stat. 4634; Pub. L. 103–355, title II, §2151, Oct. 13, 1994, 108 Stat. 3310; Pub. L. 105–85, title VIII, §808(b)(1), Nov. 18, 1997, 111 Stat. 1836.

Editorial Notes

Amendments

2016—Subsec. (a)(15). Pub. L. 114–261 inserted "or subcontractor, or personal service contractor" after "contractor".

2013—Subsec. (a)(16). Pub. L. 113–66 and Pub. L. 113–67 amended par. (16) generally. Prior to amendment, par. (16) read as follows: "Costs of compensation of senior executives of contractors for a fiscal year, regardless of the contract funding source, to the extent that the compensation exceeds the benchmark compensation amount determined applicable for the fiscal year by the Administrator under section 1127 of this title." See Effective Date of 2013 Amendment notes below.

Statutory Notes and Related Subsidiaries

Effective Date of 2013 Amendment

Pub. L. 113–67, div. A, title VII, §702(c), Dec. 26, 2013, 127 Stat. 1189, provided that: "This section [amending this section and former section 2324 of Title 10, Armed Forces, repealing section 1127 of this title, and enacting provisions set out as a note under this section] and the amendments made by this section shall apply only with respect to costs of compensation incurred under contracts entered into on or after the date that is 180 days after the date of the enactment of this Act [Dec. 26, 2013]."

Pub. L. 113–66, div. A, title VIII, §811(d), Dec. 26, 2013, 127 Stat. 806, provided that: "The amendments made by this section [amending this section and former section 2324 of Title 10, Armed Forces, and repealing section 1127 of this title] shall apply with respect to costs of compensation incurred under contracts entered into on or after the date that is 180 days after the date of the enactment of this Act [Dec. 26, 2013]."

Reports

Pub. L. 113–67, div. A, title VII, §702(d), Dec. 26, 2013, 127 Stat. 1189, provided that:

"(1) In general.—Not later than 60 days after the end of each fiscal year, the Director of the Office of Management and Budget shall submit a report on contractor compensation to—

"(A) the Committee on Armed Services of the Senate;

"(B) the Committee on Armed Services of the House of Representatives;

"(C) the Committee on Homeland Security and Governmental Affairs of the Senate;

"(D) the Committee on Oversight and Government Reform [now Committee on Oversight and Accountability] of the House of Representatives;

"(E) the Committee on Appropriations of the Senate; and

"(F) the Committee on Appropriations of the House of Representatives.

"(2) Elements.—The report required under paragraph (1) shall include—

"(A) the total number of contractor employees, by executive agency, in the narrowly targeted exception positions described under subsection (a) during the preceding fiscal year;

"(B) the taxpayer-funded compensation amounts received by each contractor employee in a narrowly targeted exception position during such fiscal year; and

"(C) the duties and services performed by contractor employees in the narrowly targeted exception positions during such fiscal year."

Revision of Cost Principle Relating to Entertainment, Gift, and Recreation Costs for Contractor Employees

Pub. L. 103–355, title II, §2192, Oct. 13, 1994, 108 Stat. 3315, provided that:

"(a) Costs Not Allowable.—(1) The costs of gifts or recreation for employees of a contractor or members of their families that are provided by the contractor to improve employee morale or performance or for any other purpose are not allowable under a covered contract unless, within 120 days after the date of the enactment of this Act [Oct. 13, 1994], the Federal Acquisition Regulatory Council prescribes amendments to the Federal Acquisition Regulation specifying circumstances under which such costs are allowable under a covered contract.

"(2) Not later than 90 days after the date of the enactment of this Act, the Federal Acquisition Regulatory Council shall amend the cost principle in the Federal Acquisition Regulation that is set out in section 31.205–14 of title 48, Code of Federal Regulations, relating to unallowability of entertainment costs—

"(A) by inserting in the cost principle a statement that costs made specifically unallowable under that cost principle are not allowable under any other cost principle; and

"(B) by striking out '(but see 31.205–1 and 31.205–13)'.

"(b) Definitions.—In this section:

"(1) The term 'employee' includes officers and directors of a contractor.

"(2) The term 'covered contract' has the meaning given such term in section 2324(l) of title 10, United States Code (as amended by section 2101(c) [2101(d)]), and section 306(l) of the Federal Property and Administrative Services Act of 1949 (as added by section 2151) [see 41 U.S.C. 4301(2)].

"(c) Effective Date.—Any amendments to the Federal Acquisition Regulation made pursuant to subsection (a) shall apply with respect to costs incurred after the date on which the amendments made by section 2101 apply (as provided in section 10001 [set out as an Effective Date of 1994 Amendment note under section 2302 of Title 10, Armed Forces]) or the date on which the amendments made by section 2151 apply (as provided in section 10001), whichever is later."

Executive Documents

Ex. Ord. No. 13494. Economy in Government Contracting

Ex. Ord. No. 13494, Jan. 30, 2009, 74 F.R. 6101, as amended by Ex. Ord. No. 13517, §2, Oct. 30, 2009, 74 F.R. 57239, provided:

By the authority vested in me as President by the Constitution and the laws of the United States of America, including the Federal Property and Administrative Services Act, 40 U.S.C. 101 et seq., it is hereby ordered that:

Section 1. To promote economy and efficiency in Government contracting, certain costs that are not directly related to the contractors' provision of goods and services to the Government shall be unallowable for payment, thereby directly reducing Government expenditures. This order is also consistent with the policy of the United States to remain impartial concerning any labor-management dispute involving Government contractors. This order does not restrict the manner in which recipients of Federal funds may expend those funds.

Sec. 2. It is the policy of the executive branch in procuring goods and services that, to ensure the economical and efficient administration of Government contracts, contracting departments and agencies, when they enter into, receive proposals for, or make disbursements pursuant to a contract as to which certain costs are treated as unallowable, shall treat as unallowable the costs of any activities undertaken to persuade employees—whether employees of the recipient of the Federal disbursements or of any other entity—to exercise or not to exercise, or concerning the manner of exercising, the right to organize and bargain collectively through representatives of the employees' own choosing. Such unallowable costs shall be excluded from any billing, claim, proposal, or disbursement applicable to any such Federal Government contract.

Sec. 3. Contracting departments and agencies shall treat as allowable costs incurred in maintaining satisfactory relations between the contractor and its employees (other than the costs of any activities undertaken to persuade employees to exercise or not to exercise, or concerning the manner of exercising, the right to organize and bargain collectively), including costs of labor management committees, employee publications, and other related activities. See 48 C.F.R. 31.205–21.

Sec. 4. Examples of costs unallowable under section 2 of this order include the costs of the following activities, when they are undertaken to persuade employees to exercise or not to exercise, or concern the manner of exercising, rights to organize and bargain collectively:

(a) preparing and distributing materials;

(b) hiring or consulting legal counsel or consultants;

(c) holding meetings (including paying the salaries of the attendees at meetings held for this purpose); and

(d) planning or conducting activities by managers, supervisors, or union representatives during work hours.

Sec. 5. Within 150 days of the effective date of this order, the Federal Acquisition Regulatory Council (FAR Council) shall adopt such rules and regulations and issue such orders as are deemed necessary and appropriate to carry out this order. Such rules, regulations, and orders shall minimize the costs of compliance for contractors and shall not interfere with the ability of contractors to engage in advocacy through activities for which they do not claim reimbursement.

Sec. 6. Each contracting department or agency shall cooperate with the FAR Council and provide such information and assistance as the FAR Council may require in the performance of its functions under this order.

Sec. 7. (a) This order shall be implemented consistent with applicable law and subject to the availability of appropriations.

(b) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.

Sec. 8. This order shall become effective immediately, and shall apply to contracts resulting from solicitations issued on or after the effective date of the action taken by the FAR Council under section 5 of this order.

Barack Obama.      

¹ So in original. Probably should be "services".

² So in original. Two pars. (16) have been enacted.

§4305. Required regulations

(a) In General.—The Federal Acquisition Regulation shall contain provisions on the allowability of contractor costs. Those provisions shall define in detail and in specific terms the costs that are unallowable, in whole or in part, under covered contracts.

(b) Specific Items.—The regulations shall, at a minimum, clarify the cost principles applicable to contractor costs of the following:

(1) Air shows.

(2) Membership in civic, community, and professional organizations.

(3) Recruitment.

(4) Employee morale and welfare.

(5) 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).

(6) Community relations.

(7) Dining facilities.

(8) Professional and consulting services, including legal services.

(9) Compensation.

(10) Selling and marketing.

(11) Travel.

(12) Public relations.

(13) Hotel and meal expenses.

(14) Expense of corporate aircraft.

(15) Company-furnished automobiles.

(16) Advertising.

(17) Conventions.

(c) Additional Requirements.—

(1) When questioned costs may be resolved.—The Federal Acquisition Regulation shall require that a contracting officer not resolve any questioned costs until the contracting officer has obtained—

(A) adequate documentation of those costs; and

(B) the opinion of the contract auditor on the allowability of those costs.

(2) Presence of contract auditor.—The Federal Acquisition Regulation shall provide that, to the maximum extent practicable, a contract auditor be present at any negotiation or meeting with the contractor regarding a determination of the allowability of indirect costs of the contractor.

(3) Settlement to reflect amount of individual questioned costs.—The Federal Acquisition Regulation shall require that all categories of costs designated in the report of a contract auditor as questioned with respect to a proposal for settlement be resolved in a manner so that the amount of the individual questioned costs that are paid will be reflected in the settlement.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3787.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
4305(a)	41:256(f)(1) (1st, 2d sentences).	June 30, 1949, ch. 288, title III, §306(f), as added Pub. L. 100–700, §8(a)(1), Nov. 19, 1988, 102 Stat. 4634; Pub. L. 103–355, title II, §2151, Oct. 13, 1994, 108 Stat. 3312.
4305(b)	41:256(f)(1) (last sentence).
4305(c)	41:256(f)(2)–(4).

§4306. Applicability of regulations to subcontractors

The regulations referred to in sections 4304 and 4305(a) and (b) of this title shall require prime contractors of a covered contract, to the maximum extent practicable, to apply the provisions of those regulations to all subcontractors of the covered contract.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3788.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
4306	41:256(g).	June 30, 1949, ch. 288, title III, §306(g), as added Pub. L. 100–700, §8(a)(1), Nov. 19, 1988, 102 Stat. 4634; Pub. L. 103–355, title II, §2151, Oct. 13, 1994, 108 Stat. 3313.

§4307. Contractor certification

(a) Content and Form.—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. The certification shall be in a form prescribed in the Federal Acquisition Regulation.

(b) Waiver.—An executive agency may, in an exceptional case, waive the requirement for certification under subsection (a) in the case of a contract if the agency—

(1) determines that it would be in the interest of the Federal Government to waive the certification; and

(2) states in writing the reasons for the determination and makes the determination available to the public.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3788.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
4307	41:256(h).	June 30, 1949, ch. 288, title III, §306(h), as added Pub. L. 100–700, §8(a)(1), Nov. 19, 1988, 102 Stat. 4634; Pub. L. 103–355, title II, §2151, Oct. 13, 1994, 108 Stat. 3313.

§4308. Penalties for submission of cost known to be unallowable

The submission to an executive agency of a proposal for settlement of costs for any period after those costs have been accrued that includes a cost that is expressly specified by statute or regulation as being unallowable, with the knowledge that the cost is unallowable, is subject to section 287 of title 18 and section 3729 of title 31.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3788.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
4308	41:256(i).	June 30, 1949, ch. 288, title III, §306(i), as added Pub. L. 100–700, §8(a)(1), Nov. 19, 1988, 102 Stat. 4634; Pub. L. 103–355, title II, §2151, Oct. 13, 1994, 108 Stat. 3313.

§4309. Burden of proof on contractor

In a proceeding before a 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 Federal Government is in issue, the burden of proof is on the contractor to establish that those costs are reasonable.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3788.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
4309	41:256(j).	June 30, 1949, ch. 288, title III, §306(j), as added Pub. L. 100–700, §8(a)(1), Nov. 19, 1988, 102 Stat. 4634; Pub. L. 103–355, title II, §2151, Oct. 13, 1994, 108 Stat. 3313.

