10 USC Ch. 385: OTHER TECHNOLOGY BASE POLICIES AND PROGRAMS

From Title 10—ARMED FORCESSubtitle A—General Military LawPART V—ACQUISITIONSubpart I—Defense Industrial Base

CHAPTER 385—OTHER TECHNOLOGY BASE POLICIES AND PROGRAMS

Subchapter

Sec.

Defense Trade Reciprocity and Offset Policy

4851

II.

Limitations on Procurement of Certain Items from Foreign Sources

4861

III.

Limitations on Procurement from Certain Foreign Sources

4871

IV.

Defense Industrial Reserve and Industrial Mobilization

4881

Other Matters

4891

Editorial Notes

Prior Provisions

A prior chapter 385 "PROCUREMENT TECHNICAL ASSISTANCE COOPERATIVE AGREEMENT PROGRAM", consisting of reserved section 4881, was repealed by Pub. L. 116–283, div. A, title XVIII, §1872(a)(1)(A), Jan. 1, 2021, 134 Stat. 4287.

SUBCHAPTER I—DEFENSE TRADE RECIPROCITY AND OFFSET POLICY

Sec.

4851.

Defense memoranda of understanding and related agreements.

4852.

Offset policy; notification.

§4851. Defense memoranda of understanding and related agreements

(a) Considerations in Making and Implementing MOUs and Related Agreements.—In the negotiation, renegotiation, and implementation of any existing or proposed memorandum of understanding, or any existing or proposed agreement related to a memorandum of understanding, between the Secretary of Defense, acting on behalf of the United States, and one or more foreign countries (or any instrumentality of a foreign country) relating to research, development, or production of defense equipment, or to the reciprocal procurement of defense items, the Secretary of Defense shall—

(1) consider the effects of such existing or proposed memorandum of understanding or related agreement on the defense technology and industrial base of the United States; and

(2) regularly solicit and consider comments and recommendations from the Secretary of Commerce with respect to the commercial implications of such memorandum of understanding or related agreement and the potential effects of such memorandum of understanding or related agreement on the international competitive position of United States industry.

(b) Inter-Agency Review of Effects on United States Industry.—Whenever the Secretary of Commerce has reason to believe that an existing or proposed memorandum of understanding or related agreement has, or threatens to have, a significant adverse effect on the international competitive position of United States industry, the Secretary may request an inter-agency review of the memorandum of understanding or related agreement. If, as a result of the review, the Secretary determines that the commercial interests of the United States are not being served or would not be served by adhering to the terms of such existing memorandum or related agreement or agreeing to such proposed memorandum or related agreement, as the case may be, the Secretary shall recommend to the President the renegotiation of the existing memorandum or related agreement or any modification to the proposed memorandum of understanding or related agreement that he considers necessary to ensure an appropriate balance of interests.

(c) Limitation on Entering into MOUs and Related Agreements.—A memorandum of understanding or related agreement referred to in subsection (a) may not be entered into or implemented if the President, taking into consideration the results of the inter-agency review, determines that such memorandum of understanding or related agreement has or is likely to have a significant adverse effect on United States industry that outweighs the benefits of entering into or implementing such memorandum or agreement.

(Added Pub. L. 100–456, div. A, title VIII, §824, Sept. 29, 1988, 102 Stat. 2019, §2504; amended Pub. L. 101–189, div. A, title VIII, §815(a), Nov. 29, 1989, 103 Stat. 1500; Pub. L. 101–510, div. A, title XIV, §1453, Nov. 5, 1990, 104 Stat. 1694; renumbered §2531 and amended Pub. L. 102–484, div. D, title XLII, §§4202(a), 4271(c), Oct. 23, 1992, 106 Stat. 2659, 2696; renumbered §4851, Pub. L. 116–283, div. A, title XVIII, §1870(b), Jan. 1, 2021, 134 Stat. 4284.)

Editorial Notes

Amendments

2021—Pub. L. 116–283 renumbered section 2531 of this title as this section.

1992—Pub. L. 102–484, §4202(a), renumbered section 2504 of this title as section 2531.

Subsec. (a)(1). Pub. L. 102–484, §4271(c), substituted "defense technology and industrial base" for "defense industrial base".

1990—Subsec. (a). Pub. L. 101–510 inserted "or to the reciprocal procurement of defense items," after "defense equipment," in introductory provisions.

1989—Pub. L. 101–189 inserted "and related agreements" after "understanding" in section catchline and amended text generally. Prior to amendment, text read as follows: "In the negotiation and renegotiation of each memorandum of understanding between the Secretary of Defense, acting on behalf of the United States, and one or more foreign countries (or any instrumentality of a foreign country) relating to research, development, or production of defense equipment, the Secretary of Defense shall—

"(1) consider the effect of such proposed memorandum of understanding on the defense industrial base of the United States; and

"(2) regularly solicit and consider information or recommendations from the Secretary of Commerce with respect to the effect on the United States industrial base of such memorandum of understanding."

Statutory Notes and Related Subsidiaries

Effective Date of 2021 Amendment

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

Defense Trade Reciprocity

Pub. L. 108–375, div. A, title VIII, §831, Oct. 28, 2004, 118 Stat. 2017, provided that:

"(a) Policy.—It is the policy of Congress that procurement regulations used in the conduct of trade in defense articles and defense services should be based on the principle of fair trade and reciprocity consistent with United States national security, including the need to ensure comprehensive manufacturing capability in the United States defense industrial base.

"(b) Requirement.—The Secretary of Defense shall make every effort to ensure that the policies and practices of the Department of Defense reflect the goal of establishing an equitable trading relationship between the United States and its foreign defense trade partners, including ensuring that United States firms and United States employment in the defense sector are not disadvantaged by unilateral procurement practices by foreign governments, such as the imposition of offset agreements in a manner that undermines the United States defense industrial base. In pursuing this goal, the Secretary shall—

"(1) develop a comprehensive defense acquisition trade policy that provides the necessary guidance and incentives for the elimination of any adverse effects of offset agreements in defense trade; and

"(2) review and make necessary modifications to existing acquisition policies and strategies, and review and seek to make necessary modifications to existing memoranda of understanding, cooperative project agreements, or related agreements with foreign defense trade partners, to reflect this goal.

"(c) Regulations.—The Secretary shall prescribe regulations to implement this section in the Department of Defense supplement to the Federal Acquisition Regulation.

"(d) Definitions.—In this section:

"(1) The term 'foreign defense trade partner' means a foreign country with respect to which there is—

"(A) a memorandum of understanding or related agreement described in section 2531(a) of title 10, United States Code [now 10 U.S.C. 4851(a)]; or

"(B) a cooperative project agreement described in section 27 of the Arms Export Control Act (22 U.S.C. 2767).

"(2) The term 'offset agreement' has the meaning provided that term by section 36(e) of the Arms Export Control Act (22 U.S.C. 2776(e)).

"(3) The terms 'defense article' and 'defense service' have the meanings provided those terms by section 47(7) of the Arms Export Control Act (22 U.S.C. 2794(7))."

§4852. Offset policy; notification

(a) Establishment of Offset Policy.—The President shall establish, consistent with the requirements of this section, a comprehensive policy with respect to contractual offset arrangements in connection with the purchase of defense equipment or supplies which addresses the following:

(1) Transfer of technology in connection with offset arrangements.

(2) Application of offset arrangements, including cases in which United States funds are used to finance the purchase by a foreign government.

(3) Effects of offset arrangements on specific subsectors of the industrial base of the United States and for preventing or ameliorating any serious adverse effects on such subsectors.

(b) Technology Transfer.—(1) No official of the United States may enter into a memorandum of understanding or other agreement with a foreign government that would require the transfer of United States defense technology to a foreign country or a foreign firm in connection with a contract that is subject to an offset arrangement if the implementation of such memorandum or agreement would significantly and adversely affect the defense industrial base of the United States and would result in a substantial financial loss to a United States firm.

(2) Paragraph (1) shall not apply in the case of a memorandum of understanding or agreement described in paragraph (1) if the Secretary of Defense, in consultation with the Secretary of Commerce and the Secretary of State, determines that a transfer of United States defense technology pursuant to such understanding or agreement will result in strengthening the national security of the United States and so certifies to Congress.

(3) If a United States firm is required under the terms of a memorandum of understanding, or other agreement entered into by the United States with a foreign country, to transfer defense technology to a foreign country, the United States firm may protest the determination to the Secretary of Defense on the grounds that the transfer of such technology would adversely affect the defense industrial base of the United States and would result in substantial financial loss to the protesting firm. The Secretary of Defense, in consultation with the Secretary of Commerce and the Secretary of State, shall make the final determination of the validity of the protesting firm's claim.

(c) Notification Regarding Offsets.—If at any time a United States firm enters into a contract for the sale of a weapon system or defense-related item to a foreign country or foreign firm and such contract is subject to an offset arrangement exceeding $50,000,000 in value, such firm shall notify the Secretary of Defense of the proposed sale. Notification shall be made under this subsection in accordance with regulations prescribed by the Secretary of Defense in consultation with the Secretary of Commerce.

(d) Definitions.—In this section:

(1) The term "United States firm" means a business entity that performs substantially all of its manufacturing, production, and research and development activities in the United States.

(2) The term "foreign firm" means a business entity other than a United States firm.

(Added Pub. L. 100–456, div. A, title VIII, §825(b), Sept. 29, 1988, 102 Stat. 2020, §2505; renumbered §2532, Pub. L. 102–484, div. D, title XLII, §4202(a), Oct. 23, 1992, 106 Stat. 2659; renumbered §4852, Pub. L. 116–283, div. A, title XVIII, §1870(b), Jan. 1, 2021, 134 Stat. 4284.)

Editorial Notes

Amendments

2021—Pub. L. 116–283 renumbered section 2532 of this title as this section.

1992—Pub. L. 102–484 renumbered section 2505 of this title as section 2532.

Statutory Notes and Related Subsidiaries

Effective Date of 2021 Amendment

Contractual Offset Arrangements; Congressional Statement of Findings

Pub. L. 100–456, div. A, title VIII, §825(a), Sept. 29, 1988, 102 Stat. 2019, provided that: "Congress makes the following findings:

"(1) Many contracts entered into by United States firms for the supply of weapon systems or defense-related items to foreign countries and foreign firms are subject to contractual arrangements under which United States firms must agree—

"(A) to have a specified percentage of work under, or monetary amount of, the contract performed by one or more foreign firms;

"(B) to purchase a specified amount or quantity of unrelated goods or services from domestic sources of such foreign countries; or

"(C) to invest a specified amount in domestic businesses of such foreign countries.

Such contractual arrangements, known as 'offsets', are a component of international trade and could have an impact on United States defense industry opportunities in domestic and foreign markets.

"(2) Some United States contractors and subcontractors may be adversely affected by such contractual arrangements.

"(3) Many contracts which provide for or are subject to offset arrangements require, in connection with such arrangements, the transfer of United States technology to foreign firms.

"(4) The use of such transferred technology by foreign firms in conjunction with foreign trade practices permitted under the trade policies of the countries of such firms can give foreign firms a competitive advantage against United States firms in world markets for products using such technology.

"(5) A purchase of defense equipment pursuant to an offset arrangement may increase the cost of the defense equipment to the purchasing country and may reduce the amount of defense equipment that a country may purchase.

"(6) The exporting of defense equipment produced in the United States is important to maintain the defense industrial base of the United States, lower the unit cost of such equipment to the Department of Defense, and encourage the standardized utilization of United States equipment by the allies of the United States."

Negotiations With Countries Requiring Offset Arrangements

Pub. L. 100–456, div. A, title VIII, §825(c), Sept. 29, 1988, 102 Stat. 2021, as amended by Pub. L. 101–189, div. A, title VIII, §816, Nov. 29, 1989, 103 Stat. 1501, provided that:

"(1) The President shall enter into negotiations with foreign countries that have a policy of requiring an offset arrangement in connection with the purchase of defense equipment or supplies from the United States. The negotiations should be conducted with a view to achieving an agreement with the countries concerned that would limit the adverse effects that such arrangements have on the defense industrial base of each such country. Every effort shall be made to achieve such agreements within two years after September 29, 1988.

"(2) In the negotiation or renegotiation of any memorandum of understanding between the United States and one or more foreign countries relating to the reciprocal procurement of defense equipment and supplies or research and development, the President shall make every effort to achieve an agreement with the country or countries concerned that would limit the adverse effects that offset arrangements have on the defense industrial base of the United States."

[For delegation of functions of President under section 825(c) of Pub. L. 100–456 to Secretary of Defense and United States Trade Representative, see section 5–201 of Ex. Ord. No. 12661, 54 F.R. 779, set out as a note under section 2901 of Title 19, Customs Duties.]

SUBCHAPTER II—LIMITATIONS ON PROCUREMENT OF CERTAIN ITEMS FROM FOREIGN SOURCES

Sec.

4861.

Determinations of public interest under chapter 83 of title 41.

4862.

Requirement to buy certain articles from American sources; exceptions.

4863.

Requirement to buy strategic materials critical to national security from American sources; exceptions.

4864.

Miscellaneous limitations on the procurement of goods other than United States goods.

§4861. Determinations of public interest under chapter 83 of title 41

(a) In determining under section 8302 of title 41 whether application of chapter 83 of such title is inconsistent with the public interest, the Secretary of Defense shall consider the following:

(1) The bids or proposals of small business firms in the United States which have offered to furnish American goods.

(2) The bids or proposals of all other firms in the United States which have offered to furnish American goods.

(3) The United States balance of payments.

(4) The cost of shipping goods which are other than American goods.

(5) Any duty, tariff, or surcharge which may enter into the cost of using goods which are other than American goods.

(6) A need to ensure that the Department of Defense has access to advanced, state-of-the-art commercial technology.

(7) The need to protect the national technology and industrial base, to preserve and enhance the national technology employment base, and to provide for a defense mobilization base.

(8) A need to ensure that application of different rules of origin for United States end items and foreign end items does not result in an award to a firm other than a firm providing a product produced in the United States.

(9) Any need—

(A) to maintain the same source of supply for spare and replacement parts for an end item that qualifies as an American good; or

(B) to maintain the same source of supply for spare and replacement parts in order not to impair integration of the military and commercial industrial base.

(10) The national security interests of the United States.

(b) In this section, the term "goods which are other than American goods" means—

(1) an end product that is not mined, produced, or manufactured in the United States; or

(2) an end product that is manufactured in the United States but which includes components mined, produced, or manufactured outside the United States the aggregate cost of which exceeds the aggregate cost of the components of such end product that are mined, produced, or manufactured in the United States.

(Added Pub. L. 100–370, §3(a)(1), July 19, 1988, 102 Stat. 855, §2501; renumbered §2506, Pub. L. 100–456, div. A, title VIII, §821(b)(1)(A), Sept. 29, 1988, 102 Stat. 2014; renumbered §2533, Pub. L. 102–484, div. D, title XLII, §4202(a), Oct. 23, 1992, 106 Stat. 2659; amended Pub. L. 103–337, div. A, title VIII, §812(a), (b)(1), Oct. 5, 1994, 108 Stat. 2815, 2816; Pub. L. 104–106, div. D, title XLIII, §4321(b)(20), Feb. 10, 1996, 110 Stat. 673; Pub. L. 105–85, div. A, title X, §1073(a)(54), Nov. 18, 1997, 111 Stat. 1903; Pub. L. 111–350, §5(b)(37), Jan. 4, 2011, 124 Stat. 3845; Pub. L. 113–291, div. A, title X, §1071(a)(9), Dec. 19, 2014, 128 Stat. 3505; renumbered §4861, Pub. L. 116–283, div. A, title XVIII, §1870(c)(2), Jan. 1, 2021, 134 Stat. 4285.)

Historical and Revision Notes

Section is based on Pub. L. 93–365, title VII, §707, Aug. 5, 1974, 88 Stat. 406.

Editorial Notes

Amendments

2021—Pub. L. 116–283 renumbered section 2533 of this title as this section.

2014—Subsec. (a). Pub. L. 113–291 substituted "chapter 83 of such title" for "such Act" in introductory provisions.

2011—Pub. L. 111–350, §5(b)(37)(A), substituted "chapter 83 of title 41" for "the Buy American Act" in section catchline.

Subsec. (a). Pub. L. 111–350, §5(b)(37)(B), substituted "section 8302 of title 41" for "section 2 of the Buy American Act (41 U.S.C. 10a)" in introductory provisions.

1997—Subsec. (a). Pub. L. 105–85 substituted "(41 U.S.C. 10a)" for "(41 U.S.C. 10a))".

1996—Subsec. (a). Pub. L. 104–106 substituted "the Buy American Act (41 U.S.C. 10a)) whether application of such Act" for "title III of the Act of March 3, 1993 (41 U.S.C. 10a), popularly known as the 'Buy American Act', whether application of title III of such Act".

1994—Pub. L. 103–337, §812(b)(1), substituted "Determinations of public interest under the Buy American Act" for "Limitation on use of funds: procurement of goods which are other than American goods" as section catchline.

Subsec. (a). Pub. L. 103–337, §812(a)(1), added subsec. (a) and struck out former subsec. (a) which read as follows: "Funds appropriated to the Department of Defense may not be obligated under a contract for procurement of goods which are other than American goods (as defined in subsection (c)) unless adequate consideration is given to the following:

"(1) The bids or proposals of firms located in labor surplus areas in the United States (as designated by the Department of Labor) which have offered to furnish American goods.

"(2) The bids or proposals of small business firms in the United States which have offered to furnish American goods.

"(3) The bids or proposals of all other firms in the United States which have offered to furnish American goods.

"(4) The United States balance of payments.

"(5) The cost of shipping goods which are other than American goods.

"(6) Any duty, tariff, or surcharge which may enter into the cost of using goods which are other than American goods."

Subsecs. (b), (c). Pub. L. 103–337, §812(a), redesignated subsec. (c) as (b) and struck out former subsec. (b) which read as follows: "Consideration of the matters referred to in paragraphs (1) through (6) of subsection (a) shall be given under regulations of the Secretary of Defense and subject to the determinations and exceptions contained in title III of the Act of March 3, 1933 (41 U.S.C. 10a, 10b), popularly known as the 'Buy American Act'."

1992—Pub. L. 102–484 renumbered section 2506 of this title as section 2533.

Statutory Notes and Related Subsidiaries

Effective Date of 2021 Amendment

Effective Date of 1996 Amendment

For effective date and applicability of amendment by Pub. L. 104–106, see section 4401 of Pub. L. 104–106, set out as a note under section 2220 of this title.

§4862. Requirement to buy certain articles from American sources; exceptions

(a) Requirement.—Except as provided in subsections (c) through (h), funds appropriated or otherwise available to the Department of Defense may not be used for the procurement of an item described in subsection (b) if the item is not grown, reprocessed, reused, or produced in the United States.

(b) Covered Items.—An item referred to in subsection (a) is any of the following:

(1) An article or item of—

(A) food;

(B) clothing and the materials and components thereof, other than sensors, electronics, or other items added to, and not normally associated with, clothing (and the materials and components thereof);

(D) cotton and other natural fiber products, woven silk or woven silk blends, spun silk yarn for cartridge cloth, synthetic fabric or coated synthetic fabric (including all textile fibers and yarns that are for use in such fabrics), canvas products, or wool (whether in the form of fiber or yarn or contained in fabrics, materials, or manufactured articles); or

(E) any item of individual equipment manufactured from or containing such fibers, yarns, fabrics, or materials.

(2) Hand or measuring tools.

[(3), (4) Repealed. Pub. L. 116–92, div. A, title VIII, §854(a)(3), Dec. 20, 2019, 133 Stat. 1512.]

(5) A flag of the United States.

(c) Availability Exception.—Subsection (a) does not apply to the extent that the Secretary of Defense or the Secretary of the military department concerned determines that satisfactory quality and sufficient quantity of any such article or item described in subsection (b) grown, reprocessed, reused, or produced in the United States cannot be procured as and when needed at United States market prices.

(d) Exception for Certain Procurements.—Subsection (a) does not apply to the following:

(1) Procurements outside the United States in support of combat operations or procurements of any item listed in subsection (b)(1)(A) or (b)(2) in support of contingency operations.

(2) Procurements by vessels in foreign waters.

(3) Emergency procurements or procurements of perishable foods by, or for, an establishment located outside the United States for the personnel attached to such establishment.

(4) Procurements of any item listed in subsection (b)(1)(A) or (b)(2) for which the use of procedures other than competitive procedures has been approved on the basis of section 3204(a)(2) of this title, relating to unusual and compelling urgency of need.

