10 USC Ch. 279: CONTRACTOR AUDITS AND ACCOUNTING

From Title 10—ARMED FORCESSubtitle A—General Military LawPART V—ACQUISITIONSubpart D—General Contracting Provisions

CHAPTER 279—CONTRACTOR AUDITS AND ACCOUNTING

Sec.

3841.

Examination of records of contractor.

3842.

Performance of incurred cost audits.

3843.

[Reserved].

3844.

[Reserved].

3845.

Contractor inventory accounting systems: standards.

3846.

[Reserved].

3847.

Defense Contract Audit Agency: annual report.

3848.

Defense audit agencies: Small Business Ombudsmen.

Editorial Notes

Prior Provisions

A prior chapter 279 "CONTRACTOR AUDITS AND ACCOUNTING", as added by Pub. L. 115–232, div. A, title VIII, §801(a), Aug. 13, 2018, 132 Stat. 1828, and consisting of reserved section 3841, was repealed by Pub. L. 116–283, div. A, title XVIII, §1835(a), Jan. 1, 2021, 134 Stat. 4239.

Amendments

2021—Pub. L. 117–81, div. A, title XVII, §1701(i)(7)(A), Dec. 27, 2021, 135 Stat. 2142, amended Pub. L. 116–283, div. A, title XVIII, §1835(a), Jan. 1, 2021, 134 Stat. 4239, which added this analysis, by substituting "[Reserved]" for "Contractor internal audit reports: Department of Defense access to, use of, and safeguards and protections for" in item 3843, for "Contractor business systems" in item 3844, and for "Defense Contract Audit Agency: legal resources and expertise" in item 3846.

Statutory Notes and Related Subsidiaries

Contractor Business Systems

Pub. L. 115–232, div. A, title VIII, §824(b), Aug. 13, 2018, 132 Stat. 1856, provided that: "Not later than 120 days after the date of the enactment of this Act [Aug. 13, 2018], the Secretary of Defense shall revise the Defense Federal Acquisition Regulation Supplement to conform with the amendments to section 893 of the Ike Skelton National Defense Authorization Act for Fiscal Year 2011 (Public Law 111–383; 10 U.S.C. 2302 note [now 10 U.S.C. 3841 note prec.]) made by this section."

Pub. L. 111–383, div. A, title VIII, §893, Jan. 7, 2011, 124 Stat. 4311, as amended by Pub. L. 112–81, div. A, title VIII, §816, Dec. 31, 2011, 125 Stat. 1493; Pub. L. 113–291, div. A, title X, §1071(b)(1)(C), Dec. 19, 2014, 128 Stat. 3505; Pub. L. 114–328, div. A, title VIII, §893, Dec. 23, 2016, 130 Stat. 2324; Pub. L. 115–91, div. A, title X, §1081(d)(8), Dec. 12, 2017, 131 Stat. 1600; Pub. L. 115–232, div. A, title VIII, §824(a), Aug. 13, 2018, 132 Stat. 1856; Pub. L. 116–283, div. A, title VIII, §806, Jan. 1, 2021, 134 Stat. 3742, provided that:

"(a) Improvement Program.—The Secretary of Defense shall develop and initiate a program for the improvement of contractor business systems to ensure that such systems provide timely, reliable information for the management of Department of Defense programs by the contractor and by the Department.

"(b) Approval or Disapproval of Business Systems.—The program developed pursuant to subsection (a) shall—

"(1) include clear and specific business system requirements that are identified and made publicly available for each type of contractor business system covered by the program;

"(2) establish a process for reviewing contractor business systems and identifying material weaknesses in such systems;

"(3) identify officials of the Department of Defense who are responsible for the approval or disapproval of contractor business systems;

"(4) provide for the approval of any contractor business system that does not have a material weakness; and

"(5) provide for—

"(A) the disapproval of any contractor business system that has a material weakness; and

"(B) reduced reliance on, and enhanced scrutiny of, data provided by a contractor business system that has been disapproved.

"(c) Review by Third-party Independent Auditors.—The review process for contractor business systems pursuant to subsection (b)(2) shall—

"(1) if a registered public accounting firm attests to the internal control assessment of a contractor, pursuant to section 404(b) of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7262(b)), allow the contractor, subject to paragraph (3), to submit certified documentation from such registered public accounting firm that the contractor business systems of the contractor meet the business system requirements referred to in subsection (b)(1) and to thereby eliminate the need for further review of the contractor business systems by the Secretary of Defense;

"(2) limit the review, subject to paragraph (3), of the contractor business systems of a contractor that is not a covered contractor to confirming that the contractor uses the same contractor business system for its Government and commercial work and that the outputs of the contractor business system based on statistical sampling are reasonable; and

"(3) allow a milestone decision authority to require a review of a contractor business system of a contractor that submits documentation pursuant to paragraph (1) or that is not a covered contractor after determining in writing that such a review is necessary to appropriately manage contractual risk.

"(d) Remedial Actions.—The program developed pursuant to subsection (a) shall provide the following:

"(1) In the event a contractor business system is disapproved pursuant to subsection (b)(5), appropriate officials of the Department of Defense will be available to work with the contractor to develop a corrective action plan defining specific actions to be taken to address the material weaknesses identified in the system and a schedule for the implementation of such actions.

"(2) An appropriate official of the Department of Defense may withhold up to 10 percent of progress payments, performance-based payments, and interim payments under covered contracts from a covered contractor, as needed to protect the interests of the Department and ensure compliance, if one or more of the contractor business systems of the contractor has been disapproved pursuant to subsection (b)(5) and has not subsequently received approval.

"(3) The amount of funds to be withheld under paragraph (2) shall be reduced if a contractor adopts an effective corrective action plan pursuant to paragraph (1) and is effectively implementing such plan.

"(e) Guidance and Training.—The program developed pursuant to subsection (a) shall provide guidance and training to appropriate government officials on the data that is produced by contractor business systems and the manner in which such data should be used to effectively manage Department of Defense programs.

"(f) Rule of Construction.—Nothing in this section shall be construed to prohibit an official of the Department of Defense from reviewing, approving, or disapproving a contractor business system pursuant to any applicable law or regulation in force as of the date of the enactment of this Act during the period between the date of the enactment of this Act and the date on which the Secretary implements the requirements of this section with respect to such system.

"(g) Definitions.—In this section:

"(1) The term 'contractor business system' means an accounting system, estimating system, purchasing system, earned value management system, material management and accounting system, or property management system of a contractor.

"(2) The term 'covered contractor' means a contractor that has covered contracts with the United States Government accounting for greater than 1 percent of its total gross revenue, except that the term does not include any contractor that is exempt, under section 1502 of title 41, United States Code, or regulations implementing that section, from using full cost accounting standards established in that section.

