USC Chapter 363

in effect

10 U.S.C. § 4651 Expenditure of appropriations: limitation

(a) Money appropriated to the Department of Defense may not be spent under a contract other than a contract for personal services unless that contract provides that—(1) the United States may, by written notice to the contractor, terminate the right of the contractor to proceed under the contract if the Secretary concerned or his designee finds, after notice and hearing, that the contractor, or his agent or other representative, offered or gave any gratuity, such as entertainment or a gift, to an officer, official, or employee of the United States to obtain a contract or favorable treatment in the awarding, amending, or making of determinations concerning the performance, of a contract; and (2) if a contract is terminated under clause (1), the United States has the same remedies against the contractor that it would have had if the contractor had breached the contract and, in addition to other damages, is entitled to exemplary damages in an amount at least three, but not more than 10, as determined by the Secretary or his designee, times the cost incurred by the contractor in giving gratuities to the officer, official, or employee concerned. The existence of facts upon which the Secretary makes findings under clause (1) may be reviewed by any competent court. (b) This section does not apply to a contract that is for an amount not greater than the simplified acquisition threshold (as defined in section 134 of title 41).

10 U.S.C. § 4652 Prohibition on use of funds for documenting economic or employment impact of certain acquisition programs

No funds appropriated by the Congress may be obligated or expended to assist any contractor of the Department of Defense in preparing any material, report, lists, or analysis with respect to the actual or projected economic or employment impact in a particular State or congressional district of an acquisition program for which all research, development, testing, and evaluation has not been completed.

10 U.S.C. § 4653 Prohibition on use of funds to relieve economic dislocations

(a) In order to help avoid the uneconomic use of Department of Defense funds in the procurement of goods and services, the Congress finds that it is necessary to prohibit the use of such funds for certain purposes. (b) No funds appropriated to or for the use of the Department of Defense may be used to pay, in connection with any contract awarded by the Department of Defense, a price differential for the purpose of relieving economic dislocations.

10 U.S.C. § 4654 Prohibition against doing business with certain offerors or contractors

(a)(1) Except as provided in paragraph (2), the Secretary of a military department may not solicit an offer from, award a contract to, extend an existing contract with, or, when approval by the Secretary of the award of a subcontract is required, approve the award of a subcontract to, an offeror or contractor which to the Secretary’s knowledge has been debarred or suspended by another Federal agency unless—(A) in the case of debarment, the debarment of the offeror or contractor by all other agencies has been terminated or the period of time specified for such debarment has expired; and (B) in the case of a suspension, the period of time specified by all other agencies for the suspension of the offeror or contractor has expired. (2) Paragraph (1) does not apply in any case in which the Secretary concerned determines that there is a compelling reason to solicit an offer from, award a contract to, extend a contract with, or approve a subcontract with such offeror or contractor. (b) Whenever the Secretary concerned makes a determination described in subsection (a)(2), he shall, at the time of the determination, transmit a notice to the Administrator of General Services describing the determination. The Administrator of General Services shall maintain each such notice on a publicly accessible website to the maximum extent practicable. (c) In this section:(1) The term “debar” means to exclude, pursuant to established administrative procedures, from Government contracting and subcontracting for a specified period of time commensurate with the seriousness of the failure or offense or the inadequacy of performance. (2) The term “suspend” means to disqualify, pursuant to established administrative procedures, from Government contracting and subcontracting for a temporary period of time because a concern or individual is suspected of engaging in criminal, fraudulent, or seriously improper conduct. (d) The Secretary of Defense shall prescribe in regulations a requirement that each contractor under contract with the Department of Defense shall require each contractor to whom it awards a contract (in this section referred to as a subcontractor) to disclose to the contractor whether the subcontractor is or is not, as of the time of the award of the subcontract, debarred or suspended by the Federal Government from Government contracting or subcontracting. The requirement shall apply to any subcontractor whose subcontract is in an amount greater than the simplified acquisition threshold (as defined in section 134 of title 41). The requirement shall not apply in the case of a subcontract for the acquisition of commercial products or commercial services (as defined in sections 103 and 103a, respectively, of title 41).