(e) Exception for Chemical Warfare Protective Clothing.—Subsection (a) does not preclude the procurement of chemical warfare protective clothing produced outside the United States if—

(1) such procurement is necessary—

(A) to comply with agreements with foreign governments requiring the United States to purchase supplies from foreign sources for the purposes of offsetting sales made by the United States Government or United States firms under approved programs serving defense requirements; or

(B) in furtherance of agreements with foreign governments in which both such governments agree to remove barriers to purchases of supplies produced in the other country or services performed by sources of the other country; and

(2) any such agreement with a foreign government complies, where applicable, with the requirements of section 36 of the Arms Export Control Act (22 U.S.C. 2776) and with section 2457 of this title.

(f) Exceptions for Certain Other Commodities and Items.—Subsection (a) does not preclude the procurement of the following:

(1) Foods manufactured or processed in the United States.

(2) Waste and byproducts of cotton and wool fiber for use in the production of propellants and explosives.

(g) Exception for Commissaries, Exchanges, and Other Nonappropriated Fund Instrumentalities.—Subsection (a) does not apply to items purchased for resale purposes in commissaries, exchanges, or nonappropriated fund instrumentalities operated by the Department of Defense.

(h) Exception for Small Purchases.—(1) Except with respect to purchases of flags of the United States, subsection (a) does not apply to purchases for amounts not greater than $150,000. A proposed procurement of an item in an amount greater than $150,000 may not be divided into several purchases or contracts for lesser amounts in order to qualify for this exception.

(2)(A)(i) Except as provided by subparagraph (B), subsection (a) does not apply to purchases of flags of the United States for amounts not greater than $10,000.

(ii) A proposed procurement in an amount greater than $10,000 may not be divided into several purchases or contracts for lesser amounts in order to qualify for the exception under clause (i).

(B) The Secretary of Defense may waive subsection (a) with respect to a purchase of flags of the United States in an amount greater than $10,000 if the Secretary of Defense determines such waiver appropriate.

(3) On October 1 of each year that is evenly divisible by five, the Secretary of Defense may adjust the dollar threshold in this subsection based on changes in the Consumer Price Index. Any such adjustment shall take effect on the date on which the Secretary publishes notice of such adjustment in the Federal Register.

(i) Applicability to Contracts and Subcontracts for Procurement of Commercial Products.—This section is applicable to contracts and subcontracts for the procurement of commercial products notwithstanding section 1906 of title 41.

(j) Geographic Coverage.—In this section, the term "United States" includes the possessions of the United States.

(k) Notification Required Within 7 Days After Contract Award If Certain Exceptions Applied.—In the case of any contract for the procurement of an item described in subparagraph (B), (C), (D), or (E) of subsection (b)(1), if the Secretary of Defense or of the military department concerned applies an exception set forth in subsection (c) or (e) with respect to that contract, the Secretary shall, not later than 7 days after the award of the contract, post a notification that the exception has been applied on the Internet site maintained by the General Services Administration known as FedBizOpps.gov (or any successor site).

Editorial Notes

Amendments

2023—Subsec. (b)(5). Pub. L. 118–31, §832(a)(1), added par. (5).

Subsec. (h)(1). Pub. L. 118–31, §832(a)(2)(A), substituted "Except with respect to purchases of flags of the United States, subsection (a)" for "Subsection (a)".

Subsec. (h)(2), (3). Pub. L. 118–31, §832(a)(2)(B), (C), added par. (2) and redesignated former par. (2) as (3).

2021—Pub. L. 116–283, §1870(c)(2), renumbered section 2533a of this title as this section.

Subsec. (d)(4). Pub. L. 117–81, which directed substitution of "section 3204(a)(2)" for "section 2304(c)(2)", could not be executed because of the intervening amendment by Pub. L. 116–283, §1883(b)(2). See note below.

Pub. L. 116–283, §1883(b)(2), substituted "section 3204(a)(2)" for "section 2304(c)(2)".

Subsec. (h). Pub. L. 116–283, §817, amended subsec. (h) generally. Prior to amendment, text read as follows: "Subsection (a) does not apply to purchases for amounts not greater than the simplified acquisition threshold referred to in section 2304(g) of this title."

2019—Subsec. (b)(3), (4). Pub. L. 116–92, §854(a)(3), struck out pars. (3) and (4) which added stainless steel flatware and dinnerware to the list of covered items.

Pub. L. 116–92, §854(a)(1), added pars. (3) and (4).

2018—Subsec. (i). Pub. L. 115–232 substituted "Products" for "Items" in heading and "commercial products" for "commercial items" in text.

2013—Subsec. (k). Pub. L. 112–239 substituted "FedBizOpps.gov" for "FedBizOps.gov".

2011—Subsec. (b)(1)(C). Pub. L. 112–81 inserted "(and the structural components thereof)" after "tents".

Subsec. (c). Pub. L. 111–383, §847, substituted "subsection (b)" for "subsection (b)(1)".

Subsec. (d)(1), (4). Pub. L. 111–383, §1075(b)(38), substituted "(b)(1)(A) or (b)(2)" for "(b)(1)(A), (b)(2), or (b)(3)".

Subsec. (i). Pub. L. 111–350 substituted "section 1906 of title 41" for "section 34 of the Office of Federal Procurement Policy Act (41 U.S.C. 430)".

2006—Subsec. (b)(1)(B). Pub. L. 109–163, §833(b), inserted before semicolon "and the materials and components thereof, other than sensors, electronics, or other items added to, and not normally associated with, clothing (and the materials and components thereof)".

Subsec. (b)(2), (3). Pub. L. 109–364, §842(a)(3)(A), redesignated par. (3) as (2) and struck out former par. (2) which read as follows: "Specialty metals, including stainless steel flatware."

Subsec. (c). Pub. L. 109–364, §842(a)(3)(B), struck out "or specialty metals (including stainless steel flatware)" after "subsection (b)(1)".

Subsec. (d)(3). Pub. L. 109–163, §831, inserted ", or for," after "perishable foods by".

Subsec. (e). Pub. L. 109–364, §842(a)(3)(C), struck out "Specialty Metals and" after "Exception for" in heading and "specialty metals or" after "procurement of" in introductory provisions.

Subsec. (k). Pub. L. 109–163, §833(a), added subsec. (k).

2003—Subsec. (d). Pub. L. 108–136, §826(1), struck out "Outside the United States" after "Procurements" in heading.

Subsec. (d)(1). Pub. L. 108–136, §826(2), inserted "or procurements of any item listed in subsection (b)(1)(A), (b)(2), or (b)(3) in support of contingency operations" after "combat operations".

Subsec. (d)(4). Pub. L. 108–136, §826(3), added par. (4).

Subsec. (f). Pub. L. 108–136, §827, substituted "Exceptions for Certain Other Commodities and Items.—Subsection (a) does not preclude the procurement of the following:

"(1) Foods"

for "Exception for Certain Foods.—Subsection (a) does not preclude the procurement of foods", and added par. (2).

Statutory Notes and Related Subsidiaries

Effective Date of 2023 Amendment

Pub. L. 118–31, div. A, title VIII, §832(b), Dec. 22, 2023, 137 Stat. 337, provided that: "The amendments made by subsection (a) [amending this section] shall apply only with respect to agreements entered into on or after the date of the enactment of this Act [Dec. 22, 2023]."

Effective Date of 2021 Amendment

Amendment by Pub. L. 117–81 to take effect immediately after the amendments made by title XVIII of Pub. L. 116–283 have taken effect, see section 1701(a)(3) of Pub. L. 117–81, set out in a note preceding section 3001 of this title and note below.

Amendment by sections 1870(c)(2) and 1883(b)(2) of Pub. L. 116–283 effective Jan. 1, 2022, with additional provisions for delayed implementation and applicability of existing law, see section 1801(d) of Pub. L. 116–283, set out as a note preceding section 3001 of this title.

Effective Date of 2019 Amendment

Pub. L. 116–92, div. A, title VIII, §854(a)(2), Dec. 20, 2019, 133 Stat. 1512, as amended by Pub. L. 116–283, div. A, title XVIII, §1870(c)(5), Jan. 1, 2021, 134 Stat. 4285, provided that: "Paragraphs (3) and (4) of section 4862(b) of title 10, United States Code, as added by paragraph (1), shall apply with respect to contracts entered into on or after the date occurring 1 year after the date of the enactment of this Act [Dec. 20, 2019]."

Pub. L. 116–92, div. A, title VIII, §854(a)(3), Dec. 20, 2019, 133 Stat. 1512, provided that the amendment made by section 854(a)(3) is effective Sept. 30, 2023.

Effective Date of 2006 Amendment

Pub. L. 109–364, div. A, title VIII, §842(a)(4)(B), Oct. 17, 2006, 120 Stat. 2337, provided that: "The amendments made by paragraph (3) [amending this section] shall take effect on the date occurring 30 days after the date of the enactment of this Act [Oct. 17, 2006]."

Short Title

This section is popularly known as the "Berry Amendment".

Appropriations for United States Flags

Pub. L. 118–47, div. A, title VIII, §8037, Mar. 23, 2024, 138 Stat. 491, provided that: "None of the funds made available in this Act [div. A of Pub. L. 118–47, see Tables for classification], or any subsequent Act making appropriations for the Department of Defense, may be used for the purchase or manufacture of a flag of the United States unless such flags are treated as covered items under section 4862(b) of title 10, United States Code."

Similar provisions were contained in the following appropriation acts:

Pub. L. 117–328, div. C, title VIII, §8037, Dec. 29, 2022, 136 Stat. 4595.

Pub. L. 117–103, div. C, title VIII, §8038, Dec. 29, 2022, 136 Stat. 183.

Periodic Audits of Contracting Compliance by Inspector General of Department of Defense

Pub. L. 113–66, div. A, title XVI, §1601, Dec. 26, 2013, 127 Stat. 941, as amended by Pub. L. 117–286, §4(b)(29), Dec. 27, 2022, 136 Stat. 4346, provided that:

"(a) Requirement for Periodic Audits of Contracting Compliance.—The Inspector General of the Department of Defense shall conduct periodic audits of contracting practices and policies related to procurement under section 2533a of title 10, United States Code [now 10 U.S.C. 4862].

"(b) Requirement for Additional Information in Semiannual Reports.—The Inspector General of the Department of Defense shall ensure that findings and other information resulting from audits conducted pursuant to subsection (a) are included in the semiannual report transmitted to congressional committees under section 408(f)(1) of title 5, United States Code."

Fire Resistant Rayon Fiber

Pub. L. 110–181, div. A, title VIII, §829, Jan. 28, 2008, 122 Stat. 229, as amended by Pub. L. 111–383, div. A, title VIII, §821(a), Jan. 7, 2011, 124 Stat. 4267; Pub. L. 112–81, div. A, title VIII, §822, Dec. 31, 2011, 125 Stat. 1502, provided that:

"(a) Authority To Procure.—The Secretary of Defense may procure fire resistant rayon fiber for the production of uniforms that is manufactured in a foreign country referred to in subsection (d) if the Secretary determines either of the following:

"(1) That fire resistant rayon fiber for the production of uniforms is not available from sources within the national technology and industrial base.

"(2) That—

"(A) procuring fire resistant rayon fiber manufactured from suppliers within the national technology and industrial base would result in sole-source contracts or subcontracts for the supply of fire resistant rayon fiber; and

"(B) such sole-source contracts or subcontracts would not be in the best interests of the Government or consistent with the objectives of section 2304 of title 10, United States Code [see 10 U.S.C. 3201 et seq.].

"(b) Submission to Congress.—Not later than 30 days after making a determination under subsection (a), the Secretary shall submit to Congress a copy of the determination.

"(c) Applicability to Subcontracts.—The authority under subsection (a) applies with respect to subcontracts under Department of Defense contracts as well as to such contracts.

"(d) Foreign Countries Covered.—The authority under subsection (a) applies with respect to a foreign country that—

"(1) is a party to a defense memorandum of understanding entered into under section 2531 of title 10, United States Code [now 10 U.S.C. 4851]; and

"(2) does not discriminate against defense items produced in the United States to a greater degree than the United States discriminates against defense items produced in that country.

"(e) National Technology and Industrial Base Defined.—In this section, the term 'national technology and industrial base' has the meaning given that term in section 2500 of title 10, United States Code [now 10 U.S.C. 4801]."

Training for Defense Acquisition Workforce on the Requirements of the Berry Amendment

Pub. L. 109–163, div. A, title VIII, §832, Jan. 6, 2006, 119 Stat. 3388, provided that:

"(a) Training During Fiscal Year 2006.—The Secretary of Defense shall ensure that each member of the defense acquisition workforce who participates personally and substantially in the acquisition of textiles on a regular basis receives training during fiscal year 2006 on the requirements of section 2533a of title 10, United States Code [now 10 U.S.C. 4862] (commonly referred to as the 'Berry Amendment'), and the regulations implementing that section.

"(b) Inclusion of Information in New Training Programs.—The Secretary shall ensure that any training program developed or implemented after the date of the enactment of this Act [Jan. 6, 2006] for members of the defense acquisition workforce who participate personally and substantially in the acquisition of textiles on a regular basis includes comprehensive information on the requirements described in subsection (a)."

Application of Exception to Seafood Products

Pub. L. 108–287, title VIII, §8118, Aug. 5, 2004, 118 Stat. 998, as amended by Pub. L. 113–291, div. A, title X, §1071(b)(4), Dec. 19, 2014, 128 Stat. 3506; Pub. L. 116–283, div. A, title XVIII, §1870(c)(6)(B), Jan. 1, 2021, 134 Stat. 4285, provided that: "Notwithstanding any other provision of law, section 4862(f) of title 10, United States Code, shall hereafter not apply to any fish, shellfish, or seafood product. This section applies to contracts and subcontracts for the procurement of commercial items notwithstanding section 1906 of title 41, United States Code."

§4863. Requirement to buy strategic materials critical to national security from American sources; exceptions

(a) Requirement.—Except as provided in subsections (b) through (m), the acquisition by the Department of Defense of the following items is prohibited:

(1) The following types of end items, or components thereof, containing a specialty metal not melted or produced in the United States: aircraft, missile and space systems, ships, tank and automotive items, weapon systems, or ammunition.

(2) A specialty metal that is not melted or produced in the United States and that is to be purchased directly by the Department of Defense or a prime contractor of the Department.

(b) Availability Exception.—(1) Subsection (a) does not apply to the extent that the Secretary of Defense or the Secretary of the military department concerned determines that compliant specialty metal of satisfactory quality and sufficient quantity, and in the required form, cannot be procured as and when needed. For purposes of the preceding sentence, the term "compliant specialty metal" means specialty metal melted or produced in the United States.

(2) This subsection applies to prime contracts and subcontracts at any tier under such contracts.

(1) Acquisitions outside the United States in support of combat operations or in support of contingency operations.

(2) Acquisitions for which the use of procedures other than competitive procedures has been approved on the basis of section 3204(a)(2) of this title, relating to unusual and compelling urgency of need.

(d) Exception Relating to Agreements With Foreign Governments.—Subsection (a)(1) does not preclude the acquisition of a specialty metal if—

(1) the acquisition is necessary—

(2) any such agreement with a foreign government complies, where applicable, with the requirements of section 36 of the Arms Export Control Act (22 U.S.C. 2776) and with section 2457 of this title.

(e) Exception for Commissaries, Exchanges, and Other Nonappropriated Fund Instrumentalities.—Subsection (a) does not apply to items purchased for resale purposes in commissaries, exchanges, and nonappropriated fund instrumentalities operated by the Department of Defense.

(f) Exception for Small Purchases.—Subsection (a) does not apply to acquisitions in amounts not greater than the simplified acquisition threshold referred to in section 3205 of this title.

(g) Exception for Purchases of Electronic Components.—Subsection (a) does not apply to acquisitions of electronic components, unless the Secretary of Defense, upon the recommendation of the Strategic and Critical Materials Board of Directors pursuant to section 10 of the Strategic and Critical Materials Stock Piling Act (50 U.S.C. 98h–1), determines that the domestic availability of a particular electronic component is critical to national security.

(h) Applicability to Acquisitions of Commercial Products.—(1) Except as provided in paragraphs (2) and (3), this section applies to acquisitions of commercial products, notwithstanding sections 1906 and 1907 of title 41.

(2) This section does not apply to contracts or subcontracts for the acquisition of commercially available off-the-shelf items, as defined in section 104 of title 41, other than—

(A) contracts or subcontracts for the acquisition of specialty metals, including mill products, such as bar, billet, slab, wire, plate and sheet, that have not been incorporated into end items, subsystems, assemblies, or components;

(B) contracts or subcontracts for the acquisition of forgings or castings of specialty metals, unless such forgings or castings are incorporated into commercially available off-the-shelf end items, subsystems, or assemblies;

(C) contracts or subcontracts for commercially available high performance magnets unless such high performance magnets are incorporated into commercially available off-the-shelf-end items or subsystems; and

(D) contracts or subcontracts for commercially available off-the-shelf fasteners, unless such fasteners are—

(i) incorporated into commercially available off-the-shelf end items, subsystems, assemblies, or components; or

(ii) purchased as provided in paragraph (3).

(3) This section does not apply to fasteners that are commercial products that are purchased under a contract or subcontract with a manufacturer of such fasteners, if the manufacturer has certified that it will purchase, during the relevant calendar year, an amount of domestically melted specialty metal, in the required form, for use in the production of such fasteners for sale to the Department of Defense and other customers, that is not less than 50 percent of the total amount of the specialty metal that it will purchase to carry out the production of such fasteners.

(i) Exceptions for Purchases of Specialty Metals Below Minimum Threshold.—(1) Notwithstanding subsection (a), the Secretary of Defense or the Secretary of a military department may accept delivery of an item containing specialty metals that were not melted in the United States if the total amount of noncompliant specialty metals in the item does not exceed 2 percent of the total weight of specialty metals in the item.

(2) This subsection does not apply to high performance magnets.

(j) Streamlined Compliance for Commercial Derivative Military Articles.—(1) Subsection (a) shall not apply to an item acquired under a prime contract if the Secretary of Defense or the Secretary of a military department determines that—

(A) the item is a commercial derivative military article; and

(B) the contractor certifies that the contractor and its subcontractors have entered into a contractual agreement, or agreements, to purchase an amount of domestically melted specialty metal in the required form, for use during the period of contract performance in the production of the commercial derivative military article and the related commercial article, that is not less than the greater of—

(i) an amount equivalent to 120 percent of the amount of specialty metal that is required to carry out the production of the commercial derivative military article (including the work performed under each subcontract); or

(ii) an amount equivalent to 50 percent of the amount of specialty metal that is purchased by the contractor and its subcontractors for use during such period in the production of the commercial derivative military article and the related commercial article.

(2) For the purposes of this subsection, the amount of specialty metal that is required to carry out the production of the commercial derivative military article includes specialty metal contained in any item, including commercially available off-the-shelf items, incorporated into such commercial derivative military article.

(k) National Security Waiver.—(1) Notwithstanding subsection (a), the Secretary of Defense may accept the delivery of an end item containing noncompliant materials if the Secretary determines in writing that acceptance of such end item is necessary to the national security interests of the United States.

(2) A written determination under paragraph (1)—

(A) may not be delegated below the level of the Deputy Secretary of Defense or the Under Secretary of Defense for Acquisition and Sustainment;

(B) shall specify the quantity of end items to which the waiver applies and the time period over which the waiver applies; and

(C) shall be provided to the congressional defense committees prior to making such a determination (except that in the case of an urgent national security requirement, such certification may be provided to the defense committees up to 7 days after it is made).

(3)(A) In any case in which the Secretary makes a determination under paragraph (1), the Secretary shall determine whether or not the noncompliance was knowing and willful.

(B) If the Secretary determines that the noncompliance was not knowing or willful, the Secretary shall ensure that the contractor or subcontractor responsible for the noncompliance develops and implements an effective plan to ensure future compliance.

(i) require the development and implementation of a plan to ensure future compliance; and

(ii) consider suspending or debarring the contractor or subcontractor until such time as the contractor or subcontractor has effectively addressed the issues that lead to such noncompliance.

(l) Specialty Metal Defined.—In this section, the term "specialty metal" means any of the following:

(1) Steel—

(A) with a maximum alloy content exceeding one or more of the following limits: manganese, 1.65 percent; silicon, 0.60 percent; or copper, 0.60 percent; or

(B) containing more than 0.25 percent of any of the following elements: aluminum, chromium, cobalt, columbium, molybdenum, nickel, titanium, tungsten, or vanadium.

(2) Metal alloys consisting of nickel, iron-nickel, and cobalt base alloys containing a total of other alloying metals (except iron) in excess of 10 percent.

