SUBCHAPTER III—LIMITATIONS ON PROCUREMENT FROM CERTAIN FOREIGN SOURCES
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.
(C) The Secretary shall establish procedures to carry out this paragraph.
(3) The head of an agency shall prohibit each firm or subsidiary of a firm awarded a contract by the agency from entering into a subcontract under that contract in an amount in excess of $25,000 with a firm or subsidiary included on the list maintained under paragraph (1) unless there is a compelling reason to do so. In the case of any subcontract requiring consent by the head of an agency, the head of the agency shall not consent to the award of the subcontract to a firm or subsidiary included on such list unless there is a compelling reason for such approval.
(e) Distribution of List.—The Administrator of General Services shall ensure that the list developed and maintained under subsection (d) is made available to Federal agencies and the public in the same manner and to the same extent as the list of suspended and debarred contractors compiled pursuant to subpart 9.4 of the Federal Acquisition Regulation.
(f) Applicability.—(1) This section does not apply to a contract for an amount less than $100,000.
(2) This section does not apply to the Coast Guard or the National Aeronautics and Space Administration.
(g) Regulations.—The Secretary of Defense, after consultation with the Secretary of State, shall prescribe regulations to carry out this section. Such regulations shall include a definition of the term "significant interest".
(Added Pub. L. 99–500, §101(c) [title X, §951(a)(1)], Oct. 18, 1986, 100 Stat. 1783–82, 1783-164, and Pub. L. 99–591, §101(c) [title X, §951(a)(1)], Oct. 30, 1986, 100 Stat. 3341–82, 3341-164, §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
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 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
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."
§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.
(c) Exceptions.—Subsection (a)(1) does not apply under the following circumstances:
(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;
(C) tungsten metal powder;
(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;
(C) the Russian Federation; and
(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
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 for section 1870(d)(2), (3) of Pub. L. 116–283.
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.
(c) Definitions.—In this section:
(1) Covered nation.—The term "covered nation" means—
(A) the Democratic People's Republic of North Korea;
(B) the People's Republic of China;
(C) the Russian Federation; and
(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.
(c) Definitions.—In this section:
(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
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 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
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.
(c) Exceptions.—
(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.
(C) Purchases for amounts not greater than $150,000.
(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;
(C) the Russian Federation; and
(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."