"(3) The term 'covered contract' means a contract that is subject to the cost accounting standards promulgated pursuant to section 1502 of title 41, United States Code, that could be affected if the data produced by a contractor business system has a material weakness.

"(4) The term 'material weakness' means a deficiency or combination of deficiencies in the internal control over information in contractor business systems, such that there is a reasonable possibility that a material misstatement of such information will not be prevented, or detected and corrected, on a timely basis. For purposes of this paragraph, a reasonable possibility exists when the likelihood of an event occurring—

"(A) is probable; or

"(B) is more than remote but less than likely.

"(5) The term 'approved purchasing system' has the meaning given the term in section 44.101 of the Federal Acquisition Regulation (or any similar regulation).

"(h) Defense Contract Audit Agency Legal Resources and Expertise.—

"(1) Requirement.—The Secretary of Defense shall ensure that—

"(A) the Defense Contract Audit Agency has sufficient legal resources and expertise to conduct its work in compliance with applicable Department of Defense policies and procedures; and

"(B) such resources and expertise are provided in a manner that is consistent with the audit independence of the Defense Contract Audit Agency.

"(2) Report.—Not later than 180 days after the date of the enactment of this Act, the Secretary shall submit to the Committees on Armed Services of the Senate and the House of Representatives a report on the steps taken to comply with the requirements of this subsection.

"(i) Consent to Subcontract.—If the contractor on a Department of Defense contract requiring a contracting officer's written consent prior to the contractor entering into a subcontract has an approved purchasing system, the contracting officer may not withhold such consent without the written approval of the program manager."

[Pub. L. 115–91, div. A, title X, §1081(d), Dec. 12, 2017, 131 Stat. 1599, provided that the amendment made by section 1081(d)(8) to section 893(c) of Pub. L. 114–328 (which amended section 893 of Pub. L. 111–383, set out above) is effective as of Dec. 23, 2016, and as if included in Pub. L. 114–328 as enacted.]

§3841. Examination of records of contractor

(a) Records Defined.—In this section, the term "records" includes books, documents, accounting procedures and practices, and other data, regardless of type and regardless of whether such items are in written form, in the form of computer data, or in any other form.

(b) Agency Authority.—

(1) The head of an agency, acting through an authorized representative, is authorized to inspect the plant and audit the records of—

(A) a contractor performing a cost-reimbursement, incentive, time-and-materials, labor-hour, or price-redeterminable contract, or any combination of such contracts, made by that agency under a chapter 137 legacy provision; and

(B) a subcontractor performing any cost-reimbursement, incentive, time-and-materials, labor-hour, or price-redeterminable subcontract or any combination of such subcontracts under a contract referred to in subparagraph (A).

(2) The head of an agency, acting through an authorized representative, is authorized, for the purpose of evaluating the accuracy, completeness, and currency of certified cost or pricing data required to be submitted pursuant to chapter 271 of this title with respect to a contract or subcontract, to examine all records of the contractor or subcontractor related to—

(A) the proposal for the contract or subcontract;

(B) the discussions conducted on the proposal;

(D) performance of the contract or subcontract.

(1) Authority to require the production of records.—The Director of the Defense Contract Audit Agency (or any successor agency) may require by subpoena the production of any records of a contractor that the Secretary of Defense is authorized to audit or examine under subsection (b).

(2) Enforcement of subpoena.—Any such subpoena, in the case of contumacy or refusal to obey, shall be enforceable by order of an appropriate United States district court.

(3) Authority not delegable.—The authority provided by paragraph (1) may not be redelegated.

(d) Comptroller General Authority.—

(1) In general.—Except as provided in paragraph (2), each contract awarded after using procedures other than sealed bid procedures shall provide that the Comptroller General and his representatives are authorized to examine any records of the contractor, or any of its subcontractors, that directly pertain to, and involve transactions relating to, the contract or subcontract and to interview any current employee regarding such transactions.

(2) Exception for foreign contractor or subcontractor.—Paragraph (1) does not apply to a contract or subcontract with a foreign contractor or foreign subcontractor if the head of the agency concerned determines, with the concurrence of the Comptroller General or his designee, that the application of that paragraph to the contract or subcontract would not be in the public interest. However, the concurrence of the Comptroller General or his designee is not required—

(A) where the contractor or subcontractor is a foreign government or agency thereof or is precluded by the laws of the country involved from making its records available for examination; and

(B) where the head of the agency determines, after taking into account the price and availability of the property and services from United States sources, that the public interest would be best served by not applying paragraph (1).

(3) Additional records not required.—Paragraph (1) may not be construed to require a contractor or subcontractor to create or maintain any record that the contractor or subcontractor does not maintain in the ordinary course of business or pursuant to another provision of law.

(e) Limitation on Audits Relating to Indirect Costs.—The head of an agency may not perform an audit of indirect costs under a contract, subcontract, or modification before or after entering into the contract, subcontract, or modification in any case in which the contracting officer determines that the objectives of the audit can reasonably be met by accepting the results of an audit that was conducted by any other department or agency of the Federal Government within one year preceding the date of the contracting officer's determination.

(f) Limitation.—The authority of the head of an agency under subsection (b), and the authority of the Comptroller General under subsection (d), with respect to a contract or subcontract shall expire three years after final payment under such contract or subcontract.

(g) Inapplicability to Certain Contracts.—This section does not apply to the following contracts:

(1) Contracts for utility services at rates not exceeding those established to apply uniformly to the public, plus any applicable reasonable connection charge.

(2) A contract or subcontract that is for an amount not greater than the simplified acquisition threshold.

(h) Forms of Original Record Storage.—Nothing in this section shall be construed to preclude a contractor from duplicating or storing original records in electronic form.

(i) Use of Images of Original Records.—The head of an agency shall not require a contractor or subcontractor to provide original records in an audit carried out pursuant to this section if the contractor or subcontractor provides photographic or electronic images of the original records and meets the following requirements:

(1) The contractor or subcontractor has established procedures to ensure that the imaging process preserves the integrity, reliability, and security of the original records.

(2) The contractor or subcontractor maintains an effective indexing system to permit timely and convenient access to the imaged records.

(3) The contractor or subcontractor retains the original records for a minimum of one year after imaging to permit periodic validation of the imaging systems.

(Added and amended Pub. L. 116–283, div. A, title XVIII, §1835(a), (b), Jan. 1, 2021, 134 Stat. 4239.)

Editorial Notes

Codification

The text of subsecs. (a), (e), (g), (h), and (i) of section 2313 of this title, which were transferred to this section, redesignated as subsecs. (b), (f), (h), (i), and (j), respectively, and amended by Pub. L. 116–283, §1835(b)(1)–(3), (6), was based on Pub. L. 103–355, title II, §2201(a)(1), Oct. 13, 1994, 108 Stat. 3316, which amended section 2313 generally.