(3) Titanium and titanium alloys.

(4) Zirconium and zirconium base alloys.

(m) Additional Definitions.—In this section:

(1) The term "United States" includes possessions of the United States.

(2) The term "component" has the meaning provided in section 105 of title 41.

(3) The term "acquisition" has the meaning provided in section 131 of title 41.

(4) The term "required form" shall not apply to end items or to their components at any tier. The term "required form" means in the form of mill product, such as bar, billet, wire, slab, plate or sheet, and in the grade appropriate for the production of—

(A) a finished end item delivered to the Department of Defense; or

(B) a finished component assembled into an end item delivered to the Department of Defense.

(5) The term "commercially available off-the-shelf", has the meaning provided in section 104 of title 41.

(6) The term "assemblies" means items forming a portion of a system or subsystem that can be provisioned and replaced as an entity and which incorporates multiple, replaceable parts.

(7) The term "commercial derivative military article" means an item procured by the Department of Defense that is or will be produced using the same production facilities, a common supply chain, and the same or similar production processes that are used for the production of articles predominantly used by the general public or by nongovernmental entities for purposes other than governmental purposes.

(8) The term "subsystem" means a functional grouping of items that combine to perform a major function within an end item, such as electrical power, attitude control, and propulsion.

(9) The term "end item" means the final production product when assembled or completed, and ready for issue, delivery, or deployment.

(10) The term "subcontract" includes a subcontract at any tier.

(Added Pub. L. 109–364, div. A, title VIII, §842(a)(1), Oct. 17, 2006, 120 Stat. 2335, §2533b; amended Pub. L. 110–181, div. A, title VIII, §804(a)–(f), Jan. 28, 2008, 122 Stat. 208–211; Pub. L. 111–350, §5(b)(39), Jan. 4, 2011, 124 Stat. 3845; Pub. L. 111–383, div. A, title X, §1075(f)(2), Jan. 7, 2011, 124 Stat. 4376; Pub. L. 113–291, div. A, title X, §1071(a)(10), Dec. 19, 2014, 128 Stat. 3505; Pub. L. 115–232, div. A, title VIII, §837(c), Aug. 13, 2018, 132 Stat. 1875; Pub. L. 116–92, div. A, title IX, §902(77), Dec. 20, 2019, 133 Stat. 1552; renumbered §4863 and amended Pub. L. 116–283, div. A, title XVIII, §§1870(c)(2), 1883(b)(2), Jan. 1, 2021, 134 Stat. 4285, 4294; Pub. L. 117–81, div. A, title XVII, §1701(d)(18), Dec. 27, 2021, 135 Stat. 2138; Pub. L. 117–263, div. A, title XIV, §1411(d)(2)(A), Dec. 23, 2022, 136 Stat. 2871; Pub. L. 118–31, div. A, title VIII, §833(a), Dec. 22, 2023, 137 Stat. 337.)

Amendment of Section

Pub. L. 118–31, div. A, title VIII, §833, Dec. 22, 2023, 137 Stat. 337, provided that, effective 24 months after Dec. 22, 2023, this section is amended as follows:

(1) in subsection (d), by striking "; and" in paragraph (1)(B) and inserting a semicolon, by striking the period at the end of paragraph (2) and inserting "; and", and by adding at the end the following new paragraph:

"(3) any specialty metal procured as mill product or incorporated into a component other than an end item pursuant to this subsection shall be melted or produced—

"(A) in the United States;

"(B) in the country from which the mill product or component is procured; or

"(C) in another country covered under subparagraph (1)(B)."; and

(2) by redesignating subsections (l) and (m) as subsections (m) and (n), respectively, and by inserting after subsection (k) the following new subsection:

(l) Provenance of Aerospace-grade Metals.—(1) The Secretary of Defense shall require that, for any system or component for which the provenance of materials must be tracked to comply with safety regulations concerning flight, the supplier of such system or component shall inform the government if any of the materials were known to be manufactured or processed in—

(A) China;

(B) Iran;

(C) North Korea; or

(D) Russia.

(2) Not later than March 31 of each year, the Secretary of Defense shall submit to the congressional defense committees a report indicating how much specialty metal has been acquired and placed into systems of the Department of Defense from the countries described in paragraph (1).

See 2023 Amendment notes below.

Editorial Notes

Amendments

2023—Subsec. (d)(3). Pub. L. 118–31, §833(a)(1), added par. (3).

Subsecs. (l) to (n). Pub. L. 118–31, §833(a)(2), (3), added subsec. (l) and redesignated former subsecs. (l) and (m) as (m) and (n), respectively.

2022—Subsec. (g). Pub. L. 117–263 substituted "Strategic and Critical Materials Board of Directors pursuant to section 10 of the Strategic and Critical Materials Stock Piling Act (50 U.S.C. 98h–1)" for "Strategic Materials Protection Board pursuant to section 187 of this title".

2021—Pub. L. 116–283, §1870(c)(2), renumbered section 2533b of this title as this section.

Subsec. (c)(2). Pub. L. 117–81, §1701(d)(18)(A), which directed the substitution of "section 3204(a)(2)" for "section 2304(c)(2)", could not be executed because of the intervening amendment by Pub. L. 116–283, §1883(b)(2). See note below.

Pub. L. 116–283, §1883(b)(2), substituted "section 3204(a)(2)" for "section 2304(c)(2)".

Subsec. (f). Pub. L. 117–81, §1701(d)(18)(B), which directed the substitution of "section 3205" for "section 2304(g)", could not be executed because of the intervening amendment by Pub. L. 116–283, §1883(b)(2). See note below.

Pub. L. 116–283, §1883(b)(2), substituted "section 3205" for "section 2304(g)".

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

2018—Subsec. (h). Pub. L. 115–232, §837(c)(1), substituted "Products" for "Items" in heading.

Subsec. (h)(1), (3). Pub. L. 115–232, §837(c)(2), substituted "commercial products" for "commercial items".

2014—Subsec. (h)(1). Pub. L. 113–291, §1071(a)(10)(A)(i), substituted "sections 1906 and 1907 of title 41" for "sections 34 and 35 of the Office of Federal Procurement Policy Act (41 U.S.C. 430 and 431)".

Subsec. (h)(2). Pub. L. 113–291, §1071(a)(10)(A)(ii), substituted "section 104 of title 41" for "section 35(c) of the Office of Federal Procurement Policy Act (41 U.S.C. 431(c))" in introductory provisions.

Subsec. (m)(2). Pub. L. 113–291, §1071(a)(10)(B)(i), substituted "section 105 of title 41" for "section 4 of the Office of Federal Procurement Policy Act (41 U.S.C. 403)".

Subsec. (m)(3). Pub. L. 113–291, §1071(a)(10)(B)(ii), substituted "section 131 of title 41" for "section 4 of the Office of Federal Procurement Policy Act (41 U.S.C. 403)".

Subsec. (m)(5). Pub. L. 113–291, §1071(a)(10)(B)(iii), substituted "section 104 of title 41" for "section 35(c) of the Office of Federal Procurement Policy Act (41 U.S.C. 431(c))".

2011—Subsec. (a)(2). Pub. L. 111–383, §1075(f)(2)(A), made technical amendment to directory language of Pub. L. 110–181, §804(a)(3). See 2008 Amendment note below.

Subsec. (h). Pub. L. 111–350, §5(b)(39)(A), which directed substitution of "section 1906 of title 41" for "section 34 of the Office of Federal Procurement Policy Act (41 U.S.C. 430)", could not be executed because the words "section 34 of the Office of Federal Procurement Policy Act (41 U.S.C. 430)" did not appear in text.

Subsec. (j). Pub. L. 111–350, §5(b)(39)(B), which directed substitution of "section 105 of title 41" for "section 4 of the Office of Federal Procurement Policy Act (41 U.S.C. 403)" in subsec. (j), could not be executed because the words "section 4 of the Office of Federal Procurement Policy Act (41 U.S.C. 403)" did not appear in subsec. (j) after the amendment by Pub. L. 110–181, §804(d).

Subsec. (m)(3) to (10). Pub. L. 111–383, §1075(f)(2)(B), made technical amendment to directory language of Pub. L. 110–181, §804(e). See 2008 Amendment note below.

2008—Subsec. (a). Pub. L. 110–181, §804(a)(1), substituted "Except as provided in subsections (b) through (m), the acquisition by the Department of Defense of the following items is prohibited:" for "Except as provided in subsections (b) through (j), funds appropriated or otherwise available to the Department of Defense may not be used for procurement of—" in introductory provisions.

Subsec. (a)(1). Pub. L. 110–181, §804(a)(2), substituted "The following" for "the following" and substituted period for "; or" at end.

Subsec. (a)(2). Pub. L. 110–181, §804(a)(3), as amended by Pub. L. 111–383, §1075(f)(2)(A), substituted "A specialty" for "a specialty".

Subsec. (c). Pub. L. 110–181, §804(f)(1), substituted "Acquisitions" for "Procurements" in heading and pars. (1) and (2).

Subsec. (d). Pub. L. 110–181, §804(f)(2), substituted "acquisition" for "procurement" in introductory provisions and par. (1).

Subsec. (f). Pub. L. 110–181, §804(f)(3), substituted "acquisitions" for "procurements".

Subsec. (g). Pub. L. 110–181, §804(c), (f)(3), substituted "acquisitions" for "procurements" and "electronic components, unless the Secretary of Defense, upon the recommendation of the Strategic Materials Protection Board pursuant to section 187 of this title, determines that the domestic availability of a particular electronic component is critical to national security." for "commercially available electronic components whose specialty metal content is de minimis in value compared to the overall value of the lowest level electronic component produced that contains such specialty metal."

Subsec. (h). Pub. L. 110–181, §804(b), amended heading and text generally. Prior to amendment, text read as follows: "This section applies to procurements of commercial items notwithstanding section 34 of the Office of Federal Procurement Policy Act (41 U.S.C. 430)."

Subsecs. (i) to (m). Pub. L. 110–181, §804(d), added subsecs. (i) to (k) and redesignated former subsecs. (i) and (j) as (l) and (m), respectively.

Subsec. (m)(3) to (10). Pub. L. 110–181, §804(e), as amended by Pub. L. 111—383, §1075(f)(2)(B), added pars. (3) to (10).

Statutory Notes and Related Subsidiaries

Effective Date of 2023 Amendment

Pub. L. 118–31, div. A, title VIII, §833(b), Dec. 22, 2023, 137 Stat. 337, provided that: "Subsection (a) [amending this section] shall take effect on the date that is 24 months after the date of the enactment of this Act [Dec. 22, 2023]."

Effective Date of 2021 Amendment

Effective Date of 2011 Amendment

Pub. L. 111–383, div. A, title X, §1075(f)(2), Jan. 7, 2011, 124 Stat. 4376, provided that the amendment made by section 1075(f)(2) is effective as of January 28, 2008, and as if included in Public Law 110–181 as enacted.

Effective Date

Pub. L. 109–364, div. A, title VIII, §842(a)(4)(A), Oct. 17, 2006, 120 Stat. 2337, provided that: "Section 2533b of title 10, United States Code [now 10 U.S.C. 4863], as added by paragraph (1), shall apply with respect to contracts entered into after the date occurring 30 days after the date of the enactment of this Act [Oct. 17, 2006]."

Regulations

Pub. L. 110–181, div. A, title VIII, §804(g), Jan. 28, 2008, 122 Stat. 211, provided that: "Not later than 120 days after the date of the enactment of this Act [Jan. 28, 2008], the Secretary of Defense shall prescribe regulations on the implementation of this section [amending this section and enacting provisions formerly set out as a note under section 2533b] and the amendments made by this section, including specific guidance on how thresholds established in subsections (h)(3), (i) and (j) of section 2533b of title 10, United States Code [now 10 U.S.C. 4863], as amended by this section, should be implemented."

Requirements Relating to Waivers of Certain Domestic Source Limitations Relating to Specialty Metals

Pub. L. 110–181, div. A, title VIII, §884, Jan. 28, 2008, 122 Stat. 264, provided that:

"(a) Notice Requirement.—At least 30 days prior to making a domestic nonavailability determination pursuant to section 2533b(b) of title 10, United States Code [now 10 U.S.C. 4863(b)], that would apply to more than one contract of the Department of Defense, the Secretary of Defense shall, to the maximum extent practicable and in a manner consistent with the protection of national security information and confidential business information—

"(1) publish a notice on the website maintained by the General Services Administration known as FedBizOpps.gov (or any successor site) of the Secretary's intent to make the domestic nonavailability determination; and

"(2) solicit information relevant to such notice from interested parties, including producers of specialty metal mill products.

"(b) Determination.—(1) The Secretary shall take into consideration all information submitted pursuant to subsection (a) in making a domestic nonavailability determination pursuant to section 2533b(b) of title 10, United States Code [now 10 U.S.C. 4863(b)], that would apply to more than one contract of the Department of Defense, and may also consider other relevant information that cannot be made part of the public record consistent with the protection of national security information and confidential business information.

"(2) The Secretary shall ensure that any such determination and the rationale for such determination is made publicly available to the maximum extent consistent with the protection of national security information and confidential business information."

§4864. Miscellaneous limitations on the procurement of goods other than United States goods

(a) Limitation on Certain Procurements.—The Secretary of Defense may procure any of the following items only if the manufacturer of the item satisfies the requirements of subsection (b):

(1) Buses.—Multipassenger motor vehicles (buses).

(2) Components for naval vessels.—The following components of vessels, to the extent they are unique to marine applications:

(A) Gyrocompasses.

(B) Electronic navigation chart systems.

(D) Propulsion and machinery control systems.

(E) Totally enclosed lifeboats.

(F) Welded shipboard anchor and mooring chain.

(3) Components for auxiliary ships.—Subject to subsection (k), large medium-speed diesel engines.

(4) Components for t–ao 205 and t–arc class vessels.—The following components of T–AO 205 and T–ARC class vessels:

(A) Auxiliary equipment, including pumps, for all shipboard services.

(B) Propulsion system components, including engines, reduction gears, and propellers.

(D) Spreaders for shipboard cranes.

(5) Star tracker.—A star tracker used in a satellite weighing more than 400 pounds whose principal purpose is to support the national security, defense, or intelligence needs of the United States Government.

(b) Manufacturer in the National Technology and Industrial Base.—(1) Except as provided in paragraph (2), a manufacturer meets the requirements of this subsection if the manufacturer is part of the national technology and industrial base.

(2) A manufacturer of welded shipboard anchor and mooring chain for naval vessels meets the requirements of this subsection if the manufacturer is part of the national technology and industrial base.

(c) Applicability to Certain Items.—Subsection (a) does not apply to a procurement of spare or repair parts needed to support components for naval vessels produced or manufactured outside the United States.

(d) Waiver Authority.—The Secretary of Defense may waive the limitation in subsection (a) with respect to the procurement of an item listed in that subsection if the Secretary determines that any of the following apply:

(1) Application of the limitation would cause unreasonable costs or delays to be incurred.

(2) United States producers of the item would not be jeopardized by competition from a foreign country, and that country does not discriminate against defense items produced in the United States to a greater degree than the United States discriminates against defense items produced in that country.

(3) Application of the limitation would impede cooperative programs entered into between the Department of Defense and a foreign country, or would impede the reciprocal procurement of defense items under a memorandum of understanding providing for reciprocal procurement of defense items that is entered into under section 4851 of this title, and that country does not discriminate against defense items produced in the United States to a greater degree than the United States discriminates against defense items produced in that country.

(4) Satisfactory quality items manufactured by an entity that is part of the national technology and industrial base (as defined in section 4801(1) of this title) are not available.

(5) Application of the limitation would result in the existence of only one source for the item that is an entity that is part of the national technology and industrial base (as defined in section 4801(1) of this title).

(6) The procurement is for an amount less than the simplified acquisition threshold and simplified purchase procedures are being used.

(7) Application of the limitation is not in the national security interests of the United States.

(8) Application of the limitation would adversely affect a United States company.

(e) Sonobuoys.—

(1) Limitation.—The Secretary of Defense may not procure a sonobuoy manufactured in a foreign country if United States firms that manufacture sonobuoys are not permitted to compete on an equal basis with foreign manufacturing firms for the sale of sonobuoys in that foreign country.

(2) Waiver authority.—The Secretary may waive the limitation in paragraph (1) with respect to a particular procurement of sonobuoys if the Secretary determines that such procurement is in the national security interests of the United States.

(3) Definition.—In this subsection, the term "United States firm" has the meaning given such term in section 4852(d)(1) of this title.

(f) Principle of Construction With Future Laws.—A provision of law may not be construed as modifying or superseding the provisions of this section, or as requiring funds to be limited, or made available, by the Secretary of Defense to a particular domestic source by contract, unless that provision of law—

(1) specifically refers to this section;

(2) specifically states that such provision of law modifies or supersedes the provisions of this section; and

(3) specifically identifies the particular domestic source involved and states that the contract to be awarded pursuant to such provision of law is being awarded in contravention of this section.

(g) Inapplicability to Contracts under Simplified Acquisition Threshold.—This section does not apply to a contract or subcontract for an amount that does not exceed the simplified acquisition threshold.

(h) Implementation of Naval Vessel Component Limitation.—In implementing subsection (a)(2), the Secretary of Defense—

(1) may not use contract clauses or certifications; and

(2) shall use management and oversight techniques that achieve the objective of the subsection without imposing a significant management burden on the Government or the contractor involved.

(i) Implementation of Certain Waiver Authority.—(1) The Secretary of Defense may exercise the waiver authority described in paragraph (2) only if the waiver is made for a particular item listed in subsection (a) and for a particular foreign country.

(2) This subsection applies to the waiver authority provided by subsection (d) on the basis of the applicability of paragraph (2) or (3) of that subsection.

(3) The waiver authority described in paragraph (2) may not be delegated below the Under Secretary of Defense for Acquisition and Sustainment.

(4) At least 15 days before the effective date of any waiver made under the waiver authority described in paragraph (2), the Secretary shall publish in the Federal Register and submit to the congressional defense committees a notice of the determination to exercise the waiver authority.

(5) Any waiver made by the Secretary under the waiver authority described in paragraph (2) shall be in effect for a period not greater than one year, as determined by the Secretary.

(j) Limitation on Certain Procurements Application Process.—

(1) In general.—The Secretary of Defense shall administer a process to analyze and assess potential items for consideration to be required to be procured from a manufacturer that is part of the national technology and industrial base.

(2) Elements.—The application process required under paragraph (1) shall include the following elements:

(A) The Secretary shall designate an official within the Office of the Secretary of Defense responsible for administration of the limitation on certain procurements application process and associated policy.

(B) A person or organization that meets the definition of national technology and industrial base under section 4801(1) of this title shall have the opportunity to apply for status as an item required to be procured from a manufacturer that is part of the national technology and industrial base. The application shall include, at a minimum, the following information:

(i) Information demonstrating the applicant meets the criteria of a manufacturer in the national technology and industrial base under section 4801(1) of this title.

(ii) For each item the applicant seeks to be required to be procured from a manufacturer that is part of the national technology and industrial base, the applicant shall include the following information:

(I) The extent to which such item has commercial applications.

(II) The number of such items to be procured by current programs of record.

(III) The criticality of such item to a military unit's mission accomplishment.

(IV) The estimated cost and other considerations of reconstituting the manufacturing capability of such item, if not maintained in the national technology and industrial base.

(V) National security regulations or restrictions imposed on such item that may not be imposed on a non-national technology and industrial base competitor.

(VI) Non-national security-related Federal, State, and local government regulations imposed on such item that may not be imposed on a non-national technology and industrial base competitor.

(VII) The extent to which such item is fielded in current programs of record.

(VIII) The extent to which cost and pricing data for such item has been deemed fair and reasonable.

(3) Consideration of applications.—

(A) Responsibility of designated official.—The official designated pursuant to paragraph (2)(A) shall be responsible for providing complete applications submitted pursuant to this subsection to the appropriate component acquisition executive for consideration not later than 15 days after receipt of such application.

(B) Review.—Not later than 120 days after receiving a complete application, the component acquisition executive shall review such application, make a determination, and return the application to the official designated pursuant to paragraph (2)(A).

(C) Elements of determination.—The determination required under subparagraph (B) shall, for each item proposed pursuant to paragraph (2)(B)(ii)—

(i) recommend inclusion under this section;

(ii) recommend inclusion under this section with further modifications; or

(iii) not recommend inclusion under this section.

(D) Justification.—The determination required under subparagraph (B) shall also include the rationale and justification for the determination.