10 U.S.C. § 4655 Prohibition of contractors limiting subcontractor sales directly to the United States

(a) Each contract for the purchase of supplies or services made by the Department of Defense shall provide that the contractor will not—(1) enter into any agreement with a subcontractor under the contract that has the effect of unreasonably restricting sales by the subcontractor directly to the United States of any item or process (including computer software) made or furnished by the subcontractor under the contract (or any follow-on production contract); or (2) otherwise act to restrict unreasonably the ability of a subcontractor to make sales to the United States described in clause (1). (b) This section does not prohibit a contractor from asserting rights it otherwise has under law. (c) This section does not apply to a contract that is for an amount not greater than the simplified acquisition threshold (as defined in section 134 of title 41). (d)(1) An agreement between the contractor in a contract for the acquisition of commercial products or commercial services and a subcontractor under such contract that restricts sales by such subcontractor directly to persons other than the contractor may not be considered to unreasonably restrict sales by that subcontractor to the United States in violation of the provision included in such contract pursuant to subsection (a) if the agreement does not result in the United States being treated differently with regard to the restriction than any other prospective purchaser of such commercial products or commercial services from that subcontractor. (2) In paragraph (1), the terms “commercial product” and “commercial service” have the meanings given those terms in sections 103 and 103a, respectively, of title 41.

10 U.S.C. § 4656 Prohibition on persons convicted of defense-contract related felonies and related criminal penalty on defense contractors

(a) Prohibition.—(1) An individual who is convicted of fraud or any other felony arising out of a contract with the Department of Defense shall be prohibited from each of the following:(A) Working in a management or supervisory capacity on any defense contract or any first tier subcontract of a defense contract. (B) Serving on the board of directors of any defense contractor or any subcontractor awarded a contract directly by a defense contractor. (C) Serving as a consultant to any defense contractor or any subcontractor awarded a contract directly by a defense contractor. (D) Being involved in any other way, as determined under regulations prescribed by the Secretary of Defense, with a defense contract or first tier subcontract of a defense contract. (2) Except as provided in paragraph (3), the prohibition in paragraph (1) shall apply for a period, as determined by the Secretary of Defense, of not less than five years after the date of the conviction. (3) The prohibition in paragraph (1) may apply with respect to an individual for a period of less than five years if the Secretary determines that the five-year period should be waived in the interests of national security. (4) The prohibition in paragraph (1) does not apply with respect to the following:(A) A contract referred to in subparagraph (A), (B), (C), or (D) of such paragraph that is not greater than the simplified acquisition threshold (as defined in section 134 of title 41). (B) A contract referred to in such subparagraph that is for the acquisition of commercial products or commercial services (as defined in sections 103 and 103a, respectively, of title 41). (C) A subcontract referred to in such subparagraph that is under a contract described in subparagraph (A) or (B). (b) Criminal Penalty.—A defense contractor or subcontractor shall be subject to a criminal penalty of not more than $500,000 if such contractor or subcontractor is convicted of knowingly—(1) employing a person under a prohibition under subsection (a); or (2) allowing such a person to serve on the board of directors of such contractor or subcontractor. (c) Single Point of Contact for Information.—(1) The Attorney General shall ensure that a single point of contact is established to enable a defense contractor or subcontractor to promptly obtain information regarding whether a person that the contractor or subcontractor proposes to use for an activity covered by paragraph (1) of subsection (a) is under a prohibition under that subsection. (2) The procedure for obtaining such information shall be specified in regulations prescribed by the Secretary of Defense under subsection (a).