The text of subsec. (b) of section 2313 of this title, which was transferred to this section, redesignated as subsec. (c), and amended by Pub. L. 116–283, §1835(b)(1), (4), was based on Pub. L. 103–355, title II, §2201(a)(1), Oct. 13, 1994, 108 Stat. 3316; Pub. L. 104–106, div. A, title XV, §1502(a)(1), Feb. 10, 1996, 110 Stat. 502; Pub. L. 106–65, div. A, title X, §1032(a)(2), Oct. 5, 1999, 113 Stat. 751.

The text of subsec. (c) of section 2313 of this title, which was transferred to this section, redesignated as subsec. (d), and amended by Pub. L. 116–283, §1835(b)(1), (5), was based on Pub. L. 103–355, title II, §2201(a)(1), Oct. 13, 1994, 108 Stat. 3317; Pub. L. 110–417, [div. A], title VIII, §871(b), Oct. 14, 2008, 122 Stat. 4555.

The text of subsec. (d) of section 2313 of this title, which was transferred to this section and redesignated as subsec. (e) by Pub. L. 116–283, §1835(b)(1), was based on Pub. L. 104–201, div. A, title VIII, §808(a), Sept. 23, 1996, 110 Stat. 2607, which amended subsec. (d) generally.

The text of subsec. (f) of section 2313 of this title, which was transferred to this section and redesignated as subsec. (e) by Pub. L. 116–283, §1835(b)(1), was based on Pub. L. 103–355, title II, §2201(a)(1), title IV, §4102(c), Oct. 13, 1994, 108 Stat. 3317, 3340.

Prior Provisions

A prior section 3841, added Pub. L. 85–861, §1(94), Sept. 2, 1958, 72 Stat. 1483, related to separation or transfer to retired reserve of reserve nurses and medical specialists at age 50 if in a reserve grade below major, prior to repeal by Pub. L. 86–559, §1(22), June 30, 1960, 74 Stat. 271.

Amendments

2021—Subsec. (a). Pub. L. 116–283, §1835(b)(2), redesignated subsec. (i) of section 2313 of this title as subsec. (a) of this section.

Subsec. (b). Pub. L. 116–283, §1835(b)(1), (3), redesignated subsec. (a) of section 2313 of this title as subsec. (b) of this section, realigned margins of pars. (1) and (2), and substituted "made by that agency under a chapter 137 legacy provision" for "made by that agency under this chapter" in par. (1)(A) and "chapter 271" for "section 2306a" in par. (2).

Subsec. (c). Pub. L. 116–283, §1835(b)(1), (4), redesignated subsec. (b) of section 2313 of this title as subsec. (c) of this section, inserted heading and substituted "subsection (b)" for "subsection (a)" in par. (1), and inserted headings and realigned margins of pars. (2) and (3).

Subsec. (d). Pub. L. 116–283, §1835(b)(1), (5), redesignated subsec. (c) of section 2313 of this title as subsec. (d) of this section and inserted headings and realigned margins of pars. (1) to (3).

Subsec. (e). Pub. L. 116–283, §1835(b)(1), redesignated subsec. (d) of section 2313 of this title as subsec. (e) of this section.

Subsec. (f). Pub. L. 116–283, §1835(b)(1), (6), redesignated subsec. (e) of section 2313 of this title as subsec. (f) of this section and substituted "subsection (b)" for "subsection (a)" and "subsection (d)" for "subsection (c)".

Subsecs. (g) to (i). Pub. L. 116–283, §1835(b)(1), redesignated subsecs. (f) to (h) of section 2313 of this title as subsecs. (g) to (i), respectively, of this section.

Statutory Notes and Related Subsidiaries

Effective Date

Section and 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 an Effective Date of 2021 Amendment note preceding section 3001 of this title.

Exception From Records Examination Requirement

Requirements under subsecs. (b)(2)(A)–(C) and (c) of this section (former subsecs. (a)(2)(A)–(C) and (b) of section 2313 of this title) not applicable to certain contracts valued at less than $7,500,000 awarded to small business or nontraditional defense contractors, with certain exceptions, see section 873(b) of Pub. L. 114–92, set out in a Pilot Program for Streamlining Awards for Innovative Technology Projects note under section 3702 of this title.

Department of Defense Access to, Use of, and Safeguards and Protections for Contractor Internal Audit Reports

Pub. L. 112–239, div. A, title VIII, §832, Jan. 2, 2013, 126 Stat. 1844, provided that:

"(a) Revised Guidance Required.—Not later than 180 days after the date of the enactment of this Act [Jan. 2, 2013], the Director of the Defense Contract Audit Agency shall revise guidance on access to defense contractor internal audit reports (including the Contract Audit Manual) to incorporate the requirements of this section.

"(b) Documentation Requirements.—The revised guidance shall ensure that requests for access to defense contractor internal audit reports are appropriately documented. The required documentation shall include, at a minimum, the following:

"(1) Written determination that access to such reports is necessary to complete required evaluations of contractor business systems.

"(2) A copy of any request from the Defense Contract Audit Agency to a contractor for access to such reports.

"(3) A record of response received from the contractor, including the contractor's rationale or justification if access to requested reports was not granted.

"(b) [sic] Safeguards and Protections.—The revised guidance shall include appropriate safeguards and protections to ensure that contractor internal audit reports cannot be used by the Defense Contract Audit Agency for any purpose other than evaluating and testing the efficacy of contractor internal controls and the reliability of associated contractor business systems.

"(c) Risk-based Auditing.—A determination by the Defense Contract Audit Agency that a contractor has a sound system of internal controls shall provide the basis for increased reliance on contractor business systems or a reduced level of testing with regard to specific audits, as appropriate. Internal audit reports provided by a contractor pursuant to this section may be considered in determining whether or not a contractor has a sound system of internal controls, but shall not be the sole basis for such a determination.

"(d) Comptroller General Review.—Not later than one year after the date of the enactment of this Act, the Comptroller General of the United States shall initiate a review of the documentation required by subsection (a). Not later than 90 days after completion of the review, the Comptroller General 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 results of the review, with findings and recommendations for improving the audit processes of the Defense Contract Audit Agency."

Executive Documents

Exemption of Functions

Functions with respect to purchases authorized to be made outside limits of United States or District of Columbia under Foreign Assistance Act of 1961, as amended, as exempt, see Ex. Ord. No. 11223, May 12, 1965, 30 F.R. 6635, set out as a note under section 2393 of Title 22, Foreign Relations and Intercourse.