§4310. Proceeding costs not allowable

(a) Definitions.—In this section:

(1) Costs.—The term "costs", with respect to a proceeding, means all costs incurred by a contractor, subcontractor, or personal services contractor, whether before or after the commencement of the proceeding, including—

(A) administrative and clerical expenses;

(B) the cost of legal services, including legal services performed by an employee of the contractor, subcontractor, or personal services contractor;

(C) the cost of the services of accountants and consultants retained by the contractor, subcontractor, or personal services contractor; and

(D) the pay of directors, officers, and employees of the contractor, subcontractor, or personal services contractor for time devoted by those directors, officers, and employees to the proceeding.

(2) Penalty.—The term "penalty" does not include restitution, reimbursement, or compensatory damages.

(3) Proceeding.—The term "proceeding" includes an investigation.

(b) In General.—Except as otherwise provided in this section, costs incurred by a contractor, subcontractor, or personal services contractor in connection with a criminal, civil, or administrative proceeding commenced by the Federal Government, by a State, or by a contractor, subcontractor, or personal services contractor or grantee employee submitting a complaint under section 4712 of this title are not allowable as reimbursable costs under a covered contract, subcontract, or personal services contract if the proceeding—

(1) relates to a violation of, or failure to comply with, a Federal or State statute or regulation or to any other activity described in section 4712(a)(1) of this title; and

(2) results in a disposition described in subsection (c).

(c) Covered Dispositions.—A disposition referred to in subsection (b)(2) is any of the following:

(1) In 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 subsection (b).

(2) In a civil or administrative proceeding involving an allegation of fraud or similar misconduct, a determination of contractor, subcontractor, or personal services contractor liability on the basis of the violation or failure referred to in subsection (b).

(3) In any civil or administrative proceeding, the imposition of a monetary penalty or an order to take corrective action under section 4712 of this title by reason of the violation or failure referred to in subsection (b).

(4) A final decision to do any of the following, by reason of the violation or failure referred to in subsection (b):

(A) Debar or suspend the contractor, subcontractor, or personal services contractor.

(B) Rescind or void the contract, subcontract, or personal services contract.

(C) Terminate the contract, subcontract, or personal services contract for default.

(5) A disposition of the proceeding by consent or compromise if the disposition could have resulted in a disposition described in paragraph (1), (2), (3), or (4).

(d) Costs Allowed by Settlement Agreement in Proceeding Commenced by Federal Government.—In the case of a proceeding referred to in subsection (b) that is commenced by the Federal Government and is resolved by consent or compromise pursuant to an agreement entered into by a contractor, subcontractor, or personal services contractor and the Federal Government, the costs incurred by the contractor, subcontractor, or personal services contractor in connection with the proceeding that are otherwise not allowable as reimbursable costs under subsection (b) may be allowed to the extent specifically provided in that agreement.

(e) Costs Specifically Authorized by Executive Agency in Proceeding Commenced by State.—In the case of a proceeding referred to in subsection (b) that is commenced by a State, the executive agency that awarded the covered contract, subcontract, or personal services contract involved in the proceeding may allow the costs incurred by the contractor, subcontractor, or personal services contractor in connection with the proceeding as reimbursable costs if the executive agency determines, in accordance with the Federal Acquisition Regulation, that the costs were incurred as a result of—

(1) a specific term or condition of the contract, subcontract, or personal services contract; or

(2) specific written instructions of the executive agency.

(f) Other Allowable Costs.—

(1) In general.—Except as provided in paragraph (3), costs incurred by a contractor, subcontractor, or personal services contractor in connection with a criminal, civil, or administrative proceeding commenced by the Federal Government 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 the costs are not disallowable under subsection (b), but only to the extent provided in paragraph (2).

(2) Amount of allowable costs.—

(A) Maximum amount allowed.—The amount of the costs allowable under paragraph (1) in any case may not exceed the amount equal to 80 percent of the amount of the costs incurred, to the extent that the costs are determined to be otherwise allowable and allocable under the Federal Acquisition Regulation.

(B) Content of regulations.—Regulations issued for the purpose of subparagraph (A) 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 Federal Government as a party, and other factors as may be appropriate.

(3) When otherwise allowable costs are not allowable.—In the case of a proceeding referred to in paragraph (1), contractor, subcontractor, or personal services contractor costs otherwise allowable as reimbursable costs under this subsection are not allowable if—

(A) the proceeding involves the same contractor, subcontractor, or personal services contractor misconduct alleged as the basis of another criminal, civil, or administrative proceeding; and

(B) the costs of the other proceeding are not allowable under subsection (b).

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3789; Pub. L. 112–239, div. A, title VIII, §828(d), Jan. 2, 2013, 126 Stat. 1841; Pub. L. 114–261, §1(b)(2)(A), Dec. 14, 2016, 130 Stat. 1362.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
4310(a)	41:256(k)(6).	June 30, 1949, ch. 288, title III, §306(k), as added Pub. L. 100–700, §8(a)(1), Nov. 19, 1988, 102 Stat. 4634; Pub. L. 103–355, title II, §2151, Oct. 13, 1994, 108 Stat. 3313.
4310(b)	41:256(k)(1).
4310(c)	41:256(k)(2).
4310(d)	41:256(k)(3).
4310(e)	41:256(k)(4).
4310(f)	41:256(k)(5).

Editorial Notes

Amendments

2016—Pub. L. 114–261, §1(b)(2)(A)(i), (ii), inserted ", subcontractor, or personal services contractor" after "contractor" and ", subcontract, or personal services contract" after "contract" wherever appearing.

Subsec. (b)(1). Pub. L. 114–261, §1(b)(2)(A)(iii), inserted "or to any other activity described in section 4712(a)(1) of this title" after "statute or regulation".

2013—Subsec. (b). Pub. L. 112–239, §828(d)(1), substituted "commenced by the Federal Government, by a State, or by a contractor or grantee employee submitting a complaint under section 4712 of this title" for "commenced by the Federal Government or a State".

Subsec. (c)(3). Pub. L. 112–239, §828(d)(2), substituted "the imposition of a monetary penalty or an order to take corrective action under section 4712 of this title" for "the imposition of a monetary penalty".

CHAPTER 45—CONTRACT FINANCING

        

Editorial Notes

Amendments

2018—Pub. L. 115–232, div. A, title VIII, §836(b)(18)(B)(ii), Aug. 13, 2018, 132 Stat. 1864, substituted "Payments for commercial products and commercial services" for "Payments for commercial items" in item 4505.

§4501. Authority of executive agency

An executive agency may—

(1) make advance, partial, progress or other payments under contracts for property or services made by the agency; and

(2) insert in solicitations for procurement of property or services a provision limiting to small business concerns advance or progress payments.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3790.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
4501	41:255(a).	June 30, 1949, ch. 288, title III, §305(a), 63 Stat. 396; July 12, 1952, ch. 703, §1(m), 66 Stat. 594; Pub. L. 85–800, §4, Aug. 28, 1958, 72 Stat. 966; Pub. L. 103–355, title II, §2051(a)(2), (c), Oct. 13, 1994, 108 Stat. 3304.

Statutory Notes and Related Subsidiaries

Relationship to Prompt Payment Requirements

Pub. L. 103–355, title II, §2051(f), Oct. 13, 1994, 108 Stat. 3306, provided that: "The amendments made by this section [see Tables for classification] are not intended to impair or modify procedures required by the provisions of chapter 39 of title 31, United States Code, and the regulations issued pursuant to such provisions of law (as such procedures are in effect on the date of the enactment of this Act [Oct. 13, 1994]), except that the Government may accept payment terms offered by a contractor offering a commercial item."

§4502. Payment

(a) Basis for Payment.—When practicable, payments under section 4501 of this title shall be made on any of the following bases:

(1) Performance measured by objective, quantifiable methods such as delivery of acceptable items, work measurement, or statistical process controls.

(2) Accomplishment of events defined in the program management plan.

(3) Other quantifiable measures of results.

(b) Payment Amount.—Payments made under section 4501 of this title may not exceed the unpaid contract price.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3791.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
4502(a)	41:255(b).	June 30, 1949, ch. 288, title III, §305(b), as added Pub. L. 103–355, title II, §2051(b), Oct. 13, 1994, 108 Stat. 3304.
4502(b)	41:255(c).	June 30, 1949, ch. 288, title III, §305(c), 63 Stat. 396; July 12, 1952, ch. 703, §1(m), 66 Stat. 594; Pub. L. 85–800, §4, Aug. 28, 1958, 72 Stat. 966; Pub. L. 103–355, title II, §2051(a)(3), (5), Oct. 13, 1994, 108 Stat. 3304.

§4503. Security for advance payments

Advance payments under section 4501 of this title may be made only on adequate security and a determination by the agency head that to do so would be in the public interest. The security may be in the form of a lien in favor of the Federal Government on the property contracted for, on the balance in an account in which the payments are deposited, and on such of the property acquired for performance of the contract as the parties may agree. This lien shall be paramount to all other liens and is effective immediately upon the first advancement of funds without filing, notice, or any other action by the Federal Government.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3791.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
4503	41:255(d).	June 30, 1949, ch. 288, title III, §305(d), 63 Stat. 396; July 12, 1952, ch. 703, §1(m), 66 Stat. 594; Pub. L. 85–800, §4, Aug. 28, 1958, 72 Stat. 966; Pub. L. 103–355, title II, §2051(a)(4), (5), (d), Oct. 13, 1994, 108 Stat. 3304.

§4504. Conditions for progress payments

(a) Payment Commensurate With Work.—The executive agency shall ensure that a payment for work in progress (including materials, labor, and other items) under a contract of an executive agency that provides for those payments is commensurate with the work accomplished that meets standards established under the contract. The contractor shall provide information and evidence the executive agency determines is necessary to permit the executive agency to carry out this subsection.

(b) Limitation.—The executive agency shall ensure that progress payments referred to in subsection (a) are not made for more than 80 percent of the work accomplished under the contract as long as the executive agency has not made the contractual terms, specifications, and price definite.

(c) Application.—This section applies to a contract in an amount greater than $25,000.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3791.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
4504	41:255(e).	June 30, 1949, ch. 288, title III, §305(e), as added Pub. L. 103–355, title II, §2051(e), Oct. 13, 1994, 108 Stat. 3304, as amended Pub. L. 104–106, title XLIII, §4321(a)(4), Feb. 10, 1996, 110 Stat. 671.

§4505. Payments for commercial products and commercial services

(a) Terms and Conditions for Payments.—Payments under section 4501 of this title for commercial products or commercial services may be made under terms and conditions that the head of the executive agency determines are appropriate or customary in the commercial marketplace and are in the best interests of the Federal Government.

(b) Security for Payments.—The head of the executive agency shall obtain adequate security for the payments. If the security is in the form of a lien in favor of the Federal Government, the lien is paramount to all other liens and is effective immediately on the first payment, without filing, notice, or other action by the Federal Government.

(c) Limitation on Advance Payments.—Advance payments made under section 4501 of this title for commercial products or commercial services may include payments, in a total amount not more than 15 percent of the contract price, in advance of any performance of work under the contract.

(d) Nonapplication of Certain Conditions.—The conditions of sections 4503 and 4504 of this title need not be applied if they would be inconsistent, as determined by the head of the executive agency, with commercial terms and conditions pursuant to this section.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3791; Pub. L. 115–232, div. A, title VIII, §836(b)(18)(A), (B)(i), Aug. 13, 2018, 132 Stat. 1864.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
4505	41:255(f).	June 30, 1949, ch. 288, title III, §305(f), as added Pub. L. 103–355, title II, §2051(e), Oct. 13, 1994, 108 Stat. 3304, as amended Pub. L. 104–106, title XLIII, §4321(a)(4), Feb. 10, 1996, 110 Stat. 671.

Editorial Notes

Amendments

2018—Pub. L. 115–232, §836(b)(18)(B)(i), substituted "Payments for commercial products and commercial services" for "Payments for commercial items" in section catchline.

Subsecs. (a), (c). Pub. L. 115–232, §836(b)(18)(A), substituted "commercial products or commercial services" for "commercial items".

