Policy Lab / October 17, 2026
Federal discussion draft · Not introduced or enacted
A proposed federal framework for defense competition, verifiable noncompetitive pricing, repair rights, supplier entry, procurement integrity, and industrial resilience, with $20 billion in new direct appropriations.
Unoffset proposed funding · No official budget score · Savings are hypothetical
Competition, fair pricing, and independent sustainment · 18 titles · 137 sections · 8 nonstatutory appendices
No official congressional filing, sponsor or referral is represented.
A guide to this proposal
The proposal would give public buyers stronger tools to test prices, qualify alternative suppliers, obtain usable repair rights, and address misconduct while preserving lawful profit, political speech, existing priced commitments, and judicial review.
Analysis is commentary. Model text is a proposal. Fiscal scenarios, where provided, are illustrative.
Foundation Analysis
The draft links pricing discipline with the capacity to switch suppliers and maintain equipment. That is a coherent policy mechanism, but achieving it depends on technical delivery, qualified staff, credible market evidence, and reconciliation with recent acquisition law.
In plain language: The proposal would give public buyers stronger tools to test prices, qualify alternative suppliers, obtain usable repair rights, and address misconduct while preserving lawful profit, political speech, existing priced commitments, and judicial review.
Risk-based pricing review, prospective repair licenses, second-source investment, and market monitoring address different causes of dependence. The bill preserves lawful profit and rejects automatic breakup, viewpoint discrimination, and unpriced appropriation of private technology. Lower prices and greater resilience can conflict when duplicate capacity raises costs.
Commercial-product and subcontract applicability, new nontraditional-contractor exceptions, and the whistleblower denial pathway need express reconciliation. Judicial penalties, compensation, notice, and review reduce constitutional risk but do not resolve every speech, property, jury, or jurisdiction question. The supplied text remains unchanged.
The transition and ten-program-year appropriation totals $20 billion: $0.5B + $1.5B + four installments of $2.25B + five of $1.8B. It has no enacted offset. The supplied 2% and 5% price-reduction cases reproduce $15B and $37.5B in hypothetical avoided obligations; neither is an official savings forecast or deficit score.
Second-source qualification, secure technical data, experienced acquisition staff, and supplier participation are binding constraints. Service members may gain availability and repair options; smaller firms may gain access while facing disproportionate compliance costs. Agencies need funded pilots and outcome baselines before expanding requirements.
a substantive platform for procurement reform that warrants further development. Its strongest features are prospective application, calibrated duties, explicit funding, separation of remedies, and attention to real production and repair capability. It is not ready to be described as filing-ready without a commercial-acquisition and FY2026 statutory crosswalk, a complete retaliation remedy, agency implementation estimates, supplier-burden testing, and official budget review.
Foundation review dated October 17, 2026. Supplied model legislation, not introduced or enacted law, an official counsel opinion, legal advice, or an official CBO/JCT score. Selected current primary-source checks and reproducible arithmetic do not constitute a full legal citator search, systematic evidence review, measured savings estimate, or constitutional certification.
02 / Policy mechanisms
Sections 401–410
Screen noncompetitive acquisitions above $250,000, require defined supplemental factual certification at $2 million for the high-risk subset, and obtain independent review above $10 million. Commercial evidence, research exceptions, emergency bridges, and materiality safeguards qualify the duties. These are proposed thresholds, not a statement of today’s general rules.
Sections 301–309 and 801–807
Map actual ownership and capacity, review qualifying control transactions, and fund qualification, tooling, and shared infrastructure. A second corporate name is not a qualified production source; entry must include rights, workers, capacity, security, and a sustainable demand case.
Sections 701–710
Identify necessary technical and software rights before award; price them separately; validate delivered data; and qualify secure repair. Rights acquisition does not by itself create working maintenance capability, and compensation and scope limits matter for privately financed technology.
Sections 506–508 and 601–607
Apply targeted conditions to substantial assistance recipients after specified production failure; scrutinize pass-through charges; support timely supplier payment; and limit certain exclusionary terms. The draft does not impose a universal profit ceiling or dividend prohibition.
