CHAPTER 385 - OTHER TECHNOLOGY BASE POLICIES AND PROGRAMS

Title 10 > CHAPTER 385

Sections (21)

(a) Considerations in Making and Implementing MOUs and Related Agreements.— In the negotiation, renegotiation, and implementation of any existing or proposed memorandum of understanding, or any existing or proposed agreement related to a memorandum of understanding, between the Secretary of Defense, acting on behalf of the United States, and one or more foreign countries (or any instrumentality of a foreign country) relating to research, development, or production of defense equipment, or to the reciprocal procurement of defense items, the Secretary of Defense shall— consider the effects of such existing or proposed memorandum of understanding or related agreement on the defense technology and industrial base of the United States; and regularly solicit and consider comments and recommendations from the Secretary of Commerce with respect to the commercial implications of such memorandum of understanding or related agreement and the potential effects of such memorandum of understanding or related agreement on the international competitive position of United States industry.

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

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

§ 4852 Offset policy; notification

(a) Establishment of Offset Policy.— The President shall establish, consistent with the requirements of this section, a comprehensive policy with respect to contractual offset arrangements in connection with the purchase of defense equipment or supplies which addresses the following: Transfer of technology in connection with offset arrangements. Application of offset arrangements, including cases in which United States funds are used to finance the purchase by a foreign government. Effects of offset arrangements on specific subsectors of the industrial base of the United States and for preventing or ameliorating any serious adverse effects on such subsectors.

(b) Technology Transfer.— No official of the United States may enter into a memorandum of understanding or other agreement with a foreign government that would require the transfer of United States defense technology to a foreign country or a foreign firm in connection with a contract that is subject to an offset arrangement if the implementation of such memorandum or agreement would significantly and adversely affect the defense industrial base of the United States and would result in a substantial financial loss to a United States firm. Paragraph (1) shall not apply in the case of a memorandum of understanding or agreement described in paragraph (1) if the Secretary of Defense, in consultation with the Secretary of Commerce and the Secretary of State, determines that a transfer of United States defense technology pursuant to such understanding or agreement will result in strengthening the national security of the United States and so certifies to Congress. If a United States firm is required under the terms of a memorandum of understanding, or other agreement entered into by the United States with a foreign country, to transfer defense technology to a foreign country, the United States firm may protest the determination to the Secretary of Defense on the grounds that the transfer of such technology would adversely affect the defense industrial base of the United States and would result in substantial financial loss to the protesting firm. The Secretary of Defense, in consultation with the Secretary of Commerce and the Secretary of State, shall make the final determination of the validity of the protesting firm’s claim.

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

(d) Definitions.— In this section: The term “United States firm” means a business entity that performs substantially all of its manufacturing, production, and research and development activities in the United States. The term “foreign firm” means a business entity other than a United States firm.

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

(a) In determining under section 8302 of title 41 whether application of chapter 83 of such title is inconsistent with the public interest, the Secretary of Defense shall consider the following: The bids or proposals of small business firms in the United States which have offered to furnish American goods. The bids or proposals of all other firms in the United States which have offered to furnish American goods. The United States balance of payments. The cost of shipping goods which are other than American goods. Any duty, tariff, or surcharge which may enter into the cost of using goods which are other than American goods. A need to ensure that the Department of Defense has access to advanced, state-of-the-art commercial technology. The need to protect the national technology and industrial base, to preserve and enhance the national technology employment base, and to provide for a defense mobilization base. A need to ensure that application of different rules of origin for United States end items and foreign end items does not result in an award to a firm other than a firm providing a product produced in the United States. Any need— to maintain the same source of supply for spare and replacement parts for an end item that qualifies as an American good; or to maintain the same source of supply for spare and replacement parts in order not to impair integration of the military and commercial industrial base. The national security interests of the United States.

(b) In this section, the term “goods which are other than American goods” means— an end product that is not mined, produced, or manufactured in the United States; or an end product that is manufactured in the United States but which includes components mined, produced, or manufactured outside the United States the aggregate cost of which exceeds the aggregate cost of the components of such end product that are mined, produced, or manufactured in the United States.

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

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

(b) Covered Items.— An item referred to in subsection (a) is any of the following: An article or item of— food; clothing and the materials and components thereof, other than sensors, electronics, or other items added to, and not normally associated with, clothing (and the materials and components thereof); tents (and the structural components thereof), tarpaulins, or covers; cotton and other natural fiber products, woven silk or woven silk blends, spun silk yarn for cartridge cloth, synthetic fabric or coated synthetic fabric (including all textile fibers and yarns that are for use in such fabrics), canvas products, or wool (whether in the form of fiber or yarn or contained in fabrics, materials, or manufactured articles); or any item of individual equipment manufactured from or containing such fibers, yarns, fabrics, or materials. Hand or measuring tools. Stainless steel flatware. Dinnerware. A flag of the United States.

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

(d) Exception for Certain Procurements.— Subsection (a) does not apply to the following: Procurements outside the United States in support of combat operations or procurements of any item listed in subsection (b)(1)(A) or (b)(2) in support of contingency operations. Procurements by, or for, vessels in foreign waters. Emergency procurements or procurements of perishable foods by, or for, an establishment located outside the United States for the personnel attached to such establishment. Procurements of any item listed in subsection (b)(1)(A) or (b)(2) for which the use of procedures other than competitive procedures has been approved on the basis of section 3204(a)(2) of this title , relating to unusual and compelling urgency of need.

(e) Exception for Chemical Warfare Protective Clothing.— Subsection (a) does not preclude the procurement of chemical warfare protective clothing produced outside the United States if— such procurement is necessary— to comply with agreements with foreign governments requiring the United States to purchase supplies from foreign sources for the purposes of offsetting sales made by the United States Government or United States firms under approved programs serving defense requirements; or in furtherance of agreements with foreign governments in which both such governments agree to remove barriers to purchases of supplies produced in the other country or services performed by sources of the other country; and any such agreement with a foreign government complies, where applicable, with the requirements of section 36 of the Arms Export Control Act ( 22 U.S.C. 2776 ) and with section 2457 of this title .