10 U.S.C. § 4657 Prohibition on criminal history inquiries by contractors prior to conditional offer

(a) Limitation on Criminal History Inquiries.—(1) In general.—Except as provided in paragraphs (2) and (3), the head of an agency—(A) may not require that an individual or sole proprietor who submits a bid for a contract to disclose criminal history record information regarding that individual or sole proprietor before determining the apparent awardee; and (B) shall require as a condition of receiving a Federal contract and receiving payments under such contract that the contractor may not verbally or through written form request the disclosure of criminal history record information regarding an applicant for a position related to work under such contract before such contractor extends a conditional offer to the applicant. (2) Otherwise required by law.—The prohibition under paragraph (1) does not apply with respect to a contract if consideration of criminal history record information prior to a conditional offer with respect to the position is otherwise required by law. (3) Exception for certain positions.—(A) In general.—The prohibition under paragraph (1) does not apply with respect to—(i) a contract that requires an individual hired under the contract to access classified information or to have sensitive law enforcement or national security duties; or (ii) a position that the Secretary of Defense identifies under the regulations issued under subparagraph (B). (B) Regulations.—(i) Issuance.—Not later than 16 months after the date of enactment of the Fair Chance to Compete for Jobs Act of 2019, the Secretary of Defense, in consultation with the Administrator of General Services, shall issue regulations identifying additional positions with respect to which the prohibition under paragraph (1) shall not apply, giving due consideration to positions that involve interaction with minors, access to sensitive information, or managing financial transactions. (ii) Compliance with civil rights laws.—The regulations issued under clause (i) shall—(I) be consistent with, and in no way supersede, restrict, or limit the application of title VII of the Civil Rights Act of 1964 (42 U.S.C. 2000e et seq.) or other relevant Federal civil rights laws; and (II) ensure that all hiring activities conducted pursuant to the regulations are conducted in a manner consistent with relevant Federal civil rights laws. (b) Complaint Procedures.—The Secretary of Defense shall establish and publish procedures under which an applicant for a position with a Department of Defense contractor may submit a complaint, or any other information, relating to compliance by the contractor with subsection (a)(1)(B). (c) Action for Violations of Prohibition on Criminal History Inquiries.—(1) First violation.—If the Secretary of Defense determines that a contractor has violated subsection (a)(1)(B), the Secretary shall—(A) notify the contractor; (B) provide 30 days after such notification for the contractor to appeal the determination; and (C) issue a written warning to the contractor that includes a description of the violation and the additional remedies that may apply for subsequent violations. (2) Subsequent violations.—If the Secretary of Defense determines that a contractor that was subject to paragraph (1) has committed a subsequent violation of subsection (a)(1)(B), the Secretary shall notify the contractor, shall provide 30 days after such notification for the contractor to appeal the determination, and, in consultation with the relevant Federal agencies, may take actions, depending on the severity of the infraction and the contractor’s history of violations, including—(A) providing written guidance to the contractor that the contractor’s eligibility for contracts requires compliance with this section; (B) requiring that the contractor respond within 30 days affirming that the contractor is taking steps to comply with this section; and (C) suspending payment under the contract for which the applicant was being considered until the contractor demonstrates compliance with this section. (d) Definitions.—In this section:(1) Conditional offer.—The term “conditional offer” means an offer of employment for a position related to work under a contract that is conditioned upon the results of a criminal history inquiry. (2) Criminal history record information.—The term “criminal history record information” has the meaning given that term in section 9201 of title 5.

10 U.S.C. § 4658 Debarment of persons convicted of fraudulent use of “Made in America” labels

(a) If the Secretary of Defense determines that a person has been convicted of intentionally affixing a label bearing a “Made in America” inscription, or another inscription with the same meaning, to any product sold in or shipped to the United States that is not made in America, the Secretary shall determine, not later than 90 days after determining that the person has been so convicted, whether the person should be debarred from contracting with the Department of Defense. (b) In this section, the term “debar” has the meaning given that term by section 4654(c) of this title.

10 U.S.C. § 4659 Prohibition on contracting with entities that comply with the secondary Arab boycott of Israel

(a) Policy.—Under section 3(5)(A) 11 See References in Text note below. of the Export Administration Act of 1979 (50 U.S.C. 4602(5)(A)), it is the policy of the United States to oppose restrictive trade practices or boycotts fostered or imposed by foreign countries against other countries friendly to the United States or against any other United States person. (b) Prohibition.—(1) Consistent with the policy referred to in subsection (a), the Department of Defense may not award a contract for an amount in excess of the simplified acquisition threshold (as defined in section 134 of title 41) to a foreign entity unless that entity certifies to the Secretary of Defense that it does not comply with the secondary Arab boycott of Israel. (2) In paragraph (1), the term “foreign entity” means a foreign person, a foreign company, or any other foreign entity. (c) Waiver Authority.—The Secretary of Defense may waive the prohibition in subsection (b) in specific instances when the Secretary determines that the waiver is necessary in the national security interests of the United States. (d) Exceptions.—Subsection (b) does not apply—(1) to contracts for consumable supplies, provisions, or services that are intended to be used for the support of United States forces or of allied forces in a foreign country; or (2) to contracts pertaining to the use of any equipment, technology, data, or services for intelligence or classified purposes by the United States Government in the interests of national security or to the acquisition or lease of any such equipment, technology, data, or services by the United States Government in the interests of national security.