Foreign Contractors

Secretaries of Defense, Army, Navy, or Air Force, or their designees, to determine, prior to exercising authority provided in amendment of this section by Pub. L. 89–607 to exempt certain contracts with foreign contractors from requirement of an examination-of-records clause, that all reasonable efforts have been made to include such examination-of-records clause, as required by par. (11) of Part I of Ex. Ord. No. 10789, and that alternate sources of supply are not reasonably available, see par. (11) of Part I of Ex. Ord. No. 10789, Nov. 14, 1958, 23 F.R. 8897, as amended, set out as a note under section 1431 of Title 50, War and National Defense.

§3842. Performance of incurred cost audits

(a) Compliance With Standards of Risk and Materiality.—Not later than October 1, 2020, the Secretary of Defense shall comply with commercially accepted standards of risk and materiality in the performance of each incurred cost audit of costs associated with a contract of the Department of Defense.

(b) Conditions for the Use of Qualified Auditors to Perform Incurred Cost Audits.—(1) To support the need of the Department of Defense for timely and effective incurred cost audits, and to ensure that the Defense Contract Audit Agency is able to allocate resources to higher-risk and more complex audits, the Secretary of Defense shall use qualified private auditors to perform a sufficient number of incurred cost audits of contracts of the Department of Defense to—

(A) eliminate, by October 1, 2020, any backlog of incurred cost audits of the Defense Contract Audit Agency;

(B) ensure that incurred cost audits are completed not later than one year after the date of receipt of a qualified incurred cost submission;

(C) maintain an appropriate mix of Government and private sector capacity to meet the current and future needs of the Department of Defense for the performance of incurred cost audits;

(D) ensure that qualified private auditors perform incurred cost audits on an ongoing basis to improve the efficiency and effectiveness of the performance of incurred cost audits; and

(E) limit multiyear auditing to ensure that multiyear auditing is conducted only—

(i) to address outstanding incurred cost audits for which a qualified incurred cost submission was submitted to the Defense Contract Audit Agency more than 12 months before the date of the enactment of this section; or

(ii) when the contractor being audited submits a written request, including a justification for the use of multiyear auditing, to the Under Secretary of Defense (Comptroller).

(2) The Secretary of Defense shall consult with Federal agencies that have awarded contracts or task orders to qualified private auditors to ensure that the Department of Defense is using, as appropriate, best practices relating to contracting with qualified private auditors.

(3) The Secretary of Defense shall ensure that a qualified private auditor performing an incurred cost audit under this section—

(A) has no conflict of interest in performing such an audit, as defined by generally accepted government auditing standards;

(B) possesses the necessary independence to perform such an audit, as defined by generally accepted government auditing standards;

(D) accesses and uses proprietary or nonpublic data furnished to the qualified private auditor only for the purposes stated in the contract;

(E) takes all reasonable steps to protect proprietary and nonpublic data furnished during the audit; and

(F) does not use proprietary or nonpublic data provided to the qualified private auditor under the authority of this section to compete for Government or nongovernment contracts.

(c) Procedures for the Use of Qualified Private Auditors.—(1) Not later than October 1, 2018, the Secretary of Defense shall submit to the congressional defense committees a plan to implement the requirements of subsection (b). Such plan shall include, at a minimum—

(A) a description of the incurred cost audits that the Secretary determines are appropriate to be conducted by qualified private auditors, including the approximate number and dollar value of such incurred cost audits;

(B) an estimate of the number and dollar value of incurred cost audits to be conducted by qualified private auditors for each of the fiscal years 2019 through 2025 necessary to meet the requirements of subsection (b); and

(2) Not later than April 1, 2019, the Secretary of Defense or a Federal department or agency authorized by the Secretary shall award a contract or issue a task order under an existing contract to two or more qualified private auditors to perform incurred cost audits of costs associated with contracts of the Department of Defense. The Defense Contract Management Agency or a contract administration office of a military department shall use a contract or a task order awarded or issued pursuant to this paragraph for the performance of an incurred cost audit, if doing so will assist the Secretary in meeting the requirements in subsection (b).

(3) To improve the quality of incurred cost audits and reduce duplication of performance of such audits, the Secretary of Defense may provide a qualified private auditor with information on past or ongoing audit results or other relevant information on the entities the qualified private auditor is auditing.

(4) The Secretary of Defense shall consider the results of an incurred cost audit performed under this section without regard to whether the Defense Contract Audit Agency or a qualified private auditor performed the audit.

(5) The contracting officer for a contract that is the subject of an incurred cost audit shall have the sole discretion to determine what action should be taken based on an audit finding on direct costs of the contract.

(d) Qualified Private Auditor Requirements.—(1) A qualified private auditor awarded a contract or issued a task order under subsection (c)(2) shall conduct an incurred cost audit in accordance with the generally accepted government auditing standards.

(2) A qualified private auditor awarded a contract or issued a task order under subsection (c)(2) shall develop and maintain complete and accurate working papers on each incurred cost audit. All working papers and reports on the incurred cost audit prepared by such qualified private auditor shall be the property of the Department of Defense, except that the qualified private auditor may retain a complete copy of all working papers to support such reports made pursuant to this section.

(3) A breach of contract by a qualified private auditor with respect to use of proprietary or nonpublic data may subject the qualified private auditor to—

(A) criminal, civil, administrative, and contractual actions for penalties, damages, and other appropriate remedies by the United States; and

(B) civil actions for damages and other appropriate remedies by the contractor or subcontractor whose data are affected by the breach.

(e) Peer Review.—(1) Effective October 1, 2022, the Defense Contract Audit Agency may issue unqualified audit findings for an incurred cost audit only if the Defense Contract Audit Agency is peer reviewed by a commercial auditor and passes such peer review. Such peer review shall be conducted in accordance with the peer review requirements of generally accepted government auditing standards, including the requirements related to frequency of peer reviews, and shall be deemed to meet the requirements of the Defense Contract Audit Agency for a peer review under such standards.

(2) Not later than October 1, 2019, the Secretary of Defense shall provide to the Committees on Armed Services of the Senate and the House of Representatives an update on the process of securing a commercial auditor to perform the peer review referred to in paragraph (1).

(f) Numeric Materiality Standards for Incurred Cost Audits.—(1) Not later than October 1, 2020, the Department of Defense shall implement numeric materiality standards for incurred cost audits to be used by auditors that are consistent with commercially accepted standards of risk and materiality.

(2) Not later than October 1, 2019, the Secretary of Defense shall submit to the congressional defense committees a report containing proposed numeric materiality standards required under paragraph (1). In developing such standards, the Secretary shall consult with commercial auditors that conduct incurred cost audits, the advisory panel authorized under section 809 of the National Defense Authorization Act for Fiscal Year 2016 (Public Law 114–92; 129 Stat. 889), and other governmental and nongovernmental entities with relevant expertise.