Statutory Notes and Related Subsidiaries

Effective Date of 2018 Amendment

Amendment by Pub. L. 115–232 effective Jan. 1, 2020, subject to a savings provision, see section 836(h) of Pub. L. 115–232, set out as an Effective Date of 2018 Amendment; Savings Provision note under section 453b of Title 6, Domestic Security.

§4506. Action in case of fraud

(a) Definition.—In this section, the term "remedy coordination official", with respect to an executive agency, means the individual or entity in that executive agency who coordinates within that executive agency the administration of criminal, civil, administrative, and contractual remedies resulting from investigations of fraud or corruption related to procurement activities.

(b) Recommendation To Reduce or Suspend Payments.—In any case in which the remedy coordination official of an executive 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 executive agency is based on fraud, the remedy coordination official shall recommend that the executive agency reduce or suspend further payments to that contractor.

(c) Reduction or Suspension of Payments.—The head of an executive agency receiving a recommendation under subsection (b) 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. On making an affirmative determination, the head of the executive agency may reduce or suspend further payments to the contractor under the contract.

(d) Extent of Reduction or Suspension.—The extent of any reduction or suspension of payments by an executive agency under subsection (c) on the basis of fraud shall be reasonably commensurate with the anticipated loss to the Federal Government resulting from the fraud.

(e) Written Justification.—A written justification for each decision of the head of an executive agency whether to reduce or suspend payments under subsection (c), and for each recommendation received by the executive agency in connection with the decision, shall be prepared and be retained in the files of the executive agency.

(f) Notice.—The head of each executive agency shall prescribe procedures to ensure that, before the head of the executive agency decides to reduce or suspend payments in the case of a contractor under subsection (c), the contractor is afforded notice of the proposed reduction or suspension and an opportunity to submit matters to the executive agency in response to the proposed reduction or suspension.

(g) Review.—Not later than 180 days after the date on which the head of an executive agency reduces or suspends payments to a contractor under subsection (c), the remedy coordination official of the executive agency shall—

(1) review the determination of fraud on which the reduction or suspension is based; and

(2) transmit a recommendation to the head of the executive agency whether the suspension or reduction should continue.

(h) Report.—The head of each executive agency who receives recommendations made by the remedy coordination official of the executive agency to reduce or suspend payments under subsection (c) during a fiscal year shall prepare for that year a report that contains the recommendations, the actions taken on the recommendations and the reasons for those actions, and an assessment of the effects of those actions on the Federal Government. The report shall be available to any Member of Congress on request.

(i) Restriction on Delegation.—The head of an executive agency may not delegate responsibilities under this section to an individual in a position below level IV of the Executive Schedule.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3792.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
4506	41:255(g).	June 30, 1949, ch. 288, title III, §305(g), as added Pub. L. 103–355, title II, §2051(e), Oct. 13, 1994, 108 Stat. 3305, as amended Pub. L. 104–106, title XLIII, §4321(a)(4), Feb. 10, 1996, 110 Stat. 671.

CHAPTER 47—MISCELLANEOUS

        

Editorial Notes

Amendments

2019—Pub. L. 116–92, div. A, title XI, §1123(a)(2), Dec. 20, 2019, 133 Stat. 1612, added item 4714.

2018—Pub. L. 115–390, title II, §203(b), Dec. 21, 2018, 132 Stat. 5192, added item 4713.

2016—Pub. L. 114–261, §1(a)(3)(B), Dec. 14, 2016, 130 Stat. 1362, added item 4712 and struck out former item 4712 "Pilot program for enhancement of contractor protection from reprisal for disclosure of certain information".

2013—Pub. L. 112–239, div. A, title VIII, §828(a)(2), Jan. 2, 2013, 126 Stat. 1840, added item 4712.

§4701. Determinations and decisions

(a) Individual or Class Determinations and Decisions Authorized.—

(1) In general.—Determinations and decisions required to be made under this division by the head of an executive agency or provided in this division or chapters 1 to 11 of title 40 to be made by the Administrator of General Services or other agency head may be made for an individual purchase or contract or, except for determinations or decisions made under sections 3105, 3301, 3303 to 3305, 3306(a)–(e), and 3308, chapter 37, and section 4702 of this title or to the extent expressly prohibited by another law, for a class of purchases or contracts.

(2) Delegation.—Except as provided in section 3304(a)(7) of this title, and except as provided in section 121(d)(1) and (2) of title 40 with respect to the Administrator of General Services, the agency head, in the discretion and subject to the direction of the agency head, may delegate powers provided by this division or chapters 1 to 11 of title 40, including the making of determinations and decisions described in paragraph (1), to other officers or officials of the agency.

(3) Finality.—The determinations and decisions are final.

(b) Written Findings.—

(1) Basis for certain determinations.—Each determination or decision under section 3901, 3905, 4503, or 4706(d)(2)(B) of this title shall be based on a written finding by the individual making the determination or decision. A finding under section 4503 or 4706(d)(2)(B) shall set out facts and circumstances that support the determination or decision.

(2) Finality.—Each finding referred to in paragraph (1) is final.

(3) Maintaining copies of findings.—The head of an executive agency shall maintain for a period of not less than 6 years a copy of each finding referred to in paragraph (1) that is made by an individual in that executive agency. The period begins on the date of the determination or decision to which the finding relates.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3793.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
4701	41:257.	June 30, 1949, ch. 288, title III, §307, 63 Stat. 396; Pub. L. 85–800, §5, Aug. 28, 1958, 72 Stat. 967; Pub. L. 89–343, §§3, 4, Nov. 8, 1965, 79 Stat. 1303; Pub. L. 98–369, title VII, §2714(a)(4), July 18, 1984, 98 Stat. 1184; Pub. L. 104–106, title XLIII, §4321(e)(6), Feb. 10, 1996, 110 Stat. 675; Pub. L. 104–316, title I, §121(c), Oct. 19, 1996, 110 Stat. 3836.
	41:262.	June 30, 1949, ch. 288, title III, §312, as added Pub. L. 103–355, title I, §1553, Oct. 13, 1994, 108 Stat. 3300.

§4702. Prohibition on release of contractor proposals

(a) Definition.—In this section, the term "proposal" means a proposal, including a technical, management, or cost proposal, submitted by a contractor in response to the requirements of a solicitation for a competitive proposal.

(b) Prohibition.—A proposal in the possession or control of an executive agency may not be made available to any person under section 552 of title 5.

(c) Nonapplication.—Subsection (b) does not apply to a proposal that is set forth or incorporated by reference in a contract entered into between the agency and the contractor that submitted the proposal.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3794.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
4702(a)	41:253b(m)(3).	June 30, 1949, ch. 288, title III, §303B(m), as added Pub. L. 104–201, title VIII, §821(b), Sept. 23, 1996, 110 Stat. 2609.
4702(b)	41:253b(m)(1).
4702(c)	41:253b(m)(2).

In subsection (b), the words "Except as provided in paragraph (2)" are omitted as unnecessary.

§4703. Validation of proprietary data restrictions

(a) Contract That Provides for Delivery of Technical Data.—A contract for property or services entered into by an executive agency that provides for the delivery of technical data shall provide that—

(1) a contractor or subcontractor at any tier shall be prepared to furnish to the contracting officer a written justification for any restriction the contractor or subcontractor asserts on the right of the Federal Government to use the data; and

(2) the contracting officer may review the validity of a restriction the contractor or subcontractor asserts under the contract on the right of the Federal Government to use technical data furnished to the Federal Government under the contract if the contracting officer determines that reasonable grounds exist to question the current validity of the asserted restriction and that the continued adherence to the asserted restriction by the Federal Government would make it impracticable to procure the item competitively at a later time.

(b) Challenge of Restriction.—If after a review the contracting officer determines that a challenge to the asserted restriction is warranted, the contracting officer shall provide written notice to the contractor or subcontractor asserting the restriction. The notice shall state—

(1) the grounds for challenging the asserted restriction; and

(2) the requirement for a response within 60 days justifying the current validity of the asserted restriction.

(c) Additional Time for Responses.—If a contractor or subcontractor asserting a restriction subject to this section 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, the contracting officer shall provide appropriate additional time to adequately permit the justification to be submitted.

(d) Multiple Challenges.—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 earliest 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 challenge.

(e) Decision on Validity of Asserted Restriction.—

(1) No response submitted.—The contracting officer shall issue a decision pertaining to the validity of the asserted restriction if the contractor or subcontractor does not submit a response under subsection (b).

(2) Response submitted.—Within 60 days of receipt of a justification submitted in response to the notice provided pursuant to subsection (b), a contracting officer shall issue a decision or notify the party asserting the restriction of the time within which a decision will be issued.

(f) Claim Deemed Claim Within Chapter 71.—A claim pertaining to the validity of the asserted restriction that is submitted in writing to a contracting officer by a contractor or subcontractor at any tier is deemed to be a claim within the meaning of chapter 71 of this title.

(g) Final Disposition of Challenge.—

(1) Challenge is sustained.—If the contracting officer's challenge to the restriction on the right of the Federal Government to use technical data is sustained on final disposition—

(A) the restriction is cancelled; and

(B) if the asserted restriction is found not to be substantially justified, the contractor or subcontractor, as appropriate, is liable to the Federal Government for payment of the cost to the Federal Government 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 Federal Government in challenging the asserted restriction, unless special circumstances would make the payment unjust.

(2) Challenge not sustained.—If the contracting officer's challenge to the restriction on the right of the Federal Government to use technical data is not sustained on final disposition, the Federal Government—

(A) continues to be bound by the restriction; and

(B) is 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 Federal Government is found not to be made in good faith.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3794.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
4703(a)	41:253d(a).	June 30, 1949, ch. 288, title III, §303D, formerly §303E, as added Pub. L. 98–577, title II, §203(a), Oct. 30, 1984, 98 Stat. 3071; renumbered §303D, Pub. L. 99–145, title XIII, §1304(c)(4)(A), Nov. 8, 1985, 99 Stat. 742.
4703(b)	41:253d(b).
4703(c)	41:253d(c) (1st sentence).
4703(d)	41:253d(c) (last sentence).
4703(e)	41:253d(d).
4703(f)	41:253d(e).
4703(g)	41:253d(f).

§4704. Prohibition of contractors limiting subcontractor sales directly to Federal Government

(a) Contract Restrictions.—Each contract for the purchase of property or services made by an executive agency shall provide that the contractor will not—

(1) enter into an agreement with a subcontractor under the contract that has the effect of unreasonably restricting sales by the subcontractor directly to the Federal Government of any item or process (including computer software) made or furnished by the subcontractor under the contract (or any follow-on production contract); or

(2) otherwise act to restrict unreasonably the ability of a subcontractor to make sales described in paragraph (1) to the Federal Government.

(b) Rights Under Law Preserved.—This section does not prohibit a contractor from asserting rights it otherwise has under law.

(c) Inapplicability to Certain Contracts.—This section does not apply to a contract for an amount that is not greater than the simplified acquisition threshold.

(d) Inapplicability When Government Treated Similarly to Other Purchasers.—An agreement between the contractor in a contract for the acquisition of commercial products or commercial services and a subcontractor under the contract that restricts sales by the subcontractor directly to persons other than the contractor may not be considered to unreasonably restrict sales by that subcontractor to the Federal Government in violation of the provision included in the contract pursuant to subsection (a) if the agreement does not result in the Federal Government being treated differently with regard to the restriction than any other prospective purchaser of the commercial products or commercial services from that subcontractor.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3795; Pub. L. 115–232, div. A, title VIII, §836(b)(19), Aug. 13, 2018, 132 Stat. 1864.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
4704(a)	41:253g(a).	June 30, 1949, ch. 288, title III, §303G(a), (b), formerly §303H, as added Pub. L. 98–577, title II, §206(a), Oct. 30, 1984, 98 Stat. 3073; renumbered §303G, Pub. L. 99–145, title XIII, §1304(c)(4)(A), Nov. 8, 1985, 99 Stat. 742.
4704(b)	41:253g(b).
4704(c)	41:253g(c).	June 30, 1949, ch. 288, title III, §303G(c), as added Pub. L. 103–355, title IV, §4103(b), Oct. 13, 1994, 108 Stat. 3341.
4704(d)	41:253g(d).	June 30, 1949, ch. 288, title III, §303G(d), as added Pub. L. 103–355, title VIII, §8204(a), Oct. 13, 1994, 108 Stat. 3396.