(4) Recommendations for legislation.—For applications recommended under subsection (3), the official designated pursuant to paragraph (2)(A) shall be responsible for preparing a legislative proposal for consideration by the Secretary.

(k) Implementation of Auxiliary Ship Component Limitation.—Subsection (a)(3) applies only with respect to contracts awarded by the Secretary of a military department for new construction of an auxiliary ship after the date of the enactment of the National Defense Authorization Act for Fiscal Year 2020 using funds available for National Defense Sealift Fund programs or Shipbuilding and Conversion, Navy. For purposes of this subsection, the term "auxiliary ship" does not include an icebreaker or a special mission ship.

(l) Periodic Review.—

(1) Recommendation.—Not later than November 1, 2024, and every five years thereafter, the Under Secretary of Defense for Acquisition and Sustainment shall review each item described in subsections (a) and (e) of this section and submit to the congressional defense committees, in writing, one of the following recommendations:

(A) Recommend continued inclusion of the item under this section.

(B) Recommend continued inclusion of the item under this section with modifications.

(2) Elements.—Each review required under paragraph (1) shall include, with respect to the five-year period preceding the date of submission of the written determination related to such a review, the following elements:

(A) The criticality of the item reviewed to a military unit's mission accomplishment or other national security objectives.

(B) The extent to which such item is fielded in current programs of record.

(D) The extent to which cost and pricing data for such item has been deemed fair and reasonable.

(3) Justification.—The written determination required under paragraph (1) shall also include the findings of the applicable review conducted under such paragraph and any key justifications for the recommendation.

Historical and Revision Notes
Revised section	Source (U.S. Code)	Source (Statutes at Large)
2400	10:2303 (note).	Sept. 20, 1968, Pub. L. 90–500, §404, 82 Stat. 851.

The words "of the United States under the provisions of this Act or the provisions of any other law" are omitted as surplus. The word "acquisition" is substituted for "purchase, lease, rental, or other acquisition" because it is inclusive. The words "this section" are substituted for "this prohibition" because of the restatement.

Editorial Notes

References in Text

The date of the enactment of the National Defense Authorization Act for Fiscal Year 2020, referred to in subsec. (k), is the date of enactment of Pub. L. 116–92, which was approved Dec. 20, 2019.

Amendments

2022—Subsec. (a)(4). Pub. L. 117–263, §853(a)(2), inserted "and T–ARC" after "T–AO 205" in heading and introductory provisions in text.

Subsecs. (k), (l). Pub. L. 117–263, §§852, 853(a)(1) added subsec. (l) and redesignated former subsec. (l) as (k).

2021—Pub. L. 116–283, §1870(c)(2), renumbered section 2534 of this title as this section.

Subsec. (a)(2). Pub. L. 116–283, §845(a)(1)(A),(B), added par. (2) and struck out former par. (2). Prior to amendment, text read as follows: "Chemical weapons antidote contained in automatic injectors (and components for such injectors)."

Subsec. (a)(2)(F). Pub. L. 117–81, §816(1), added subpar. (F).

Subsec. (a)(3). Pub. L. 117–81, §1081(a)(30)(A), substituted "subsection (k)" for "subsection (j)".

Pub. L. 116–283, §845(a)(1)(A), (C), redesignated par. (6) as (3), substituted "subsection (j)" for "subsection (k)", and struck out former par. (3) which related to components for naval vessels.

Subsec. (a)(4). Pub. L. 116–283, §845(a)(1)(A), (D), added par. (4) and struck out former par. (4) which related to valves and machine tools.

Subsec. (a)(5). Pub. L. 117–81, §1081(a)(30)(B), substituted "principal" for "principle".

Pub. L. 116–283, §1603(a), added par. (5).

Pub. L. 116–283, §845(a)(1)(A), struck out par. (5). Text read as follows: "Ball bearings and roller bearings, in accordance with subpart 225.71 of part 225 of the Defense Federal Acquisition Regulation Supplement, as in effect on October 23, 1992, except ball bearings and roller bearings being procured for use in an end product manufactured by a manufacturer that does not satisfy the requirements of subsection (b) or in a component part manufactured by such a manufacturer."

Subsec. (a)(6). Pub. L. 116–283, §845(a)(1)(A), redesignated par. (6) as (3).

Subsec. (b). Pub. L. 117–81, §816(2), designated existing provisions as par. (1), substituted "Except as provided in paragraph (2), a manufacturer" for "A manufacturer", and added par. (2).

Pub. L. 116–283, §845(a)(2), amended subsec. (b) generally. Prior to amendment, subsec. (b) related to manufacturer in the national technology and industrial base.

Subsec. (c). Pub. L. 116–283, §845(a)(3), struck out par. (1) designation and heading and struck out pars. (2) to (5), which related to valves and machine tools, ball bearings and roller bearings, vessel propellers, and chemical weapons antidote, respectively.

Subsec. (d)(3). Pub. L. 116–283, §1870(c)(3)(A), substituted "section 4851" for "section 2531".

Subsec. (d)(4), (5). Pub. L. 116–283, §1870(c)(3)(B), as added by Pub. L. 117–81, §1701(b)(23)(A), substituted "section 4801(1)" for "section 2500(1)".

Subsec. (e)(3). Pub. L. 116–283, §1870(c)(3)(C), formerly §1870(c)(3)(B), as redesignated by Pub. L. 117–81, §1701(b)(23)(B), substituted "section 4852(d)(1)" for "section 2532(d)(1)".

Subsec. (g). Pub. L. 116–283, §845(a)(4), struck out par. (1) designation and par. (2) which read as follows: "Paragraph (1) does not apply to contracts for items described in subsection (a)(5) (relating to ball bearings and roller bearings), notwithstanding section 1905 of title 41."

Subsec. (h). Pub. L. 116–283, §845(a)(5), substituted "subsection (a)(2)" for "subsection (a)(3)(B)" in introductory provisions.

Subsec. (i)(3). Pub. L. 116–283, §845(a)(6), substituted "Under Secretary of Defense for Acquisition and Sustainment" for "Under Secretary of Defense for Acquisition, Technology, and Logistics".

Subsec. (j). Pub. L. 116–283, §845(a)(7), (8), redesignated subsec. (k) related to limitation on certain procurements application process as (j) and struck out former subsec. (j) which related to inapplicability to certain contracts to purchase ball bearings or roller bearings.

Subsec. (j)(2)(B). Pub. L. 116–283, §1870(c)(3)(D), formerly §1870(c)(3)(C), as redesignated and amended by Pub. L. 117–81, §1701(b)(23)(B), (C), substituted "section 4801(1)" for "section 2500(1)" in two places.

Subsec. (k). Pub. L. 116–283, §1870(c)(4), redesignated subsec. (k) relating to implementation of auxiliary ship component limitation as (l).

Pub. L. 116–283, §845(a)(9), substituted "Subsection (a)(3)" for "Subsection (a)(6)" in subsec. (k) relating to implementation of auxiliary ship component limitation.

Pub. L. 116–283, §845(a)(8), redesignated subsec. (k) related to limitation on certain procurements application process as (j).

Subsec. (l). Pub. L. 116–283, §1870(c)(4), redesignated subsec. (k) relating to implementation of auxiliary ship component limitation as (l).

2019—Subsec. (a)(6). Pub. L. 116–92, §853(a), added par. (6).

Subsec. (k). Pub. L. 116–92, §853(b), added subsec. (k) related to implementation of auxiliary ship component limitation.

2018—Subsec. (k). Pub. L. 115–232 added subsec. (k) related to limitation on certain procurements application process.

2017—Subsec. (c)(5). Pub. L. 115–91 added par. (5).

2011—Subsec. (g)(2). Pub. L. 111–350 substituted "section 1905 of title 41" for "section 33 of the Office of Federal Procurement Policy Act (41 U.S.C. 429)".

2003—Subsec. (a)(5). Pub. L. 108–136 inserted before period at end ", except ball bearings and roller bearings being procured for use in an end product manufactured by a manufacturer that does not satisfy the requirements of subsection (b) or in a component part manufactured by such a manufacturer".

2001—Subsec. (i)(3). Pub. L. 107–107, §1048(b)(2), substituted "Under Secretary of Defense for Acquisition, Technology, and Logistics" for "Under Secretary of Defense for Acquisition and Technology".

Subsec. (j). Pub. L. 107–107, §835(a), added subsec. (j).

2000—Subsec. (c)(3). Pub. L. 106–398 substituted "October 1, 2005" for "October 1, 2000".

1997—Subsec. (b)(3). Pub. L. 105–85, §1073(a)(55), substituted "(a)(3)(A)(iii)" for "(a)(3)(A)(ii)".

Subsec. (d)(4), (5). Pub. L. 105–85, §371(d)(1), substituted "section 2500(1)" for "section 2491(1)".

Subsec. (i). Pub. L. 105–85, §811(a), added subsec. (i).

1996—Subsec. (a)(3). Pub. L. 104–106, §806(a)(1), amended par. (3) generally. Prior to amendment, par. (3) read as follows: "Air circuit breakers.—Air circuit breakers for naval vessels."

Subsec. (b)(3). Pub. L. 104–106, §806(a)(2), added par. (3).

Subsec. (c). Pub. L. 104–106, §1503(a)(30), substituted "Certain Items" for "certain items" in heading.

Subsec. (c)(1). Pub. L. 104–106, §806(a)(3), amended par. (1) generally. Prior to amendment, par. (1) read as follows: "Air circuit breakers.—Subsection (a) does not apply to a procurement of spares or repair parts needed to support air circuit breakers produced or manufactured outside the United States."

Subsec. (c)(3). Pub. L. 104–106, §806(b), substituted "October 1, 2000" for "October 1, 1995".

Subsec. (c)(4). Pub. L. 104–201, §1074(a)(14), substituted "February 10, 1998" for "the date occurring two years after the date of the enactment of the National Defense Authorization Act for Fiscal Year 1996".

Pub. L. 104–106, §806(c), added par. (4).

Subsec. (d)(3). Pub. L. 104–201, §810, inserted "or would impede the reciprocal procurement of defense items under a memorandum of understanding providing for reciprocal procurement of defense items that is entered into under section 2531 of this title," after "a foreign country,".

Subsec. (g). Pub. L. 104–106, §806(d), designated existing provisions as par. (1) and added par. (2).

Subsec. (h). Pub. L. 104–106, §806(a)(4), added subsec. (h).

1994—Pub. L. 103–337 amended section generally. Prior to amendment, section consisted of subsecs. (a) to (f) relating to acquisition of multipassenger motor vehicles, chemical weapons antidote, valves and machine tools, carbonyl iron powders, air circuit breakers, and sonobuoys.

Subsec. (g). Pub. L. 103–355 added subsec. (g).

1993—Subsec. (b)(2). Pub. L. 103–160 substituted "Under Secretary of Defense for Acquisition and Technology" for "Under Secretary of Defense for Acquisition".

1992—Pub. L. 102–484, §§4202(a), 4271(b)(4), renumbered section 2507 of this title as section 2534 and substituted "Miscellaneous limitations on the procurement of goods other than United States goods" for "Miscellaneous procurement limitations" in section catchline.

Subsec. (c). Pub. L. 102–484, §831, redesignated subsec. (d) as (c) and struck out former subsec. (c) which read as follows: "Manual Typewriters From Warsaw Pact Countries.—Funds appropriated to or for the use of the Department of Defense may not be used for the procurement of manual typewriters which contain one or more components manufactured in a country which is a member of the Warsaw Pact unless the products of that country are accorded nondiscriminatory treatment (most-favored-nation treatment)."

Subsec. (d). Pub. L. 102–484, §831(b), redesignated subsec. (e) as (d). Former subsec. (d) redesignated (c).

Subsec. (d)(3)(A). Pub. L. 102–484, §1052(33), substituted "Government-owned" for "government-owned".

Subsec. (e). Pub. L. 102–484, §831(b), redesignated subsec. (f) as (e). Former subsec. (e) redesignated (d).

Subsec. (f). Pub. L. 102–484, §833(a), added subsec. (f). Former subsec. (f) redesignated (e).

1991—Subsec. (d)(1). Pub. L. 102–190, §834(a), substituted "Effective through fiscal year 1996" for "During fiscal years 1989, 1990, and 1991".

Subsec. (d)(3) to (5). Pub. L. 102–190, §834(b), added pars. (3) and (4), redesignated former par. (3) as (5), and struck out former par. (4) which read as follows: "The provisions of this section may be renewed with respect to any item by the Secretary of Defense at the end of fiscal year 1991 for an additional two fiscal years if the Secretary determines that a continued restriction on that item is in the national security interest."

Subsec. (e)(1). Pub. L. 102–190, §835(1), substituted "Until January 1, 1993, the Secretary" for "The Secretary".

Subsec. (e)(3). Pub. L. 102–190, §835(2), (4), redesignated par. (4) as (3) and struck out former par. (3) which read as follows: "After September 30, 1994, the Secretary may terminate the restriction required under paragraph (1) if the Secretary determines that continuing the restriction is not in the national interest."

Subsec. (e)(3)(A). Pub. L. 102–190, §835(3), struck out before period "by an entity more than 50 percent of which is owned or controlled by citizens of the United States or Canada".

Subsec. (e)(4). Pub. L. 102–190, §835(4), redesignated par. (4) as (3).

1990—Subsec. (e). Pub. L. 101–510, §835(a), added subsec. (e).

Subsec. (f). Pub. L. 101–510, §1421, added subsec. (f).

1988—Pub. L. 100–370, and Pub. L. 100–456, §821(b)(1)(A), successively renumbered section 2400 of this title as section 2502 of this title and then as this section.

Subsec. (a). Pub. L. 100–370 substituted "this subsection" for "this section".

Subsec. (d). Pub. L. 100–456, §822, added subsec. (d).

1987—Pub. L. 100–180 substituted "Miscellaneous procurement limitations" for "Limitation on procurement of buses" in section catchline, designated existing provisions as subsec. (a) and added heading, and added subsecs. (b) and (c).

Statutory Notes and Related Subsidiaries

Effective Date of 2021 Amendment

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

Amendment by section 1870(c)(2)–(4) of Pub. L. 116–283 effective Jan. 1, 2022, with additional provisions for delayed implementation and applicability of existing law, see section 1801(d) of Pub. L. 116–283, set out as a note preceding section 3001 of this title.

Effective Date of 2018 Amendment

Pub. L. 115–232, div. A, title VIII, §844(b), Aug. 13, 2018, 132 Stat. 1881, as amended by Pub. L. 116–92, div. A, title XVII, §1731(b)(2), Dec. 20, 2019, 133 Stat. 1816, provided that: "The amendment made by subsection (a) [amending this section] shall take effect one year after the date of the enactment of this Act [Aug. 13, 2018]."

[Pub. L. 116–92, div. A, title XVII, §1731(b), Dec. 20, 2019, 133 Stat. 1816, provided that the amendment made by section 1731(b)(2) to section 844(b) of Pub. L. 115–232, set out above, is effective Aug. 13, 2018, and as if included in Pub. L. 115–232 as enacted.]

Effective Date of 1997 Amendment

Pub. L. 105–85, div. A, title VIII, §811(b), Nov. 18, 1997, 111 Stat. 1840, provided that: "Subsection (i) of section 2534 of such title [now 10 U.S.C. 4864(i)], as added by subsection (a), shall apply with respect to—

"(1) contracts and subcontracts entered into on or after the date of the enactment of this Act [Nov. 18, 1997]; and

"(2) options for the procurement of items that are exercised after such date under contracts that are entered into before such date if the option prices are adjusted for any reason other than the application of a waiver granted under subsection (d) of such section 2534 [now 10 U.S.C. 4864(d)], on the basis of the applicability of paragraph (2) or (3) of that subsection."

Effective Date of 1994 Amendment

For effective date and applicability of amendment by Pub. L. 103–355, see section 10001 of Pub. L. 103–355, set out as a note under section 8752 of this title.

Effective Date of 1992 Amendment

Pub. L. 102–484, div. A, title VIII, §833(b), Oct. 23, 1992, 106 Stat. 2461, provided that: "Subsection (f) of section 2534 of title 10, United States Code, as added by subsection (a) [see, now, 10 U.S.C. 4864(e)], shall apply with respect to solicitations for contracts issued after the expiration of the 120-day period beginning on the date of the enactment of this Act [Oct. 23, 1992]."

Regulations

Pub. L. 117–263, div. A, title VIII, §853(b), Dec. 23, 2022, 136 Stat. 2722, provided that: "Not later than June 1, 2023, the Secretary of Defense shall issue regulations for carrying out section 4864(j) of title 10, United States Code."

Review of Select Components

Pub. L. 116–283, div. A, title VIII, §845(b), Jan. 1, 2021, 134 Stat. 3767, provided that:

"The Secretary of the Defense shall expedite the review period under paragraph (3)(B) of section 2534(j) of title 10, United States Code [now 10 U.S.C. 4864(j)], as redesignated by subsection (a), to not more than 60 days for applications submitted pursuant to such section 2534(j) [now 4864(j)] for the following components for auxiliary ships:

"(1) Auxiliary equipment, including pumps, for all shipboard services.

"(2) Propulsion system components, including engines, reduction gears, and propellers.

"(3) Shipboard cranes.

"(4) Spreaders for shipboard cranes."

Certain Exemption

Pub. L. 116–283, div. A, title XVI, §1603(b), Jan. 1, 2021, 134 Stat. 4043, provided that: "Paragraph (5) of section 2534(a) of title 10, United States Code [now 10 U.S.C. 4864(a)(5)], as added by subsection (a) of this section, shall not apply with respect to programs that have received Milestone A approval (as defined in section 2431a of such title [now 10 U.S.C. 4211]) before October 1, 2021."

Clarification of Delegation Authority

Pub. L. 116–283, div. A, title XVI, §1603(c), Jan. 1, 2021, 134 Stat. 4043, provided that: "Subject to subsection (i) of section 2534 of title 10, United States Code [now 10 U.S.C. 4864(i)], the Secretary of Defense may delegate to a service acquisition executive the authority to make a waiver under subsection (d) of such section with respect to the limitation under subsection (a)(5) of such section, as added by subsection (a) of this section."

Procurement of Photovoltaic Devices

Pub. L. 111–383, div. A, title VIII, §846, Jan. 7, 2011, 124 Stat. 4285, as amended by Pub. L. 113–291, div. A, title X, §1071(b)(1)(A), Dec. 19, 2014, 128 Stat. 3505, provided that:

"(a) Contract Requirement.—The Secretary of Defense shall ensure that each contract described in subsection (b) awarded by the Department of Defense includes a provision requiring the photovoltaic devices provided under the contract to comply with chapter 83 of title 41, United States Code, subject to the exceptions to that chapter provided in the Trade Agreements Act of 1979 (19 U.S.C. 2501 et seq.) or otherwise provided by law.

"(b) Contracts Described.—The contracts described in this subsection include energy savings performance contracts, utility service contracts, land leases, and private housing contracts, to the extent that such contracts result in ownership of photovoltaic devices by the Department of Defense. For the purposes of this section, the Department of Defense is deemed to own a photovoltaic device if the device is—

"(1) installed on Department of Defense property or in a facility owned by the Department of Defense; and

"(2) reserved for the exclusive use of the Department of Defense for the full economic life of the device.

"(c) Definition of Photovoltaic Devices.—In this section, the term 'photovoltaic devices' means devices that convert light directly into electricity through a solid-state, semiconductor process."

SUBCHAPTER III—LIMITATIONS ON PROCUREMENT FROM CERTAIN FOREIGN SOURCES

Sec.

4871.

Contracts: consideration of national security objectives.

4872.

Acquisition of sensitive materials from non-allied foreign nations: prohibition.

4873.

Additional requirements pertaining to printed circuit boards.

4874.

Award of certain contracts to entities controlled by a foreign government: prohibition.

4875.

Prohibition on acquisition of personal protective equipment and certain other items from non-allied foreign nations.

Editorial Notes

Amendments

2021—Pub. L. 117–81, div. A, title XVII, §1701(t)(1), Dec. 27, 2021, 135 Stat. 2150, amended Pub. L. 116–283, div. A, title XVIII, §1870(d)(1), Jan. 1, 2021, 135 Stat. 4286, which added this analysis, by substituting "Contracts: consideration of national security objectives" for "Acquisition of sensitive materials from non-allied foreign nations: prohibition" in item 4871 and "Acquisition of sensitive materials from non-allied foreign nations: prohibition" for "Award of certain contracts to entities controlled by a foreign government: prohibition" in item 4872 and by adding item 4874.