(g) Timeliness of Incurred Cost Audits.—(1) The Secretary of Defense shall ensure that all incurred cost audits performed by qualified private auditors or the Defense Contract Audit Agency are performed in a timely manner.

(2) The Secretary of Defense shall notify a contractor of the Department of Defense within 60 days after receipt of an incurred cost submission from the contractor whether the submission is a qualified incurred cost submission.

(3) With respect to qualified incurred cost submissions received on or after the date of the enactment of this section, audit findings shall be issued for an incurred cost audit not later than one year after the date of receipt of such qualified incurred cost submission.

(4) Not later than October 1, 2020, and subject to paragraph (5), if audit findings are not issued within one year after the date of receipt of a qualified incurred cost submission, the audit shall be considered to be complete and no additional audit work shall be conducted.

(5) The Under Secretary of Defense (Comptroller) may waive the requirements of paragraph (4) on a case-by-case basis if the Director of the Defense Contract Audit Agency submits a written request. The Director of the Defense Contract Audit Agency shall include in the report required under section 3847 of this title the total number of waivers issued and the reasons for issuing each such waiver.

(h) Review of Audit Performance.—Not later than April 1, 2025, the Comptroller General of the United States shall submit to the congressional defense committees a report that evaluates for the period beginning on October 1, 2019, and ending on August 31, 2023—

(1) the timeliness, individual cost, and quality of incurred cost audits, set forth separately by incurred cost audits performed by the Defense Contract Audit Agency and by qualified private auditors;

(2) the cost to contractors of the Department of Defense for incurred cost audits, set forth separately by incurred cost audits performed by the Defense Contract Audit Agency and by qualified private auditors;

(3) the effect, if any, on other types of audits conducted by the Defense Contract Audit Agency that results from incurred cost audits conducted by qualified private auditors; and

(4) the capability and capacity of qualified private auditors to conduct incurred cost audits for the Department of Defense.

(i) Definitions.—In this section:

(1) The term "commercial auditor" means a private entity engaged in the business of performing audits.

(2) The term "incurred cost audit" means an audit of charges to the Government by a contractor under a flexibly priced contract.

(3) The term "flexibly priced contract" has the meaning given the term "flexibly-priced contracts and subcontracts" in part 30 of the Federal Acquisition Regulation (section 30.001 of title 48, Code of Federal Regulations).

(4) The term "generally accepted government auditing standards" means the generally accepted government auditing standards of the Comptroller General of the United States.

(5) The term "numeric materiality standard" means a dollar amount of misstatements, including omissions, contained in an incurred cost audit that would be material if the misstatements, individually or in the aggregate, could reasonably be expected to influence the economic decisions of the Government made on the basis of the incurred cost audit.

(6) The term "qualified incurred cost submission" means a submission by a contractor of costs incurred under a flexibly priced contract that has been qualified by the Department of Defense as sufficient to conduct an incurred cost audit.

(7) The term "qualified private auditor" means a commercial auditor—

(A) that performs audits in accordance with generally accepted government auditing standards; and

(B) that has received a passing peer review rating, as defined by generally accepted government auditing standards.

(Added Pub. L. 115–91, div. A, title VIII, §803(a), Dec. 12, 2017, 131 Stat. 1451, §2313b; amended Pub. L. 115–232, div. A, title X, §1081(a)(19), Aug. 13, 2018, 132 Stat. 1984; Pub. L. 116–92, div. A, title XVII, §1731(a)(41), Dec. 20, 2019, 133 Stat. 1814; renumbered §3842 and amended Pub. L. 116–283, div. A, title XVIII, §1835(c), (d)(1), Jan. 1, 2021, 134 Stat. 4240.)

Editorial Notes

References in Text

The date of the enactment of this section, referred to in subsecs. (b)(1)(E)(i) and (g)(3), is the date of enactment of Pub. L. 115–91, which was approved Dec. 12, 2017.

Section 809 of the National Defense Authorization Act for Fiscal Year 2016, referred to in subsec. (f)(2), is section 809 of Pub. L. 114–92, div. A, title VIII, Nov. 25, 2015, 129 Stat. 889, which relates to the establishment of an advisory panel on streamlining acquisition regulations and is not classified to the Code.

Prior Provisions

A prior section 3842, added Pub. L. 85–861, §1(94), Sept. 2, 1958, 72 Stat. 1483, related to separation or transfer to Retired Reserve of Reserve nurses and medical specialists at age 55 if in a reserve grade above captain, prior to repeal by Pub. L. 86–559, §1(22), June 30, 1960, 74 Stat. 271.

Amendments

2021—Pub. L. 116–283, §1835(c), renumbered section 2313b of this title as this section.

Subsec. (g)(5). Pub. L. 116–283, §1835(d)(1), substituted "section 3847" for "section 2313a".

2019—Subsec. (d)(1), (2). Pub. L. 116–92 substituted "a task order" for "an task order".

2018—Subsec. (b)(1)(E). Pub. L. 115–232 redesignated cls. (A) and (B) as (i) and (ii), respectively.

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.

§3843. [Reserved]

(Added Pub. L. 116–283, div. A, title XVIII, §1835(e)(1), Jan. 1, 2021, 134 Stat. 4241; amended Pub. L. 117–81, div. A, title XVII, §1701(i)(7)(B)(i), Dec. 27, 2021, 135 Stat. 2142.)

Editorial Notes

Prior Provisions

A prior section 3843, added Pub. L. 85–861, §1(94), Sept. 2, 1958, 72 Stat. 1483; amended Pub. L. 86–559, §1(23), June 30, 1960, 74 Stat. 271; Pub. L. 99–145, title XIII, §1303(a)(20)(A), Nov. 8, 1985, 99 Stat. 739, related to transfer or discharge of reserve commissioned officers below grade of major general, prior to repeal by Pub. L. 103–337, div. A, title XVI, §§1629(a)(3), 1691(b)(1), Oct. 5, 1994, 108 Stat. 2963, 3026, effective Oct. 1, 1996. See sections 14509 and 14510 of this title.

Amendments

2021—Pub. L. 117–81, §1701(i)(7)(B)(i), amended Pub. L. 116–283, §1835(e)(1), which enacted this section, by adding section 3843 designation and catchline "[Reserved]" and striking out former section 3843 designation and catchline "Contractor internal audit reports: Department of Defense access to, use of, and safeguards and protections for".

Statutory Notes and Related Subsidiaries

Effective Date of 2021 Amendment

Amendment made to Pub. L. 116–283 by Pub. L. 117–81, resulting in omission of this section, 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 Effective Date note below.

Effective Date

Section 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 an Effective Date of 2021 Amendment note preceding section 3001 of this title.