Editorial Notes

Amendments

2018—Subsec. (d). Pub. L. 115–232 substituted "commercial products or commercial services" for "commercial items" in two places.

Statutory Notes and Related Subsidiaries

Effective Date of 2018 Amendment

Amendment by Pub. L. 115–232 effective Jan. 1, 2020, subject to a savings provision, see section 836(h) of Pub. L. 115–232, set out as an Effective Date of 2018 Amendment; Savings Provision note under section 453b of Title 6, Domestic Security.

§4705. Protection of contractor employees from reprisal for disclosure of certain information

(a) Definitions.—In this section:

(1) Contract.—The term "contract" means a contract awarded by the head of an executive agency.

(2) Contractor.—The term "contractor" means a person awarded a contract with an executive agency.

(3) Inspector general.—The term "Inspector General" means an Inspector General appointed under chapter 4 of title 5.

(b) Prohibition of Reprisals.—An employee of a contractor may not be discharged, demoted, or otherwise discriminated against as a reprisal for disclosing to a Member of Congress or an authorized official of an executive agency or the Department of Justice information relating to a substantial violation of law related to a contract (including the competition for, or negotiation of, a contract).

(c) Investigation of Complaints.—An individual who believes that the individual has been subjected to a reprisal prohibited by subsection (b) may submit a complaint to the Inspector General of the executive agency. Unless the Inspector General determines that the complaint is frivolous, the Inspector General shall investigate the complaint and, on completion of the investigation, submit a report of the findings of the investigation to the individual, the contractor concerned, and the head of the agency. If the executive agency does not have an Inspector General, the duties of the Inspector General under this section shall be performed by an official designated by the head of the executive agency.

(d) Remedy and Enforcement Authority.—

(1) Actions contractor may be ordered to take.—If the head of an executive agency determines that a contractor has subjected an individual to a reprisal prohibited by subsection (b), the head of the executive agency may take one or more of the following actions:

(A) Abatement.—Order the contractor to take affirmative action to abate the reprisal.

(B) Reinstatement.—Order the contractor to reinstate the individual to the position that the individual held before the reprisal, together with the compensation (including back pay), employment benefits, and other terms and conditions of employment that would apply to the individual in that position if the reprisal had not been taken.

(C) Payment.—Order the contractor to pay the complainant an amount equal to the aggregate amount of all costs and expenses (including attorneys' fees and expert witnesses' fees) that the complainant reasonably incurred for, or in connection with, bringing the complaint regarding the reprisal, as determined by the head of the executive agency.

(2) Enforcement order.—When a contractor fails to comply with an order issued under paragraph (1), the head of the executive agency shall file an action for enforcement of the order in the United States district court for a district in which the reprisal was found to have occurred. In an action brought under this paragraph, the court may grant appropriate relief, including injunctive relief and compensatory and exemplary damages.

(3) Review of enforcement order.—A person adversely affected or aggrieved by an order issued under paragraph (1) may obtain review of the order's conformance with this subsection, and regulations issued to carry out this section, in the United States court of appeals for a circuit in which the reprisal is alleged in the order to have occurred. A petition seeking review must be filed no more than 60 days after the head of the agency issues the order. Review shall conform to chapter 7 of title 5.

(e) Scope of Section.—This section does not—

(1) authorize the discharge of, demotion of, or discrimination against an employee for a disclosure other than a disclosure protected by subsection (b); or

(2) modify or derogate from a right or remedy otherwise available to the employee.

(f) Four-year Suspension of Effectiveness While Pilot Program Is in Effect.—While section 4712 ¹ of this title is in effect, this section shall not be in effect.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3796; Pub. L. 112–239, div. A, title VIII, §828(c), Jan. 2, 2013, 126 Stat. 1841; Pub. L. 117–286, §4(b)(72), Dec. 27, 2022, 136 Stat. 4351.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
4705(a)	41:265(e).	June 30, 1949, ch. 288, title III, §315, as added Pub. L. 103–355, title VI, §6006, Oct. 13, 1994, 108 Stat. 3365; Pub. L. 104–106, title XLIII, §4321(e)(8), Feb. 10, 1996, 110 Stat. 675.
4705(b)	41:265(a).
4705(c)	41:265(b).
4705(d)	41:265(c).
4705(e)	41:265(d).

In subsection (d)(2), the word "contractor" is substituted for "person" for clarity and for consistency with subsection (d)(1).

Editorial Notes

References in Text

Section 4712 of this title, referred to in subsec. (f), formerly referred to a pilot program in the section catchline and contained a subsec. (i) which provided that section 4712 would be in effect for a specified four-year period. The section catchline was amended and subsec. (i) was struck out by Pub. L. 114–261, §1(a)(3)(A), Dec. 14, 2016, 130 Stat. 1362.

Amendments

2022—Subsec. (a)(3). Pub. L. 117–286 substituted "chapter 4 of title 5." for "the Inspector General Act of 1978 (5 U.S.C. App.)."

2013—Subsec. (f). Pub. L. 112–239 added subsec. (f).

¹ See References in Text note below.

§4706. Examination of facilities and records of contractor

(a) Definition.—In this section, the term "records" includes books, documents, accounting procedures and practices, and other data, regardless of type and regardless of whether the items are in written form, in the form of computer data, or in any other form.

(b) Agency Authority.—

(1) Inspection of plant and audit of records.—The head of an executive agency, acting through an authorized representative, may 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 those contracts, the executive agency makes under this division; and

(B) a subcontractor performing a cost-reimbursement, incentive, time-and-materials, labor-hour, or price-redeterminable subcontract, or any combination of those subcontracts, under a contract referred to in subparagraph (A).

(2) Examination of records.—The head of an executive agency, acting through an authorized representative, may, for the purpose of evaluating the accuracy, completeness, and currency of certified cost or pricing data required to be submitted pursuant to chapter 35 of this title with respect to a contract or subcontract, 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.

(c) Subpoena Power.—

(1) Authority to require the production of records.—The Inspector General of an executive agency appointed under section 403 or 415 of title 5 or, on request of the head of an executive agency, the Director of the Defense Contract Audit Agency (or any successor agency) of the Department of Defense or the Inspector General of the General Services Administration may require by subpoena the production of records of a contractor, access to which is provided for that executive agency by subsection (b).

(2) Enforcement of subpoena.—A subpoena under paragraph (1), in the case of contumacy or refusal to obey, is enforceable by order of an appropriate United States district court.

(3) Authority not delegable.—The authority provided by paragraph (1) may not be delegated.

(4) Report.—In the year following a year in which authority provided in paragraph (1) is exercised for an executive agency, the head of the executive agency shall submit to the Committee on Homeland Security and Governmental Affairs of the Senate and the Committee on Oversight and Government Reform of the House of Representatives a report on the exercise of the authority during the preceding year and the reasons why the authority was exercised in any instance.

(d) Authority of Comptroller General.—

(1) In general.—Except as provided in paragraph (2), each contract awarded after using procedures other than sealed bid procedures shall provide that the Comptroller General and representatives of the Comptroller General may examine 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 the transactions.

(2) Exception for foreign contractor or subcontractor.—Paragraph (1) does not apply to a contract or subcontract with a foreign contractor or foreign subcontractor if the executive agency concerned determines, with the concurrence of the Comptroller General or the designee of the Comptroller General, that applying paragraph (1) to the contract or subcontract would not be in the public interest. The concurrence of the Comptroller General or the designee is not required when—

(A) the contractor or subcontractor is—

(i) the government of a foreign country or an agency of that government; or

(ii) precluded by the laws of the country involved from making its records available for examination; and

(B) the executive 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) Additional records not required.—Paragraph (1) does not require a contractor or subcontractor to create or maintain a record that the contractor or subcontractor does not maintain in the ordinary course of business or pursuant to another law.

(e) Limitation on Audits Relating to Indirect Costs.—An executive 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 when 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 another department or agency of the Federal Government within one year preceding the date of the contracting officer's determination.

(f) Expiration of Authority.—The authority of an executive agency under subsection (b) and the authority of the Comptroller General under subsection (d) shall expire 3 years after final payment under the contract or subcontract.

(g) 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 not greater than the simplified acquisition threshold.

(h) Electronic Form Allowed.—This section does not preclude a contractor from duplicating or storing original records in electronic form.

(i) Original Records Not Required.—An executive 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) Preservation procedures established.—The contractor or subcontractor has established procedures to ensure that the imaging process preserves the integrity, reliability, and security of the original records.

(2) Indexing system maintained.—The contractor or subcontractor maintains an effective indexing system to permit timely and convenient access to the imaged records.

(3) Original records retained.—The contractor or subcontractor retains the original records for a minimum of one year after imaging to permit periodic validation of the imaging systems.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3797; Pub. L. 117–286, §4(b)(73), Dec. 27, 2022, 136 Stat. 4351.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
4706(a)	41:254d(i).	June 30, 1949, ch. 288, title III, §304C(a)(1), (b), (g)–(i), as added Pub. L. 103–355, title II, §2251(a), Oct. 13, 1994, 108 Stat. 3318, 3320.
4706(b)(1)	41:254d(a)(1).
4706(b)(2)	41:254d(a)(2).	June 30, 1949, ch. 288, title III, §304C(a)(2), as added Pub. L. 103–355, title II, §2251(a), Oct. 13, 1994, 108 Stat. 3318; Pub. L. 104–106, title XLIII, §4321(e)(5), Feb. 10, 1996, 110 Stat. 675.
4706(c)	41:254d(b).
4706(d)	41:254d(c).	June 30, 1949, ch. 288, title III, §304C(c), as added Pub. L. 103–355, title II, §2251(a), Oct. 13, 1994, 108 Stat. 3319; Pub. L. 110–417, title VIII, §871(a), Oct. 14, 2008, 122 Stat.4555.
4706(e)	41:254d(d).	June 30, 1949, ch. 288, title III, §304C(d), as added Pub. L. 103–355, title II, §2251(a), Oct. 13, 1994, 108 Stat. 3319; Pub. L. 104–201, title VIII, §808(b), Sept. 23, 1996, 110 Stat. 2607.
4706(f)	41:254d(e).
4706(g)	41:254d(f).	June 30, 1949, ch. 288, title III, §304C(f), as added and amended Pub. L. 103–355, title II, §2251(a), title IV, §4103(d), Oct. 13, 1994, 108 Stat. 3320, 3341.
4706(h)	41:254d(g).
4706(i)	41:254d(h).

In subsection (c)(4), the words "Committee on Oversight and Government Reform" are substituted for "Committee on Government Operations" on authority of section 1(a)(6) of Public Law 104–14 (2 U.S.C. note prec. 21), Rule X(1)(h) of the Rules of the House of Representatives, adopted by House Resolution No. 5 (106th Congress, January 6, 1999), and Rule X(1)(m) of the Rules of the House of Representatives, adopted by House Resolution No. 6 (110th Congress, January 5, 2007). The words "Committee on Homeland Security and Governmental Affairs" are substituted for "Committee on Governmental Affairs" on authority of Senate Resolution No. 445 (108th Congress, October 9, 2004).

Editorial Notes

Amendments

2022—Subsec. (c)(1). Pub. L. 117–286 substituted "section 403 or 415 of title 5" for "section 3 or 8G of the Inspector General Act of 1978 (5 U.S.C. App.)".

Statutory Notes and Related Subsidiaries

Change of Name

Committee on Oversight and Government Reform of House of Representatives changed to Committee on Oversight and Reform of House of Representatives by House Resolution No. 6, One Hundred Sixteenth Congress, Jan. 9, 2019. Committee on Oversight and Reform of House of Representatives changed to Committee on Oversight and Accountability of House of Representatives by House Resolution No. 5, One Hundred Eighteenth Congress, Jan. 9, 2023.