(f) Exceptions for Certain Other Commodities and Items.— Subsection (a) does not preclude the procurement of the following: Foods manufactured or processed in the United States. Waste and byproducts of cotton and wool fiber for use in the production of propellants and explosives.

(g) Exception for Commissaries, Exchanges, and Other Nonappropriated Fund Instrumentalities.— Except as provided in paragraph (2), subsection (a) does not apply to items purchased for resale purposes in commissaries, exchanges, or nonappropriated fund instrumentalities operated by the Department of Defense. Paragraph (1) shall not apply with respect to the procurement of seafood originating in a covered foreign country, including procurement for use in military dining facilities, galleys aboard United States naval vessels, and procurement for resale in commissary stores, notwithstanding the source of funds used for such procurement. The Secretary of Defense may waive the requirements of subparagraph (A) if such procurement would cause undue burden to a naval vessel while at sea or in port at a foreign port, a dining facility in a foreign country, a commissary, an exchange, or a nonappropriated fund instrumentality located on a military installation located outside the United States. In this paragraph, the term “covered foreign country” means The People’s Republic of China, the Russian Federation, the Islamic Republic of Iran, or the Democratic People’s Republic of Korea.

(h) Exception for Small Purchases.— Except with respect to purchases of flags of the United States, subsection (a) does not apply to purchases for amounts not greater than $150, 000. A p ro p ose d p roc u re m e n t o f ani t e minanam o u n t g re a t er t han$ 150,000 may not be divided into several purchases or contracts for lesser amounts in order to qualify for this exception. Except as provided by subparagraph (B), subsection (a) does not apply to purchases of flags of the United States for amounts not greater than $10, 000. A p ro p ose d p roc u re m e n t inanam o u n t g re a t er t han$ 10,000 may not be divided into several purchases or contracts for lesser amounts in order to qualify for the exception under clause (i). The Secretary of Defense may waive subsection (a) with respect to a purchase of flags of the United States in an amount greater than $10,000 if the Secretary of Defense determines such waiver appropriate. This section is applicable to contracts and subcontracts for the procurement of flags of the United States. On October 1 of each year that is evenly divisible by five, the Secretary of Defense may adjust the dollar threshold in this subsection based on changes in the Consumer Price Index. Any such adjustment shall take effect on the date on which the Secretary publishes notice of such adjustment in the Federal Register.

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

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

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

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

(a) Requirement.— Except as provided in subsections (b) through (m), the acquisition by the Department of Defense of the following items is prohibited: The following types of end items, or components thereof, containing a specialty metal not melted or produced in the United States: aircraft, missile and space systems, ships, tank and automotive items, weapon systems, or ammunition. A specialty metal that is not melted or produced in the United States and that is to be purchased directly by the Department of Defense or a prime contractor of the Department.

(b) Availability Exception.— Subsection (a) does not apply to the extent that the Secretary of Defense or the Secretary of the military department concerned determines that compliant specialty metal of satisfactory quality and sufficient quantity, and in the required form, cannot be procured as and when needed at a reasonable price. For purposes of the preceding sentence, the term “compliant specialty metal” means specialty metal melted or produced in the United States. This subsection applies to prime contracts and subcontracts at any tier under such contracts. The authority in subsection (b)(1)— may be delegated to the head of contracting activity for the relevant component for an exception for a single acquisition program; may be delegated to the senior acquisition executive of a military department for an exception for multiple programs within such military department; and may be delegated to the Undersecretary of Defense for Acquisition and Sustainment for an exception for more than one military department.

(c) Exception for Certain Acquisitions.— Subsection (a) does not apply to the following: Acquisitions outside the United States in support of contingency operations or for use outside of the United States. Acquisitions for which the use of procedures other than competitive procedures has been approved on the basis of section 3204(a)(2) of this title , relating to unusual and compelling urgency of need.

(d) Exception Relating to Agreements With Foreign Governments.— Subsection (a)(1) does not preclude the acquisition of a specialty metal if— the acquisition is necessary— to comply with agreements with foreign governments requiring the United States to purchase supplies from foreign sources for the purposes of offsetting sales made by the United States Government or United States firms under approved programs serving defense requirements; or in furtherance of agreements with qualifying foreign governments in which both such governments agree to remove barriers to purchases of supplies produced in the other country or services performed by sources of the other country; and any such agreement with a foreign government complies, where applicable, with the requirements of section 36 of the Arms Export Control Act ( 22 U.S.C. 2776 ) and with section 2457 of this title .

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

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

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

(h) Applicability to Acquisitions of Commercial Products.— Except as provided in paragraphs (2) and (3), this section applies to acquisitions of commercial products, notwithstanding sections 1906 and 1907 of title 41. This section does not apply to contracts or subcontracts for the acquisition of commercially available off-the-shelf items, as defined in section 104 of title 41 , other than— contracts or subcontracts for the acquisition of specialty metals, including mill products, such as bar, billet, slab, wire, plate and sheet, that have not been incorporated into end items, subsystems, assemblies, or components; contracts or subcontracts for the acquisition of forgings or castings of specialty metals, unless such forgings or castings are incorporated into commercially available off-the-shelf end items, subsystems, or assemblies; contracts or subcontracts for commercially available high performance magnets unless such high performance magnets are incorporated into commercially available off-the-shelf-end items or subsystems; and contracts or subcontracts for commercially available off-the-shelf fasteners, unless such fasteners are— incorporated into commercially available off-the-shelf end items, subsystems, assemblies, or components; or purchased as provided in paragraph (3). This section does not apply to fasteners that are commercial products that are purchased under a contract or subcontract with a manufacturer of such fasteners, if the manufacturer has certified that it will purchase, during the relevant calendar year, an amount of domestically melted specialty metal, in the required form, for use in the production of such fasteners for sale to the Department of Defense and other customers, that is not less than 50 percent of the total amount of the specialty metal that it will purchase to carry out the production of such fasteners.