§3844. [Reserved]

(Added Pub. L. 116–283, div. A, title XVIII, §1835(e)(1), Jan. 1, 2021, 134 Stat. 4241; amended Pub. L. 117–81, div. A, title XVII, §1701(i)(7)(B)(i), Dec. 27, 2021, 135 Stat. 2142.)

Editorial Notes

Prior Provisions

A prior section 3844, added Pub. L. 85–861, §1(94), Sept. 2, 1958, 72 Stat. 1484; amended Pub. L. 86–559, §1(24), June 30, 1960, 74 Stat. 271, related to transfer or discharge of certain reserve major generals and brigadier generals who are 62 years old, prior to repeal by Pub. L. 103–337, div. A, title XVI, §§1629(a)(3), 1691(b)(1), Oct. 5, 1994, 108 Stat. 2963, 3026, effective Oct. 1, 1996. See section 14511 of this title.

Amendments

2021—Pub. L. 117–81, §1701(i)(7)(B)(i), amended Pub. L. 116–283, §1835(e)(1), which enacted this section, by adding section 3844 designation and catchline "[Reserved]" and striking out former section 3844 designation and catchline "Contractor business systems".

Statutory Notes and Related Subsidiaries

Effective Date of 2021 Amendment

Effective Date

§3845. Contractor inventory accounting systems: standards

(a) The Secretary of Defense shall prescribe in regulations—

(1) standards for inventory accounting systems used by contractors under contract with the Department of Defense; and

(2) appropriate enforcement requirements with respect to such standards.

(b) The regulations prescribed pursuant to subsection (a) shall not apply to a contract that is for an amount not greater than the simplified acquisition threshold.

(c) The regulations prescribed pursuant to subsection (a) shall not apply to a contract for the purchase of commercial products.

(Added Pub. L. 100–456, div. A, title VIII, §834(a)(1), Sept. 29, 1988, 102 Stat. 2024, §2410b; amended Pub. L. 103–355, title IV, §4102(h), title VIII, §8105(i), Oct. 13, 1994, 108 Stat. 3341, 3393; Pub. L. 104–106, div. D, title XLIII, §4301(a)(1), Feb. 10, 1996, 110 Stat. 656; Pub. L. 104–201, div. A, title X, §1074(b)(3), Sept. 23, 1996, 110 Stat. 2660; Pub. L. 111–350, §5(b)(28), Jan. 4, 2011, 124 Stat. 3845; Pub. L. 115–232, div. A, title VIII, §836(e)(6), Aug. 13, 2018, 132 Stat. 1870; renumbered §3845 and amended Pub. L. 116–283, div. A, title XVIII, §1835(c), (d)(2), Jan. 1, 2021, 134 Stat. 4240.)

Editorial Notes

Prior Provisions

A prior section 3845, added Pub. L. 85–861, §1(94), Sept. 2, 1958, 72 Stat. 1484; amended Pub. L. 100–456, div. A, title XII, §1234(a)(1), Sept. 29, 1988, 102 Stat. 2059, related to transfer or discharge of certain officers of Army National Guard of United States who are 64 years of age, prior to repeal Pub. L. 103–337, div. A, title XVI, §§1629(a)(3), 1691(b)(1), Oct. 5, 1994, 108 Stat. 2963, 3026, effective Oct. 1, 1996. See section 14512(a) of this title.

Amendments

2021—Pub. L. 116–283, §1835(c), renumbered section 2410b of this title as this section.

Subsec. (c). Pub. L. 116–283, §1835(d)(2), struck out "(as defined in section 103 of title 41)" after "commercial products".

2018—Subsec. (c). Pub. L. 115–232 substituted "commercial products" for "commercial items".

2011—Subsec. (c). Pub. L. 111–350 substituted "section 103 of title 41)" for "section 4(12) of the Office of Federal Procurement Policy Act (41 U.S.C. 403(12)))".

1996—Subsec. (a)(2). Pub. L. 104–106, as amended by Pub. L. 104–201, struck out "certification and" after "appropriate".

1994—Subsecs. (a), (b). Pub. L. 103–355, §4102(h), designated existing provisions as subsec. (a) and added subsec. (b).

Subsec. (c). Pub. L. 103–355, §8105(i), added subsec. (c).

Statutory Notes and Related Subsidiaries

Effective Date of 2021 Amendment

Effective Date of 2018 Amendment

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

Effective Date of 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.

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.

Regulations

Pub. L. 100–456, div. A, title VIII, §834(b), Sept. 29, 1988, 102 Stat. 2025, provided that:

"(1) The Secretary of Defense shall prescribe the regulations required by paragraph (1) of section 2410b of title 10, United States Code [now 10 U.S.C. 3845(a)(1)], as added by subsection (a), not later than 30 days after the date of the enactment of this Act [Sept. 29, 1988].

"(2) The Secretary of Defense shall prescribe the regulations required by paragraph (2) of section 2410b of title 10, United States Code [now 10 U.S.C. 3845(a)(2)], as added by subsection (a), not later than 180 days after the date of the enactment of this Act."

§3846. [Reserved]

(Added Pub. L. 116–283, div. A, title XVIII, §1835(e)(2), Jan. 1, 2021, 134 Stat. 4241; amended Pub. L. 117–81, div. A, title XVII, §1701(i)(7)(B)(ii), Dec. 27, 2021, 135 Stat. 2142.)

Editorial Notes

Prior Provisions

A prior section 3846, added Pub. L. 85–861, §1(94), Sept. 2, 1958, 72 Stat. 1484, related to transfer or discharge of reserve first lieutenants, captains, and majors not recommended for promotion by two selection boards, prior to repeal by Pub. L. 103–337, div. A, title XVI, §§1629(a)(3), 1691(b)(1), Oct. 5, 1994, 108 Stat. 2963, 3026, effective Oct. 1, 1996. See section 14501 et seq. of this title.

Amendments

2021—Pub. L. 117–81, §1701(i)(7)(B)(ii), amended Pub. L. 116–283, §1835(e)(1), which enacted this section, by adding section 3846 designation and catchline "[Reserved]" and striking out former section 3846 designation and catchline "Defense Contract Audit Agency: legal resources and expertise".

