USC Chapter 281

in effect

10 U.S.C. § 3861 Research and development contracts: indemnification provisions

(a) With the approval of the Secretary of the military department concerned, any contract of a military department for research or development, or both, may provide that the United States will indemnify the contractor against either or both of the following, but only to the extent that they arise out of the direct performance of the contract and to the extent not compensated by insurance or otherwise:(1) Claims (including reasonable expenses of litigation or settlement) by third persons, including employees of the contractor, for death, bodily injury, or loss of or damage to property, from a risk that the contract defines as unusually hazardous. (2) Loss of or damage to property of the contractor from a risk that the contract defines as unusually hazardous. (b) A contract, made under subsection (a), that provides for indemnification must also provide for—(1) notice to the United States of any claim or suit against the contractor for the death, bodily injury, or loss of or damage to property; and (2) control of or assistance in the defense by the United States, at its election, of that suit or claim. (c) No payment may be made under subsection (a) unless the Secretary of the department concerned, or an officer or official of his department designated by him, certifies that the amount is just and reasonable. (d) Upon approval by the Secretary concerned, payments under subsection (a) may be made from—(1) funds obligated for the performance of the contract concerned; (2) funds available for research or development, or both, and not otherwise obligated; or (3) funds appropriated for those payments.

10 U.S.C. § 3862 Requests for equitable adjustment or other relief

(a) Certification Requirement.—A request for equitable adjustment to contract terms or request for relief under Public Law 85–804 (50 U.S.C. 1431 et seq.) that exceeds the simplified acquisition threshold may not be paid unless a person authorized to certify the request on behalf of the contractor certifies, at the time the request is submitted, that—(1) the request is made in good faith, and (2) the supporting data are accurate and complete to the best of that person’s knowledge and belief. (b) Restriction on Legislative Payment of Claims.—In the case of a contract of an agency named in section 3063 of this title, no provision of a law enacted after September 30, 1994, that directs the payment of a particular claim under such contract, a particular request for equitable adjustment to any term of such contract, or a particular request for relief under Public Law 85–804 (50 U.S.C. 1431 et seq.) regarding such contract may be implemented unless such provision of law—(1) specifically refers to this subsection; and (2) specifically states that this subsection does not apply with respect to the payment directed by that provision of law. (c) Treatment of Certain Clauses Implementing Executive Orders.—The unilateral insertion of a covered clause into an existing Department of Defense contract, order, or other transaction by a contracting officer shall be treated as a change directed by the contracting officer pursuant to, and subject to, the Changes clause of the underlying contract, order, or other transaction. (d) Definitions.—In this section:(1) The term “simplified acquisition threshold” has the meaning given that term in section 134 of title 41. (2) The term “Changes clause” means the clause described in part 52.243–4 of the Federal Acquisition Regulation or any successor regulation. (3) The term “covered clause” means any clause implementing the requirements of an Executive order issued by the President.

10 U.S.C. § 3863 Retention of amounts collected from contractor during the pendency of contract dispute

(a) Retention of Funds.—Notwithstanding sections 1552(a) and 3302(b) of title 31, any amount, including interest, collected from a contractor as a result of a claim made by a military department or Defense Agency under chapter 71 of title 41, shall remain available in accordance with this section to pay—(1) any settlement of the claim by the parties; (2) any judgment rendered in the contractor’s favor on an appeal of the decision on that claim to the Armed Services Board of Contract Appeals under section 7104(a) of title 41; or (3) any judgment rendered in the contractor’s favor in an action on that claim in a court of the United States. (b) Period of Availability.—(1) The period of availability of an amount under subsection (a), in connection with a claim—(A) expires 180 days after the expiration of the period for bringing an action on that claim in the United States Court of Federal Claims under section 7104(b) of title 41 if, within that 180-day period—(i) no appeal on the claim is commenced at the Armed Services Board of Contract Appeals under section 7104(a) of such title; and (ii) no action on the claim is commenced in a court of the United States; or (B) if not expiring under subparagraph (A), expires—(i) in the case of a settlement of the claim, 180 days after the date of the settlement; or (ii) in the case of a judgment rendered on the claim in an appeal to the Armed Services Board of Contract Appeals under section 7104(a) of title 41 or an action in a court of the United States, 180 days after the date on which the judgment becomes final and not appealable. (2) While available under this section, an amount may be obligated or expended only for a purpose described in subsection (a). (3) Upon the expiration of the period of availability of an amount under paragraph (1), the amount shall be covered into the Treasury as miscellaneous receipts.

10 U.S.C. § 3864 Assumption of uninsurable risk on certain contracts

(a) In General.—The Secretary of Defense shall ensure that a contractor is not required to assume the risk of loss for work in process under a covered contract if, due to the classified nature of the performance of such contractor under such covered contract—(1) such contractor is unable to obtain insurance for such risk of loss from a commercial provider; or (2) a commercial provider is unable to process a claim of such contractor for loss of work in process under such covered contract. (b) Limitations.—Subsection (a) shall not apply with respect to a loss of work in process under a covered contract to the extent that such loss—(1) is the result of willful misconduct or lack of good faith on the part of the managerial personnel of the contractor, including with respect to the oversight of subcontractors by the contractor; or (2) is the result of workmanship error by the contractor. (c) Definitions.—In this section:(1) The term “classified contract” means a contract the performance of which requires a contractor performing under such contract, or an employee of such contractor, to have access to classified information. (2) The term “covered contract” means a classified, fixed-price type contract for the acquisition of a product entered into by the Department of Defense after the enactment of this Act. (3) The term “work in process” means an item at any stage of production or manufacture at any time from the initiation of contract performance until delivery to and acceptance by the Government. (4) The term “workmanship error” means damage to work in process that is a result of an incorrectly performed skill-based task, operation, or action that was originally planned or intended.