Pub. L. 117–81, div. A, title VIII, §802(b)(2)(A), title XVII, §1701(e)(2)(B), Dec. 27, 2021, 135 Stat. 1813, 2138, added items 4873 and 4875. Amendment by section 1701(e)(2)(B), which directed adding item 4873 to the analysis for this chapter, was executed by adding item 4873 to analysis for this subchapter to reflect the probable intent of Congress.

Statutory Notes and Related Subsidiaries

Enhanced Authority To Acquire Products and Services Produced in Africa in Support of Certain Activities

Pub. L. 114–328, div. A, title VIII, §899A(a)–(e), Dec. 23, 2016, 130 Stat. 2336, 2337, provided that:

"(a) In General.—Except as provided in subsection (c), in the case of a product or service to be acquired in support of covered activities in a covered African country for which the Secretary of Defense makes a determination described in subsection (b), the Secretary may conduct a procurement in which—

"(1) competition is limited to products or services from the host nation;

"(2) a preference is provided for products or services from the host nation; or

"(3) a preference is provided for products or services from a covered African country, other than the host nation.

"(b) Determination.—

"(1) In general.—A determination described in this subsection is a determination by the Secretary of any of the following:

"(A) That the product or service concerned is to be used only in support of covered activities.

"(B) That it is in the national security interests of the United States to limit competition or provide a preference as described in subsection (a) because such limitation or preference is necessary—

"(i) to reduce overall United States transportation costs and risks in shipping products in support of operations, exercises, theater security cooperation activities, and other missions in the African region;

"(ii) to reduce delivery times in support of covered activities; or

"(iii) to promote regional security and stability in Africa.

"(C) That the product or service is of equivalent quality to a product or service that would have otherwise been acquired without such limitation or preference.

"(2) Requirement for effectiveness of any particular determination.—A determination under paragraph (1) shall not be effective for purposes of a limitation or preference under subsection (a) unless the Secretary also determines that—

"(A) the limitation or preference will not adversely affect—

"(i) United States military operations or stability operations in the African region; or

"(ii) the United States industrial base; and

"(B) in the case of air transportation, an air carrier holding a certificate under section 41102 of title 49, United States Code, is not reasonably available to provide the air transportation.

"(c) Inapplicability of Authority to Procurement of Items on Abilityone Procurement Catalog.—The authority under subsection (a) may not be used for the procurement of any good that is contained in the procurement list described in section 8503(a) of title 41, United States Code, if such good can be produced and delivered by a qualified non profit agency for the blind or a nonprofit agency for other severely disabled in a timely fashion to support mission requirements.

"(d) Report on Use of Authority.—Not later than December 31, 2017, the Secretary shall submit to the congressional defense committees [Committees on Armed Services and Appropriations of the Senate and the House of Representatives] a report on the use of the authority in subsection (a). The report shall include, but not be limited to, the following:

"(1) The number of determinations made by the Secretary pursuant to subsection (b).

"(2) A list of the countries providing products or services as a result of determinations made pursuant to subsection (b).

"(3) A description of the products and services acquired using the authority.

"(4) The extent to which the use of the authority has met the one or more of the objectives specified in clause (i), (ii), or (iii) of subsection (b)(1)(B).

"(5) Such recommendations for improvements to the authority as the Secretary considers appropriate.

"(6) Such other matters as the Secretary considers appropriate.

"(e) Definitions.—In this section:

"(1) Covered activities.—The term 'covered activities' means Department of Defense activities in the African region or a regional neighbor.

"(2) Covered african country.—The term 'covered African country' means a country in Africa that has signed a long-term agreement with the United States related to the basing or operational needs of the United States Armed Forces.

"(3) Host nation.—The term 'host nation' means a nation that allows the Armed Forces and supplies of the United States to be located on, to operate in, or to be transported through its territory.

"(4) Product or service of a covered african country.—The term 'product or service of a covered African country' means the following:

"(A) A product from a covered African country that is wholly grown, mined, manufactured, or produced in the covered African country.

"(B) A service from a covered African country that is performed by a person or entity that—

"(i) is properly licensed or registered by appropriate authorities of the covered African country; and

"(ii) as determined by the Chief of Mission concerned—

"(I) is operating primarily in the covered African country; or

"(II) is making a significant contribution to the economy of the covered African country through payment of taxes or use of products, materials, or labor that are primarily grown, mined, manufactured, produced, or sourced from the covered African country."

Prohibition on Contracting With the Enemy

Pub. L. 113–291, div. A, title VIII, subtitle E, Dec. 19, 2014, 128 Stat. 3450, as amended by Pub. L. 115–232, div. A, title VIII, §872, title XII, §1251(b)(2), Aug. 13, 2018, 132 Stat. 1905, 2053; Pub. L. 116–92, div. A, title VIII, §822, Dec. 20, 2019, 133 Stat. 1490, as amended by Pub. L. 116–283, div. A, title X, §1081(c)(3), Jan. 1, 2021, 134 Stat. 3873; Pub. L. 117–263, div. A, title VIII, §820, Dec. 23, 2022, 136 Stat. 2709; Pub. L. 118–31, div. A, title VIII, §823(a)–(c), Dec. 22, 2023, 137 Stat. 327–331, provided that:

"SEC. 841. THREAT MITIGATION IN COMMERCIAL SUPPORT TO OPERATIONS.

"(a) Program Established.—The Secretary of Defense shall, in conjunction with the Director of National Intelligence and the Secretary of State, establish a program to enable commanders of combatant commands to identify and manage risks resulting from covered persons and entities engaging in covered activities. The Secretary of Defense shall issue guidance establishing such program, including identifying who shall be responsible for carrying out and overseeing the program, procedures for using information available from intelligence, security, and law enforcement sources to identify such risks, and strategies for managing the risks posed by covered persons and entities engaging in covered activities.

"(b) Authority.—

"(1) Identification.—

"(A) In general.—Under the program established under subsection (a), the commander of the combatant command concerned shall evaluate covered persons and entities within the area of responsibility of such command to identify such covered persons and entities that are engaging in covered activities.

"(B) Notification.—Upon identification of a covered person or entity who is engaging in covered activities pursuant to an evaluation under subparagraph (A), the commander of the combatant command concerned, or the designated deputies of such commander, shall submit to the Under Secretary of Defense for Acquisition and Sustainment, the Under Secretary of Defense for Intelligence and Security, and the Under Secretary of Defense for Policy a notice of such identification and the rationale for such identification.

"(2) Covered procurement actions.—The head of a contracting activity may take a covered procurement action with respect to a person or entity identified as engaging in a covered activity under the program established under subsection (a) if such head receives a notification from the Under Secretary of Defense for Acquisition and Sustainment stating that, based on a risk assessment conducted by the commander of a combatant command who made such identification—

"(A) such person or entity is a covered person or entity;

"(B) such person or entity is or was engaging in one or more covered activities; and

"(C) less intrusive measures are not reasonably available to manage the risk posed by such person or entity.

"(c) Notification to Covered Person or Entity.—

"(1) Advance notice.—The head of a contracting activity, or other appropriate official, shall notify covered persons and entities of the following:

"(A) The program established under subsection (a).

"(B) The authorities provided by subsection (b).

"(C) The responsibilities of covered persons or entities to exercise due diligence to mitigate their engagement in covered activities.

"(2) Notice of covered procurement actions.—

"(A) In general.—Not later than 30 days prior to taking a covered procurement action, the head of a contracting activity shall notify the covered person or entity of the covered procurement action. The covered person or entity shall be permitted the opportunity to challenge the covered procurement action by requesting an administrative review of the action under the procedures of the Department of Defense not later than 30 days after receipt of notice of the action.

"(B) Limitation on disclosure of information.—The rationale of the commander of a combatant command that identified the covered person or entity receiving a notice under subparagraph (A) as a covered person or entity engaging in a covered activity under subsection (b)(1) shall not be disclosed to such covered person or entity, or their representatives, to the extent that such disclosure would compromise national security or pose an unacceptable threat to personnel of the United States or its partners or allies.

"(C) Protection of classified information.—Classified information relied upon to take a covered procurement action may not be disclosed to a covered person or entity, or to their representatives, unless a protective order issued by a court of competent jurisdiction established under article I or article III of the Constitution of the United States specifically addresses the conditions under which such classified information may be disclosed.

"(d) Covered Procurement Action Reporting.—Not later than 15 days after the head of a contracting activity takes a covered procurement action, such head of a contracting activity shall report such covered procurement action to the Under Secretary of Defense for Acquisition and Sustainment and include such covered procurement action in the Federal Awardee Performance and Integrity Information System or other formal systems of record and, in the case that such cover procurement action is for the exclusion a person or commercial entity from an award, the System for Award Management.

"(e) Annual Review.—The Secretary of Defense, in coordination with the Director of National Intelligence and the Secretary of State, shall, on an annual basis, review the lists of persons and entities previously subject to a covered procurement action under subsection (b)(2) to determine whether or not such persons and entities continue to warrant use of the covered procurement action.

"(f) Waiver.—The Secretary of Defense, in conjunction with the Secretary of State, may grant a waiver for actions taken under subsection (b) if it is in the best interest of national security.

"(g) Delegation of Authority.—The authority provided by subsection (b) to make a determination to use a covered procurement action, in whole or in part, may not be delegated below the level of head of contracting activity, or equivalent official, for purposes of grants or cooperative agreements.

"(h) Updating Regulations.—The Federal Acquisition Regulation and the Defense Federal Acquisition Regulation Supplement shall be revised to implement the provisions of this subtitle.

"(i) Reports.—

"(1) In general.—Not later than March 1 of 2023, and annually thereafter, the Secretary of Defense shall submit to the congressional defense committees (as defined in section 101(a) of title 10, United States Code) a report on the use of the authorities in this section in the preceding calendar year, including the following:

"(A) For each instance in which a head of contracting activity took a covered procurement action, the following:

"(i) The head of contracting activity taking such action.

"(ii) An explanation of the basis for taking the covered procurement action.

"(iii) The value of the contract, grant, or cooperative agreement subject to the covered procurement action.

"(iv) The value of all contracts, grants, or cooperative agreements the Department of Defense has with the person or entity concerned at the time of taking the covered procurement action.

"(B) For each instance in which a head of contracting activity did not take a covered procurement action following an identification from a combatant commander under subsection (b), the following:

"(i) The head of contracting activity concerned.

"(ii) An explanation of the basis for not taking the covered procurement action.

"(C) Specific examples where the authorities under this section can not be used to mitigate national security threats posed by vendors supporting Department operations because of the restriction on using such authorities only with respect to contingency operations.

"(D) A description of the policies ensuring that oversight of the use of the authorities in this section is effectively carried out by a single office in the Office of the Under Secretary of Defense for Acquisition and Sustainment.

"(2) Form.—Any report under this subsection may, at the election of the Secretary of Defense—

"(A) be submitted in unclassified form, but with a classified annex; or

"(B) be submitted in classified form.

"(j) National Security Exception.—Nothing in this section shall apply to the authorized intelligence or law enforcement activities of the United States Government.

"(k) Construction With Other Authorities.—The authorities in this section shall be in addition to, and not to the exclusion of, any other authorities available to executive agencies to implement policies and purposes similar to those set forth in this section.

"(l) Sunset.—The provisions of this section shall cease to be effective on December 31, 2033.

"SEC. 842. ADDITIONAL ACCESS TO RECORDS.

"(a) Additional Access to Records.—The Secretary of Defense may examine any records of persons or entities that have existing contracts with, or are active recipients of a grant or cooperative agreement from, the Department of Defense, including any subcontractors or subgrantees, to the extent necessary to support the program established under section 841 of this Act.

"(b) Limitation.—The examination authorized under subsection (a) may only take place after a written determination is made by the contracting officer, based on a finding from the combatant commander, stating that this examination will support the program established under such section 841 and that less intrusive measures are not reasonably available to manage the risk.

"SEC. 843. DEFINITIONS.

"In this subtitle:

"(1) Covered activities.—The term 'covered activities' means activities where a covered person or entity is—

"(A) engaging in acts of violence against personnel of the United States or its partners and allies;

"(B) providing financing, logistics, training, or intelligence to a person described in subparagraph (A);

"(C) engaging in foreign intelligence activities against the United States or its partners and allies;

"(D) engaging in transnational organized crime or criminal activities; or

"(E) engaging in other activities that present a direct or indirect risk to United States or partner and allied missions and forces.

"(2) Covered contract, grant, or cooperative agreement defined.—The term 'covered contract, grant, or cooperative agreement' means a contract, grant, or cooperative agreement that is performed outside the United States, including its possessions and territories.

"(3) Covered person or entity.—The term 'covered person or entity' means any person, corporation, company, limited liability company, limited partnership, business trust, business association, or other similar entity outside of the United States or any foreign reporting company in accordance with section 5336(a)(11)(A)(ii) of title 31, United States Code, that is responding to a covered solicitation or performing work on a covered contract, grant, or cooperative agreement.

"(4) Covered combatant command.—The term 'covered combatant command' means the following:

"(A) The United States Africa Command.

"(B) The United States Central Command.

"(C) The United States European Command.

"(D) United States Indo-Pacific Command.

"(E) The United States Southern Command.

"(F) The United States Transportation Command.

"(5) Covered procurement action.—The term 'covered procurement action' means an action taken by a head of contracting activity to—

"(A) exclude a person or commercial entity from an award with or without an existing contract, grant, or cooperative agreement;

"(B) terminate a contract, grant, or cooperative agreement for default; or

"(C) void, in whole or in part, a contract, grant, or cooperative agreement.

"(6) Covered solicitation.—The term 'covered solicitation' means any solicitation by the Department of Defense for work for which the place of performance is outside of the United States.

"(7) Head of contracting activity.—The term 'head of contracting activity' has the meaning described in section 1.601 of the Federal Acquisition Regulation."

[Pub. L. 118–31, div. A, title VIII, §823(a)(2)(B), Dec. 22, 2023, 137 Stat. 327, which directed amendment of "matter preceding paragraph (1)" of section 841(a) of Pub. L. 113–291, set out above, by substituting "and the Secretary of State, establish a program to enable commanders of combatant commands to identify and manage risks resulting from covered persons and entities engaging in covered activities. The Secretary of Defense shall issue guidance establishing such program, including identifying who shall be responsible for carrying out and overseeing the program, procedures for using information available from intelligence, security, and law enforcement sources to identify such risks, and strategies for managing the risks posed by covered persons and entities engaging in covered activities." for " 'and in consultation with the Secretary of State' and all that follows through the period at the end", was executed, to reflect the probable intent of Congress, by making the substitution for introductory provisions and pars. (1) and (2) which read as follows: "and in consultation with the Secretary of State, establish in each covered combatant command a program to identify persons and entities within the area of responsibility of such command that—

["(1) provide funds, including goods and services, received under a covered contract, grant, or cooperative agreement of an executive agency directly or indirectly to a covered person or entity; or

["(2) fail to exercise due diligence to ensure that none of the funds, including goods and services, received under a covered contract, grant, or cooperative agreement of an executive agency are provided directly or indirectly to a covered person or entity."]

[Pub. L. 118–31, div. A, title VIII, §823(d), Dec. 22, 2023, 137 Stat. 331, provided that: "The amendments made by this section [amending subtitle E of title VIII of div. A of Pub. L. 113–291, set out above] shall take effect 180 days after the date of the enactment of this Act [Dec. 22, 2023], and shall apply to covered solicitations issued and covered contracts, grants, or cooperative agreements (as that term is defined in section 843 of the Carl Levin and Howard P. 'Buck' McKeon National Defense Authorization Act for Fiscal Year 2015 [Pub. L. 113–291], as amended by subsection (c)), awarded on or after such date, and to task and delivery orders that have been issued on or after such date pursuant to covered contracts, grants, or cooperative agreements that are awarded before, on, or after such date."]

[Pub. L. 116–283, div. A, title X, §1081(c)(3), Jan. 1, 2021, 134 Stat. 3873, which directed technical amendment of section 821 of Pub. L. 116–92 by inserting "Carl Levin and Howard P. 'Buck' McKeon" before "National Defense Authorization Act for Fiscal Year 2015", was executed to section 822 of Pub. L. 116–92, which amended the Carl Levin and Howard P. "Buck" McKeon National Defense Authorization Act for Fiscal Year 2015 (Pub. L. 113–291), set out above, to reflect the probable intent of Congress.]

[Pub. L. 116–283, div. A, title X, §1081(c), Jan. 1, 2021, 134 Stat. 3873, provided that the amendment made by section 1081(c)(3) of Pub. L. 116–283 to section 821 (probably should be 822) of Pub. L. 116–92, which amended section 841 of Pub. L. 113–291, set out above, is effective as of Dec. 20, 2020 (probably should be Dec. 20, 2019), and as if included in Pub. L. 116–92.]

§4871. Contracts: consideration of national security objectives

(a) Disclosure of Ownership or Control by a Foreign Government.—The head of an agency shall require a firm or a subsidiary of a firm that submits a bid or proposal in response to a solicitation issued by the Department of Defense to disclose in that bid or proposal any significant interest in such firm or subsidiary (or, in the case of a subsidiary, in the firm that owns the subsidiary) that is owned or controlled (whether directly or indirectly) by a foreign government or an agent or instrumentality of a foreign government, if such foreign government is the government of a country that the Secretary of State determines under section 6(j)(1)(A) ¹ of the Export Administration Act of 1979 (50 U.S.C. 4605(j)(1)(A)) has repeatedly provided support for acts of international terrorism.

(b) Prohibition on Entering Into Contracts Against the Interests of the United States.—Except as provided in subsection (c), the head of an agency may not enter into a contract with a firm or a subsidiary of a firm if—

(1) a foreign government owns or controls (whether directly or indirectly) a significant interest in such firm or subsidiary (or, in the case of a subsidiary, in the firm that owns the subsidiary); and

(2) such foreign government is the government of a country that the Secretary of State determines under section 6(j)(1)(A) ¹ of the Export Administration Act of 1979 (50 U.S.C. 4605(j)(1)(A)) has repeatedly provided support for acts of international terrorism.

(c) Waiver.—(1)(A) If the Secretary of Defense determines under paragraph (2) that entering into a contract with a firm or a subsidiary of a firm described in subsection (b) is not inconsistent with the national security objectives of the United States, the head of an agency may enter into a contract with such firm or subsidiary if in the best interests of the Government.

(B) The Secretary shall maintain records of each contract entered into by reason of subparagraph (A). Such records shall include the following:

(i) The identity of the foreign government concerned.

(ii) The nature of the contract.

(iii) The extent of ownership or control of the firm or subsidiary concerned (or, if appropriate in the case of a subsidiary, of the firm that owns the subsidiary) by the foreign government concerned or the agency or instrumentality of such foreign government.

(iv) The reasons for entering into the contract.

(2) Upon the request of the head of an agency, the Secretary of Defense shall determine whether entering into a contract with a firm or subsidiary described in subsection (b) is inconsistent with the national security objectives of the United States. In making such a determination, the Secretary of Defense shall consider the following:

(A) The relationship of the United States with the foreign government concerned.

(B) The obligations of the United States under international agreements.

(C) The extent of the ownership or control of the firm or subsidiary (or, if appropriate in the case of a subsidiary, of the firm that owns the subsidiary) by the foreign government or an agent or instrumentality of the foreign government.

(D) Whether payments made, or information made available, to the firm or subsidiary under the contract could be used for purposes hostile to the interests of the United States.

(d) List of Firms Subject to Prohibition.—(1) The Secretary of Defense shall develop and maintain a list of all firms and subsidiaries of firms that the Secretary has identified as being subject to the prohibition in subsection (b).

(2)(A) A person may request the Secretary to include on the list maintained under paragraph (1) any firm or subsidiary of a firm that the person believes to be owned or controlled by a foreign government described in subsection (b)(2). Upon receipt of such a request, the Secretary shall determine whether the conditions in paragraphs (1) and (2) of subsection (b) exist in the case of that firm or subsidiary. If the Secretary determines that such conditions do exist, the Secretary shall include the firm or subsidiary on the list.

(B) A firm or subsidiary of a firm included on the list may request the Secretary to remove such firm or subsidiary from the list on the basis that it has been erroneously included on the list or its ownership circumstances have significantly changed. Upon receipt of such a request, the Secretary shall determine whether the conditions in paragraphs (1) and (2) of subsection (b) exist in the case of that firm or subsidiary. If the Secretary determines that such conditions do not exist, the Secretary shall remove the firm or subsidiary from the list.

(3) The head of an agency shall prohibit each firm or subsidiary of a firm awarded a contract by the agency from entering into a subcontract under that contract in an amount in excess of $25,000 with a firm or subsidiary included on the list maintained under paragraph (1) unless there is a compelling reason to do so. In the case of any subcontract requiring consent by the head of an agency, the head of the agency shall not consent to the award of the subcontract to a firm or subsidiary included on such list unless there is a compelling reason for such approval.

