(c) Whoever, by collusion, understanding, or arrangement, deprives or attempts to deprive the United States of the benefit of a full and free competition under this chapter or of a full and free audit, so far as necessary to disclose the cost of executing the contract, of the books of a person carrying out a contract under this chapter shall be fined not more than $20,000 or imprisoned for not more than five years, or both.

(Aug. 10, 1956, ch. 1041, 70A Stat. 126; Sept. 7, 1962, Pub. L. 87-651, title I, § 131, 76 Stat. 514.)

§ 2277. Appropriations; availability

Any appropriation available to a military department for the procurement of aircraft, aircraft parts, or aeronautical accessories may be used by that department to buy designs and pay the costs of arbitration under this chapter.

(Aug. 10, 1956, ch. 1041, 70A Stat. 127.)

§2278. Purchase of sample aircraft

The Secretary of the Army or the Secretary of the Air Force may buy a sample aircraft from an unsuccessful bidder in a competition held by his department and requiring the submission of sample aircraft. However, not more than one sample aircraft may be bought from each of the first, second, and third of those bidders in order of merit, at prices not more than 75, 60, and 50 percent, respectively, of the cost of developing and manufacturing the sample, as determined by the Secretary of the military department concerned. (Aug. 10, 1956, ch. 1041, 70A Stat. 127.)

§ 2279. Aircraft: restrictions on alien employees of contractor

Unless the Secretary of the military department concerned first consents in writing, an alien employed by a person who contracts under this chapter to furnish or construct aircraft, aircraft parts, or aeronautical accessories for the United States may not have access to the plans or specifications for the contracted items or to the work under construction, and may not participate in the trials under the contract.

(Aug. 10, 1956, ch. 1041, 70A Stat. 127.)

37-PROCUREMENT GENERALLY 1

icy.

napter.

ntracts: formal advertising; exceptions.

nents for bids; time; opening; award; rejection.

3.

S.

delegation of procurement functions and responsibilities. opriations.

nd decisions.

dated damages.

poks and records of contractor.

to agencies named in section 2303 of this title.

to the procurement of automatic data processing equip-
ices for certain defense purposes.
tity of contractor.

f policy

finds that in order to ensure national defense serve fiscal resources, and to enhance defense , it is in the interest of the United States to services for the Department of Defense in the ic, and efficient manner. It is therefore the that services and property (including weapon ed items) for the Department of Defense be accontract, other than cost-plus-a-percentage-ofcluding multiyear contracts, that will promote United States. Further, it is the policy of the contracts, when practicable, provide for the

$2302. Definitions In this chapter

at times and in quantities that will result in
Government and provide incentives to contrac-
uctivity through investment in capital facili-
advanced technology.

licy of the Congress that contracts for advance
ponents, parts, and materials necessary for
ogistics support of a weapon system should, if
ble, be entered into in a manner to achieve
es and more efficient production rates.
olicy of Congress that a fair proportion of the
acts made under this chapter be placed with

ns.

(1) "Head of an agency" m
retary, or any Assistant Se
Force; the Secretary of Tran
the National Aeronautics an
(2) "Negotiate" means ma
(3) "Formal advertising"
section 2305 of this title.
Aug. 10, 1956, ch. 1041, 70A S
368, title III, § 301(b), 72 Stat.
1(43A), 72 Stat. 1457; Dec.
$511(74), 94 Stat. 2926.)

(although technically incorrectly) referred to as the "Armed Servdition to the defense procurement procedures prescribed by this of this title, numerous limitations on defense procurement are preal Department of Defense Appropriation Act.

$2303. Applicability of chapter

(a) This chapter applies to t
chase, by any of the following a
all property named in subsect
payment is to be made from app
(1) The Department of the
(2) The Department of th
(3) The Department of th
(4) The Coast Guard.
(5) The National Aeronau

(b) This chapter does not cov
including-

(1) public works;

(2) buildings;

(3) facilities;

(4) vessels;

(5) floating equipment;

(6) aircraft;

(7) parts;

(8) accessories;

(9) equipment; and

(10) machine tools.

(c) The provisions of this ch of property apply also to contr (Aug. 10, 1956, ch. 1041, 70A 568, title III, § 301(b), 72 Stat. 4 $2304. Purchases and contra (a) Purchases of and contrac this chapter shall be made l

Section 502 of the Department of Defe 1112a) of the Department of Defense Aut

(a) Purchases of and contracts for property or services covered by this chapter shall be made by formal advertising, and shall be awarded on a competitive bid basis to the lowest responsible bidder, in all cases in which the use of such method is feasible and practicable under the existing conditions and circumstances. If use of such method is not feasible and practicable, the head of an agency, subject to the requirements for determinations and findings in section 2310, may negotiate such a purchase or contract, if

(1) it is determined that such action is necessary in the public interest during a national emergency declared by Congress or the President;

(2) the public exigency will not permit the delay incident to advertising;

(3) the aggregate amount involved is not more than $25,000; (4) the purchase or contract is for personal or professional services;

(5) the purchase or contract is for any service by a university, college, or other educational institution;

(6) the purchase or contract is for property or services to be procured and used outside the United States and the Territories, Commonwealths, and possessions;

(7) the purchase or contract is for medicine or medical supplies;

(8) the purchase or contract is for property for authorized resale;

(9) the purchase or contract is for perishable or nonperishable subsistence supplies;

(10) the purchase or contract is for property or services for which it is impracticable to obtain competition;

(11) the purchase or contract is for property or services that he determines to be for experimental, developmental, or research work, or for making or furnishing property for experiment, test, development, or research;

(12) the purchase or contract is for property or services whose procurement he determines should not be publicly disclosed because of their character, ingredients, or components;

(13) the purchase or contract is for equipment that he determines to be technical equipment whose standardization and the interchangeability of whose parts are necessary in the

(B) if the contractor fails to repair or replace such parts promptly, as determined by the Secretary of Defense, the contractor will pay the costs incurred by the United States in procuring such parts from another source.