Statutory Notes and Related Subsidiaries

Effective Date of 2021 Amendment

Effective Date

§3847. Defense Contract Audit Agency: annual report

(a) Required Report.—The Director of the Defense Contract Audit Agency shall prepare an annual report of the activities of the Agency during the previous fiscal year. The report shall include, at a minimum—

(1) a description of significant problems, abuses, and deficiencies encountered during the conduct of contractor audits;

(2) statistical tables showing—

(A) the total number and dollar value of audit reports completed and pending, set forth separately by type of audit;

(B) the priority given to each type of audit;

(C) the length of time taken for each type of audit, both from the date of receipt of a qualified incurred cost submission and from the date the audit begins;

(D) the sustained questioned costs, set forth separately by type of audit, both as a total value and as a percentage of the total questioned costs for the audit;

(E) the total number and dollar value of incurred cost audits completed, and the method by which such incurred cost audits were completed;

(F) the aggregate cost of performing audits, set forth separately by type of audit;

(G) the ratio of sustained questioned costs to the aggregate costs of performing audits, set forth separately by type of audit; and

(H) the total number and dollar value of audits that are pending for a period longer than one year as of the end of the fiscal year covered by the report, and the fiscal year in which the qualified submission was received, set forth separately by type of audit;

(3) a summary of any recommendations of actions or resources needed to improve the audit process;

(4) a summary, set forth separately by dollar amount and percentage, of indirect costs for independent research and development incurred by contractors in the previous fiscal year;

(5) a summary, set forth separately by dollar amount and percentage, of indirect costs for bid and proposal costs incurred by contractors in the previous fiscal year;

(6) a description of outreach actions toward industry to promote more effective use of audit resources; and

(7) any other matters the Director considers appropriate.

(b) Submission of Annual Report.—Not later than March 30 of each year, the Director shall submit to the congressional defense committees the report required by subsection (a).

(c) Public Availability.—Not later than 60 days after the submission of an annual report to the congressional defense committees under subsection (b), the Director shall make the report available on the publicly available website of the Agency or such other publicly available website as the Director considers appropriate.

(d) Definitions.—

(1) The terms "incurred cost audit" and "qualified incurred cost submission" have the meaning given those terms in section 3842 of this title.

(2) The term "sustained questioned costs" means questioned costs that were recovered by the Federal Government as a result of contract negotiations related to such questioned costs.

(Added Pub. L. 112–81, div. A, title VIII, §805(a), Dec. 31, 2011, 125 Stat. 1486, §2313a; amended Pub. L. 114–92, div. A, title VIII, §893(b), Nov. 25, 2015, 129 Stat. 952; Pub. L. 114–328, div. A, title VIII, §824(d)(1), Dec. 23, 2016, 130 Stat. 2279; Pub. L. 115–91, div. A, title VIII, §811(d)(1), title X, §1081(d)(5), Dec. 12, 2017, 131 Stat. 1460, 1600; renumbered §3847 and amended Pub. L. 116–283, div. A, title XVIII, §1835(c), (d)(3), Jan. 1, 2021, 134 Stat. 4240.)

Editorial Notes

Prior Provisions

A prior section 3847, added Pub. L. 85–861, §1(94), Sept. 2, 1958, 72 Stat. 1484; Pub. L. 86–559, §1(25), June 30, 1960, 74 Stat. 272, provided for transfer to Retired Reserve or discharge from his reserve appointment, after July 1, 1960, of each officer in a reserve grade below lieutenant colonel with 25 years service assigned to Army Nurse Corps, Army Medical Specialist Corps, or Women's Army Corps who had not been recommended for promotion to reserve grade of lieutenant colonel or who has not remained on active duty since such a recommendation, prior to repeal by Pub. L. 90–130, §1(12)(A), Nov. 8, 1967, 81 Stat. 376.

Amendments

2021—Pub. L. 116–283, §1835(c), renumbered section 2313a of this title as this section.

Subsec. (d)(1). Pub. L. 116–283, §1835(d)(3), substituted "section 3842" for "section 2313b".

2017—Subsec. (a)(2)(A). Pub. L. 115–91, §811(d)(1)(A)(i), inserted "and dollar value" after "number" and ", set forth separately by type of audit" after "pending".

Subsec. (a)(2)(C). Pub. L. 115–91, §811(d)(1)(A)(ii), inserted ", both from the date of receipt of a qualified incurred cost submission and from the date the audit begins" after "audit".

Subsec. (a)(2)(D). Pub. L. 115–91, §811(d)(1)(A)(iii), amended subpar. (D) generally. Prior to amendment, subpar. (D) read as follows: "the total costs of sustained or recovered costs both as a total number and as a percentage of questioned costs; and".

Subsec. (a)(2)(E) to (H). Pub. L. 115–91, §811(d)(1)(A)(iv), (v), added subpars. (E) to (H) and struck out former subpar. (E) which read as follows: "an assessment of the number and types of audits pending for a period longer than allowed pursuant to guidance of the Defense Contract Audit Agency;".

Subsec. (a)(4), (5). Pub. L. 115–91, §1081(d)(5), amended Pub. L. 114–328, §824(d)(1)(B). See 2016 Amendment note below.

Subsec. (d). Pub. L. 115–91, §811(d)(1)(B), added subsec. (d).

2016—Subsec. (a)(4), (5). Pub. L. 114–328, §824(d)(1)(B), as amended by Pub. L. 115–91, §1081(d)(5), added pars. (4) and (5). Former pars. (4) and (5) redesignated (6) and (7), respectively.

Subsec. (a)(6), (7). Pub. L. 114–328, §824(d)(1)(A), redesignated pars. (4) and (5) as (6) and (7), respectively.

2015—Subsec. (a)(2)(D). Pub. L. 114–92, §893(b)(1), amended subpar. (D) generally. Prior to amendment, subpar. (D) read as follows: "the total dollar value of questioned costs (including a separate category for the dollar value of unsupported costs); and".

Subsec. (a)(4), (5). Pub. L. 114–92, §893(b)(2)–(4), added par. (4) and redesignated former par. (4) as (5).

Statutory Notes and Related Subsidiaries

Effective Date of 2021 Amendment

Effective Date of 2017 Amendment

Pub. L. 115–91, div. A, title X, §1081(d), Dec. 12, 2017, 131 Stat. 1599, provided that the amendment made by section 1081(d)(5) is effective as of Dec. 23, 2016, and as if included in Pub. L. 114–328 as enacted.

Effective Date of 2016 Amendment

Pub. L. 114–328, div. A, title VIII, §824(d)(2), Dec. 23, 2016, 130 Stat. 2279, provided that: "The amendments made by this subsection [amending this section] shall take effect on October 1, 2018."

§3848. Defense audit agencies: Small Business Ombudsmen

(a) Small Business Ombudsman.—The Secretary of Defense shall designate within each defense audit agency an official as the Small Business Ombudsman to have the duties described in subsection (b) and such other responsibilities as may be determined by the Secretary.