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

(j) Streamlined Compliance for Commercial Derivative Military Articles.— Subsection (a) shall not apply to an item acquired under a prime contract if the Secretary of Defense or the Secretary of a military department determines that— the item is a commercial derivative military article; and the contractor certifies that the contractor and its subcontractors have entered into a contractual agreement, or agreements, to purchase an amount of domestically melted specialty metal in the required form, for use during the period of contract performance in the production of the commercial derivative military article and the related commercial article, that is not less than the greater of— an amount equivalent to 120 percent of the amount of specialty metal that is required to carry out the production of the commercial derivative military article (including the work performed under each subcontract); or an amount equivalent to 50 percent of the amount of specialty metal that is purchased by the contractor and its subcontractors for use during such period in the production of the commercial derivative military article and the related commercial article. For the purposes of this subsection, the amount of specialty metal that is required to carry out the production of the commercial derivative military article includes specialty metal contained in any item, including commercially available off-the-shelf items, incorporated into such commercial derivative military article.

(k) National Security Waiver.— Notwithstanding subsection (a), the Secretary of Defense or the Secretary of the military department concerned may accept the delivery of an end item containing noncompliant materials if the Secretary determines in writing that acceptance of such end item is necessary to the national security interests of the United States. A written determination under paragraph (1)— may be delegated— to the senior acquisition executive of the military department concerned for a waiver for one or more acquisition programs within the such military department; and to the Deputy Secretary of Defense or the Under Secretary of Defense for Acquisition and Sustainment for a waiver applicable to more than one military department; shall specify the quantity of end items to which the waiver applies and the time period over which the waiver applies; and shall be provided to the congressional defense committees prior to making such a determination (except that in the case of an urgent national security requirement, such certification may be provided to the defense committees up to 7 days after it is made). In any case in which the Secretary makes a determination under paragraph (1), the Secretary shall determine whether or not the noncompliance was knowing and willful. If the Secretary determines that the noncompliance was not knowing or willful, the Secretary shall ensure that the contractor or subcontractor responsible for the noncompliance develops and implements an effective plan to ensure future compliance. If the Secretary determines that the noncompliance was knowing or willful, the Secretary shall— require the development and implementation of a plan to ensure future compliance; and consider suspending or debarring the contractor or subcontractor until such time as the contractor or subcontractor has effectively addressed the issues that lead to such noncompliance.

(l) Specialty Metal Defined.— In this section, the term “specialty metal” means any of the following: Steel— with a maximum alloy content exceeding one or more of the following limits: manganese, 1.65 percent; silicon, 0.60 percent; or copper, 0.60 percent; or containing more than 0.25 percent of any of the following elements: aluminum, chromium, cobalt, columbium, molybdenum, nickel, titanium, tungsten, or vanadium. Metal alloys consisting of nickel, iron-nickel, and cobalt base alloys containing a total of other alloying metals (except iron) in excess of 10 percent. Titanium and titanium alloys. Zirconium and zirconium base alloys.

(m) Additional Definitions.— In this section: The term “United States” includes possessions of the United States. The term “component” has the meaning provided in section 105 of title 41 . The term “acquisition” has the meaning provided in section 131 of title 41 . The term “required form” shall not apply to end items or to their components at any tier. The term “required form” means in the form of mill product, such as bar, billet, wire, slab, plate or sheet, and in the grade appropriate for the production of— a finished end item delivered to the Department of Defense; or a finished component assembled into an end item delivered to the Department of Defense. The term “commercially available off-the-shelf”, has the meaning provided in section 104 of title 41 . The term “assemblies” means items forming a portion of a system or subsystem that can be provisioned and replaced as an entity and which incorporates multiple, replaceable parts. The term “commercial derivative military article” means an item procured by the Department of Defense that is or will be produced using the same production facilities, a common supply chain, and the same or similar production processes that are used for the production of articles predominantly used by the general public or by nongovernmental entities for purposes other than governmental purposes. The term “subsystem” means a functional grouping of items that combine to perform a major function within an end item, such as electrical power, attitude control, and propulsion. The term “end item” means the final production product when assembled or completed, and ready for issue, delivery, or deployment. The term “subcontract” includes a subcontract at any tier. The term “qualifying foreign government” means the government of a country with which the United States has in effect a reciprocal defense procurement agreement or memorandum of understanding entered into pursuant to section 4851 of this title .

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

(a) Limitation on Certain Procurements.— The Secretary of Defense may procure any of the following items only if the manufacturer of the item satisfies the requirements of subsection (b): Multipassenger motor vehicles (buses). The following components of vessels, to the extent they are unique to marine applications: Gyrocompasses. Electronic navigation chart systems. Steering controls. Propulsion and machinery control systems. Totally enclosed lifeboats. Welded shipboard anchor and mooring chain. Subject to subsection (k), large medium-speed diesel engines. The following components of T–AO 205 and T–ARC class vessels: Auxiliary equipment, including pumps, for all shipboard services. Propulsion system components, including engines, reduction gears, and propellers. Shipboard cranes. Spreaders for shipboard cranes. A star tracker used in a satellite weighing more than 400 pounds whose principal purpose is to support the national security, defense, or intelligence needs of the United States Government.

(b) Manufacturer in the National Technology and Industrial Base.— Except as provided in paragraph (2), a manufacturer meets the requirements of this subsection if the manufacturer is part of the national technology and industrial base. A manufacturer of welded shipboard anchor and mooring chain for naval vessels meets the requirements of this subsection if the manufacturer is part of the national technology and industrial base.