Titles IX, XIV and XV
Bound emergency decisions and indispensable-supplier accommodations with records and review. Contract adjustments, responsibility decisions, knowing misconduct, and whistleblower claims use different standards and forums. Readiness protection cannot make proven misconduct disappear.
Titles XII, XIII, XVI and XVII
Combine workforce investment, protected records, controlled pilots, independent evaluation, and purpose-specific accounts. Track operational availability, qualification time, usable repair rights, supplier participation, and net implementation costs rather than treating gross recoveries as total success.
Repair independence requires usable information, lawful rights, tools and qualified people. This imagined mechanical study illustrates modularity; it is not a working design or a real facility.
03 / Independent fiscal reproduction
The appropriation is explicit. Its sufficiency and economic return are unproven.
Section 1702 supplies $0.5B at enactment, $1.5B for program year 1, $2.25B annually in years 2–5, and $1.8B annually in years 6–10. Program year 1 is the first full fiscal year after enactment. “Through year 1” includes the separate transition period and is not necessarily a twelve-month window.
No new installments in years 11–30.
| Measure | Through Y1 | Through Y5 | Through Y10 |
|---|---|---|---|
| New budget authority | 2.00 | 11.00 | 20.00 |
| 0% illustrative avoided obligations | 0 | 0 | 0 |
| 2% illustrative avoided obligations | 0 | 5.00 | 15.00 |
| 5% illustrative avoided obligations | 0 | 12.50 | 37.50 |
The source assumes a flat $100B annual eligible purchasing pool and coverage of 0%, 25%, 50%, 75%, then 100% in years 5–10. The pool is hypothetical. The 2% case is an assumption, not a central forecast. $20B ÷ $750B = 2.67% is an arithmetic equality, not validated budget break-even.
The first three allocations permit limited transfers under section 1703(c). The 5% grant-administration cap applies to the diversification allocation, not all administration. Recoveries, avoided obligations, outlays and budget authority are different measures. No new revenue or rescission offsets the schedule. A hypothetical $1.8B annual extension in years 11–30 would require another $36B; the bill does not appropriate it.
04 / Explore assumptions
Change the hypothetical purchasing base, price change, and private compliance cost. Negative price reductions model price increases. This extends the author’s illustration; it does not forecast outcomes or change the bill.
Coverage follows the supplied ten-year ramp. Private compliance is a flat annual assumption and is not federal spending. Comparing these nominal totals mixes fiscal and resource concepts; it is only a sensitivity aid. Outlay timing, borrowing costs, rights valuation, demand, quality, supplier exit and wider effects are not estimated. Zero private compliance is a starting assumption, not a finding of zero burden.
05 / Primary evidence
Selected official sources checked October 17, 2026. All four GAO reports cited in the source packet were verified, including the June 2026 F-35 report. These findings establish problems and constraints; they do not validate the draft’s thresholds, funding level, or predicted effects.
GAO identifies gaps in defense transaction review and post-merger monitoring. Historical review counts are not a current coverage rate. Better staffing and market maps are supported responses; the report does not validate the draft’s specific notice thresholds or presumption.
GAO’s selected sustainment programs expose weaknesses in planning and checking technical-data deliverables. The relevant outcome is an independent, safe repair using lawful rights and usable information. This evidence does not price a nationwide licensing program.
The June 2026 F-35 report documents persistent readiness and sustainment challenges. Its findings support scrutiny of incentives and capacity. They do not establish fraud, recoverable overpayments, or the effect this draft would have on the fleet.
GAO found incomplete linkage of prototype other transactions to follow-on production, including later FAR contracts. Common identifiers and actual-performer records could help evaluation; its selected case study cannot establish the performance of all other transactions.
Shipbuilding and weapon-system evidence identifies demand uncertainty, workforce, coordination, immature technology and acquisition-planning constraints. More suppliers or stronger price review may help some markets, but can add duplicated fixed costs or delays in others.
GAO shipbuilding industrial investments ↗ · GAO 2026 weapon systems assessment ↗
06 / Independent review
These findings are Foundation commentary. The supplied legislation has not been silently rewritten.