§4707. Remission of liquidated damages

When a contract made on behalf of the Federal Government by the head of a Federal agency, or by an authorized officer of the agency, includes a provision for liquidated damages for delay, the Secretary of the Treasury on recommendation of the head of the agency may remit any part of the damages as the Secretary of the Treasury believes is just and equitable.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3799.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
4707	41:256a.	Sept. 5, 1950, ch. 849, §10(a), 64 Stat. 591; Pub. L. 104–316, title II, §202(u), Oct. 19, 1996, 110 Stat. 3845.

§4708. Payment of reimbursable indirect costs in cost-type research and development contracts with educational institutions

A cost-type research and development contract (including a grant) with a university, college, or other educational institution may provide for payment of reimbursable indirect costs on the basis of predetermined fixed-percentage rates applied to the total of the reimbursable direct costs incurred or to an element of the total of the reimbursable direct costs incurred.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3799.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
4708	41:254a.	Pub. L. 87–638, Sept. 5, 1962, 76 Stat. 437.

The words "On and after September 5, 1962" are omitted as obsolete.

§4709. Implementation of electronic commerce capability

(a) Role of Head of Executive Agency.—The head of each executive agency shall implement the electronic commerce capability required by section 2301 of this title. In implementing the capability, the head of an executive agency shall consult with the Administrator.

(b) Program Manager.—The head of each executive agency shall designate a program manager to implement the electronic commerce capability for the agency. The program manager reports directly to an official at a level not lower than the senior procurement executive designated for the agency under section 1702(c) of this title.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3800.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
4709	41:252c.	June 30, 1949, ch. 288, title III, §302C, as added Pub. L. 103–355, title IX, §9003, Oct. 13, 1994, 108 Stat. 3403; Pub. L. 105–85, title VIII, §850(f)(4)(A), Nov. 18, 1997, 111 Stat. 1850.

§4710. Limitations on tiering of subcontractors

(a) Definition.—In this section, the term "executive agency" has the same meaning given in section 133 of this title.

(b) Regulations.—For executive agencies other than the Department of Defense, the Federal Acquisition Regulation shall—

(1) require contractors to minimize the excessive use of subcontractors, or of tiers of subcontractors, that add no or negligible value; and

(2) ensure that neither a contractor nor a subcontractor receives indirect costs or profit on work performed by a lower-tier subcontractor to which the higher-tier contractor or subcontractor adds no or negligible value (but not to limit charges for indirect costs and profit based on the direct costs of managing lower-tier subcontracts).

(c) Covered Contracts.—This section applies to any cost-reimbursement type contract or task or delivery order in an amount greater than the simplified acquisition threshold (as defined by section 134 of this title).

(d) Rule of Construction.—Nothing in this section shall be construed as limiting the ability of the Department of Defense to implement more restrictive limitations on the tiering of subcontractors.

(e) Applicability.—The Department of Defense shall continue to be subject to guidance on limitations on tiering of subcontractors issued by the Department of Defense pursuant to section 852 of the John Warner National Defense Authorization Act for Fiscal Year 2007 (Public Law 109–364, 10 U.S.C. 2324 note).

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3800.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
4710	41:254b note.	Pub. L. 110–417, [div. A], title VIII, §866, Oct. 14, 2008, 122 Stat. 4551.

In subsection (b), the words "Not later than one year after the date of the enactment of this Act" are omitted because of section 6(f) of the bill. The word "shall" is substituted for the words "shall be amended" to reflect the permanence of the provision.

§4711. Linking of award and incentive fees to acquisition outcomes

(a) Definition.—In this section, the term "executive agency" has the same meaning given in section 133 of this title.

(b) Guidance for Executive Agencies on Linking of Award and Incentive Fees to Acquisition Outcomes.—The Federal Acquisition Regulation shall provide executive agencies other than the Department of Defense with instructions, including definitions, on the appropriate use of award and incentive fees in Federal acquisition programs.

(c) Elements.—The regulations under subsection (b) shall—

(1) ensure that all new contracts using award fees link the fees to acquisition outcomes (which shall be defined in terms of program cost, schedule, and performance);

(2) establish standards for identifying the appropriate level of officials authorized to approve the use of award and incentive fees in new contracts;

(3) provide guidance on the circumstances in which contractor performance may be judged to be "excellent" or "superior" and the percentage of the available award fee which contractors should be paid for the performance;

(4) establish standards for determining the percentage of the available award fee, if any, which contractors should be paid for performance that is judged to be "acceptable", "average", "expected", "good", or "satisfactory";

(5) ensure that no award fee may be paid for contractor performance that is judged to be below satisfactory performance or performance that does not meet the basic requirements of the contract;

(6) provide specific direction on the circumstances, if any, in which it may be appropriate to roll over award fees that are not earned in one award fee period to a subsequent award fee period or periods;

(7) ensure consistent use of guidelines and definitions relating to award and incentive fees across the Federal Government;

(8) ensure that each executive agency—

(A) collects relevant data on award and incentive fees paid to contractors; and

(B) has mechanisms in place to evaluate the data on a regular basis;

(9) include performance measures to evaluate the effectiveness of award and incentive fees as a tool for improving contractor performance and achieving desired program outcomes; and

(10) provide mechanisms for sharing proven incentive strategies for the acquisition of different types of products and services among contracting and program management officials.

(d) Guidance for Department of Defense.—The Department of Defense shall continue to be subject to guidance on award and incentive fees issued by the Secretary of Defense pursuant to section 814 of the John Warner National Defense Authorization Act for Fiscal Year 2007 (Public Law 109–364, 10 U.S.C. 2302 note).

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3800.)

Historical and Revision Notes

Revised Section	Source (U.S. Code)	Source (Statutes at Large)
4711	41:251 note.	Pub. L. 110–417, [div. A], title VIII, §867, Oct. 14, 2008, 122 Stat. 4551.

In subsection (b), the words "Not later than 1 year after the date of the enactment of this Act" are omitted because of section 6(f) of the bill. The words "shall provide" are substituted for "shall be amended to provide" to reflect the permanence of the provision.

§4712. Enhancement of contractor protection from reprisal for disclosure of certain information

(a) Prohibition of Reprisals.—

(1) In general.—An employee of a contractor, subcontractor, grantee, subgrantee, or personal services contractor may not be discharged, demoted, or otherwise discriminated against as a reprisal for disclosing to a person or body described in paragraph (2) information that the employee reasonably believes is evidence of gross mismanagement of a Federal contract or grant, a gross waste of Federal funds, an abuse of authority relating to a Federal contract or grant, a substantial and specific danger to public health or safety, or a violation of law, rule, or regulation related to a Federal contract (including the competition for or negotiation of a contract) or grant.

(2) Persons and bodies covered.—The persons and bodies described in this paragraph are the persons and bodies as follows:

(A) A Member of Congress or a representative of a committee of Congress.

(B) An Inspector General.

(C) The Government Accountability Office.

(D) A Federal employee responsible for contract or grant oversight or management at the relevant agency.

(E) An authorized official of the Department of Justice or other law enforcement agency.

(F) A court or grand jury.

(G) A management official or other employee of the contractor, subcontractor, grantee, subgrantee, or personal services contractor who has the responsibility to investigate, discover, or address misconduct.

(3) Rules of construction.—For the purposes of paragraph (1)—

(A) an employee who initiates or provides evidence of contractor, subcontractor, grantee, subgrantee, or personal services contractor misconduct in any judicial or administrative proceeding relating to waste, fraud, or abuse on a Federal contract or grant shall be deemed to have made a disclosure covered by such paragraph; and

(B) a reprisal described in paragraph (1) is prohibited even if it is undertaken at the request of an executive branch official, unless the request takes the form of a non-discretionary directive and is within the authority of the executive branch official making the request.

(b) Investigation of Complaints.—

(1) Submission of complaint.—A person who believes that the person has been subjected to a reprisal prohibited by subsection (a) may submit a complaint to the Inspector General of the executive agency involved. Unless the Inspector General determines that the complaint is frivolous, fails to allege a violation of the prohibition in subsection (a), or has previously been addressed in another Federal or State judicial or administrative proceeding initiated by the complainant, the Inspector General shall investigate the complaint and, upon completion of such investigation, submit a report of the findings of the investigation to the person, the contractor, subcontractor, grantee, subgrantee, or personal services contractor concerned, and the head of the agency.

(2) Inspector general action.—

(A) Determination or submission of report on findings.—Except as provided under subparagraph (B), the Inspector General shall make a determination that a complaint is frivolous, fails to allege a violation of the prohibition in subsection (a), or has previously been addressed in another Federal or State judicial or administrative proceeding initiated by the complainant or submit a report under paragraph (1) within 180 days after receiving the complaint.

(B) Extension of time.—If the Inspector General is unable to complete an investigation in time to submit a report within the 180-day period specified in subparagraph (A) and the person submitting the complaint agrees to an extension of time, the Inspector General shall submit a report under paragraph (1) within such additional period of time, up to 180 days, as shall be agreed upon between the Inspector General and the person submitting the complaint.

(3) Prohibition on disclosure.—The Inspector General may not respond to any inquiry or disclose any information from or about any person alleging the reprisal, except to the extent that such response or disclosure is—

(A) made with the consent of the person alleging the reprisal;

(B) made in accordance with the provisions of section 552a of title 5 or as required by any other applicable Federal law; or

(C) necessary to conduct an investigation of the alleged reprisal.

(4) Time limitation.—A complaint may not be brought under this subsection more than three years after the date on which the alleged reprisal took place.

(c) Remedy and Enforcement Authority.—

(1) In general.—Not later than 30 days after receiving an Inspector General report pursuant to subsection (b), the head of the executive agency concerned shall determine whether there is sufficient basis to conclude that the contractor, subcontractor, grantee, subgrantee, or personal services contractor concerned has subjected the complainant to a reprisal prohibited by subsection (a) and shall either issue an order denying relief or shall take one or more of the following actions:

(A) Order the contractor, subcontractor, grantee, subgrantee, or personal services contractor to take affirmative action to abate the reprisal.

(B) Order the contractor, subcontractor, grantee, subgrantee, or personal services contractor to reinstate the person to the position that the person held before the reprisal, together with compensatory damages (including back pay), employment benefits, and other terms and conditions of employment that would apply to the person in that position if the reprisal had not been taken.

(C) Order the contractor, subcontractor, grantee, subgrantee, or personal services contractor to pay the complainant an amount equal to the aggregate amount of all costs and expenses (including attorneys' fees and expert witnesses' fees) that were reasonably incurred by the complainant for, or in connection with, bringing the complaint regarding the reprisal, as determined by the head of the executive agency.

(D) Consider disciplinary or corrective action against any official of the executive agency, if appropriate.

(2) Exhaustion of remedies.—If the head of an executive agency issues an order denying relief under paragraph (1) or has not issued an order within 210 days after the submission of a complaint under subsection (b), or in the case of an extension of time under paragraph (b)(2)(B), not later than 30 days after the expiration of the extension of time, and there is no showing that such delay is due to the bad faith of the complainant, the complainant shall be deemed to have exhausted all administrative remedies with respect to the complaint, and the complainant may bring a de novo action at law or equity against the contractor, subcontractor, grantee, subgrantee, or personal services contractor to seek compensatory damages and other relief available under this section in the appropriate district court of the United States, which shall have jurisdiction over such an action without regard to the amount in controversy. Such an action shall, at the request of either party to the action, be tried by the court with a jury. An action under this paragraph may not be brought more than two years after the date on which remedies are deemed to have been exhausted.

(3) Admissibility of evidence.—An Inspector General determination and an agency head order denying relief under paragraph (2) shall be admissible in evidence in any de novo action at law or equity brought pursuant to this subsection.

(4) Enforcement of orders.—Whenever a person fails to comply with an order issued under paragraph (1), the head of the executive agency concerned shall file an action for enforcement of such order in the United States district court for a district in which the reprisal was found to have occurred. In any action brought under this paragraph, the court may grant appropriate relief, including injunctive relief, compensatory and exemplary damages, and attorney fees and costs. The person upon whose behalf an order was issued may also file such an action or join in an action filed by the head of the executive agency.