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

(d) Waiver Authority.— The Secretary of Defense may waive the limitation in subsection (a) with respect to the procurement of an item listed in that subsection if the Secretary determines that any of the following apply: Application of the limitation would cause unreasonable costs or delays to be incurred. United States producers of the item would not be jeopardized by competition from a foreign country, and that country does not discriminate against defense items produced in the United States to a greater degree than the United States discriminates against defense items produced in that country. Application of the limitation would impede cooperative programs entered into between the Department of Defense and a foreign country, or would impede the reciprocal procurement of defense items under a memorandum of understanding providing for reciprocal procurement of defense items that is entered into under section 4851 of this title , and that country does not discriminate against defense items produced in the United States to a greater degree than the United States discriminates against defense items produced in that country. Satisfactory quality items manufactured by an entity that is part of the national technology and industrial base (as defined in section 4801(1) of this title ) are not available. Application of the limitation would result in the existence of only one source for the item that is an entity that is part of the national technology and industrial base (as defined in section 4801(1) of this title ). The procurement is for an amount less than the simplified acquisition threshold and simplified purchase procedures are being used. Application of the limitation is not in the national security interests of the United States. Application of the limitation would adversely affect a United States company.

(e) Sonobuoys.— The Secretary of Defense may not procure a sonobuoy manufactured in a foreign country if United States firms that manufacture sonobuoys are not permitted to compete on an equal basis with foreign manufacturing firms for the sale of sonobuoys in that foreign country. The Secretary may waive the limitation in paragraph (1) with respect to a particular procurement of sonobuoys if the Secretary determines that such procurement is in the national security interests of the United States. In this subsection, the term “United States firm” has the meaning given such term in section 4852(d)(1) of this title .

(f) Principle of Construction With Future Laws.— A provision of law may not be construed as modifying or superseding the provisions of this section, or as requiring funds to be limited, or made available, by the Secretary of Defense to a particular domestic source by contract, unless that provision of law— specifically refers to this section; specifically states that such provision of law modifies or supersedes the provisions of this section; and specifically identifies the particular domestic source involved and states that the contract to be awarded pursuant to such provision of law is being awarded in contravention of this section.

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

(h) Implementation of Naval Vessel Component Limitation.— In implementing subsection (a)(2), the Secretary of Defense— may not use contract clauses or certifications; and shall use management and oversight techniques that achieve the objective of the subsection without imposing a significant management burden on the Government or the contractor involved.

(i) Implementation of Certain Waiver Authority.— The Secretary of Defense may exercise the waiver authority described in paragraph (2) only if the waiver is made for a particular item listed in subsection (a) and for a particular foreign country. This subsection applies to the waiver authority provided by subsection (d) on the basis of the applicability of paragraph (2) or (3) of that subsection. The waiver authority described in paragraph (2) may not be delegated below the Under Secretary of Defense for Acquisition and Sustainment. At least 15 days before the effective date of any waiver made under the waiver authority described in paragraph (2), the Secretary shall publish in the Federal Register and submit to the congressional defense committees a notice of the determination to exercise the waiver authority. Any waiver made by the Secretary under the waiver authority described in paragraph (2) shall be in effect for a period not greater than one year, as determined by the Secretary.

(j) Limitation on Certain Procurements Application Process.— The Secretary of Defense shall administer a process to analyze and assess potential items for consideration to be required to be procured from a manufacturer that is part of the national technology and industrial base. The application process required under paragraph (1) shall include the following elements: The Secretary shall designate an official within the Office of the Secretary of Defense responsible for administration of the limitation on certain procurements application process and associated policy. A person or organization that meets the definition of national technology and industrial base under section 4801(1) of this title shall have the opportunity to apply for status as an item required to be procured from a manufacturer that is part of the national technology and industrial base. The application shall include, at a minimum, the following information: Information demonstrating the applicant meets the criteria of a manufacturer in the national technology and industrial base under section 4801(1) of this title . For each item the applicant seeks to be required to be procured from a manufacturer that is part of the national technology and industrial base, the applicant shall include the following information: The extent to which such item has commercial applications. The number of such items to be procured by current programs of record. The criticality of such item to a military unit’s mission accomplishment. The estimated cost and other considerations of reconstituting the manufacturing capability of such item, if not maintained in the national technology and industrial base. National security regulations or restrictions imposed on such item that may not be imposed on a non-national technology and industrial base competitor. Non-national security-related Federal, State, and local government regulations imposed on such item that may not be imposed on a non-national technology and industrial base competitor. The extent to which such item is fielded in current programs of record. The extent to which cost and pricing data for such item has been deemed fair and reasonable. The official designated pursuant to paragraph (2)(A) shall be responsible for providing complete applications submitted pursuant to this subsection to the appropriate component acquisition executive for consideration not later than 15 days after receipt of such application. Not later than 120 days after receiving a complete application, the component acquisition executive shall review such application, make a determination, and return the application to the official designated pursuant to paragraph (2)(A). The determination required under subparagraph (B) shall, for each item proposed pursuant to paragraph (2)(B)(ii)— recommend inclusion under this section; recommend inclusion under this section with further modifications; or not recommend inclusion under this section. The determination required under subparagraph (B) shall also include the rationale and justification for the determination. For applications recommended under subsection (3), the official designated pursuant to paragraph (2)(A) shall be responsible for preparing a legislative proposal for consideration by the Secretary.

(k) Implementation of Auxiliary Ship Component Limitation.— Subsection (a)(3) applies only with respect to contracts awarded by the Secretary of a military department for new construction of an auxiliary ship after the date of the enactment of the National Defense Authorization Act for Fiscal Year 2020 using funds available for National Defense Sealift Fund programs or Shipbuilding and Conversion, Navy. For purposes of this subsection, the term “auxiliary ship”— with respect to a contract entered into after December 20, 2019 , does not include an icebreaker or a special mission ship; and with respect to a contract entered into on or after the date of the enactment of the National Defense Authorization Act for Fiscal Year 2025, includes an icebreaker or a special mission ship, unless the Secretary of the Navy certifies to Congress that the forecasted sales over a four-year period of large medium-speed diesel engines manufactured in the national technology and industrial base will not fall below the minimum sustaining rate for plant operations of a diminishing manufacturing source.