Sections 104, 402, 601–607, 1804–1805
The draft’s broad coverage does not expressly reference 10 U.S.C. §§3452 and 3459. Section 3452(e)(4) specifically addresses later statutes that refer to it and apply notwithstanding it; section 3459 limits commercial-subcontract flowdowns. The certification override of §§3702–3704 does not by itself settle this separate architecture. Specify intended coverage for commercial products, services, COTS and lower tiers, and add targeted conforming language. This is an applicability issue requiring reconciliation, not a conclusion that all commercial coverage fails.
Section 1501(e)–(g)
The new de novo action follows 180 days without final agency resolution, but does not expressly cover an earlier adverse final decision. It also needs clear investigation, decision, remedy and order-enforcement powers for newly covered applicants, former workers and individual contractors. Preserving existing rights does not necessarily supply the same remedy to the expanded population. Add a denial-or-timeout trigger and align service, exhaustion, tolling and overlap rules; section 4701(c)(3) supplies a useful comparator.
Sections 402, 407, 409 and 1804
The proposed $2 million duty is an express policy choice, not a mistaken quotation of the existing threshold. Current section 3702 generally uses $10 million for specified post-June 30, 2026 awards. The draft overrides threshold and anticipated-bid limits, but should expressly reconcile FY2026 NDAA section 1826 nontraditional-contractor exemptions and the section 3709 accelerated pricing program. The independent duty and existing exceptions have different populations. Use applicable deviations as well as base FAR text.
10 U.S.C. §3702 ↗ · FY2026 NDAA, Public Law 119-60 ↗ · Official DFARS overhaul deviation register ↗
Sections 1301, 1601 and 1801
Main transaction duties begin at day 540, while the principal integrated records capability is due within two years. Interim channels are therefore a material dependency. Before the first covered awards, demonstrate secure submissions, identity matching, access logs, retention, correction and review capacity. The existing alternative-channel safeguards help, but a statutory deadline does not establish operational readiness.
Section 606(a)
The exclusivity limitation uses “contract financed under this Act,” rather than the broader “covered acquisition.” Title XVII funds implementation and assistance, not all defense purchases. Decide whether that narrower perimeter is intended and explain it explicitly. A public description should not promise procurement-wide exclusivity limits under this clause.
Sections 305 and 1801(c)
Notice and waiting requirements in sections 303–304 expressly begin at day 540. Section 305 depends on transactions subject to section 303, which supports that same timing, but is not named in the delay list. State the substantive prohibition’s date expressly to avoid disputes with the day-180 general default. This is an avoidable ambiguity, not evidence of intended retroactivity.
Sections 701–710 and 1301
FY2026 NDAA section 805 already directs technical-data tracking, missing-data assessment, negotiated-rights options and escrow consideration. Map and reuse that work. The proposal correctly provides prospective scope, compensation and necessity findings; actual rights valuation, secure delivery and successful repair still need technical and contractual testing.
Titles VII, X, XIV and XV
DOJ district-court penalties and applicable jury rights address the adjudication concern illustrated by Jarkesy. Narrow procurement disclosures, protected viewpoints and exclusion of unrelated donor lists reduce speech risks, but need an evidentiary record and careful implementation. Compensated prospective rights and existing-contract protections reduce property risk without guaranteeing litigation outcomes. The two-year representation restriction reaches some behind-the-scenes advice and merits role-specific workforce analysis.
SEC v. Jarkesy, Supreme Court opinion ↗ · Americans for Prosperity Foundation v. Bonta ↗
Section 1006(c)–(d)
The clause requires an express conflict contingency and use of covered federal funds. Commingled receipts and lawful fixed-price profits need an administrable tracing rule consistent with protected private advocacy. Overbroad tracing could burden lawful speech; formal segregation alone could defeat the condition. No misconduct by a particular firm is inferred.
Sections 1702–1707 and supplied Appendix D
The author’s zero-reduction case is not a full adverse case: supplier exit, compliance, qualification failures, delays or reduced scale can increase prices. The $100B pool and 2% assumption are not measured estimates. Year-6 annual authority falls 20% nominally from $2.25B to $1.8B, and new installments stop after year 10 while duties continue. Price changes, private burdens, upkeep, agency resources and future appropriations need separate modeling.