10 U.S.C. § 4660 Prohibition on collection of political information

(a) Prohibition on Requiring Submission of Political Information.—The head of an agency may not require a contractor to submit political information related to the contractor or a subcontractor at any tier, or any partner, officer, director, or employee of the contractor or subcontractor—(1) as part of a solicitation, request for bid, request for proposal, or any other form of communication designed to solicit offers in connection with the award of a contract for procurement of property or services; or (2) during the course of contract performance as part of the process associated with modifying a contract or exercising a contract option. (b) Scope.—The prohibition under this section applies to the procurement of commercial products and commercial services, the procurement of commercial-off-the-shelf-items, and the non-commercial procurement of supplies, property, services, and manufactured items, irrespective of contract vehicle, including contracts, purchase orders, task or deliver orders under indefinite delivery/indefinite quantity contracts, blanket purchase agreements, and basic ordering agreements. (c) Rule of Construction.—Nothing in this section shall be construed as—(1) waiving, superseding, restricting, or limiting the application of the Federal Election Campaign Act of 1971 (52 U.S.C. 30101 et seq.) or preventing Federal regulatory or law enforcement agencies from collecting or receiving information authorized by law; or (2) precluding the Defense Contract Audit Agency from accessing and reviewing certain information, including political information, for the purpose of identifying unallowable costs and administering cost principles established pursuant to subchapter I of chapter 273 of this title. (d) Definitions.—In this section:(1) Contractor.—The term “contractor” includes contractors, bidders, and offerors, and individuals and legal entities who would reasonably be expected to submit offers or bids for Federal Government contracts. (2) Political information.—The term “political information” means information relating to political spending, including any payment consisting of a contribution, expenditure, independent expenditure, or disbursement for an electioneering communication that is made by the contractor, any of its partners, officers, directors or employees, or any of its affiliates or subsidiaries to a candidate or on behalf of a candidate for election for Federal office, to a political committee, to a political party, to a third party entity with the intention or reasonable expectation that it would use the payment to make independent expenditures or electioneering communications, or that is otherwise made with respect to any election for Federal office, party affiliation, and voting history. (3) Other terms.—Each of the terms “contribution”, “expenditure”, “independent expenditure”, “candidate”, “election”, “electioneering communication”, and “Federal office” has the meaning given that term in the Federal Election Campaign Act of 1971 (52 U.S.C. 30101 et seq.).

10 U.S.C. § 4661 Prohibition on certain procurements from the Xinjiang Uyghur Autonomous Region

(a) Prohibition on the Availability of Funds for Certain Procurements From XUAR.—None of the funds authorized to be appropriated by a national defense authorization Act or any other Act, or otherwise made available for any fiscal year for the Department of Defense, may be obligated or expended to knowingly procure any products mined, produced, or manufactured wholly or in part by forced labor from XUAR or from an entity that has used labor from within or transferred from XUAR as part of a “poverty alleviation” or “pairing assistance” program. (b) Definitions.—In this section, the terms “forced labor” and “XUAR” have the meanings given, respectively, in section 2496 of this title.

10 U.S.C. § 4662 Prohibition on the transfer of certain data on employees of the Department of Defense to third parties

(a) In General.—Each contract entered into by the Department of Defense on or after the date of the enactment of this section shall include a provision prohibiting the contractor and each subcontractor under such contract from selling, licensing, or otherwise transferring covered individually identifiable Department employee data to any individual or entity other than the Federal Government, except to the extent required to perform such contract or a subcontract under such contract. This provision does not apply in circumstances where the transfer of such data would otherwise be authorized by law. (b) Waiver.—The Secretary of Defense may waive the requirements of subsection (a) with respect to the sale, licensing, or other transfer of covered individually identifiable Department employee data if the Secretary determines that such waiver—(1) appropriately considers the privacy risks to the employee of the Department of Defense to which such data relates; and (2) is necessary in the interest of national security. (c) Report.—Not later than January 15, 2026, and annually thereafter for four years, the Under Secretary of Defense for Acquisition and Sustainment, shall submit to the congressional defense committees a report on the use of the waiver authority under subsection (b) for the fiscal year preceding the date of submission of the report. The report shall include, for each use of the waiver—(1) the specific justification for providing the waiver; (2) an identification of the contractor or subcontractor that is the subject of the waiver request; and (3) an identification of the purpose of the sale, licensing, or transfer of covered individually identifiable Department employee data that is the subject of the waiver request. (d) Definitions.—In this section:(1) The term “covered individually identifiable Department employee data” means individually identifiable Department employee data obtained by a contractor or subcontractor described in subsection (a). (2) The term “individually identifiable Department employee data” means information related to an employee of the Department of Defense, including a member of the Armed Forces, that—(A) identifies such employee; or (B) which may be used to infer, by either direct or indirect means, the identity of such an employee to whom the information applies.