(l) Periodic Review.— Not later than November 1, 2024 , and every five years thereafter, the Under Secretary of Defense for Acquisition and Sustainment shall review each item described in subsections (a) and (e) of this section and submit to the congressional defense committees, in writing, one of the following recommendations: Recommend continued inclusion of the item under this section. Recommend continued inclusion of the item under this section with modifications. Recommend discontinuing inclusion of the item under this section. Each review required under paragraph (1) shall include, with respect to the five-year period preceding the date of submission of the written determination related to such a review, the following elements: The criticality of the item reviewed to a military unit’s mission accomplishment or other national security objectives. The extent to which such item is fielded in current programs of record. The number of such items to be procured by current programs of record. The extent to which cost and pricing data for such item has been deemed fair and reasonable. The written determination required under paragraph (1) shall also include the findings of the applicable review conducted under such paragraph and any key justifications for the recommendation.

§ 4865 Prohibition on acquisition of advanced batteries composed of materials from certain foreign sources

(a) In General.— The Secretary of Defense shall procure advanced batteries and cells whose functional cell components and technology, whether as end items or embedded within warfighting and support systems, are not owned, sourced, refined, or produced from a foreign entity of concern.

(b) Applicability.— This section applies to all new acquisition programs on January 1, 2028 , standard batteries on January 1, 2029 , and for existing acquisition programs on January 30, 2031 .

(c) Exceptions.— Subsection (a) does not apply to an advanced battery or cell of an advanced battery if— the final assembly of such advanced battery or cell is carried out by an entity other than a foreign entity of concern; functional cell components comprising more than 95 percent of the costs of the functional cell components of such advanced battery or cell are from sources other than foreign entities of concern; and such advanced battery or cell is produced without technology licensed from a foreign entity of concern. For the purposes of subparagraph (A)(ii), any material or component from an entity that has been recycled and reprocessed domestically is considered to originate from that entity regardless of origin. Subsection (a) does not apply to a battery or cell of a battery that is— acquired for use in a cell phone, laptop, personal electronic device, or medical equipment intended for use in an office, administrative, hospital, or non-combat environment; commercially available off-the-shelf item for use only in the maintenance of equipment; or acquired for research, development, testing, and evaluation by the Department of Defense. The Secretary of Defense may waive the limitations specified in subsection (a) for a specific system or battery for one year if— the Secretary determines that a satisfactory quality and sufficient quantity such advanced battery or cell that are not subject to such prohibition cannot be acquired as and when needed by the Department of Defense at reasonable costs; or in the case of an advanced battery or cell that is a component of a warfighting or support system, sufficient documentation exists to show that such advanced battery or cell is not a functional enabler of operational capability for such system and such advanced battery or cell poses no risk to the security of or sourcing for such system. The Secretary of Defense may delegate the authority under subparagraph (A) only to the Under Secretary of Defense for Acquisition and Sustainment.

(d) Report.— Not later than December 1, 2028 , and not less frequently than once every three years thereafter until the date that is twelve years after the date of the enactment of this Act, the Secretary of Defense shall provide to the congressional defense committees a briefing on the status of meeting the requirements under subsection (a).

(e) Definitions.— In this section: The term “new acquisition program” means a defense acquisition program that has not reached the initiation of the engineering and manufacturing development phase, or an equivalent phase of development, including a defense acquisition program that has not undergone a formal Milestone B approval or equivalent decision point, before the date of the enactment of this Act. The term “existing acquisition program” means a defense acquisition program that has reached the initiation of the engineering and manufacturing development phase, or an equivalent phase of development, including a defense acquisition program that has undergone a formal Milestone B approval or equivalent decision point, before the date of the enactment of this Act. The term “functional cell component” means the cathode materials, anode materials, separators, anode foils, and other functional materials of an advanced battery that contribute to the chemical processes necessary for energy storage, including solvents, additives, electrolyte salts, and internal safety devices. The “foreign entity of concern” has the meaning given such term under section 40207(a) of the Infrastructure Investment and Jobs Act ( 42 U.S.C. 18741(a) ), and includes entities specified in section 154 of the National Defense Authorization Act for Fiscal Year 2024 ( Public Law 118–31 ; 10 U.S.C. 4651 note prec.). The term “standard battery” means a battery that used in more than one weapons system and are not managed by one portfolio acquisition executive.

“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.— 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. 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. 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— such person or entity is a covered person or entity; such person or entity is or was engaging in one or more covered activities; and less intrusive measures are not reasonably available to manage the risk posed by such person or entity.

(“(c) Notification to Covered Person or Entity.— The head of a contracting activity, or other appropriate official, shall notify covered persons and entities of the following: The program established under subsection (a). The authorities provided by subsection (b). The responsibilities of covered persons or entities to exercise due diligence to mitigate their engagement in covered activities. 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. 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. 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.— 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: For each instance in which a head of contracting activity took a covered procurement action, the following: The head of contracting activity taking such action. An explanation of the basis for taking the covered procurement action. The value of the contract, grant, or cooperative agreement subject to the covered procurement action. 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. 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: The head of contracting activity concerned. An explanation of the basis for not taking the covered procurement action. 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. 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. Any report under this subsection may, at the election of the Secretary of Defense— be submitted in unclassified form, but with a classified annex; or 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: The term ‘covered activities’ means activities where a covered person or entity is— engaging in acts of violence against personnel of the United States or its partners and allies; providing financing, logistics, training, or intelligence to a person described in subparagraph (A); engaging in foreign intelligence activities against the United States or its partners and allies; engaging in transnational organized crime or criminal activities; or engaging in other activities that present a direct or indirect risk to United States or partner and allied missions and forces. 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. 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. Repealed. Pub. L. 118–159, div. A, title XVII, § 1701(e) , Dec. 23, 2024 , 138 Stat. 2207 .] The term ‘covered procurement action’ means an action taken by a head of contracting activity to— exclude a person or commercial entity from an award with or without an existing contract, grant, or cooperative agreement; terminate a contract, grant, or cooperative agreement for default; or void, in whole or in part, a contract, grant, or cooperative agreement. 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. The term ‘head of contracting activity’ has the meaning described in section 1.601 of the Federal Acquisition Regulation.”