(e) Distribution of List.—The Administrator of General Services shall ensure that the list developed and maintained under subsection (d) is made available to Federal agencies and the public in the same manner and to the same extent as the list of suspended and debarred contractors compiled pursuant to subpart 9.4 of the Federal Acquisition Regulation.

(f) Applicability.—(1) This section does not apply to a contract for an amount less than $100,000.

(2) This section does not apply to the Coast Guard or the National Aeronautics and Space Administration.

(g) Regulations.—The Secretary of Defense, after consultation with the Secretary of State, shall prescribe regulations to carry out this section. Such regulations shall include a definition of the term "significant interest".

(Added Pub. L. 99–500, §101(c) [title X, §951(a)(1)], Oct. 18, 1986, 100 Stat. 1783–82, 1783-164, and Pub. L. 99–591, §101(c) [title X, §951(a)(1)], Oct. 30, 1986, 100 Stat. 3341–82, 3341-164, §2327; Pub. L. 99–661, div. A, title IX, formerly title IV, §951(a)(1), Nov. 14, 1986, 100 Stat. 3944, renumbered title IX, Pub. L. 100–26, §3(5), Apr. 21, 1987, 101 Stat. 273; amended Pub. L. 100–180, div. A, title XII, §1231(8), Dec. 4, 1987, 101 Stat. 1160; Pub. L. 100–224, §5(b)(2), Dec. 30, 1987, 101 Stat. 1538; Pub. L. 105–85, div. A, title VIII, §843, Nov. 18, 1997, 111 Stat. 1844; Pub. L. 108–136, div. A, title X, §1031(a)(16), Nov. 24, 2003, 117 Stat. 1597; Pub. L. 114–328, div. A, title X, §1081(b)(3)(C), Dec. 23, 2016, 130 Stat. 2418; renumbered §4871, Pub. L. 116–283, div. A, title XVIII, §1870(d)(2), Jan. 1, 2021, 134 Stat. 4286; Pub. L. 117–81, div. A, title XVII, §1701(t)(2)(B), (C), Dec. 27, 2021, 135 Stat. 2150.)

Editorial Notes

References in Text

Section 6(j)(1)(A) of the Export Administration Act of 1979 (50 U.S.C. 4605(j)(1)(A)), referred to in subsecs. (a) and (b)(2), was repealed by Pub. L. 115–232, div. A, title XVII, §1766(a), Aug. 13, 2018, 132 Stat. 2232. For similar provisions, see section 4813(c)(1)(A)(i) of Title 50, War and National Defense, as enacted by Pub. L. 115–232.

Codification

Pub. L. 116–283, §1870(d)(2), which had initially directed the transfer of section 2533c of this title to this section, was amended by Pub. L. 117–81, §1701(t)(2)(B), (C), and, after that amendment, such transfer was no longer directed. Instead, Pub. L. 116–283, as amended by Pub. L. 117–81, transferred section 2327 of this title to this section and section 2533c of this title to section 4872.

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

Pub. L. 99–500, Pub. L. 99–591, and Pub. L. 99–661 added identical sections.

Amendments

2021—Pub. L. 116–283, §1870(d)(2), as amended by Pub. L. 117–81, §1701(t)(2)(B), (C), renumbered section 2327 of this title as this section.

2016—Subsecs. (a), (b)(2). Pub. L. 114–328 substituted "(50 U.S.C. 4605(j)(1)(A))" for "(50 U.S.C. App. 2405(j)(1)(A))".

2003—Subsec. (c)(1)(A). Pub. L. 108–136, §1031(a)(16)(A), substituted "if in the best interests of the Government" for "after the date on which such head of an agency submits to Congress a report on the contract".

Subsec. (c)(1)(B). Pub. L. 108–136, §1031(a)(16)(B), substituted "The Secretary shall maintain records of each contract entered into by reason of subparagraph (A). Such records" for "A report under subparagraph (A)".

Subsec. (c)(1)(C). Pub. L. 108–136, §1031(a)(16)(C), struck out subpar. (C) which read as follows: "After the head of an agency submits a report to Congress under subparagraph (A) with respect to a firm or a subsidiary, such head of an agency is not required to submit a report before entering into any subsequent contract with such firm or subsidiary unless the information required to be included in such report under subparagraph (B) has materially changed since the submission of the previous report."

1997—Subsecs. (d) to (g). Pub. L. 105–85 added subsecs. (d) and (e) and redesignated former subsecs. (d) and (e) as (f) and (g), respectively.

1987—Subsecs. (a), (b)(2). Pub. L. 100–224 substituted "50 U.S.C. App." for "50 U.S.C." in parenthetical after "Export Administration Act of 1979".

Subsec. (d)(1). Pub. L. 100–180 inserted par. (1) designation.

Statutory Notes and Related Subsidiaries

Effective Date of 2021 Amendment

Effective Date

Pub. L. 99–500, §101(c) [title X, §951(c)], Oct. 18, 1986, 100 Stat. 1783–82, 1783-165, Pub. L. 99–591, §101(c) [title X, §951(c)], Oct. 30, 1986, 100 Stat. 3341–82, 3341-165, and Pub. L. 99–661, div. A, title IX, formerly title IV, §951(c), Nov. 14, 1986, 100 Stat. 3945, renumbered title IX, Pub. L. 100–26, §3(5), Apr. 21, 1987, 101 Stat. 273, provided that: "Section 2327 of title 10, United States Code [now 10 U.S.C. 4871] (as added by subsection (a)(1)), shall apply to contracts entered into by the Secretary of Defense after the end of the 90-day period beginning on the date of the enactment of this Act [Oct. 18, 1986]."

Transfer of Functions

For transfer of authorities, functions, personnel, and assets of the Coast Guard, including the authorities and functions of the Secretary of Transportation relating thereto, to the Department of Homeland Security, and for treatment of related references, see sections 468(b), 551(d), 552(d), and 557 of Title 6, Domestic Security, and the Department of Homeland Security Reorganization Plan of November 25, 2002, as modified, set out as a note under section 542 of Title 6.

Prohibition on Operation or Procurement of Foreign-Made Unmanned Aircraft Systems

Pub. L. 116–92, div. A, title VIII, §848, Dec. 20, 2019, 133 Stat. 1508, as amended by Pub. L. 117–263, div. A, title VIII, §817(a), Dec. 23, 2022, 136 Stat. 2707, provided that:

"(a) Prohibition on Agency Operation or Procurement.—The Secretary of Defense may not operate or enter into or renew a contract for the procurement of—

"(1) a covered unmanned aircraft system that—

"(A) is manufactured in a covered foreign country or by an entity domiciled in a covered foreign country;

"(B) uses flight controllers, radios, data transmission devices, cameras, or gimbals manufactured in a covered foreign country or by an entity domiciled in a covered foreign country;

"(C) uses a ground control system or operating software developed in a covered foreign country or by an entity domiciled in a covered foreign country; or

"(D) uses network connectivity or data storage located in or administered by an entity domiciled in a covered foreign country; or

"(2) a system manufactured in a covered foreign country or by an entity domiciled in a covered foreign country for the detection or identification of covered unmanned aircraft systems.

"(b) Prohibition on Certain Contracts.—The Secretary of Defense may not enter into a contract (or extend or renew a contract) on or after October 1, 2024, with an entity that operates (as determined by the Secretary or the Secretary's designee) equipment from a covered unmanned aircraft system company in the performance of a Department of Defense contract.

"(c) Exemption.—The Secretary of Defense is exempt from any restrictions under subsection (a) or (b) if the operation, procurement, or contracting action is for the purposes of—

"(1) Counter-UAS surrogate testing and training; or

"(2) intelligence, electronic warfare, and information warfare operations, testing, analysis, and training.

"(d) Waiver.—The Secretary of Defense (or the Secretary's designee) may waive any restrictions under subsections (a) or (b) by certifying in writing to the congressional defense committees [Committees on Armed Services and Appropriations of the Senate and the House of Representatives] that the operation, procurement, or contracting action is required in the national interest of the United States.

"(e) Definitions.—In this section:

"(1) Covered foreign country.—The term 'covered foreign country' means any of the following:

"(A) the People's Republic of China.

"(B) The Russian Federation.

"(C) The Islamic Republic of Iran.

"(D) The Democratic People's Republic of Korea.

"(2) Covered unmanned aircraft system.—The term 'covered unmanned aircraft system' means an unmanned aircraft system and any related services and equipment.

"(3) Covered unmanned aircraft system company.—The term 'covered unmanned aircraft system company' means any of the following:

"(A) Da-Jiang Innovations (or any subsidiary or affiliate of Da-Jiang Innovations).

"(B) Any entity that produces or provides unmanned aircraft systems and is included on Consolidated Screening List maintained by the International Trade Administration of the Department of Commerce.

"(C) Any entity that produces or provides unmanned aircraft systems and—

"(i) is domiciled in a covered foreign country; or

"(ii) is subject to unmitigated foreign ownership, control or influence by a covered foreign country, as determined by the Secretary of Defense unmitigated foreign ownership, control or influence in accordance with the National Industrial Security Program (or any successor to such program)."

[Pub. L. 117–263, div. A, title VIII, §817(b), Dec. 23, 2022, 136 Stat. 2708, provided that: "Not later than 180 days after the date of the enactment of this Act [Dec. 23, 2022], the Secretary of Defense shall issue policy to—

["(1) implement the requirements of section 848 of the National Defense Authorization Act for Fiscal Year 2020 (Public Law 116–92; 10 U.S.C. 4871 note), as amended by this section, including by establishing a due diligence process for the Department of Defense to make determinations required by subsection (b) of such section 848 (as amended by this section); and

["(2) establish an appeal process for any offerors or awardees with which the Secretary has not entered into a contract or has not extended or renewed a contract pursuant to subsection (b) of such section 848 (as amended by this section)."]

Elimination of Unreliable Sources of Defense Items and Components

Pub. L. 108–136, div. A, title VIII, §821, Nov. 24, 2003, 117 Stat. 1546, provided that:

"(a) Identification of Certain Countries.—The Secretary of Defense, in coordination with the Secretary of State, shall identify and list foreign countries that restrict the provision or sale of military goods or services to the United States because of United States counterterrorism or military operations after the date of the enactment of this Act [Nov. 24, 2003]. The Secretary shall review and update the list as appropriate. The Secretary may remove a country from the list, if the Secretary determines that doing so would be in the interest of national defense.

"(b) Prohibition on Procurement of Items From Identified Countries.—The Secretary of Defense may not procure any items or components contained in military systems if the items or components, or the systems, are manufactured in any foreign country identified under subsection (a).

"(c) Waiver Authority.—The Secretary of Defense may waive the limitation in subsection (b) if the Secretary determines in writing and notifies Congress that the Department of Defense's need for the item is of such an unusual and compelling urgency that the Department would be unable to meet national security objectives.

"(d) Effective Date.—(1) Subject to paragraph (2), subsection (b) applies to contracts in existence on the date of the enactment of this Act [Nov. 24, 2003] or entered into after such date.

"(2) With respect to contracts in existence on the date of the enactment of this Act, the Secretary of Defense shall take such action as is necessary to ensure that such contracts are in compliance with subsection (b) not later than 24 months after such date."

¹ See References in Text note below.

§4872. Acquisition of sensitive materials from non-allied foreign nations: prohibition

(a) In General.—Except as provided in subsection (c), the Secretary of Defense may not—

(1) procure any covered material melted or produced in any covered nation, or any end item that contains a covered material manufactured in any covered nation, except as provided by subsection (c); or

(2) sell any material from the National Defense Stockpile, if the National Defense Stockpile Manager determines that such a sale is not in the national interests of the United States, to—

(A) any covered nation; or

(B) any third party that the Secretary reasonably believes is acting as a broker or agent for a covered nation or an entity in a covered nation.

(b) Applicability.—Subsection (a) shall apply to prime contracts and subcontracts at any tier.

(1) If the Secretary of Defense—

(A) identifies a specific end item for which a specific covered material of satisfactory quality and quantity, in the required form, cannot be procured as and when needed at a reasonable price; and

(B) waives subsection (a)(1) for such specific end item and such specific covered material for a period not exceeding 36 months.

(2) To the procurement of an end item described in subsection (a)(1) or the sale of any covered material described under subsection (a)(1) by the Secretary outside of the United States for use outside of the United States.

(3) To the purchase by the Secretary of an end item containing a covered material that is—

(A) a commercially available off-the-shelf item (as defined in section 104 of title 41), other than—

(i) a commercially available off-the-shelf item that is 50 percent or more tungsten by weight; or

(ii) a mill product, such as bar, billet, slab, wire, cube, sphere, block, blank, plate, or sheet, that has not been incorporated into an end item, subsystem, assembly, or component;

(B) an electronic device, unless the Secretary of Defense, upon the recommendation of the Strategic and Critical Materials Board of Directors pursuant to section 10 of the Strategic and Critical Materials Stock Piling Act (50 U.S.C. 98h–1), determines that the domestic availability of a particular electronic device is critical to national security; or

(C) a neodymium-iron-boron magnet manufactured from recycled material if the milling of the recycled material and sintering of the final magnet takes place in the United States.

(d) Definitions.—In this section:

(1) Covered material.—The term "covered material" means—

(A) samarium-cobalt magnets;

(B) neodymium-iron-boron magnets;

(D) tungsten heavy alloy or any finished or semi-finished component containing tungsten heavy alloy; and

(E) tantalum metals and alloys.

(2) Covered nation.—The term "covered nation" means—

(A) the Democratic People's Republic of North Korea;

(B) the People's Republic of China;

(D) the Islamic Republic of Iran.

(3) End item.—The term "end item" has the meaning given in section 4863(m) of this title.

(Added Pub. L. 115–232, div. A, title VIII, §871(a), Aug. 13, 2018, 132 Stat. 1904, §2533c; amended Pub. L. 116–92, div. A, title VIII, §849, Dec. 20, 2019, 133 Stat. 1508; renumbered §4872 and amended Pub. L. 116–283, div. A, title VIII, §844(a), title XVIII, §1870(d)(2), (3), Jan. 1, 2021, 134 Stat. 3766, 4286; Pub. L. 117–81, div. A, title XVII, §1701(t)(2)(B), (C), (3), Dec. 27, 2021, 135 Stat. 2150; Pub. L. 117–263, div. A, title XIV, §1411(d)(2)(B), Dec. 23, 2022, 136 Stat. 2872; Pub. L. 118–31, div. A, title VIII, §834, Dec. 22, 2023, 137 Stat. 337.)

Amendment of Subsections (a)(1) and (c)(3)(A)(i)

Pub. L. 116–283, div. A, title VIII, §844, Jan. 1, 2021, 134 Stat. 3766, provided that, effective 6 years after Jan. 1, 2021, section 2533c of this title, which is now this section, is amended as follows:

(1) in subsection (a)(1), by striking "material melted" and inserting "material mined, refined, separated, melted,"; and

(2) in subsection (c)(3)(A)(i), by striking "tungsten" and inserting "covered material".

See Codification and 2021 Amendment notes below.

Editorial Notes

Codification

Pub. L. 116–283, §1870(d)(2), which had initially directed the transfer of section 2536 of this title to this section, was amended by Pub. L. 117–81, §1701(t)(2)(B), (C), and, after that amendment, such transfer was no longer directed. Instead, Pub. L. 116–283, as amended by Pub. L. 117–81, transferred section 2533c of this title to this section and section 2536 of this title to section 4874.

Amendments by section 844(a) of Pub. L. 116–283, which were directed to section 2533c of this title effective 5 years after Jan. 1, 2021, are to be executed to this section, to reflect the probable intent of Congress and the renumbering of section 2533c as this section by Pub. L. 116–283, as amended by Pub. L. 117–81, effective Jan. 1, 2022.

Amendments

2023—Subsec. (c). Pub. L. 118–31, §834(1), substituted "Subsection (a)(1)" for "Subsection (a)" in introductory provisions.

Subsec. (c)(1). Pub. L. 118–31, §834(2), substituted "Defense—" for "Defense determines that covered materials", inserted subpar. (A) designation and "identifies a specific end item for which a specific covered material" before "of satisfactory quality", and added subpar. (B).

2022—Subsec. (c)(3)(B). Pub. L. 117–263 substituted "Strategic and Critical Materials Board of Directors pursuant to section 10 of the Strategic and Critical Materials Stock Piling Act (50 U.S.C. 98h–1)" for "Strategic Materials Protection Board pursuant to section 187 of this title".

2021—Pub. L. 116–283, §1870(d)(3)(B), as amended by Pub. L. 117–81, §1701(t)(3), amended section catchline generally. Prior to amendment, section catchline read as follows: "Prohibition on acquisition of sensitive materials from non-allied foreign nations".

Pub. L. 116–283, §1870(d)(2), as amended by Pub. L. 117–81, §1701(t)(2)(B), (C), renumbered section 2533c of this title as this section.

Subsec. (a)(1). Pub. L. 116–283, §844(a)(1), substituted "material mined, refined, separated, melted," for "material melted". See Codification note above.

Subsec. (c)(3)(A)(i). Pub. L. 116–283, §844(a)(2), substituted "covered material" for "tungsten". See Codification note above.

Subsec. (d)(3). Pub. L. 116–283, §1870(d)(3)(A), as amended by Pub. L. 117–81, §1701(t)(3), substituted "section 4863(m)" for "section 2533b(m)".

2019—Subsec. (a)(2). Pub. L. 116–92, §849(a), substituted "material" for "covered material" in introductory provisions.

Subsec. (d)(1)(E). Pub. L. 116–92, §849(b), added subpar. (E).

Statutory Notes and Related Subsidiaries

Effective Date of 2021 Amendment

Pub. L. 116–283, div. A, title VIII, §844(b), Jan. 1, 2021, 134 Stat. 3766, as amended by Pub. L. 118–31, div. A, title VIII, §854, Dec. 22, 2023, 137 Stat. 345, provided that: "The amendments made by subsection (a) [amending this section] shall take effect on the date that is 6 years after the date of the enactment of this Act [Jan. 1, 2021]."

Amendment by section 1870(d)(2), (3) of Pub. L. 116–283 effective Jan. 1, 2022, with additional provisions for delayed implementation and applicability of existing law, see section 1801(d) of Pub. L. 116–283, set out as a note preceding section 3001 of this title.

§4873. Additional requirements pertaining to printed circuit boards

(a) In General.—

(1) Beginning on the date determined under paragraph (3), the Secretary of Defense may not acquire a covered printed circuit board from a covered nation.

(2) Paragraph (1) shall not apply with respect to any acquisition of supplies or services below the micro-purchase threshold under section 3573 of this title.

(3) Paragraph (1) shall take effect on January 1, 2027.

(b) Waiver.—

(1) The Secretary may waive the prohibition under subsection (a) if the Secretary determines in writing that—

(A) there are no significant national security concerns regarding counterfeiting, quality, or unauthorized access created by such waiver;

(B) the waiver is required to support national security; and

(C) a covered printed circuit board of satisfactory quality and sufficient quantity, in the required form, cannot be procured as and when needed from nations other than a covered nation at reasonable cost, excluding comparisons with non-market economies.

(2) Not later than 10 days after the Secretary provides a waiver under paragraph (1), the Secretary shall submit to the Committee on Armed Services of the Senate and the Committee on Armed Services of the House of Representatives a written notice setting forth the reasoning for the waiver, together with a copy of the waiver itself.

(1) Covered nation.—The term "covered nation" means—

(A) the Democratic People's Republic of North Korea;

(B) the People's Republic of China;

(D) the Islamic Republic of Iran.

(2) Covered printed circuit board.—The term "covered printed circuit board" means any specified type of partially manufactured or complete bare printed circuit board or fully or partially assembled printed circuit board that—

(A) performs a mission critical function in any product or service that is not a commercial product or commercial service; or

(B) is a component of—

(i) a defense security system; or

(ii) a system, other than a defense security system, that transmits or stores information and which the Secretary identifies as national security sensitive in the contract under which such printed circuit board is acquired.

(3) Secretary.—The term "Secretary" means the Secretary of Defense.

(4) Commercial product; commercial service; commercially available off-the shelf item.—The terms "commercial product", "commercial service", and "commercially available off-the-shelf item" have the meanings given such terms in sections 103, 103a, and 104 of title 41, respectively.

(5) Defense security system.—

(A) The term "defense security system" means an information system (including a telecommunications system) used or operated by the Department of Defense, by a contractor of the Department, or by another organization on behalf of the Department, the function, operation, or use of which—

(i) involves command and control of an armed force;

(ii) involves equipment that is an integral part of a weapon or weapon system; or

(iii) subject to subparagraph (B), is critical to the direct fulfillment of military missions.