(5) Judicial review.—Any person adversely affected or aggrieved by an order issued under paragraph (1) may obtain review of the order's conformance with this subsection, and any regulations issued to carry out this section, in the United States court of appeals for a circuit in which the reprisal is alleged in the order to have occurred. No petition seeking such review may be filed more than 60 days after issuance of the order by the head of the executive agency. Review shall conform to chapter 7 of title 5. Filing such an appeal shall not act to stay the enforcement of the order of the head of an executive agency, unless a stay is specifically entered by the court.

(6) Burdens of proof.—The legal burdens of proof specified in section 1221(e) of title 5 shall be controlling for the purposes of any investigation conducted by an Inspector General, decision by the head of an executive agency, or judicial or administrative proceeding to determine whether discrimination prohibited under this section has occurred.

(7) Rights and remedies not waivable.—The rights and remedies provided for in this section may not be waived by any agreement, policy, form, or condition of employment.

(d) Notification of Employees.—The head of each executive agency shall ensure that contractors, subcontractors, grantees, subgrantees, and personal services contractors of the agency inform their employees in writing of the rights and remedies provided under this section, in the predominant native language of the workforce.

(e) Construction.—Nothing in this section may be construed to authorize the discharge of, demotion of, or discrimination against an employee for a disclosure other than a disclosure protected by subsection (a) or to modify or derogate from a right or remedy otherwise available to the employee.

(f) Exceptions.—(1) This section shall not apply to any element of the intelligence community, as defined in section 3(4) of the National Security Act of 1947 (50 U.S.C. 401a(4)).

(2) This section shall not apply to any disclosure made by an employee of a contractor, subcontractor, grantee, subgrantee, or personal services contractor of an element of the intelligence community if such disclosure—

(A) relates to an activity of an element of the intelligence community; or

(B) was discovered during contract, subcontract, grantee, subgrantee, or personal services contractor services provided to an element of the intelligence community.

(g) Definitions.—In this section:

(1) The term "abuse of authority" means an arbitrary and capricious exercise of authority that is inconsistent with the mission of the executive agency concerned or the successful performance of a contract or grant of such agency.

(2) The term "Inspector General" means an Inspector General appointed under chapter 4 of title 5 and any Inspector General that receives funding from, or has oversight over contracts or grants awarded for or on behalf of, the executive agency concerned.

(h) Construction.—Nothing in this section, or the amendments made by this section,¹ shall be construed to provide any rights to disclose classified information not otherwise provided by law.

(Added Pub. L. 112–239, div. A, title VIII, §828(a)(1), Jan. 2, 2013, 126 Stat. 1837; amended Pub. L. 113–66, div. A, title X, §1091(e), Dec. 26, 2013, 127 Stat. 876; Pub. L. 114–261, §1(a)(2), (3)(A), Dec. 14, 2016, 130 Stat. 1362; Pub. L. 116–260, div. U, title VIII, §801, Dec. 27, 2020, 134 Stat. 2297; Pub. L. 117–263, div. A, title VIII, §807(b), Dec. 23, 2022, 136 Stat. 2704; Pub. L. 117–286, §4(b)(74), Dec. 27, 2022, 136 Stat. 4351.)

Editorial Notes

Amendments

2022—Subsec. (a)(1). Pub. L. 117–263, §807(b)(1)(A), substituted "subgrantee," for "or subgrantee".

Subsec. (a)(2)(G). Pub. L. 117–263, §807(b)(1)(B), substituted "subgrantee, or personal services contractor" for "or subgrantee".

Subsec. (a)(3)(A). Pub. L. 117–263, §807(b)(1)(C), substituted "subgrantee, or personal services contractor" for "or subgrantee".

Subsec. (b)(1). Pub. L. 117–263, §807(b)(2), substituted "subgrantee, or personal services contractor concerned" for "or subgrantee concerned".

Subsec. (c)(1). Pub. L. 117–263, §807(b)(3)(A)(i), substituted "subgrantee, or personal services contractor concerned" for "or subgrantee concerned" in introductory provisions.

Subsec. (c)(1)(A). Pub. L. 117–263, §807(b)(3)(A)(ii), substituted "subgrantee, or personal services contractor" for "or subgrantee".

Subsec. (c)(1)(B). Pub. L. 117–263, §807(b)(3)(A)(iii), substituted "subgrantee, or personal services contractor" for "or subgrantee".

Subsec. (c)(1)(C). Pub. L. 117–263, §807(b)(3)(A)(iv), substituted "subgrantee, or personal services contractor" for "or subgrantee".

Subsec. (c)(1)(D). Pub. L. 117–263, §807(b)(3)(A)(v), added subpar. (D).

Subsec. (c)(2). Pub. L. 117–263, §807(b)(3)(B), substituted "subgrantee, or personal services contractor" for "or subgrantee".

Subsec. (d). Pub. L. 117–263, §807(b)(4), substituted "subgrantees, and personal services contractors" for "and subgrantees".

Subsec. (f)(2). Pub. L. 117–263, §807(b)(5), substituted "subgrantee, or personal services contractor" for "or subgrantee" in two places.

Subsec. (g)(2). Pub. L. 117–286 substituted "chapter 4 of title 5" for "the Inspector General Act of 1978".

2020—Subsec. (a)(2)(G). Pub. L. 116–260, §801(1), substituted "grantee, or subgrantee" for "or grantee".

Subsec. (a)(3)(A). Pub. L. 116–260, §801(2), substituted "contractor, subcontractor, grantee, or subgrantee" for "contractor, subcontractor, or grantee".

Subsec. (b)(1). Pub. L. 116–260, §801(3), substituted "contractor, subcontractor, grantee, or subgrantee" for "contractor or grantee".

Subsec. (c). Pub. L. 116–260, §801(4), substituted "contractor, subcontractor, grantee, or subgrantee" for "contractor or grantee" wherever appearing.

Subsec. (d). Pub. L. 116–260, §801(5), substituted "grantees, and subgrantees" for "and grantees".

Subsec. (f). Pub. L. 116–260, §801(6), substituted "grantee, or subgrantee" for "or grantee" in two places.

2016—Pub. L. 114–261, §1(a)(3)(A)(i), substituted "Enhancement" for "Pilot program for enhancement" in section catchline.

Subsec. (a)(1). Pub. L. 114–261, §1(a)(2), substituted "grantee, or subgrantee or personal services contractor" for "or grantee".

Subsec. (i). Pub. L. 114–261, §1(a)(3)(A)(ii), struck out subsec. (i). Text read as follows: "This section shall be in effect for the four-year period beginning on the date of that is 180 days after the date the enactment of this section."

2013—Subsec. (i). Pub. L. 113–66 inserted "that is 180 days after the date" before "the enactment".

Statutory Notes and Related Subsidiaries

Effective Date of 2013 Amendment

Pub. L. 112–239, div. A, title VIII, §828(b), Jan. 2, 2013, 126 Stat. 1840, provided that:

"(1) In general.—The amendments made by subsection (a) [enacting this section] shall take effect on the date that is 180 days after the date of the enactment of this Act [Jan. 2, 2013], and shall, during the period section 4712 of title 41, United States Code, as added by such subsection, is in effect, apply to—

"(A) all contracts and grants awarded on or after such date;

"(B) all task orders entered on or after such date pursuant to contracts awarded before, on, or after such date; and

"(C) all contracts awarded before such date that are modified to include a contract clause providing for the applicability of such amendments.

"(2) Revision of federal acquisition regulation.—Not later than 180 days after the date of the enactment of this Act, the Federal Acquisition Regulation shall be revised to implement the requirements arising under the amendments made by this section [enacting this section and amending sections 4310 and 4705 of this title].

"(3) Inclusion of contract clause in contracts awarded before effective date.—At the time of any major modification to a contract that was awarded before the date that is 180 days after the date of the enactment of this Act [Jan. 2, 2013], the head of the contracting agency shall make best efforts to include in the contract a contract clause providing for the applicability of the amendments made by this section to the contract."

¹ So in original.

§4713. Authorities relating to mitigating supply chain risks in the procurement of covered articles

(a) Authority.—Subject to subsection (b), the head of an executive agency may carry out a covered procurement action.

(b) Determination and Notification.—Except as authorized by subsection (c) to address an urgent national security interest, the head of an executive agency may exercise the authority provided in subsection (a) only after—

(1) obtaining a joint recommendation, in unclassified or classified form, from the chief acquisition officer and the chief information officer of the agency, or officials performing similar functions in the case of executive agencies that do not have such officials, which includes a review of any risk assessment made available by the executive agency identified under section 1323(a)(3) of this title, that there is a significant supply chain risk in a covered procurement;

(2) providing notice of the joint recommendation described in paragraph (1) to any source named in the joint recommendation advising—

(A) that a recommendation is being considered or has been obtained;

(B) to the extent consistent with the national security and law enforcement interests, of information that forms the basis for the recommendation;

(C) that, within 30 days after receipt of the notice, the source may submit information and argument in opposition to the recommendation; and

(D) of the procedures governing the consideration of the submission and the possible exercise of the authority provided in subsection (a);

(3) making a determination in writing, in unclassified or classified form, after considering any information submitted by a source under paragraph (2) and in consultation with the chief information security officer of the agency, that—

(A) use of the authority under subsection (a) 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) the use of such authorities will apply to a single covered procurement or a class of covered procurements, and otherwise specifies the scope of the determination; and

(4) providing a classified or unclassified notice of the determination made under paragraph (3) to the appropriate congressional committees and leadership that includes—

(A) the joint recommendation described in paragraph (1);

(B) a summary of any risk assessment reviewed in support of the joint recommendation required by paragraph (1); and

(C) a summary of the basis for the determination, including a discussion of less intrusive measures that were considered and why such measures were not reasonably available to reduce supply chain risk.

(c) Procedures To Address Urgent National Security Interests.—In any case in which the head of an executive agency determines that an urgent national security interest requires the immediate exercise of the authority provided in subsection (a), the head of the agency—

(1) may, to the extent necessary to address such national security interest, and subject to the conditions in paragraph (2)—

(A) temporarily delay the notice required by subsection (b)(2);

(B) make the determination required by subsection (b)(3), regardless of whether the notice required by subsection (b)(2) has been provided or whether the notified source has submitted any information in response to such notice;

(C) temporarily delay the notice required by subsection (b)(4); and

(D) exercise the authority provided in subsection (a) in accordance with such determination within 60 calendar days after the day the determination is made; and

(2) shall take actions necessary to comply with all requirements of subsection (b) as soon as practicable after addressing the urgent national security interest, including—

(A) providing the notice required by subsection (b)(2);

(B) promptly considering any information submitted by the source in response to such notice, and making any appropriate modifications to the determination based on such information;

(C) providing the notice required by subsection (b)(4), including a description of the urgent national security interest, and any modifications to the determination made in accordance with subparagraph (B); and

(D) providing notice to the appropriate congressional committees and leadership within 7 calendar days of the covered procurement actions taken under this section.

(d) Confidentiality.—The notice required by subsection (b)(2) shall be kept confidential until a determination with respect to a covered procurement action has been made pursuant to subsection (b)(3).

(e) Delegation.—The head of an executive agency may not delegate the authority provided in subsection (a) or the responsibility identified in subsection (f) to an official below the level one level below the Deputy Secretary or Principal Deputy Director.

(f) Annual Review of Determinations.—The head of an executive agency shall conduct an annual review of all determinations made by such head under subsection (b) and promptly amend any covered procurement action as appropriate.

(g) Regulations.—The Federal Acquisition Regulatory Council shall prescribe such regulations as may be necessary to carry out this section.

(h) Reports Required.—Not less frequently than annually, the head of each executive agency that exercised the authority provided in subsection (a) or (c) during the preceding 12-month period shall submit to the appropriate congressional committees and leadership a report summarizing the actions taken by the agency under this section during that 12-month period.

(i) Rule of Construction.—Nothing in this section shall be construed to authorize the head of an executive agency to carry out a covered procurement action based solely on the fact of foreign ownership of a potential procurement source that is otherwise qualified to enter into procurement contracts with the Federal Government.

(j) Termination.—The authority provided under subsection (a) shall terminate on December 31, 2033.