Amendment numbering was checked separately: the proposed new subsections in sections 3702, 3771 and 3841 do not collide with the operative subsections retrieved. A historical codification note is not an existing subsection. Recheck the code and active acquisition deviations at filing; the retrieved official Code pages stated currency through Public Law 119-120, October 7, 2026.
07 / Implementation
| Stage | Lead actors | Work and safeguards |
|---|---|---|
| Enactment–90 days | Secretary and agency heads | Create the Office, designate accountable owners, establish accounts, and inventory capacity. Appropriations and specified establishment provisions take effect immediately; obligations remain limited by available authority. |
| Days 90–180 | Acquisition, ethics, workforce and rulemaking teams | Prepare proposed rules, staffing and supplier-burden analysis. General operation and protected-reporting provisions begin at day 180 under section 1801, with specific exceptions. |
| Days 180–365 | Secretary, FAR Council and technical teams | Complete final rules, baseline measures, secure access controls, draft clauses, and lawful pilots. Rulemaking delay does not suspend independently operative duties. |
| Days 365–540 | Contracting activities and antitrust agencies | Train staff, test submissions and review capacity, publish clauses, and verify notice procedures. Main new transaction duties apply at day 540, subject to the precise transition provisions. |
| Years 2–5 | Program offices, DOJ, FTC, IG and GAO | Evaluate additional sourcing and repair outcomes, review concentration and delays, test data delivery, and correct failed interventions. Maintain independent oversight and five-year review. |
| Years 6–10 and beyond | Congress and implementing agencies | Evaluate retained capacity and full lifecycle costs; decide future funding. No new installments for program years 11–30 are supplied by this bill. Continuing duties remain subject to lawful funding. |
08 / Distribution and evaluation
Potentially faster repair, reliable supply and stronger negotiation. Additional review can delay awards; quality, mission readiness and lifecycle value must be measured alongside price.
Finance new authority before benefits are proven. Savings may permit additional purchases rather than reduce outlays; financing costs, maintenance liabilities and opportunity costs remain unscored.
Face additional evidence, competition and targeted assistance conditions. Lawful margins and existing commitments remain protected; stronger intervention can still affect investment incentives and risk pricing.
May gain qualification support, prompt payment and access. Compliance, certification and security costs can deter participation; ordinary-record alternatives need usability testing and actual burden data.
May gain apprenticeship and diversified production. Facility duplication or changes in demand can disrupt jobs and local tax bases; benefits should be measured by durable placement and retained capability.
DOD-administered foreign purchases may receive covered protections without automatic technology transfer. Speech, trade secrets, classified details and personal information require distinct protections.
These are mechanism-based assessments, not measured incidence estimates or stakeholder endorsements.
| Outcome | Measure | Necessary control |
|---|---|---|
| Qualified alternatives | Independently controlled sources with tested capacity and usable rights | Market-level baseline; report qualification time, retained capability and failed entrants. |
| Value and readiness | Quality-adjusted lifecycle cost, delivery reliability, repair time and availability | Match quantities and specifications; account for inflation, design changes and government-caused delay. |
| Supplier burden | Hours, compliance cost, bid participation and exit by firm size | Compare eligible cohorts; publish waiver use and reasons without exposing protected costs. |
| Fiscal accountability | Authority, obligations, outlays, recoveries and avoided obligations | Separate each measure; prevent double counting between price credits, fraud settlements and cost avoidance. |
| Rights and oversight | Validated data packages, secure access, appeal outcomes and retaliation resolution | Test actual independent repair; audit access and publish reversal and delay rates. |
Pilots should state the eligible population, comparison method, full costs and stopping criteria in advance. Publish adverse results. Do not measure savings from inflated opening bids, count a nominal competitor as qualified capacity, or treat a settlement as proof of every allegation.
09 / Foundation relevance
The proposal connects public institutional capacity, fair market access, durable repair, worker opportunity and oversight. Its relevance to the Foundation’s human-rights work lies in due process and protected speech; its connection to international cooperation concerns lawful procurement and resilient institutions. It does not itself authorize or end war, establish that commercial incentives caused a conflict, or create a Foundation-funded program.