§ 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— 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 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.— 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. The Secretary shall maintain records of each contract entered into by reason of subparagraph (A). Such records shall include the following: The identity of the foreign government concerned. The nature of the contract. 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. The reasons for entering into the contract. 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: The relationship of the United States with the foreign government concerned. The obligations of the United States under international agreements. 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. 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.— 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). 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. 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. The Secretary shall establish procedures to carry out this paragraph. 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.— This section does not apply to a contract for an amount less than $100,000. 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”.

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

(a) In General.— Except as provided in subsections (c) and (e), the Secretary of Defense may not— 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 subsections (c) and (e); or 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— any covered nation; or 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: If the Secretary of Defense or the Secretary of the military department concerned— 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 waives subsection (a)(1) for such specific end item and such specific covered material for a period not exceeding 36 months. 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 in support of contingency operations or for use outside of the United States. To the purchase by the Secretary of an end item containing a covered material that is— a commercially available off-the-shelf item (as defined in section 104 of title 41 ), other than— a commercially available off-the-shelf item that is 50 percent or more tungsten by weight; or 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; 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; a neodymium-iron-boron magnet or samarium-cobalt magnet manufactured from recycled material if the milling of the recycled material and sintering of the final magnet takes place in the United States; or tantalum, tungsten, or molybdenum produced from recycled material if the contractor demonstrates to the Secretary that the recycled material was produced outside of a covered nation and the melting of the recycled material and any further processing and manufacturing of the recycled material takes place in the United States or in the country of a qualifying foreign government, as defined in section 4863(m)(11) of this title .

(d) Delegation.— The authorities in subsection (c)— may be delegated to the head of contracting activity for the relevant component for an exception for a single acquisition program; may be delegated to the senior acquisition executive of a military department for an exception for multiple programs within such military department; and may be delegated to the Undersecretary of Defense for Acquisition and Sustainment for an exception for more than one military department.

(e) National Security Waiver.— Notwithstanding subsection (a), the Secretary of Defense or the Secretary of the military department concerned, may accept the delivery of an end item containing covered material manufactured in a covered nation if the Secretary determines in writing that acceptance of such end item is necessary to the national security interests of the United States. A written determination under paragraph (1)— may be delegated— to the senior acquisition executive of the military department concerned for a waiver for one or more acquisition programs within such military department; and to the Deputy Secretary of Defense or the Under Secretary of Defense for Acquisition and Sustainment for a waiver applicable to more than one military department; shall specify the quantity of end items to which the waiver applies and the time period over which the waiver applies; and shall be provided to the congressional defense committees prior to making such a determination (except that in the case of an urgent national security requirement, such certification may be provided to the defense committees up to 7 days after it is made). If the Secretary of Defense or the authorized delegate has made a determination under subsection (k) of section 4863 of this title for a national security waiver of the restrictions under subsection (a) of that section for a specific end item, the Secretary or authorized delegate may apply that waiver to the restrictions under subsection (a) of this section for the same covered material or end item.

(f) Definitions.— In this section: The term “covered material” means— samarium-cobalt magnets; neodymium-iron-boron magnets; tungsten metal powder; tungsten heavy alloy or any finished or semi-finished component containing tungsten heavy alloy; tantalum metals and alloys; and molybdenum. The term “covered nation” means— the Democratic People’s Republic of North Korea; the People’s Republic of China; the Russian Federation; and the Islamic Republic of Iran. The term “end item” has the meaning given in section 4863(m) of this title .

§ 4873 Additional requirements pertaining to printed circuit boards

(a) In General.— Beginning on the date determined under paragraph (3), the Secretary of Defense may not acquire a covered printed circuit board from a covered nation. 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 . Paragraph (1) shall take effect on January 1, 2027 .

(b) Waiver.— The Secretary may waive the prohibition under subsection (a) if the Secretary determines in writing that— there are no significant national security concerns regarding counterfeiting, quality, or unauthorized access created by such waiver; the waiver is required to support national security; and 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. 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: The term “covered nation” means— the Democratic People’s Republic of North Korea; the People’s Republic of China; the Russian Federation; and the Islamic Republic of Iran. 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— performs a mission critical function in any product or service that is not a commercial product or commercial service; or is a component of— a defense security system; or 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. The term “Secretary” means the Secretary of Defense. 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. 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— involves command and control of an armed force; involves equipment that is an integral part of a weapon or weapon system; or subject to subparagraph (B), is critical to the direct fulfillment of military missions. 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). The term “specified type” means a printed circuit board that is— a component of an electronic device that facilitates the routing, connecting, transmitting or securing of data and is commonly connected to a network, and any other end item, good, or product specified by the Secretary in accordance with subsection (d)(2).

(d) Rulemaking.— 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— 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 either— 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 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. 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. 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.

§ 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.— 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; or in the case of a contract awarded for environmental restoration, remediation, or waste management at a Department of Defense or Department of Energy facility— 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 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) ). 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: The term “entity controlled by a foreign government” includes— any domestic or foreign organization or corporation that is effectively owned or controlled by a foreign government; and 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 . The term “proscribed category of information” means a category of information that— with respect to Department of Defense contracts— includes special access information; 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 is defined in regulations prescribed by the Secretary of Defense for the purposes of this section; and with respect to Department of Energy contracts— is determined by the Secretary of Energy to include information described in subparagraph (A)(ii); and is defined in regulations prescribed by the Secretary of Energy for the purposes of this section. The term “Secretary concerned” means— the Secretary of Defense, with respect to Department of Defense contracts; and the Secretary of Energy, with respect to Department of Energy contracts.

§ 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.— Subsection (a) does not apply under the following circumstances: 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. The procurement of a covered item for use outside of the United States. Purchases for amounts not greater than $150, 000. A p ro p ose d p roc u re m e n t inanam o u n t g re a t er t han$ 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: The term “covered item” means an article or item of— 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 sanitizing and disinfecting wipes, testing swabs, gauze, and bandages. The term “covered nation” means— the Democratic People’s Republic of North Korea; the People’s Republic of China; the Russian Federation; and the Islamic Republic of Iran.