(k) Definitions.—In this section:

(1) Appropriate congressional committees and leadership.—The term "appropriate congressional committees and leadership" means—

(A) the Committee on Homeland Security and Governmental Affairs, the Committee on the Judiciary, the Committee on Appropriations, the Committee on Armed Services, the Committee on Commerce, Science, and Transportation, the Select Committee on Intelligence, and the majority and minority leader of the Senate; and

(B) the Committee on Oversight and Government Reform, the Committee on the Judiciary, the Committee on Appropriations, the Committee on Homeland Security, the Committee on Armed Services, the Committee on Energy and Commerce, the Permanent Select Committee on Intelligence, and the Speaker and minority leader of the House of Representatives.

(2) Covered article.—The term "covered article" means—

(A) information technology, as defined in section 11101 of title 40, including cloud computing services of all types;

(B) telecommunications equipment or telecommunications service, as those terms are defined in section 3 of the Communications Act of 1934 (47 U.S.C. 153);

(C) the processing of information on a Federal or non-Federal information system, subject to the requirements of the Controlled Unclassified Information program; or

(D) hardware, systems, devices, software, or services that include embedded or incidental information technology.

(3) Covered procurement.—The term "covered procurement" means—

(A) a source selection for a covered article involving either a performance specification, as provided in subsection (a)(3)(B) of section 3306 of this title, or an evaluation factor, as provided in subsection (b)(1)(A) of such section, relating to a supply chain risk, or where supply chain risk considerations are included in the agency's determination of whether a source is a responsible source as defined in section 113 of this title;

(B) the consideration of proposals for and issuance of a task or delivery order for a covered article, as provided in section 4106(d)(3) of this title, where the task or delivery order contract includes a contract clause establishing a requirement relating to a supply chain risk;

(C) any contract action involving a contract for a covered article where the contract includes a clause establishing requirements relating to a supply chain risk; or

(D) any other procurement in a category of procurements determined appropriate by the Federal Acquisition Regulatory Council, with the advice of the Federal Acquisition Security Council.

(4) 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 requirements established under section 3311 of this title for the purpose of reducing supply chain risk in the acquisition or use of covered articles.

(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 determination that a source is not a responsible source as defined in section 113 of this title based on considerations of supply chain risk.

(D) The decision to withhold consent for a contractor to subcontract with a particular source or to direct a contractor to exclude a particular source from consideration for a subcontract under the contract.

(5) Information and communications technology.—The term "information and communications technology" means—

(A) information technology, as defined in section 11101 of title 40;

(B) information systems, as defined in section 3502 of title 44; and

(C) telecommunications equipment and telecommunications services, as those terms are defined in section 3 of the Communications Act of 1934 (47 U.S.C. 153).

(6) Supply chain risk.—The term "supply chain risk" means the risk that any person may sabotage, maliciously introduce unwanted function, extract data, or otherwise manipulate the design, integrity, manufacturing, production, distribution, installation, operation, maintenance, disposition, or retirement of covered articles so as to surveil, deny, disrupt, or otherwise manipulate the function, use, or operation of the covered articles or information stored or transmitted on the covered articles.

(7) Executive agency.—Notwithstanding section 3101(c)(1), this section applies to the Department of Defense, the Coast Guard, and the National Aeronautics and Space Administration.

(Added Pub. L. 115–390, title II, §203(a), Dec. 21, 2018, 132 Stat. 5189; amended Pub. L. 117–263, div. E, title LIX, §5949(k)(2), Dec. 23, 2022, 136 Stat. 3492.)

Editorial Notes

References in Text

Section 3101(c)(1), referred to in subsec. (k)(7), probably means section 3101(c)(1) of this title, which excepts the Department of Defense, the Coast Guard, and the National Aeronautics and Space Administration from applicability of the Procurement procedures and regulations of the Administrator of General Services.

Amendments

2022—Subsec. (j). Pub. L. 117–263 substituted "December 31, 2033" for "the date that is 5 years after the date of the enactment of the Federal Acquisition Supply Chain Security Act of 2018".

Statutory Notes and Related Subsidiaries

Change of Name

Committee on Oversight and Government Reform of House of Representatives changed to Committee on Oversight and Reform of House of Representatives by House Resolution No. 6, One Hundred Sixteenth Congress, Jan. 9, 2019. Committee on Oversight and Reform of House of Representatives changed to Committee on Oversight and Accountability of House of Representatives by House Resolution No. 5, One Hundred Eighteenth Congress, Jan. 9, 2023.

Effective Date

Pub. L. 115–390, title II, §203(c), Dec. 21, 2018, 132 Stat. 5192, provided that: "The amendments made by this section [enacting this section] shall take effect on the date that is 90 days after the date of the enactment of this Act [Dec. 21, 2018] and shall apply to contracts that are awarded before, on, or after that date."

Title II of Pub. L. 115–390 effective 90 days after Dec. 21, 2018, see section 205 of Pub. L. 115–390, set out as a note under section 1321 of this title.

Prohibition on Certain Semiconductor Products and Services

Pub. L. 117–263, div. E, title LIX, §5949, Dec. 23, 2022, 136 Stat. 3485, provided that:

"(a) Prohibition on Use or Procurement.—

"(1) In general.—The head of an executive agency may not—

"(A) procure or obtain, or extend or renew a contract to procure or obtain, any electronic parts, products, or services that include covered semiconductor products or services; or

"(B) enter into a contract (or extend or renew a contract) with an entity to procure or obtain electronic parts or products that use any electronic parts or products that include covered semiconductor products or services.

"(2) Rule of construction.—

"(A) In general.—Nothing in paragraph (1) shall be construed—

"(i) to require any covered semiconductor products or services resident in equipment, systems, or services as of the day before the applicable effective date specified in subsection (c) to be removed or replaced;

"(ii) to prohibit or limit the utilization of such covered semiconductor products or services throughout the lifecycle of such existing equipment;

"(iii) to require the recipient of a Federal contract, grant, loan, or loan guarantee to replace covered semiconductor products or services resident in equipment, systems, or services before the effective date specified in subsection (c); or

"(iv) to require the Federal Communications Commission to designate covered semiconductor products or services to its Covered Communications Equipment or Services List maintained under section 2 of the Secured and Trusted Communications Networks Act of 2019 (47 U.S.C. 1603) [probably should be "(47 U.S.C. 1601)"].

"(B) Contracting prohibition.—Nothing in paragraph (1)(B) shall be construed to cover products or services that include covered semiconductor products or services in a system that is not a critical system.

"(b) Waiver Authority.—

"(1) Secretary of defense.—The Secretary of Defense may provide a waiver on a date later than the effective date described in subsection (c) if the Secretary determines the waiver is in the critical national security interests of the United States.

"(2) Director of national intelligence.—The Director of National Intelligence may provide a waiver on a date later than the effective date described in subsection (c) if the Director determines the waiver is in the critical national security interests of the United States.

"(3) Secretary of commerce.—The Secretary of Commerce, in consultation with the Director of National Intelligence or the Secretary of Defense, may provide a waiver on a date later than the effective date described in subsection (c) if the Secretary determines the waiver is in the critical national security interests of the United States.

"(4) Secretary of homeland security.—The Secretary of Homeland Security, in consultation with the Director of National Intelligence or the Secretary of Defense, may provide a waiver on a date later than the effective date described in subsection (c) if the Secretary determines the waiver is in the critical national security interests of the United States.

"(5) Secretary of energy.—The Secretary of Energy, in consultation with the Director of National Intelligence or the Secretary of Defense, may provide a waiver on a date later than the effective date described in subsection (c) if the Secretary determines the waiver is in the critical national security interests of the United States.

"(6) Executive agencies.—The head of an executive agency may waive, for a renewable period of not more than two years per waiver, the prohibitions under subsection (a) if—

"(A) the head of the agency, in consultation with the Secretary of Commerce, determines that no compliant product or service is available to be procured as, and when, needed at United States market prices or a price that is not considered prohibitively expensive; and

"(B) the head of the agency, in consultation with the Secretary of Defense or the Director of National Intelligence, determines that such waiver could not reasonably be expected to compromise the critical national security interests of the United States.

"(7) Report to congress.—Not later than 30 days after granting a waiver under this subsection, the head of the executive agency granting such waiver shall submit to the appropriate committees of Congress and leadership a report with a notification of such waiver, including a justification for the waiver.

"(c) Effective Dates and Regulations.—

"(1) Effective date.—The prohibitions under subsection (a) shall take effect five years after the date of the enactment of this Act [Dec. 23, 2022].

"(2) Regulations.—Not later than three years after the date of the enactment of this Act, the Federal Acquisition Regulatory Council shall prescribe regulations implementing the prohibitions under subsection (a), including a requirement for prime contractors to incorporate the substance of such prohibitions and applicable implementing contract clauses into contracts for the supply of electronic parts or products.

"(d) Office of Management and Budget Report and Briefing.—Not later than 270 days after the effective date described in subsection (c)(1), the Director of the Office of Management and Budget, in coordination with the Director of National Intelligence and the National Cyber Director, shall provide to the appropriate committees of Congress and leadership a report and briefing on—

"(1) the implementation of the prohibitions under subsection (a), including any challenges in the implementation; and

"(2) the effectiveness and utility of the waiver authority under subsection (b).

"(e) Analysis, Assessment, and Strategy.—Not later than 180 days after the date of the enactment of this Act, the Secretary of Commerce, in coordination with the Secretary of Defense, the Secretary of Homeland Security, the Director of National Intelligence, and the Secretary of Energy and, to the greatest extent practicable, leveraging relevant previous analyses and assessments, shall—

"(1) conduct an analysis of semiconductor design and production capacity domestically and by allied or partner countries required to meet the needs of the Federal Government, including analyses regarding—

"(A) semiconductors critical to national security, as determined by the Secretary of Commerce, in consultation with the Secretary of Defense and the Director of National Intelligence, in accordance with section 9902(a)(6)(A)(i) of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021 (Public Law 116–283) [15 U.S.C. 4652(a)(6)(A)(i)]; and

"(B) semiconductors classified as legacy semiconductors pursuant to section 9902(a)(6)(A)(i) of William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021 (Public Law 116–283);

"(2) assess the risk posed by the presence of covered semiconductor products or services in Federal systems;

"(3) assess the risk posed by the presence of covered semiconductor products or services in the supply chains of Federal contractors and subcontractors, including for non-Federal systems;

"(4) develop a strategy to—

"(A) improve the availability of domestic semiconductor design and production capacity required to meet the requirements of the Federal Government;

"(B) support semiconductor product and service suppliers seeking to contract with domestic, allied, or partner semiconductor producers and to improve supply chain traceability, including to meet the prohibitions under subsection (a); and

"(C) either certify the feasibility of implementing such prohibitions or exercising waiver authorities under subsection (b), to ensure uninterrupted Federal Government access to required semiconductor products and services; and

"(5) provide the results of the analysis, assessment, and strategy developed under paragraphs (1) through (4) to the Federal Acquisition Security Council.

"(f) Governmentwide Traceability and Diversification Initiative.—

"(1) In general.—Not later than two years after the date of the enactment of this Act [Dec. 23, 2022], the Secretary of Commerce, in coordination with the Secretary of Homeland Security, the Secretary of Defense, the Director of National Intelligence, the Director of the Office of Management and Budget, and the Director of the Office of Science and Technology Policy, and in consultation with industry, shall establish a microelectronics traceability and diversification initiative to coordinate analysis of and response to the Federal Government microelectronics supply chain vulnerabilities.

"(2) Elements.—The initiative established under paragraph (1) shall include the following elements:

"(A) Sharing best practices, refining microelectronics standards, such as those established pursuant to section 224 of the National Defense Authorization Act for Fiscal Year 2020 (Public Law 116–92) [10 U.S.C. 4501 note prec.], and developing recommendations to identify and mitigate, through diversification efforts, microelectronics supply chain concerns.