10 / Method and source integrity
The complete supplied DOCX is retained byte for byte. The web reader preserves all nonempty body paragraphs, five tables, and the source hyperlinks in order. Titles I–XVIII and appendices A–H remain visibly distinct. We reproduce the stated fiscal schedule and sensitivity arithmetic; review statutory interfaces and selected primary research; and identify policy, distributional, legal, operational, and evaluation questions. This is a targeted desk review, not an exhaustive case-law update, national benefit-cost model, classified-program assessment, or agency feasibility certification. No forecast, enactment, sponsor, official committee referral, or Foundation delivery program is inferred.
The packet contains 40,729 whitespace-delimited words including tables and front matter; 1,460 nonempty paragraphs; 137 unique operative sections; five tables; and 32 external hyperlinks. The 111-page review render places the end of statutory text on page 86 and the first appendix on page 87. All 300 internal document link targets resolve. Representative visual checks covered the boundary and all five tables; no claim of a page-by-page visual certification is made.
Original visual studies were generated for this page: a wide civic-foundry hero, a separately composed portrait counterpart, and a modular repair study. Artwork prompts and provenance.
Historical merger-review coverage and current resource limitations; not a finding that every merger harms competition.
Selected programs show rights-planning and deliverable-review problems; not a nationwide rights valuation.
Readiness, parts, technical-data and incentive issues; not proof of fraud or recoverable overpayments.
Incomplete prototype-to-production linkage; the 18-system study is nongeneralizable.
Coordination, workload and investment-effectiveness constraints.
Maturity and delivery findings for 104 costly programs; not all DOD purchases.
Commercial-contract and subcontract applicability; subsection (e)(4) concerns express later statutes.
Sections 805, 812, 1824 and 1826: technical data, accelerated pricing, commercial flowdowns and nontraditional contractors.
Current certification thresholds and conditions; distinct from proposed independent section 402 duty.
Existing defense contractor whistleblower framework includes a denial-or-timeout court pathway.
Technical-data rights framework and FY2026 NDAA section 805 note.
Securities-fraud civil-penalty jury holding; not a conclusion about every procurement remedy.
Narrow tailoring for compelled associational disclosure where exacting scrutiny applies.
Active acquisition deviations and effective dates must be included in a filing crosswalk.
Full Text
Read the legislation.
The complete supplied packet follows. Titles I–XVIII are proposed statutory text; appendices A–H are the source author’s nonstatutory commentary. Foundation analysis above is separate. Document contents page numbers refer to the original Word edition.
FEDERAL LEGISLATIVE DISCUSSION DRAFT
Full legislative text and nonstatutory counsel’s appendices
Competition · Fair pricing · Repair independence Industrial resilience · Procurement integrity
18 TITLES | 137 SECTIONS | 8 APPENDICES
October 17, 2026
Prepared for policy development. This proposed legislation has not been introduced or enacted. The supporting fiscal analysis is not an official Congressional Budget Office score.
This edition contains the complete proposed Defense Industry Normalization Act, followed by explanatory material that is expressly outside the legislation. The Word and PDF editions contain the same full text.
Titles I through XVIII set out definitions, duties, institutional authority, procurement standards, competition controls, enforcement, remedies, appropriations, transition rules, and severability. The formal enacting clause begins the proposed bill. The marker after section 1806 ends the legislative text.
Appendices A through H provide a design overview, commentary on all 137 sections, constitutional and legal-risk analysis, a fiscal note, operational planning, stakeholder and public explanations, a linked source register, and a Quality-Check. These materials explain the proposal but do not themselves create legal obligations.
The proposed appropriation schedule supplies $20 billion in new direct budget authority across a transition period and ten program years. It does not enact an offset or assume that future savings pay for the program. The draft preserves lawful profit, political speech, procedural protections, and existing priced commitments while imposing targeted prospective safeguards.
The contents entries link to the corresponding title, section, or appendix. Section numbering is stable across the legislative text and commentary. Page references apply to this edition; editing the Word document may change pagination.