(B) Subparagraph (A)(iii) does not include a system that is to be used for routine administrative and business applications (including payroll, finance, logistics, and personnel management applications).

(6) Specified type.—The term "specified type" means a printed circuit board that is—

(A) a component of an electronic device that facilitates the routing, connecting, transmitting or securing of data and is commonly connected to a network, and

(B) any other end item, good, or product specified by the Secretary in accordance with subsection (d)(2).

(d) Rulemaking.—

(1) The Secretary may issue rules providing that subsection (a) may not apply with respect to an acquisition of commercial products, commercial services, and commercially available off-the-shelf items if—

(A) the contractor is capable of meeting minimum requirements that the Secretary deems necessary to provide for the security of national security networks and weapon systems; including, at a minimum, compliance with section 224 of the National Defense Authorization Act for Fiscal Year 2020 (Public Law 116–92; 10 U.S.C. 2302 note); and

(B) either—

(i) the Government and the contractor have agreed to a contract requiring the contractor to take certain actions to ensure the integrity and security of the item, including protecting the item from unauthorized access, use, disclosure, disruption, modification, or destruction; or

(ii) the Secretary has determined that the contractor has adopted such procedures, tools, and methods for identifying the sources of components of such item, based on commercial best practices, that meet or exceed the applicable trusted supply chain and operational security standards of the Department of Defense.

(2) The Secretary may issue rules specifying end items, goods, and products for which a printed circuit board that is a component thereof shall be a specified type if the Secretary has promulgated final regulations, after an opportunity for notice and comment that is not less than 12 months, implementing this section.

(3) In carrying out this section, the Secretary shall, to the maximum extent practicable, avoid imposing contractual certification requirements with respect to the acquisition of commercial products, commercial services, or commercially available off-the-shelf items.

(e) Applicability.—This section shall apply only with respect to contracts entered into after the issuance of a final rule implementing this section.

(f) Rule of Construction.—Nothing in this section shall be construed to prohibit the Department of Defense from entering into a contract with an entity that connects to the facilities of a third party, for the purposes of backhaul, roaming, or interconnection arrangements, on the basis of the noncompliance by the third party with the provisions of this section or use of equipment or services that do not route or redirect user data traffic or permit visibility into any user data or packets that such equipment transmits or otherwise handles.

(Added Pub. L. 116–283, div. A, title VIII, §841(a), Jan. 1, 2021, 134 Stat. 3762, §2533d; amended Pub. L. 117–81, div. A, title VIII, §851(a), Dec. 27, 2021, 135 Stat. 1844; renumbered §4873 and amended Pub. L. 117–81, div. A, title XVII, §1701(e)(2)(A), Dec. 27, 2021, 135 Stat. 2138.)

Editorial Notes

Amendments

2021—Pub. L. 117–81 renumbered section 2533d of this title as this section.

Subsec. (a)(1). Pub. L. 117–81, §851(a)(1)(A), substituted "the date determined under paragraph (3)" for "January 1, 2023".

Subsec. (a)(2). Pub. L. 117–81 substituted "section 3573" for "section 2338".

Subsec. (a)(3). Pub. L. 117–81, §851(a)(1)(B), added par. (3).

Subsec. (c)(2). Pub. L. 117–81, §851(a)(2)(A)(i), inserted "specified type of" after "means any" in introductory provisions.

Subsec. (c)(2)(A). Pub. L. 117–81, §851(a)(2)(A)(ii), struck out "(as such terms are defined under sections 103 and 103a of title 41, respectively)" after "commercial service".

Subsec. (c)(2)(B). Pub. L. 117–81, §851(a)(2)(A)(iii), amended subpar. (b) generally. Prior to amendment, subpar. (B) read as follows: "the Secretary designates as a covered printed circuit board, after reasonable notice, based on a determination that the designation is required to support national security."

Subsec. (c)(4) to (6). Pub. L. 117–81, §851(a)(2)(B), added pars. (4) to (6).

Subsec. (d). Pub. L. 117–81, §851(a)(3), amended subsec. (d) generally. Prior to amendment, text read as follows: "Not later than May 1, 2022, the Secretary shall promulgate regulations, after an opportunity for notice and comment, implementing this section."

Statutory Notes and Related Subsidiaries

Effective Date of 2021 Amendment

Amendment by section 1701(e)(1)(A) of Pub. L. 117–81, renumbering section 2358d of this title as this section, deemed to have taken effect immediately before section 1881 of Pub. L. 116–283, subsec. (a) of which had repealed chapter 148 of this title, where section 2358d was located. See section 881(a) of Pub. L. 117–263, set out as a note under section 4027 of this title.

Trusted Supply

Pub. L. 116–283, div. A, title VIII, §841(c), Jan. 1, 2021, 134 Stat. 3764, provided that: "The Secretary of Defense shall apply the requirements of section 224 of the National Defense Authorization Act for Fiscal Year 2020 (Public Law 116–92; 10 U.S.C. 2302 note [now 10 U.S.C. 4501 note prec.]) to the acquisition of covered printed circuit boards (as such term is defined under [former] section 2533d(c) of title 10, United States Code, [now 10 U.S.C. 4873(c)] as added by this section)."

§4874. Award of certain contracts to entities controlled by a foreign government: prohibition

(a) In General.—A Department of Defense contract or Department of Energy contract under a national security program may not be awarded to an entity controlled by a foreign government if it is necessary for that entity to be given access to information in a proscribed category of information in order to perform the contract.

(b) Waiver Authority.—(1) The Secretary concerned may waive the application of subsection (a) to a contract award if—

(A) the Secretary concerned determines that the waiver is essential to the national security interests of the United States; or

(B) in the case of a contract awarded for environmental restoration, remediation, or waste management at a Department of Defense or Department of Energy facility—

(i) the Secretary concerned determines that the waiver will advance the environmental restoration, remediation, or waste management objectives of the department concerned and will not harm the national security interests of the United States; and

(ii) the entity to which the contract is awarded is controlled by a foreign government with which the Secretary concerned is authorized to exchange Restricted Data under section 144 c. of the Atomic Energy Act of 1954 (42 U.S.C. 2164(c)).

(2) The Secretary concerned shall notify Congress of any decision to grant a waiver under paragraph (1)(B) with respect to a contract. The contract may be awarded only after the end of the 45-day period beginning on the date the notification is received by the committees.

(1) The term "entity controlled by a foreign government" includes—

(A) any domestic or foreign organization or corporation that is effectively owned or controlled by a foreign government; and

(B) any individual acting on behalf of a foreign government,

as determined by the Secretary concerned. Such term does not include an organization or corporation that is owned, but is not controlled, either directly or indirectly, by a foreign government if the ownership of that organization or corporation by that foreign government was effective before October 23, 1992.

(2) The term "proscribed category of information" means a category of information that—

(A) with respect to Department of Defense contracts—

(i) includes special access information;

(ii) is determined by the Secretary of Defense to include information the disclosure of which to an entity controlled by a foreign government is not in the national security interests of the United States; and

(iii) is defined in regulations prescribed by the Secretary of Defense for the purposes of this section; and

(B) with respect to Department of Energy contracts—

(i) is determined by the Secretary of Energy to include information described in subparagraph (A)(ii); and

(ii) is defined in regulations prescribed by the Secretary of Energy for the purposes of this section.

(3) The term "Secretary concerned" means—

(A) the Secretary of Defense, with respect to Department of Defense contracts; and

(B) the Secretary of Energy, with respect to Department of Energy contracts.

(Added Pub. L. 102–484, div. A, title VIII, §836(a)(1), Oct. 23, 1992, 106 Stat. 2462, §2536; amended Pub. L. 103–35, title II, §201(d)(4), May 31, 1993, 107 Stat. 99; Pub. L. 103–160, div. A, title VIII, §842(a)–(c)(1), Nov. 30, 1993, 107 Stat. 1719; Pub. L. 104–201, div. A, title VIII, §828, Sept. 23, 1996, 110 Stat. 2611; renumbered §4874, Pub. L. 116–283, div. A, title XVIII, §1870(d)(2), Jan. 1, 2021, 134 Stat. 4286; Pub. L. 117–81, div. A, title XVII, §1701(t)(2)(B), (C), Dec. 27, 2021, 135 Stat. 2150.)

Editorial Notes

Amendments

2021—Pub. L. 116–283, §1870(d)(2), as amended by Pub. L. 117–81, §1701(t)(2)(B), (C), renumbered section 2536 of this title as this section.

1996—Subsec. (b). Pub. L. 104–201 amended subsec. (b) generally. Prior to amendment, subsec. (b) read as follows: "Waiver Authority.—The Secretary concerned may waive the application of subsection (a) to a contract award if the Secretary concerned determines that the waiver is essential to the national security interests of the United States."

1993—Pub. L. 103–160, §842(c)(1), substituted "Award of certain contracts to entities controlled by a foreign government: prohibition" for "Prohibition on award of certain Department of Defense and Department of Energy contracts to companies owned by an entity controlled by a foreign government." as section catchline.

Pub. L. 103–35 struck out period at end of section catchline.

Subsec. (a). Pub. L. 103–160, §842(a), struck out "a company owned by" after "awarded to" and substituted "that entity" for "that company".

Subsec. (c)(1). Pub. L. 103–160, §842(b), inserted at end "Such term does not include an organization or corporation that is owned, but is not controlled, either directly or indirectly, by a foreign government if the ownership of that organization or corporation by that foreign government was effective before October 23, 1992."

Statutory Notes and Related Subsidiaries

Effective Date of 2021 Amendment

Effective Date

Pub. L. 102–484, div. A, title VIII, §836(b), Oct. 23, 1992, 106 Stat. 2463, provided that: "Section 2536 of title 10, United States Code [now 10 U.S.C. 4874], as added by subsection (a), shall apply with respect to contracts entered into after the expiration of the 90-day period beginning on the date of the enactment of this Act [Oct. 23, 1992]."

Removal of National Interest Determination Requirements for Certain Entities

Pub. L. 115–232, div. A, title VIII, §842, Aug. 13, 2018, 132 Stat. 1878, provided that:

"(a) In General.—Effective October 1, 2020, a covered NTIB entity operating under a special security agreement pursuant to the National Industrial Security Program shall not be required to obtain a national interest determination as a condition for access to proscribed information.

"(b) Acceleration Authorized.—Notwithstanding the effective date of this section, the Secretary of Defense, in consultation with the Director of the Information Security Oversight Office, may waive the requirement to obtain a national interest determination for a covered NTIB entity operating under such a special security agreement that has—

"(1) a demonstrated successful record of compliance with the National Industrial Security Program; and

"(2) previously been approved for access to proscribed information.

"(c) Definitions.—In this section:

"(1) Covered ntib entity.—The term 'covered NTIB entity' means a person that is a subsidiary located in the United States—

"(A) for which the ultimate parent company and any intermediate parent companies of such subsidiary are located in a country that is part of the national technology and industrial base (as defined in section 2500 of title 10, United States Code [now 10 U.S.C. 4801]); and

"(B) that is subject to the foreign ownership, control, or influence requirements of the National Industrial Security Program.

"(2) Proscribed information.—The term 'proscribed information' means information that is—

"(A) classified at the level of top secret;

"(B) communications security information (excluding controlled cryptographic items when un-keyed or utilized with unclassified keys);

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

"(D) special access program information under section 4.3 of Executive Order No. 13526 (75 Fed. Reg. 707; 50 U.S.C. 3161 note) or successor order; or

"(E) designated as sensitive compartmented information."

Review Regarding Applicability of Foreign Ownership, Control, or Influence Requirements of National Industrial Security Program to National Technology and Industrial Base Companies

Pub. L. 115–91, div. A, title XVII, §1712, Dec. 12, 2017, 131 Stat. 1811, as amended by Pub. L. 116–283, div. A, title XVIII, §1866(d)(5), Jan. 1, 2021, 134 Stat. 4280, provided that:

"(a) Review.—The Secretary of Defense, with the concurrence of the Secretary of State and after consultation with the Director of the Information Security Oversight Office, shall review whether organizations whose ownership or majority control is based in a country that is part of the national technology and industrial base should be exempted from one or more of the foreign ownership, control, or influence requirements of the National Industrial Security Program.

"(b) Authority.—The Secretary of Defense may establish a program to exempt organizations described under subsection (a) from one or more of the foreign ownership, control, or influence requirements of the National Industrial Security Program. Any such program shall comply with the requirements of this subsection.

"(1) In general.—Under a program established under this subsection, the Secretary, with the concurrence of the Secretary of State and after consultation with the Director of the Information Security Oversight Office, shall maintain a list of organizations owned or controlled by a country that is part of the national technology and industrial base that are eligible for exemption from the requirements described under such subsection.

"(2) Determinations of eligibility.—Under a program established under this subsection, the Secretary of Defense, with the concurrence of the Secretary of State and after consultation with the Director of the Information Security Oversight Office, may (on a case-by-case basis and for the purpose of supporting specific needs of the Department of Defense) designate an organization whose ownership or majority control is based in a country that is part of the national technology and industrial base as exempt from the requirements described under subsection (a) upon a determination that such exemption—

"(A) is beneficial to improving collaboration within countries that are a part of the national technology and industrial base;

"(B) is in the national security interest of the United States; and

"(C) will not result in a greater risk of the disclosure of classified or sensitive information consistent with the National Industrial Security Program.

"(3) Exercise of authority.—The authority under this subsection may be exercised beginning on the date that is the later of—

"(A) the date that is 60 days after the Secretary of Defense, in consultation with the Secretary of State and the Director of the Information Security Oversight Office, submits to the appropriate congressional committees a report summarizing the review conducted under subsection (a); and

"(B) the date that is 30 days after the Secretary of Defense, in consultation with the Secretary of State and the Director of the Information Security Oversight Office, submits to the appropriate congressional committees a written notification of a determination made under paragraph (2), including a discussion of the issues related to the foreign ownership or control of the organization that were considered as part of the determination.

"(c) Definitions.—In this section:

"(1) Appropriate congressional committees.—The term 'appropriate congressional committees' has the meaning given the term in section 301 of title 10, United States Code.

"(2) National technology and industrial base.—the [sic] term 'national technology and industrial base' has the meaning given the term in section 4801 of title 10, United States Code."

§4875. Prohibition on acquisition of personal protective equipment and certain other items from non-allied foreign nations

(a) In General.—Except as provided in subsection (c), the Secretary of Defense may not procure any covered item from any covered nation.

(b) Applicability.—Subsection (a) shall apply to prime contracts and subcontracts at any tier.

(1) In general.—Subsection (a) does not apply under the following circumstances:

(A) If the Secretary of Defense determines that covered materials of satisfactory quality and quantity, in the required form, cannot be procured as and when needed from nations other than covered nations to meet requirements at a reasonable price.

(B) The procurement of a covered item for use outside of the United States.

(2) Limitation.—A proposed procurement in an amount greater than $150,000 may not be divided into several purchases or contracts for lesser amounts in order to qualify for this exception.

(d) Definitions.—In this section:

(1) Covered item.—The term "covered item" means an article or item of—

(A) personal protective equipment for use in preventing spread of disease, such as by exposure to infected individuals or contamination or infection by infectious material (including nitrile and vinyl gloves, surgical masks, respirator masks and powered air purifying respirators and required filters, face shields and protective eyewear, surgical and isolation gowns, and head and foot coverings) or clothing, and the materials and components thereof, other than sensors, electronics, or other items added to and not normally associated with such personal protective equipment or clothing; or

(B) sanitizing and disinfecting wipes, testing swabs, gauze, and bandages.

(2) Covered nation.—The term "covered nation" means—

(A) the Democratic People's Republic of North Korea;

(B) the People's Republic of China;

(D) the Islamic Republic of Iran.

(Added Pub. L. 117–81, div. A, title VIII, §802(a)(1), Dec. 27, 2021, 135 Stat. 1812, §2533e; renumbered §4875, Pub. L. 117–81, div. A, title VIII, §802(b)(1), Dec. 27, 2021, 135 Stat. 1813.)

Editorial Notes

Amendments

2021—Pub. L. 117–81 renumbered section 2533e of this title as this section.

Statutory Notes and Related Subsidiaries

Effective Date of 2021 Amendment

Amendment by Pub. L. 117–81, which renumbered section 2533e of this title as this section, deemed to have taken effect immediately before section 1881 of Pub. L. 116–283, subsec. (a) of which had repealed chapter 148 of this title, where section 2533c was located. See section 881(a) of Pub. L. 117–263, set out as a note under section 4027 of this title.

Pub. L. 117–81, div. A, title VIII, §802(b)(3), Dec. 27, 2021, 135 Stat. 1814, provided that: "The transfer, redesignation, and amendments made by this subsection [renumbering section 2533e of this title as this section] shall take effect immediately after the amendments made by title XVIII of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021 [Pub. L. 116–283] take effect [Jan. 1, 2022]." See note above.

References; Savings Provision; Rule of Construction

Pub. L. 117–81, div. A, title VIII, §802(b)(4), Dec. 27, 2021, 135 Stat. 1814, provided that: "Sections 1883 through 1885 of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021 (Public Law 116–283) [set out as notes preceding section 3001 of this title] shall apply with respect to the transfers, redesignations, and amendments made under this subsection [see Effective Date of 2021 Amendment note above] as if such transfers, redesignations, and amendments were made under title XVIII of such Act."

SUBCHAPTER IV—DEFENSE INDUSTRIAL RESERVE AND INDUSTRIAL MOBILIZATION

Sec.

4881.

Defense Industrial Reserve.

4882.

Industrial mobilization: orders; priorities; possession of manufacturing plants; violations.

4883.

Industrial mobilization: plants; lists.

4884.

Industrial mobilization: Board on Mobilization of Industries Essential for Military Preparedness.

§4881. Defense Industrial Reserve

(a) Declaration of Purpose and Policy.—It is the intent of Congress—

(1) to provide a comprehensive and continuous program for the future safety and for the defense of the United States by providing adequate measures whereby an essential nucleus of Government-owned industrial plants and an industrial reserve of machine tools and other industrial manufacturing equipment may be assured for immediate use to supply the needs of the armed forces in time of national emergency or in anticipation thereof;

(2) that such Government-owned plants and such reserve shall not exceed in number or kind the minimum requirements for immediate use in time of national emergency, and that any such items which shall become excess to such requirements shall be disposed of as expeditiously as possible;

(3) that to the maximum extent practicable, reliance will be placed upon private industry for support of defense production; and

(4) that machine tools and other industrial manufacturing equipment may be held in plant equipment packages or in a general reserve to maintain a high state of readiness for production of critical items of defense materiel, to provide production capacity not available in private industry for defense materiel, or to assist private industry in time of national disaster.

(b) Powers and Duties of the Secretary of Defense.—(1) To execute the policy set forth in subsection (a), the Secretary of Defense shall—

(A) determine which industrial plants and installations (including machine tools and other industrial manufacturing equipment) should become a part of the Defense Industrial Reserve;

(B) designate what excess industrial property shall be disposed of;

(C) establish general policies and provide for the transportation, handling, care, storage, protection, maintenance, repair, rebuilding, utilization, recording, leasing and security of such property;

(D) direct the transfer without reimbursement of such property to other Government agencies with the consent of such agencies;

(E) direct the leasing of any of such property to designated lessees;

(F) authorize the disposition in accordance with existing law of any of such property when in the opinion of the Secretary such property is no longer needed by the Department of Defense; and

(G) notwithstanding chapter 5 of title 40 and any other provision of law, authorize the transfer to a nonprofit educational institution or training school, on a nonreimbursable basis, of any such property already in the possession of such institution or school whenever the program proposed by such institution or school for the use of such property is in the public interest.

(2)(A) The Secretary of a military department to which equipment or other property is transferred from the Defense Industrial Reserve shall reimburse appropriations available for the purposes of the Defense Industrial Reserve for the full cost (including direct and indirect costs) of—

(i) storage of such property;

(ii) repair and maintenance of such property; and

(iii) overhead allocated to such property.

(B) The Secretary of Defense shall prescribe regulations establishing general policies and fee schedules for reimbursements under subparagraph (A).

(1) The term "Defense Industrial Reserve" means—

(A) a general reserve of industrial manufacturing equipment, including machine tools, selected by the Secretary of Defense for retention for national defense or for other emergency use;

(B) those industrial plants and installations held by and under the control of the Department of Defense in active or inactive status, including Government-owned/Government-operated plants and installations and Government-owned/contractor-operated plants and installations which are retained for use in their entirety, or in part, for production of military weapons systems, munitions, components, or supplies; and

(C) those industrial plants and installations under the control of the Secretary which are not required for the immediate need of any department or agency of the Government and which should be sold, leased, or otherwise disposed of.