"(B) Developing an assessment framework to inform Federal decisions on sourcing microelectronics, considering—

"(i) chain of custody and traceability, including origin and location of design, manufacturing, distribution, shipping, and quantities;

"(ii) confidentiality, including protection, verification, and validation of intellectual property included in microelectronics;

"(iii) integrity, including—

     "(I) security weaknesses and vulnerabilities that include potential supply chain attacks;

     "(II) risk analysis and consequence to system;

     "(III) risk of intentional or unintentional modification or tampering; and

     "(IV) risk of insider threats, including integrity of people and processes involved in the design and manufacturing of microelectronics; and

"(iv) availability, including—

     "(I) potential supply chain disruptions, including due to natural disasters or geopolitical events;

     "(II) prioritization of parts designed and manufactured in the United States and in allied or partner countries to support and sustain the defense and technology industrial base;

     "(III) risk associated with sourcing parts from suppliers outside of the United States and allied and partner countries, including long-term impacts on availability of microelectronics produced domestically or in allied or partner countries; and

     "(IV) obsolescence management and counterfeit avoidance and detection.

"(C) Developing a process for provenance and traceability from design to disposal of microelectronics components and intellectual property contained therein implementable across the Federal acquisition system to improve reporting, data analysis, and tracking.

"(D) Developing and implementing policies and plans to support the following:

"(i) Development of domestic design and manufacturing capabilities to replace covered semiconductor products or services.

"(ii) Utilization of the assessment framework developed under subparagraph (B).

"(iii) Implementation of the strategy required under subsection (e)(4) as applicable.

"(iv) Identification of and integration with existing information reporting and data visualization systems in the Federal Government, including modification to such systems to track the information.

"(v) A requirement to document microelectronics used in systems and subsystems, including origin and location of design and manufacturing, technologies used, and quantities procured.

"(vi) Elimination from Federal Government supply chains of microelectronics from entities included on the Consolidated Screening List maintained by the International Trade Administration of the Department of Commerce.

"(3) Coordination required.—In carrying out this subsection, the Secretary of Commerce shall coordinate, as necessary, with the following entities:

"(A) The National Science and Technology Council Subcommittee on Microelectronics Leadership.

"(B) The Department of Commerce semiconductor industrial advisory committee established under subsection 9906(b) of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021 (Public Law 116–283) [15 U.S.C. 4656(b)].

"(C) The White House Coordinator for CHIPS Implementation.

"(D) The Federal Acquisition Security Council (FASC).

"(E) The Government-Industry Working Group on Microelectronics.

"(F) The Joint Defense Manufacturing Technology Panel (JDMTP).

"(G) Standards development organizations.

"(g) Federal Acquisition Security Council.—Not later than two years after the date of the enactment of this Act [Dec. 23, 2022], the Federal Acquisition Security Council, in consultation with the Secretary of Commerce, the Secretary of Defense, the Secretary of Homeland Security, the Director of National Intelligence, and the Secretary of Energy, and after engagement with the private sector and other nongovernmental stakeholders in accordance with section 1323 of title 41, United States Code, shall—

"(1) issue recommendations to mitigate supply chain risks relevant to Federal Government acquisition of semiconductor products and services, considering—

"(A) the analysis, assessment, and strategy developed under subsection (e) and any related updates;

"(B) the standards provided under section 224 of the National Defense Authorization Act for Fiscal Year 2020 (Public Law 116–92) [10 U.S.C. 4501 note prec.], including any tiers of trust, levels of security, or risk-based approaches established under such section;

"(C) the extent to which such recommendations would enhance the security of critical systems;

"(D) the extent to which such recommendations would impact Federal access to commercial technologies; and

"(E) any risks to the Federal Government from contracting with microelectronics suppliers that include covered semiconductor products or services in non-Federal supply chains; and

"(2) make recommendations to the Federal Acquisition Regulatory Council and the heads of executive agencies for any needed regulations to mitigate supply chain risks.

"(h) Applicability and Responsibilities of Covered Entities and Contractors.—The regulations prescribed pursuant to subsection (c)(2) shall—

"(1) provide that contractors who supply a Federal agency with electronic parts or products are responsible for—

"(A) certifying to the non-use of covered semiconductor products or services in such parts or products;

"(B) detecting and avoiding the use or inclusion of such covered semiconductor products or services in such parts or products; and

"(C) any rework or corrective action that may be required to remedy the use or inclusion of such covered semiconductor products or services in such parts or products;

"(2) require covered entities to disclose to direct customers the inclusion of a covered semiconductor product or service in electronic parts, products, or services included in electronic parts, products, or services subject to the contracting prohibition under subsection (a) as to whether such supplied parts, products, or services include covered semiconductors products or services;

"(3) provide that a covered entity that fails to disclose the inclusion to direct customers of a covered semiconductor product or service in electronic parts, products, or services procured or obtained by an executive agency in contravention of subsection (a) shall be responsible for any rework or corrective action that may be required to remedy the use or inclusion of such covered semiconductor product or service;

"(4) provide that the costs of covered semiconductor products or services, suspect semiconductor products, and any rework or corrective action that may be required to remedy the use or inclusion of such products are not allowable costs for Federal contracts;

"(5) provide that—

"(A) any covered entity or Federal contractor or subcontractor who becomes aware, or has reason to suspect, that any end item, component, or part of a critical system purchased by the Federal Government, or purchased by a Federal contractor or subcontractor for delivery to the Federal Government for any critical system, that contains covered semiconductor products or services shall notify appropriate Federal authorities in writing within 60 days; and

"(B) the Federal authorities shall report such information to the appropriate committees of Congress and leadership within 120 days;

"(6) provide that Federal bidders and contractors—

"(A) may reasonably rely on the certifications of compliance from covered entities and subcontractors who supply electronic parts, products, or services when providing proposals to the Federal Government; and

"(B) are not required to conduct independent third party audits or other formal reviews related to such certifications;

"(7) provide that a Federal contractor or subcontractor that provides a notification under paragraph (5) that does not regard electronic parts or products manufactured or assembled by such Federal contractor or subcontractor shall not be subject to civil liability nor determined to not be a presently responsible contractor on the basis of such notification; and

"(8) provide that a Federal contractor or subcontractor that provides a notification under paragraph (5) that regards electronic parts or products manufactured or assembled by such Federal contractor or subcontractor shall not be subject to civil liability nor determined to not be a presently responsible contractor on the basis of such notification if the Federal contractor or subcontractor makes a comprehensive and documentable effort to identify and remove covered semiconductor products or services from the Federal supply.

"(i) Reports.—

"(1) Secretary of commerce.—Not later than 60 days after completing the assessment required under subsection (e), the Secretary of Commerce shall submit to the appropriate committees of Congress and leadership—

"(A) a report of the findings and recommendations of the analyses, assessment, and strategy developed under such subsection; and

"(B) a report on development of the microelectronics traceability and diversification initiative under subsection (f)(1).

"(2) Federal acquisition security council.—Not later than one year after the date of the enactment of this Act [Dec. 23, 2022], and annually thereafter for ten years, the Federal Acquisition Security Council shall include in the annual report submitted under section 1325 of title 41, United States Code, a description of—

"(A) the development of recommendations under subsection (g), including the considerations described in paragraph (1) of such subsection; and

"(B) as applicable, the impact of any recommendations or regulations implemented.

"(j) Definitions.—In this section:

"(1) Appropriate committees of congress and leadership.—The term 'appropriate committees of Congress and leadership' means—

"(A) the Committee on Armed Services, the Committee on Commerce, Science, and Transportation, the Committee on Homeland Security and Governmental Affairs, the Committee on Energy and Natural Resources, the Committee on Foreign Relations, the Committee on Banking, Housing, and Urban Affairs, the Select Committee on Intelligence, and the majority and minority leaders of the Senate; and

"(B) the Committee on Armed Services, the Committee on Energy and Commerce, the Committee on Science, Space, and Technology, the Committee on Oversight and Reform [now Committee on Oversight and Accountability], the Committee on Foreign Affairs, the Committee on Homeland Security, the Permanent Select Committee on Intelligence, and the Speaker, the majority leader, and the minority leader of the of the House of Representatives.

"(2) Covered entity.—The term 'covered entity' means an entity that—

"(A) develops, domestically or abroad, a design of a semiconductor that is the direct product of United States origin technology or software; and

"(B) purchases covered semiconductor products or services from an entity described in subparagraph (A) or (C) of paragraph (3).

"(3) Covered semiconductor product or services.—The term 'covered semiconductor product or services' means any of the following:

"(A) A semiconductor, a semiconductor product, a product that incorporates a semiconductor product, or a service that utilizes such a product, that is designed, produced or provided by, Semiconductor Manufacturing International Corporation (SMIC) (or any subsidiary, affiliate, or successor of such entity).

"(B) A semiconductor, a semiconductor product, a product that incorporates a semiconductor product, or a service that utilizes such a product, that is designed, produced, or provided by ChangXin Memory Technologies (CXMT) or Yangtze Memory Technologies Corp (YMTC) (or any subsidiary, affiliate, or successor of such entities).

"(C) A semiconductor, semiconductor product, or semiconductor service produced or provided by an entity that the Secretary of Defense or the Secretary of Commerce, in consultation with the Director of the National Intelligence or the Director of the Federal Bureau of Investigation, determines to be an entity owned or controlled by, or otherwise connected to, the government of a foreign country of concern, provided that the determination with respect to such entity is published in the Federal Register.

"(4) Critical system.—The term 'critical system'—

"(A) has the meaning given the term 'national security system' in section 11103(a)(1) of title 40, United States Code;

"(B) shall include additional systems identified by the Federal Acquisition Security Council;

"(C) shall include additional systems identified by the Department of Defense, consistent with guidance provided under section 224 of the National Defense Authorization Act for Fiscal Year 2020 (Public Law 116–92) [10 U.S.C. 4501 note prec.]; and

"(D) shall not include a system to be used for routine administrative and business applications (including payroll, finance, logistics, and personnel management applications).

"(5) Foreign country of concern.—The term 'foreign country of concern' has the meaning given the term in paragraph (7) of section 9901 of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021 (15 U.S.C. 4651), as added by section 103(a)(4) of the CHIPS Act of 2022 (division A of Public Law 117–167).

"(k) Extension of Federal Acquisition Security Supply Chain Act of 2018.—

"(1) Subchapter iii of chapter 13 of title 41, united states code.—[Amended section 1328 of this title.]

"(2)—[Amended this section.]

"(l) Authorization of Appropriations for Federal Acquisition Security Council.—

"(1) In general.—There is authorized to be appropriated $3,000,000 for each of fiscal years 2023 through 2033 for the Office of Management and Budget to support the activities of the Federal Acquisition Security Council.

"(2) Transfer authority.—The Director of the Office of Management and Budget may transfer funds authorized to be appropriated under paragraph (1) to other Federal agencies for the performance of work for which the funds were authorized."

§4714. 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), an executive 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 the 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 Administrator of General Services 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 Administrator of General Services, in consultation with the Secretary of Defense, 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 Administrator of General Services shall establish and publish procedures under which an applicant for a position with a Federal contractor may submit to the Administrator 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 head of an executive agency determines that a contractor has violated subsection (a)(1)(B), such head 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 violation.—If the head of an executive agency determines that a contractor that was subject to paragraph (1) has committed a subsequent violation of subsection (a)(1)(B), such head 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(a)(1), Dec. 20, 2019, 133 Stat. 1610.)

Editorial Notes

References in Text

The date of enactment of the Fair Chance to Compete for Jobs Act of 2019, referred to in subsec. (a)(3)(B)(i), is the date of enactment of subtitle B (§§1121–1124) of title XI of div. A of Pub. L. 116–92, which was approved Dec. 20, 2019.

The Civil Rights Act of 1964, referred to in subsec. (a)(3)(B)(ii)(I), is Pub. L. 88–352, July 2, 1964, 78 Stat. 241. Title VII of the Act is classified generally to subchapter VI (§2000e et seq.) of chapter 21 of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see Short Title note set out under section 2000a of Title 42 and Tables.

Statutory Notes and Related Subsidiaries

Effective Date

Pub. L. 116–92, div. A, title XI, §1123(a)(3), Dec. 20, 2019, 133 Stat. 1612, provided that: "Section 4714 of title 41, United States Code, as added by paragraph (1), shall apply with respect to contracts awarded pursuant to solicitations issued after the effective date described in section 1122(b)(2) of this subtitle [effective 2 years after Dec. 20, 2019, see section 1122(b)(2) of Pub. L. 116–92, div. A, title XI, subtitle B, set out as a note under section 9202 of Title 5, Government Organization and Employees]."