Drafting and source-check date: October 17, 2026. The proposal requires introduction-date legal reconciliation and official fiscal review before legislative filing.
Title I. General Provisions 7
Sec. 101. Short title; purposes. 7
Sec. 102. Congressional findings. 7
Sec. 103. Definitions. 8
Sec. 104. Scope and calibrated application. 10
Sec. 105. Rights, authority, and construction. 11
Sec. 106. Valuation, aggregation, and anti-evasion. 11
Sec. 107. Implementation standards and minimum safeguards. 12
Title II. Administration, Expertise, And Institutional Accountability 13
Sec. 201. Defense Competition and Pricing Office. 13
Sec. 202. Preservation of audit and investigative independence. 13
Sec. 203. Acquisition and audit workforce. 14
Sec. 204. Interagency coordination. 14
Sec. 205. Industrial-base market map. 15
Sec. 206. Rules, standard clauses, and consultation. 15
Sec. 207. Petitions and correction of systemic failures. 16
Title III. Competition, Consolidation, And Market Access 17
Sec. 301. Competition and dependency plans. 17
Sec. 302. Designation of critical defense inputs. 17
Sec. 303. Supplemental notice of defense-industry transactions. 18
Sec. 304. Review period and coordination with antitrust authorities. 18
Sec. 305. Defense-market competition standard. 19
Sec. 306. Remedies and monitoring of transactions. 20
Sec. 307. Access to essential contract inputs. 20
Sec. 308. Joint ventures, teaming, and collective production. 21
Sec. 309. Retrospective review and restoration of competition. 21
Title IV. Noncompetitive Pricing And Verifiable Cost Information 22
Sec. 401. Risk-based pricing review. 22
Sec. 402. Supplemental certified factual pricing data. 22
Sec. 403. Data other than certified cost or pricing data. 23
Sec. 404. Verified commercial-market evidence. 24
Sec. 405. Price methodology and reasonable return. 24
Sec. 406. Data refusal; protected lower-tier submission. 25
Sec. 407. Supplemental audit and records authority. 25
Sec. 408. Price correction and recovery of unsupported payments. 26
Sec. 409. Unallowable charges and public investment accounting. 26
Sec. 410. Pricing review quality and accountability. 27
Title V. Contract Design, Performance, And Public Investment 28
Sec. 501. Selection of contract type and allocation of risk. 28
Sec. 502. Meaningful incentives and acceptance standards. 28
Sec. 503. Requirements changes, modifications, and cost growth. 29
Sec. 504. Multiyear procurement and capacity reservations. 29
Sec. 505. Warranties, quality, and lifecycle accountability. 30
Sec. 506. Conditions on production assistance. 30
Sec. 507. Capital distributions during an uncured publicly supported production failure. 31
Sec. 508. Executive incentive integrity. 32
Title VI. Subcontracting, Affiliates, And Fair Supplier Treatment 33
Sec. 601. Visibility through subcontracting tiers. 33
Sec. 602. Pass-through charges and value added. 33
Sec. 603. Related-party transactions and ownership diligence. 34
Sec. 604. Timely and accurate payment of subcontractors. 34
Sec. 605. Responsibility for lower-tier compliance. 35
Sec. 606. Exclusivity and supplier retaliation. 35
Sec. 607. Consolidated compliance and small-supplier relief. 36
Title VII. Technical Rights, Repair, Software Continuity, And Interoperability 37
Sec. 701. Lifecycle technical-rights strategy. 37
Sec. 702. Delivery and verification of maintenance information. 37
Sec. 703. Prospective repair and sustainment license. 38
Sec. 704. Escrow and continuity arrangements. 38
Sec. 705. Software access, portability, and disabling restrictions. 39
Sec. 706. Modular architecture and open interfaces. 39
Sec. 707. Validation of restrictions and dispute resolution. 40
Sec. 708. Authorized independent repair. 40
Sec. 709. Government-owned tooling and production assets. 41
Sec. 710. Licensing assistance and lawful compensation. 41
Title VIII. New Entrants, Second Sources, And Public Industrial Capacity 42
Sec. 801. Defense supplier diversification program. 42
Sec. 802. Second-source qualification and demand discipline. 43
Sec. 803. Shared facilities and public production options. 43
Sec. 804. Qualification, testing, and solicitation access. 44
Sec. 805. Working capital and payment assistance. 44