(2) The term "plant equipment package" means a complement of active and idle machine tools and other industrial manufacturing equipment held by and under the control of the Department of Defense and approved by the Secretary for retention to produce particular defense materiel or defense supporting items at a specific level of output in the event of emergency.

(Added and amended Pub. L. 102–484, div. D, title XLII, §4235, Oct. 23, 1992, 106 Stat. 2690, §2535; Pub. L. 103–35, title II, §201(c)(8), May 31, 1993, 107 Stat. 98; Pub. L. 103–337, div. A, title III, §379(a), Oct. 5, 1994, 108 Stat. 2737; Pub. L. 107–107, div. A, title X, §1048(a)(23), Dec. 28, 2001, 115 Stat. 1224; Pub. L. 107–217, §3(b)(7), Aug. 21, 2002, 116 Stat. 1295; renumbered §4881, Pub. L. 116–283, div. A, title XVIII, §1870(e)(2)(A), Jan. 1, 2021, 134 Stat. 4286.)

Editorial Notes

Codification

The text of section 451 of Title 50, War and National Defense, which was transferred to this section, designated subsec. (a), and amended by Pub. L. 102–484, §4235(a)(2), was based on acts July 2, 1948, ch. 811, §2, 62 Stat. 1225; Nov. 16, 1973, Pub. L. 93–155, title VIII, §809, 87 Stat. 617.

The text of section 453 of Title 50 which was transferred to this section, designated subsec. (b), and amended by Pub. L. 102–484, §4235(a)(3), was based on acts July 2, 1948, ch. 811, §4, 62 Stat. 1226; Nov. 16, 1973, Pub. L. 93–155, title VIII, §809, 87 Stat. 617; Nov. 14, 1986, Pub. L. 99–661, div. A, title XIII, §1359(a), 100 Stat. 3999. For effective date of 1986 amendment, see section 1359(b) of Pub. L. 99–661.

The text of section 452 of Title 50 which was transferred to this section, designated subsec. (c), and amended by Pub. L. 102–484, §4235(b), was based on acts July 2, 1948, ch. 811, §3, 62 Stat. 1225; Nov. 16, 1973, Pub. L. 93–155, title VIII, §809, 87 Stat. 617.

Amendments

2021—Pub. L. 116–283 renumbered section 2535 of this title as this section.

2002—Subsec. (b)(1)(G). Pub. L. 107–217 substituted "chapter 5 of title 40" for "title II of the Federal Property and Administrative Services Act of 1949 (40 U.S.C. 481 et seq.)".

2001—Subsec. (a). Pub. L. 107–107, §1048(a)(23)(A)(i), substituted "intent of Congress—" for "intent of Congress" in introductory provisions.

Subsec. (a)(1). Pub. L. 107–107, §1048(a)(23)(A)(ii), (iii), substituted "armed forces" for "Armed Forces" and realigned margins.

Subsec. (a)(2) to (4). Pub. L. 107–107, §1048(a)(23)(A)(ii), realigned margins.

Subsec. (b)(1). Pub. L. 107–107, §1048(a)(23)(B)(i), substituted "in subsection (a), the Secretary of Defense shall—" for "in this section, the Secretary is authorized and directed to—" in introductory provisions.

Subsec. (b)(1)(A). Pub. L. 107–107, §1048(a)(23)(B)(ii), substituted "Defense Industrial Reserve" for "defense industrial reserve".

Subsec. (c). Pub. L. 107–107, §1048(a)(23)(C), redesignated par. (2) as (1), substituted "means—" for "means" in introductory provisions, realigned margins of subpars. (A) to (C) of par. (1) and inserted "and" after semicolon in subpar. (B), redesignated par. (3) as (2), and struck out former par. (1) which read as follows: "The term 'Secretary' means Secretary of Defense."

1994—Subsec. (b)(1)(G). Pub. L. 103–337 amended subpar. (G) generally. Prior to amendment, subpar. (G) read as follows: "authorize and regulate the lending of any such property to any nonprofit educational institution or training school whenever (i) the program proposed by such institution or school for the use of such property will contribute materially to national defense, and (ii) such institution or school shall by agreement make such provision as the Secretary shall deem satisfactory for the proper maintenance and care of such property and for its return, without expense to the Government, upon request of the Secretary."

1993—Subsec. (b)(2)(B). Pub. L. 103–35 substituted "subparagraph (A)" for "paragraph (1)".

1992—Pub. L. 102–484, §4235(a), added section number and catchline.

Subsec. (a). Pub. L. 102–484, §4235(a)(2), transferred the text of section 451 of Title 50, War and National Defense, to this section, designated it subsec. (a), inserted heading, and substituted "It" for "In enacting this chapter it" in introductory provisions. See Codification note above.

Subsec. (b). Pub. L. 102–484, §4235(a)(3), transferred the text of section 453 of Title 50, War and National Defense, to the end of this section and designated it subsec. (b), inserted heading, redesignated former subsec. (a) of section 453 as par. (1), substituted "in this section" for "in this chapter" in introductory provisions, redesignated former pars. (1) to (7) as subpars. (A) to (G), respectively, in subpar. (G) redesignated former subpars. (A) and (B) as cls. (i) and (ii), respectively, redesignated former subsec. (b) of section 453 as par. (2), and in par. (2) redesignated former par. (1) as subpar. (A), former subpars. (A) to (C) as cls. (i) to (iii), and former par. (2) as subpar. (B). See Codification note above.

Subsec. (c). Pub. L. 102–484, §4235(b), transferred the text of section 452 of Title 50, War and National Defense, to the end of this section, designated it subsec. (c), inserted heading, and substituted "In this section:" for "As used in this chapter—" in introductory provisions. See Codification note above.

Statutory Notes and Related Subsidiaries

Effective Date of 2021 Amendment

Treatment of Property Loaned Before December 31, 1993 to Educational Institutions or Training Schools

Pub. L. 103–337, div. A, title III, §379(b), Oct. 5, 1994, 108 Stat. 2737, provided that: "Except for property determined by the Secretary of Defense to be needed by the Department of Defense, property loaned before December 31, 1993, to an educational institution or training school under section 2535(b) of title 10, United States Code [now 10 U.S.C. 4881(b)], or section 4(a)(7) of the Defense Industrial Reserve Act (as in effect before October 23, 1992 [former section 453(a)(7) of Title 50, War and National Defense, see Codification and 1992 Amendment notes above]) shall be regarded as surplus property. Upon certification by the Secretary to the Administrator of General Services that the property is being used by the borrowing educational institution or training school for a purpose consistent with that for which the property was loaned, the Administrator may authorize the conveyance of all right, title, and interest of the United States in such property to the borrower if the borrower agrees to accept the property. The Administrator may require any additional terms and conditions in connection with a conveyance so authorized that the Administrator considers appropriate to protect the interests of the United States."

§4882. Industrial mobilization: orders; priorities; possession of manufacturing plants; violations

(a) Ordering Authority.—In time of war or when war is imminent, the President, through the head of any department, may order from any person or organized manufacturing industry necessary products or materials of the type usually produced or capable of being produced by that person or industry.

(b) Compliance With Order Required.—A person or industry with whom an order is placed under subsection (a), or the responsible head thereof, shall comply with that order and give it precedence over all orders not placed under that subsection.

(c) Seizure of Manufacturing Plants Upon Noncompliance.—In time of war or when war is imminent, the President, through the head of any department, may take immediate possession of any plant that is equipped to manufacture, or that in the opinion of the head of that department is capable of being readily transformed into a plant for manufacturing, arms or ammunition, parts thereof, or necessary supplies for the armed forces if the person or industry owning or operating the plant, or the responsible head thereof, refuses—

(1) to give precedence to the order as prescribed in subsection (b);

(2) to manufacture the kind, quantity, or quality of arms or ammunition, parts thereof, or necessary supplies, as ordered by the head of such department; or

(3) to furnish them at a reasonable price as determined by the head of such department.

(d) Use of Seized Plant.—The President, through the head of any department, may manufacture products that are needed in time of war or when war is imminent, in any plant that is seized under subsection (c).

(e) Compensation Required.—Each person or industry from whom products or materials are ordered under subsection (a) is entitled to fair and just compensation. Each person or industry whose plant is seized under subsection (c) is entitled to a fair and just rental.

(f) Criminal Penalty.—Whoever fails to comply with this section shall be imprisoned for not more than three years and fined under title 18.

(Added Pub. L. 103–160, div. A, title VIII, §822(a)(1), Nov. 30, 1993, 107 Stat. 1704, §2538; amended Pub. L. 103–337, div. A, title VIII, §811, Oct. 5, 1994, 108 Stat. 2815; renumbered §4882, Pub. L. 116–283, div. A, title XVIII, §1870(e)(2)(A), Jan. 1, 2021, 134 Stat. 4286.)

Editorial Notes

Prior Provisions

Provisions similar to those in this section were contained in sections 4501 and 9501 of this title, prior to repeal by Pub. L. 103–160, §822(a)(2).

Amendments

2021—Pub. L. 116–283 renumbered section 2538 of this title as this section.

1994—Subsec. (a). Pub. L. 103–337, §811(1), substituted "head of any department" for "Secretary of Defense".

Subsec. (c). Pub. L. 103–337, §811, substituted "through the head of any department" for "through the Secretary of Defense" and "opinion of the head of that department" for "opinion of the Secretary of Defense" in introductory provisions and "head of such department" for "Secretary" in pars. (2) and (3).

Subsec. (d). Pub. L. 103–337, §811(1), substituted "head of any department" for "Secretary of Defense".

Statutory Notes and Related Subsidiaries

Effective Date of 2021 Amendment

§4883. Industrial mobilization: plants; lists

(a) List of Plants Equipped to Manufacture Arms or Ammunition.—The Secretary of Defense may maintain a list of all privately owned plants in the United States, and the territories, Commonwealths, and possessions of the United States, that are equipped to manufacture for the armed forces arms or ammunition, or parts thereof, and may obtain complete information of the kinds of those products manufactured or capable of being manufactured by each of those plants, and of the equipment and capacity of each of those plants.

(b) List of Plants Convertible Into Ammunition Factories.—The Secretary of Defense may maintain a list of privately owned plants in the United States, and the territories, Commonwealths, and possessions of the United States, that are capable of being readily transformed into factories for the manufacture of ammunition for the armed forces and that have a capacity sufficient to warrant conversion into ammunition plants in time of war or when war is imminent, and may obtain complete information as to the equipment of each of those plants.

(c) Conversion Plans.—The Secretary of Defense may prepare comprehensive plans for converting each plant listed pursuant to subsection (b) into a factory for the manufacture of ammunition or parts thereof.

(Added Pub. L. 103–160, div. A, title VIII, §822(a)(1), Nov. 30, 1993, 107 Stat. 1705, §2539; renumbered §4883, Pub. L. 116–283, div. A, title XVIII, §1870(e)(2)(A), Jan. 1, 2021, 134 Stat. 4286.)

Editorial Notes

Prior Provisions

Provisions similar to those in this section were contained in sections 4502(a)–(c) and 9502(a)–(c) of this title, prior to repeal by Pub. L. 103–160, §822(a)(2).

Amendments

2021—Pub. L. 116–283 renumbered section 2539 of this title as this section.

Statutory Notes and Related Subsidiaries

Effective Date of 2021 Amendment

§4884. Industrial mobilization: Board on Mobilization of Industries Essential for Military Preparedness

The President may appoint a nonpartisan Board on Mobilization of Industries Essential for Military Preparedness, and may provide necessary clerical assistance, to organize and coordinate operations under sections 4882 and 4883 of this title.

(Added Pub. L. 103–160, div. A, title VIII, §822(a)(1), Nov. 30, 1993, 107 Stat. 1705, §2540; renumbered §2539a, Pub. L. 103–337, div. A, title X, §1070(a)(13)(A), Oct. 5, 1994, 108 Stat. 2856; renumbered §4884 and amended Pub. L. 116–283, div. A, title XVIII, §1870(e)(2), Jan. 1, 2021, 134 Stat. 4286.)

Editorial Notes

Prior Provisions

Provisions similar to those in this section were contained in sections 4502(d) and 9502(d) of this title, prior to repeal by Pub. L. 103–160, §822(a)(2).

Amendments

2021—Pub. L. 116–283, §1870(e)(2)(B), substituted "sections 4882 and 4883" for "sections 2538 and 2539".

Pub. L. 116–283, §1870(e)(2)(A), renumbered section 2539a of this title as this section.

1994—Pub. L. 103–337 renumbered section 2540 of this title as section 2539a.

Statutory Notes and Related Subsidiaries

Effective Date of 2021 Amendment

SUBCHAPTER V—OTHER MATTERS

Sec.

4891.

Improved national defense control of technology diversions overseas.

4892.

Availability of samples, drawings, information, equipment, materials, and certain services.

§4891. Improved national defense control of technology diversions overseas

(a) Collection of Information on Foreign-Controlled Contractors.—The Secretary of Defense and the Secretary of Energy shall each collect and maintain a data base containing a list of, and other pertinent information on, all contractors with the Department of Defense and the Department of Energy, respectively, that are controlled by foreign persons. The data base shall contain information on such contractors for 1988 and thereafter in all cases where they are awarded contracts exceeding $10,000,000 in any single year by the Department of Defense or the Department of Energy.

(b) Technology Risk Assessment Requirement.—(1) If the Secretary of Defense is acting as a designee of the President under section 721(a) ¹ of the Defense Production Act of 1950 (50 U.S.C. 4565(a)) and if the Secretary determines that a proposed or pending merger, acquisition, or takeover may involve a firm engaged in the development of a defense critical technology or is otherwise important to the defense industrial and technology base, then the Secretary shall require the appropriate entity or entities from the list set forth in paragraph (2) to conduct an assessment of the risk of diversion of defense critical technology posed by such proposed or pending action.

(2) The entities referred to in paragraph (1) are the following:

(A) The Defense Intelligence Agency.

(B) The Army Foreign Technology Science Center.

(D) The Air Force Foreign Aerospace Science and Technology Center.

(Added Pub. L. 102–484, div. A, title VIII, §838(a), Oct. 23, 1992, 106 Stat. 2465, §2537; amended Pub. L. 103–35, title II, §201(d)(5), (h)(2), May 31, 1993, 107 Stat. 99, 100; Pub. L. 107–314, div. A, title X, §1041(a)(16), Dec. 2, 2002, 116 Stat. 2645; Pub. L. 114–328, div. A, title X, §1081(b)(4)(B), Dec. 23, 2016, 130 Stat. 2419; Pub. L. 115–91, div. A, title X, §1051(a)(19), Dec. 12, 2017, 131 Stat. 1561; renumbered §4891, Pub. L. 116–283, div. A, title XVIII, §1870(f)(2), Jan. 1, 2021, 134 Stat. 4287.)

Editorial Notes

References in Text

Section 721(a) of the Defense Production Act of 1950, referred to in subsec. (b), is section 721(a) of act Sept. 8, 1950, ch. 932, as added by Pub. L. 100–418, title V, §5021, Aug. 23, 1988, 102 Stat. 1425, which is classified to section 4565(a) of Title 50, War and National Defense. Section 721(a) of the Act was struck out, and a new section 721(a) was added, by Pub. L. 110–49, §2, July 26, 2007, 121 Stat. 246. As so added, section 721(a) does not refer to investigations by the President or the President's designee.

Amendments

2021—Pub. L. 116–283 renumbered section 2537 of this title as this section.

2017—Subsecs. (b), (c). Pub. L. 115–91 redesignated subsec. (c) as (b) and struck out former subsec. (b) which required annual reports to Congress regarding the information collected under subsec. (a).

2016—Subsec. (c). Pub. L. 114–328 substituted "(50 U.S.C. 4565(a))" for "(50 U.S.C. App. 2170(a))".

2002—Subsec. (a). Pub. L. 107–314 substituted "$10,000,000" for "$100,000".

1993—Subsec. (a). Pub. L. 103–35, §201(d)(5), substituted "respectively, that" for "respectively, which".

Subsec. (d). Pub. L. 103–35, §201(h)(2), struck out subsec. (d) which read as follows: "In this section, the term 'defense critical technology' has the meaning provided that term by section 2491(8) of this title."

Statutory Notes and Related Subsidiaries

Effective Date of 2021 Amendment

¹ See References in Text note below.

§4892. Availability of samples, drawings, information, equipment, materials, and certain services

(a) Authority.—The Secretary of Defense and the Secretaries of the military departments, under regulations prescribed by the Secretary of Defense and when determined by the Secretary of Defense or the Secretary concerned to be in the interest of national defense, may each—

(1) sell, rent, lend, or give samples, drawings, and manufacturing or other information (subject to the rights of third parties) to any person or entity;

(2) sell, rent, or lend government equipment or materials to any person or entity—

(A) for use in independent research and development programs, subject to the condition that the equipment or material be used exclusively for such research and development; or

(B) for use in demonstrations to a friendly foreign government;

(3) make available to any person or entity, at an appropriate fee, the services of any government laboratory, center, range, or other testing facility for the testing of materials, equipment, models, computer software, and other items; and

(4) make available to any person or entity, through leases, contracts, or other appropriate arrangements, facilities, services, and equipment of any government laboratory, research center, or range, if the facilities, services, and equipment provided will not be in direct competition with the domestic private sector.

(b) Confidentiality of Test Results.—The results of tests performed with services made available under subsection (a)(3) are confidential and may not be disclosed outside the Federal Government without the consent of the persons for whom the tests are performed.

(c) Fees.—Fees made available under subsections (a)(3) and (a)(4) shall be established in the regulations prescribed pursuant to subsection (a). Such fees may not exceed the amount necessary to recoup the direct and indirect costs involved, such as direct costs of utilities, contractor support, and salaries of personnel that are incurred by the United States to provide for the testing.

(d) Use of Fees.—Fees received under subsections (a)(3) and (a)(4) may be credited to the appropriations or other funds of the activity making such services available.

(Added Pub. L. 103–160, div. A, title VIII, §822(b)(1), Nov. 30, 1993, 107 Stat. 1705, §2541; renumbered §2539b, Pub. L. 103–337, div. A, title X, §1070(a)(13)(A), Oct. 5, 1994, 108 Stat. 2856; amended Pub. L. 103–355, title III, §3022, Oct. 13, 1994, 108 Stat. 3333; Pub. L. 104–106, div. A, title VIII, §804, div. D, title XLIII, §4321(a)(8), Feb. 10, 1996, 110 Stat. 390, 671; Pub. L. 106–65, div. A, title X, §1066(a)(23), Oct. 5, 1999, 113 Stat. 771; Pub. L. 110–181, div. A, title II, §232, Jan. 28, 2008, 122 Stat. 46; renumbered §4892, Pub. L. 116–283, div. A, title XVIII, §1870(f)(2), Jan. 1, 2021, 134 Stat. 4287.)

Editorial Notes

Amendments

2021—Pub. L. 116–283 renumbered section 2539b of this title as this section.

2008—Subsec. (a)(4). Pub. L. 110–181, §232(1), added par. (4).

Subsec. (c). Pub. L. 110–181, §232(2), struck out "for services" before "made available" and substituted "subsections (a)(3) and (a)(4)" for "subsection (a)(3)".

Subsec. (d). Pub. L. 110–181, §232(3), struck out "for services made available" after "Fees received" and substituted "subsections (a)(3) and (a)(4)" for "subsection (a)(3)".

1999—Subsec. (a). Pub. L. 106–65 substituted "Secretaries of the military departments" for "secretaries of the military departments".

1996—Subsec. (a). Pub. L. 104–106, §4321(a)(8), made technical correction to Pub. L. 103–355, §3022. See 1994 Amendment note below.

Subsec. (c). Pub. L. 104–106, §804, inserted "and indirect" after "recoup the direct".

1994—Pub. L. 103–337 renumbered section 2541 of this title as section 2539b.

Subsec. (a). Pub. L. 103–355, §3022, as amended by Pub. L. 104–106, §4321(a)(8), inserted "rent," after "sell," in par. (1) and ", rent," after "sell" in par. (2).

Statutory Notes and Related Subsidiaries

Effective Date of 2021 Amendment

Effective Date of 1996 Amendment

Pub. L. 104–106, div. D, title XLIII, §4321(a), Feb. 10, 1996, 110 Stat. 671, provided that the amendment made by that section is effective as of Oct. 13, 1994, and as if included in Pub. L. 103–355 as enacted.