(b) A written guarantee provided pursuant to subsection (a) shall not apply in the case of any weapon system or component thereof which has been furnished by the Government to a contrac

tor.

(c) The Secretary of Defense may waive the requirements of subsection (a) in the case of a weapon system if the Secretary

(1) determines that the waiver is necessary in the interest of the national defense or would not be cost-effective; and

(2) notifies the Committees on Armed Services and Appropriations of the Senate and the House of Representatives in writing of his intention to waive such requirements with respect to such weapon system and includes in the notice an explanation of the reasons for the waiver.

pricing data which, as of a date agreed upon which date shall be as close to the date of gotiated price as is practicable), was inaccuoncurrent: Provided, That the requirements 1 not be applied to contracts or subcontracts iated is based on adequate price competition, market prices of commercial items sold in to the general public, prices set by law or ptional cases where the head of the agency quirements of this subsection may be waived is reasons for such determination.

of evaluating the accuracy, completeness, and icing data required to be submitted by this 'ized representative of the head of the agency of the United States Government shall have xpiration of three years after final payment subcontract, to examine all books, records, data of the contractor or subcontractor relatpricing, or performance of the contract or

1 agency may enter into contracts for periods years for the following types of services (and 1 to such services) for which funds would othor obligation only within the fiscal year for

maintenance, and support of facilities and in

e or modification of aircraft, ships, vehicles, complex military equipment;

raining necessitating high quality instructor le, pilot and aircrew members; foreign lannd

s (for example, ground maintenance; in-plane nsportation; refuse collection and disposal);

t

e a continuing requirement for the services urrent plans for the proposed contract period; ng of such services will require a substantial in plant or equipment, or the incurrence of gent liabilities for the assembly, training, or a specialized work force; and

uch a contract will promote the best interests tes by encouraging effective competition and nies in operation.

such contracts, the head of the agency shall wing principles:

of the cost of any plant or equipment amorcontract performance should not exceed the period of contract performance and the an

utility of the facilities rath
with due consideration giv
facilities, specialized nature

(B) Consideration shall be
ing an option to renew the c
to exceed three years, at
plant, equipment and other
tized.

(C) Consideration shall be
ing in the agency the right,
portion of the cost of the
thereto under appropriate c

(3) In the event funds are no
ation of such a contract into a s
shall be canceled or terminated
termination may be paid from—
(A) appropriations origin
of the contract concerned;
(B) appropriations curren
type of services concerned, a
(C) funds appropriated for

(h)(1) To the extent that fund
bon, the head of an agency ma
than contracts described in para
erty, including weapon systems
with weapon systems (or the log
linds-

(A) that the use of such
security of the United Sta
costs under the contract;

(B) that the minimum n
is expected to remain subs
templated contract period
ment rate, and total quant
(C) that there is a reas
the comtemplated contrac
will request funding for t
avoid contract cancellation

(D) that there is a stab
quired and that the techn
erty are not excessive; and
(E) that the estimates of
anticipated cost avoidance
tract are realistic.

(2)(A) The Secretary
tion regulations to promote the
thorized by paragraph (1) in a
cient use of multiyear contract
(B) Such regulations may p
such multiyear contracts to t

utility of the facilities rather than the physical life thereof, with due consideration given to such factors as location of facilities, specialized nature thereof, and obsolescence.

(B) Consideration shall be given to the desirability of obtaining an option to renew the contract for a reasonable period not to exceed three years, at prices not to include charges for plant, equipment and other nonrecurring costs, already amortized.

(C) Consideration shall be given to the desirability of reserving in the agency the right, upon payment of the unamortized portion of the cost of the plant or equipment, to take title thereto under appropriate circumstances.

(3) In the event funds are not made available for the continuon of such a contract into a subsequent fiscal year, the contract all be canceled or terminated, and the costs of cancellation or mination may be paid from

(A) appropriations originally available for the performance of the contract concerned;

(B) appropriations currently available for procurement of the type of services concerned, and not otherwise obligated; or

(C) funds appropriated for those payments.

a) (1) To the extent that funds are otherwise available for obliga1, the head of an agency may make multiyear contracts (other n contracts described in paragraph (6)) for the purchase of prop, including weapon systems and items and services associated a weapon systems (or the logistics support thereof), whenever he

S

(A) that the use of such a contract will promote the national security of the United States and will result in reduced total costs under the contract;

(B) that the minimum need for the property to be purchased is expected to remain substantially unchanged during the contemplated contract period in terms of production rate, procurement rate, and total quantities;

(C) that there is a reasonable expectation that throughout the comtemplated contract period the Department of Defense vill request funding for the contract at the level required to avoid contract cancellation;

(D) that there is a stable design for the property to be acquired and that the technical risks associated with such proprty are not excessive; and

(E) that the estimates of both the cost of the contract and the nticipated cost avoidance through the use of a multiyear conract are realistic.

A) The Secretary of Defense shall prescribe defense acquisiregulations to promote the use of multiyear contracting as aued by paragraph (1) in a manner that will allow the most effiuse of multiyear contracting.

Such regulations may provide for cancellation provisions in multiyear contracts to the extent that such provisions are