Sec. 806. Research-to-production transition and other transactions. 45
Sec. 807. Small-business access and continued independence. 46
Title IX. Emergency Procurement And Conflict-Independent Readiness 47
Sec. 901. Covered emergency determination. 47
Sec. 902. Narrowly tailored emergency exceptions. 47
Sec. 903. Emergency price definitization and audit. 48
Sec. 904. Emergency delivery, substitution, and integrity. 48
Sec. 905. Readiness availability agreements. 49
Sec. 906. Orderly drawdown and termination. 49
Sec. 907. Stockpile and production planning. 50
Sec. 908. Independent review after emergency use. 50
Title X. Procurement Integrity, Financial Conflicts, And Protected Advocacy 51
Sec. 1001. No reimbursement of political influence costs. 51
Sec. 1002. Procurement-contact records. 51
Sec. 1003. Financial conflicts of acquisition officials. 52
Sec. 1004. Program-specific post-employment safeguard. 52
Sec. 1005. Advisory research and material financial interests. 53
Sec. 1006. Improper contingent payments and influence arrangements. 54
Sec. 1007. Independent governmental requirements and policy judgments. 54
Sec. 1008. First Amendment and associational safeguards. 55
Title XI. International Procurement And Arms-Transfer Integrity 56
Sec. 1101. Government-administered foreign military purchases. 56
Sec. 1102. Direct commercial purchases supported by federal assistance. 56
Sec. 1103. Brokers, commissions, and offset arrangements. 57
Sec. 1104. End-use compliance and delivery representations. 57
Sec. 1105. Allied competition and reciprocal capability. 58
Sec. 1106. Foreign-law conflicts and unavailable records. 58
Title XII. Workforce, Communities, And Industrial Resilience 59
Sec. 1201. Defense industrial workforce partnerships. 59
Sec. 1202. Workforce and facility continuity plans. 59
Sec. 1203. Transition to alternative and dual-use production. 60
Sec. 1204. Environmental, safety, and remediation obligations. 60
Sec. 1205. Materials, counterfeit prevention, and supply continuity. 61
Sec. 1206. Fair treatment of workers and regional impacts. 61
Title XIII. Records, Transparency, Cybersecurity, And Privacy 62
Sec. 1301. Unified covered-acquisition record. 62
Sec. 1302. Public reporting and price transparency. 62
Sec. 1303. Records formats and burden controls. 63
Sec. 1304. Security and authorized access. 63
Sec. 1305. Privacy, trade secrets, and lawful disclosure. 64
Sec. 1306. Incident reporting and remediation. 64
Sec. 1307. Automated analysis and human decision-making. 65
Sec. 1308. Annual integrated report. 65
Title XIV. Violations, Remedies, And Responsible Contracting 66
Sec. 1401. Specified prohibited conduct. 66
Sec. 1402. Civil enforcement by the United States. 66
Sec. 1403. Civil penalties and proportionality. 67
Sec. 1404. Contractual corrections and recovery procedures. 68
Sec. 1405. Suspension, debarment, and indispensable suppliers. 68
Sec. 1406. Parents, affiliates, successors, and asset transfers. 69
Sec. 1407. Settlements, monitors, and public accountability. 69
Sec. 1408. Limitations periods and relation to other claims. 70
Sec. 1409. Enforcement coordination and use of recoveries. 70
Title XV. Whistleblowers, Due Process, And Judicial Review 71
Sec. 1501. Supplemental protection against retaliation. 71
Sec. 1502. Administrative fairness and separation of functions. 71
Sec. 1503. Administrative reconsideration and interim protection. 72
Sec. 1504. Review of final agency action. 72
Sec. 1505. Procurement and contract dispute forums. 73
Sec. 1506. Classified evidence, privilege, and meaningful response. 73
Sec. 1507. No waiver of reporting and anti-retaliation rights. 74
Sec. 1508. Judicial and remedial savings. 74
Title XVI. Implementation, Evaluation, And Continuity 75
Sec. 1601. Integrated implementation plan. 75
Sec. 1602. Controlled pilots and independent baselines. 76
Sec. 1603. Outcome measures and corrective action. 76
Sec. 1604. Independent congressional evaluation. 77
Sec. 1605. Five-year policy review and continuing duties. 77
Sec. 1606. Continuity, incident response, and orderly administration. 78
Title XVII. Direct Appropriations And Fiscal Controls 78
Sec. 1701. Program years and budget accounts. 78
Sec. 1702. Appropriations; period of availability. 78