§ 4881 Defense Industrial Reserve

(a) Declaration of Purpose and Policy.— It is the intent of Congress— to provide a comprehensive and continuous program for the future safety and for the defense of the United States by providing adequate measures whereby an essential nucleus of Government-owned industrial plants and an industrial reserve of machine tools and other industrial manufacturing equipment may be assured for immediate use to supply the needs of the armed forces in time of national emergency or in anticipation thereof; that such Government-owned plants and such reserve shall not exceed in number or kind the minimum requirements for immediate use in time of national emergency, and that any such items which shall become excess to such requirements shall be disposed of as expeditiously as possible; that to the maximum extent practicable, reliance will be placed upon private industry for support of defense production; and that machine tools and other industrial manufacturing equipment may be held in plant equipment packages or in a general reserve to maintain a high state of readiness for production of critical items of defense materiel, to provide production capacity not available in private industry for defense materiel, or to assist private industry in time of national disaster.

(b) Powers and Duties of the Secretary of Defense.— To execute the policy set forth in subsection (a), the Secretary of Defense shall— determine which industrial plants and installations (including machine tools and other industrial manufacturing equipment) should become a part of the Defense Industrial Reserve; designate what excess industrial property shall be disposed of; establish general policies and provide for the transportation, handling, care, storage, protection, maintenance, repair, rebuilding, utilization, recording, leasing and security of such property; direct the transfer without reimbursement of such property to other Government agencies with the consent of such agencies; direct the leasing of any of such property to designated lessees; authorize the disposition in accordance with existing law of any of such property when in the opinion of the Secretary such property is no longer needed by the Department of Defense; and notwithstanding chapter 5 of title 40 and any other provision of law, authorize the transfer to a nonprofit educational institution or training school, on a nonreimbursable basis, of any such property already in the possession of such institution or school whenever the program proposed by such institution or school for the use of such property is in the public interest. The Secretary of a military department to which equipment or other property is transferred from the Defense Industrial Reserve shall reimburse appropriations available for the purposes of the Defense Industrial Reserve for the full cost (including direct and indirect costs) of— storage of such property; repair and maintenance of such property; and overhead allocated to such property. The Secretary of Defense shall prescribe regulations establishing general policies and fee schedules for reimbursements under subparagraph (A).

(c) Definitions.— In this section: The term “Defense Industrial Reserve” means— a general reserve of industrial manufacturing equipment, including machine tools, selected by the Secretary of Defense for retention for national defense or for other emergency use; those industrial plants and installations held by and under the control of the Department of Defense in active or inactive status, including Government-owned/Government-operated plants and installations and Government-owned/contractor-operated plants and installations which are retained for use in their entirety, or in part, for production of military weapons systems, munitions, components, or supplies; and those industrial plants and installations under the control of the Secretary which are not required for the immediate need of any department or agency of the Government and which should be sold, leased, or otherwise disposed of. The term “plant equipment package” means a complement of active and idle machine tools and other industrial manufacturing equipment held by and under the control of the Department of Defense and approved by the Secretary for retention to produce particular defense materiel or defense supporting items at a specific level of output in the event of emergency.

§ 4882 Industrial mobilization: orders; priorities; possession of manufacturing plants; violations

(a) Ordering Authority.— In time of war or when war is imminent, the President, through the head of any department, may order from any person or organized manufacturing industry necessary products or materials of the type usually produced or capable of being produced by that person or industry.

(b) Compliance With Order Required.— A person or industry with whom an order is placed under subsection (a), or the responsible head thereof, shall comply with that order and give it precedence over all orders not placed under that subsection.

(c) Seizure of Manufacturing Plants Upon Noncompliance.— In time of war or when war is imminent, the President, through the head of any department, may take immediate possession of any plant that is equipped to manufacture, or that in the opinion of the head of that department is capable of being readily transformed into a plant for manufacturing, arms or ammunition, parts thereof, or necessary supplies for the armed forces if the person or industry owning or operating the plant, or the responsible head thereof, refuses— to give precedence to the order as prescribed in subsection (b); to manufacture the kind, quantity, or quality of arms or ammunition, parts thereof, or necessary supplies, as ordered by the head of such department; or to furnish them at a reasonable price as determined by the head of such department.

(d) Use of Seized Plant.— The President, through the head of any department, may manufacture products that are needed in time of war or when war is imminent, in any plant that is seized under subsection (c).

(e) Compensation Required.— Each person or industry from whom products or materials are ordered under subsection (a) is entitled to fair and just compensation. Each person or industry whose plant is seized under subsection (c) is entitled to a fair and just rental.

(f) Criminal Penalty.— Whoever fails to comply with this section shall be imprisoned for not more than three years and fined under title 18.

§ 4883 Industrial mobilization: plants; lists

(a) List of Plants Equipped to Manufacture Arms or Ammunition.— The Secretary of Defense may maintain a list of all privately owned plants in the United States, and the territories, Commonwealths, and possessions of the United States, that are equipped to manufacture for the armed forces arms or ammunition, or parts thereof, and may obtain complete information of the kinds of those products manufactured or capable of being manufactured by each of those plants, and of the equipment and capacity of each of those plants.

(b) List of Plants Convertible Into Ammunition Factories.— The Secretary of Defense may maintain a list of privately owned plants in the United States, and the territories, Commonwealths, and possessions of the United States, that are capable of being readily transformed into factories for the manufacture of ammunition for the armed forces and that have a capacity sufficient to warrant conversion into ammunition plants in time of war or when war is imminent, and may obtain complete information as to the equipment of each of those plants.

(c) Conversion Plans.— The Secretary of Defense may prepare comprehensive plans for converting each plant listed pursuant to subsection (b) into a factory for the manufacture of ammunition or parts thereof.