10 U.S.C. § 4663 Prohibition on contracting with covered entities that contract with lobbyists for Chinese military companies

(a) Prohibition on Entering Into Contracts With Covered Entities.—Except as provided in subsection (c), the Secretary of Defense may not enter into a contract with an entity, a parent company of such entity, or a subsidiary of such entity if such entity is a party to a contract with a covered lobbyist. (b) Exception.—The prohibition in subsection (a) shall not apply with respect to an entity that made reasonable inquires regarding the lobbying activities of another entity and determined such entity was not a covered lobbyist. (c) Waiver.—Upon notification to Congress, the Secretary of Defense may waive the requirements of this section. (d) Definitions.—In this section:(1) The term “covered lobbyist” means an entity that engages in lobbying activities for any entity determined to be a Chinese military company listed in accordance with section 1260H of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021 (10 U.S.C. 113 note). (2) The term “lobbying activities” has the meaning given in section 1045(c) of the National Defense Authorization Act for Fiscal Year 2018 (10 U.S.C. 971 note prec.).

10 U.S.C. § 4664 Requirements relating to long-term concessions agreements with certain retailers

(a) Prohibition on Contracting With Certain Retailers.—Except as provided by subsections (b) and (c), the Secretary of Defense may not renew, extend, or enter into a long-term concessions agreement with a retailer that is controlled by a covered nation to permit such retailer to operate or conduct business through a physical location on a covered military installation. (b) Waiver.—(1) The Secretary may waive the requirements of subsection (a) with respect to a long-term concessions agreement with a retailer if the Secretary determines that—(A) the goods or services to be provided by the retailer under such long-term concessions agreement are vital for the welfare and morale of members of the Armed Forces and no reasonable alternatives exist; and (B) the Secretary has implemented adequate measures to mitigate any potential national security risks of the retailer. (2) Not later than 30 days after each use of the waiver authority under paragraph (1), the Secretary shall provide to the Committees on Armed Services of the House of Representatives and Senate a justification for such waiver and a description of any risk mitigation strategies described in paragraph (1)(B). (c) Exceptions.—Subsection (a) does not apply with respect to a long-term concessions agreement with a retailer if—(1) such retailer has received a determination from the Committee on Foreign Investment in the United States (in this section referred to as the “Committee”) that there are no unresolved national security concerns with respect to the retailer in connection to a matter submitted to the Committee and which the Committee concluded all action pursuant to section 721 of the Defense Production Act of 1950 (50 U.S.C. 4565); or (2) such retailer is organized under the laws of the United States or any jurisdiction of the United States and is operated by citizens of the United States and the products offered for sale by such retailer on the covered military installation under such long-term concessions agreement are not produced in a covered nation. (d) Definitions.—In this section:(1) The term “controlled by a covered nation” means, with respect to a retailer—(A) that the retailer is organized under the laws of a covered nation or any jurisdiction within a covered nation; (B) that the government of a covered nation—(i) owns 50 percent or more of the shares of the retailer; or (ii) otherwise owns the controlling interest in such retailer; or (C) that the retailer is subject to the direct control of the government of a covered nation. (2) The term “covered military installation” means a military installation (as defined in section 2801 of this title) located in the United States. (3) The term “covered nation” has the meaning given in section 4872 of this title. (4) The term “long-term concessions agreement” means a contract, subcontract, or other agreement, including a lease agreement or licensing agreement, to operate a business through a physical location on a covered military installation entered into by—(A) the Secretary of Defense or a Secretary of a military department and a person; or (B) a person and a nonappropriated fund instrumentality. (5) The term “retailer” means a person that operates or seeks to operate a business providing goods or services on a covered military installation under a contract, subcontract, or other agreement, including a lease agreement or licensing agreement, with—(A) a nonappropriated fund instrumentality; (B) the Secretary of Defense; or (C) a Secretary of a military department.