(b) Duties.—The Small Business Ombudsman of a defense audit agency shall—

(1) advise the Director of the defense audit agency on policy issues related to small business concerns;

(2) serve as the defense audit agency's primary point of contact and source of information for small business concerns;

(3) collect and monitor relevant data regarding the defense audit agency's conduct of audits of small business concerns, including—

(A) data regarding the timeliness of audit closeouts for small business concerns; and

(B) data regarding the responsiveness of the defense audit agency to issues or other matters raised by small business concerns; and

(4) make recommendations to the Director regarding policies, processes, and procedures related to the timeliness of audits of small business concerns and the responsiveness of the defense audit agency to issues or other matters raised by small business concerns.

(c) Audit Independence.—The Small Business Ombudsman of a defense audit agency shall be segregated from ongoing audits in the field and shall not engage in activities with regard to particular audits that could compromise the independence of the defense audit agency or undermine compliance with applicable audit standards.

(d) Defense Audit Agency Defined.—In this section, the term "defense audit agency" means the Defense Contract Audit Agency and the Defense Contract Management Agency.

(Added Pub. L. 112–239, div. A, title XVI, §1612(a), Jan. 2, 2013, 126 Stat. 2064, §204; renumbered §3848 and amended Pub. L. 116–283, div. A, title XVIII, §1835(c), (d)(4), Jan. 1, 2021, 134 Stat. 4240.)

Editorial Notes

Prior Provisions

A prior section 3848, added Pub. L. 85–861, §1(94), Sept. 2, 1958, 72 Stat. 1485; amended Pub. L. 86–559, §1(26), June 30, 1960, 74 Stat. 272; Pub. L. 90–130, §1(12)(B), Nov. 8, 1967, 81 Stat. 376; Pub. L. 90–486, §9(1), Aug. 13, 1968, 82 Stat. 760; Pub. L. 95–485, title VIII, §820(h), Oct. 20, 1978, 92 Stat. 1627; Pub. L. 96–513, title V, §512(8), Dec. 12, 1980, 94 Stat. 2929; Pub. L. 99–145, title V, §522(a)(1), title XIII, §1303(a)(20)(B), Nov. 8, 1985, 99 Stat. 631, 739; Pub. L. 100–456, div. A, title XII, §1234(a)(1), Sept. 29, 1988, 102 Stat. 2059, related to transfer or discharge of reserve first lieutenants, captains, majors, and lieutenant colonels with 28 years of service, prior to repeal by Pub. L. 103–337, div. A, title XVI, §§1629(a)(3), 1691(b)(1), Oct. 5, 1994, 108 Stat. 2963, 3026, effective Oct. 1, 1996. See section 14501 et seq. of this title.

A prior section 3849, added Pub. L. 85–861, §1(94), Sept. 2, 1958, 72 Stat. 1485, related to separation or transfer to retired reserve of officers in the reserve grade of lieutenant colonel assigned to the Women's Army Corps upon completion of 28 years of service, prior to repeal by Pub. L. 86–559, §1(27), June 30, 1960, 74 Stat. 272.

Prior sections 3850 to 3855 were repealed by Pub. L. 103–337, div. A, title XVI, §§1629(a)(3), 1691(b)(1), Oct. 5, 1994, 108 Stat. 2963, 3026, effective Oct. 1, 1996.

Section 3850, added Pub. L. 85–861, §1(94), Sept. 2, 1958, 72 Stat. 1485; amended Pub. L. 104–106, div. A, title XV, §1501(c)(25), Feb. 10, 1996, 110 Stat. 499, related to transfer or discharge of excessive reserve commissioned officers in active status with thirty or more years of service. See sections 14514 and 14704 of this title.

Section 3851, added Pub. L. 85–861, §1(94), Sept. 2, 1958, 72 Stat. 1486; amended Pub. L. 86–559, §1(28), June 30, 1960, 74 Stat. 272; Pub. L. 90–486, §9(1), Aug. 13, 1968, 82 Stat. 760; Pub. L. 96–513, title V, §512(8), Dec. 12, 1980, 94 Stat. 2929; Pub. L. 98–525, title V, §513, Oct. 19, 1984, 98 Stat. 2522; Pub. L. 99–145, title V, §522(a)(2), title XIII, §1303(a)(20)(B), Nov. 8, 1985, 99 Stat. 631, 739; Pub. L. 99–661, div. A, title XIII, §1342(g), Nov. 14, 1986, 100 Stat. 3992; Pub. L. 100–456, div. A, title XII, §1234(a)(1), Sept. 29, 1988, 102 Stat. 2059, related to transfer or discharge of reserve colonels and brigadier generals with 30 years of service or five years in grade. See section 14508(a), (e) of this title.

Section 3852, added Pub. L. 85–861, §1(94), Sept. 2, 1958, 72 Stat. 1486; amended Pub. L. 86–559, §1(29), June 30, 1960, 74 Stat. 272; Pub. L. 99–145, title V, §523, title XIII, §1303(a)(20)(B), Nov. 8, 1985, 99 Stat. 632, 739; Pub. L. 100–456, div. A, title XII, §1234(a)(1), Sept. 29, 1988, 102 Stat. 2059, related to transfer or discharge of reserve major generals with 35 years of service or five years in grade. See section 14508(b), (f) of this title.

Section 3853, added Pub. L. 85–861, §1(94), Sept. 2, 1958, 72 Stat. 1486; amended Pub. L. 86–559, §1(30), June 30, 1960, 74 Stat. 273; Pub. L. 86–651, title I, §115, Sept. 7, 1962, 76 Stat. 513; Pub. L. 96–513, title V, §512(9), Dec. 12, 1980, 94 Stat. 2929; Pub. L. 98–94, title X, §1016(a), Sept. 24, 1983, 97 Stat. 668; Pub. L. 103–337, div. A, title XVI, §1635(a), Oct. 5, 1994, 108 Stat. 2968, related to computation of years of service. See section 14706 of this title.

Section 3854, added Pub. L. 85–861, §1(94), Sept. 2, 1958, 72 Stat. 1486, authorized Secretary of the Army to prescribe regulations to carry out this chapter.

Section 3855, added Pub. L. 86–559, §1(31), June 30, 1960, 74 Stat. 273; amended Pub. L. 96–107, title IV, §403(a), Nov. 9, 1979, 93 Stat. 808; Pub. L. 96–513, title II, §215(a), Dec. 12, 1980, 94 Stat. 2885; Pub. L. 100–180, div. A, title VII, §717(a), (d)(1)(A), Dec. 4, 1987, 101 Stat. 1113, 1114; Pub. L. 101–189, div. A, title VII, §§710(a), 711(a), Nov. 29, 1989, 103 Stat. 1476, 1477, related to retention in active status of certain reserve officers. See section 14703(a)(1), (b) of this title.

Amendments

2021—Pub. L. 116–283 renumbered section 204 of this title as this section and substituted "Defense audit agencies: Small Business Ombudsmen" for "Small Business Ombudsman for defense audit agencies" in section catchline.