§ 4884 Industrial mobilization: Board on Mobilization of Industries Essential for Military Preparedness

The President may appoint a nonpartisan Board on Mobilization of Industries Essential for Military Preparedness, and may provide necessary clerical assistance, to organize and coordinate operations under sections 4882 and 4883 of this title. (Added Pub. L. 103–160, div. A, title VIII, § 822(a)(1) , Nov. 30, 1993 , 107 Stat. 1705 , § 2540; renumbered § 2539a, Pub. L. 103–337, div. A, title X, § 1070(a)(13)(A) , Oct. 5, 1994 , 108 Stat. 2856 ; renumbered § 4884 and amended Pub. L. 116–283, div. A, title XVIII, § 1870(e)(2) , Jan. 1, 2021 , 134 Stat. 4286 .)

§ 4891 Improved national defense control of technology diversions overseas

(a) Collection of Information on Foreign-Controlled Contractors.— The Secretary of Defense and the Secretary of Energy shall each collect and maintain a data base containing a list of, and other pertinent information on, all contractors with the Department of Defense and the Department of Energy, respectively, that are controlled by foreign persons. The data base shall contain information on such contractors for 1988 and thereafter in all cases where they are awarded contracts exceeding $10,000,000 in any single year by the Department of Defense or the Department of Energy.

(b) Technology Risk Assessment Requirement.— If the Secretary of Defense is acting as a designee of the President under section 721(a) 1 of the Defense Production Act of 1950 ( 50 U.S.C. 4565(a) ) and if the Secretary determines that a proposed or pending merger, acquisition, or takeover may involve a firm engaged in the development of a defense critical technology or is otherwise important to the defense industrial and technology base, then the Secretary shall require the appropriate entity or entities from the list set forth in paragraph (2) to conduct an assessment of the risk of diversion of defense critical technology posed by such proposed or pending action. The entities referred to in paragraph (1) are the following: The Defense Intelligence Agency. The Army Foreign Technology Science Center. The Naval Maritime Intelligence Center. The Air Force Foreign Aerospace Science and Technology Center.

§ 4892 Availability of samples, drawings, information, equipment, materials, and certain services

(a) Authority.— The Secretary of Defense and the Secretaries of the military departments, under regulations prescribed by the Secretary of Defense and when determined by the Secretary of Defense or the Secretary concerned to be in the interest of national defense, may each— sell, rent, lend, or give samples, drawings, and manufacturing or other information (subject to the rights of third parties) to any person or entity; sell, rent, or lend government equipment or materials to any person or entity— for use in independent research and development programs, subject to the condition that the equipment or material be used exclusively for such research and development; or for use in demonstrations to a friendly foreign government; make available to any person or entity, at an appropriate fee, the services of any government laboratory, center, range, or other testing facility for the testing of materials, equipment, models, computer software, and other items; and make available to any person or entity, through leases, contracts, or other appropriate arrangements, facilities, services, and equipment of any government laboratory, research center, or range, if the facilities, services, and equipment provided will not be in direct competition with the domestic private sector.

(b) Confidentiality of Test Results.— The results of tests performed with services made available under subsection (a)(3) are confidential and may not be disclosed outside the Federal Government without the consent of the persons for whom the tests are performed.

(c) Fees.— Fees made available under subsections (a)(3) and (a)(4) shall be established in the regulations prescribed pursuant to subsection (a). Such fees may not exceed the amount necessary to recoup the direct and indirect costs involved, such as direct costs of utilities, contractor support, and salaries of personnel that are incurred by the United States to provide for the testing.

(d) Use of Fees.— Fees received under subsections (a)(3) and (a)(4) may be credited to the appropriations or other funds of the activity making such services available.

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CHAPTER 385 - OTHER TECHNOLOGY BASE POLICIES AND PROGRAMS

CHAPTER 385 - OTHER TECHNOLOGY BASE POLICIES AND PROGRAMS

Sections (21)

§ 4852 Offset policy; notification

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

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

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

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

§ 4865 Prohibition on acquisition of advanced batteries composed of materials from certain foreign sources

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

“SEC. 842 ADDITIONAL ACCESS TO RECORDS.

“SEC. 843 DEFINITIONS.

§ 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

§ 4881 Defense Industrial Reserve

§ 4882 Industrial mobilization: orders; priorities; possession of manufacturing plants; violations

§ 4883 Industrial mobilization: plants; lists

§ 4884 Industrial mobilization: Board on Mobilization of Industries Essential for Military Preparedness

§ 4891 Improved national defense control of technology diversions overseas

§ 4892 Availability of samples, drawings, information, equipment, materials, and certain services

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CHAPTER 385 - OTHER TECHNOLOGY BASE POLICIES AND PROGRAMS

CHAPTER 385 - OTHER TECHNOLOGY BASE POLICIES AND PROGRAMS

Sections (21)

§ 4851 Defense memoranda of understanding and related agreements

§ 4852 Offset policy; notification

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

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

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

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

§ 4865 Prohibition on acquisition of advanced batteries composed of materials from certain foreign sources

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

“SEC. 842 ADDITIONAL ACCESS TO RECORDS.

“SEC. 843 DEFINITIONS.

§ 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

§ 4881 Defense Industrial Reserve

§ 4882 Industrial mobilization: orders; priorities; possession of manufacturing plants; violations

§ 4883 Industrial mobilization: plants; lists

§ 4884 Industrial mobilization: Board on Mobilization of Industries Essential for Military Preparedness

§ 4891 Improved national defense control of technology diversions overseas

§ 4892 Availability of samples, drawings, information, equipment, materials, and certain services

Graph View

Table of Contents

Backlinks

§ 4851 Defense memoranda of understanding and related agreements

§ 4852 Offset policy; notification

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

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

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

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

§ 4865 Prohibition on acquisition of advanced batteries composed of materials 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

§ 4881 Defense Industrial Reserve

§ 4882 Industrial mobilization: orders; priorities; possession of manufacturing plants; violations

§ 4883 Industrial mobilization: plants; lists

§ 4884 Industrial mobilization: Board on Mobilization of Industries Essential for Military Preparedness

§ 4891 Improved national defense control of technology diversions overseas

§ 4892 Availability of samples, drawings, information, equipment, materials, and certain services