Sec. 1703. Allocation by purpose and agency. 79
Sec. 1704. Execution plans and limitations on obligations. 80
Sec. 1705. Assistance safeguards and cost sharing. 81
Sec. 1706. Recoveries, savings, and public accounting. 81
Sec. 1707. Long-term fiscal assessment. 82
Title XVIII. Effective Dates, Conforming Amendments, And Severability 82
Sec. 1801. Effective dates and phased application. 82
Sec. 1802. Existing contracts and transition protection. 83
Sec. 1803. Clauses, notices, and contractor access to requirements. 84
Sec. 1804. Conforming amendments to title 10, United States Code. 84
Sec. 1805. Relationship to other law and executive action. 85
Sec. 1806. Severability and remedial independence. 86
Appendix A. Counsel’S Overview And Design Decisions 87
Appendix B. Section-By-Section Commentary 89
Appendix C. Constitutional And Legal-Risk Analysis 98
Appendix D. Preliminary Fiscal Note And Sensitivity Analysis 101
Appendix E. Implementation And Operational Roadmap 104
Appendix F. Stakeholder Effects And Plain-Language Explanation 106
Appendix G. Primary Authorities And Research Register 108
Appendix H. Quality-Check And Pre-Introduction Questions 110
To restore effective competition and verifiable pricing in defense acquisitions; protect public investment and independent sustainment capability; strengthen procurement integrity and industrial resilience; provide appropriations; and for other purposes.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
(a) SHORT TITLE. This Act may be cited as the “Defense Industry Normalization Act”.
(b) PURPOSES. The purposes of this Act are to preserve a capable and diverse defense industrial base; secure fair and reasonable prices through effective competition or verifiable negotiation; reduce dependence on exclusive sources of supply and sustainment; protect public investment and lawful private innovation; prevent procurement misconduct and undisclosed financial conflicts; and ensure that procurement decisions remain subordinate to independently determined national defense requirements.
(c) RULE OF POLICY. Implementation shall reward reliable delivery, operational availability, innovation, efficient production, and resilience. Neither the existence of a profit nor an increase in demand resulting from an armed conflict, without additional evidence satisfying an applicable legal standard, shall constitute a violation of this Act.
Congress finds the following:
(1) The United States requires both a technologically capable private defense sector and sufficient public expertise to define requirements, negotiate contracts, maintain equipment, and evaluate contractor performance without improper dependence on regulated entities.
(2) Consolidation can preserve productive assets and achieve efficiencies, but the loss of independent suppliers in a relevant market can diminish competition, increase switching costs, and impair the ability to replace an unavailable or underperforming source.
(3) The Government Accountability Office has identified deficiencies in the Department’s assessment and monitoring of defense mergers and acquisitions, planning for technical-data rights, evaluation of sustainment incentives, and collection of information concerning other transaction agreements.
(4) Existing laws address competition, defective pricing, false claims, procurement integrity, and conflicts of interest. Effective reform requires additional targeted duties and the personnel, records, and remedies necessary to administer those duties, rather than an assumption that every unfavorable contractual result is unlawful.
(5) A prior Government purchase, a catalog listing, or a commercial-product classification does not, standing alone, establish that a proposed price reflects an effective competitive market.
(6) Emergency requirements can justify expedited procurement, but do not eliminate the need for records, retrospective review, proportionate pricing safeguards, and independent assessment of continuing requirements.
(7) Congress may regulate federal purchasing, protect federal funds, and prohibit corruption without discriminating against lawful political expression or penalizing an entity for its views concerning peace, war, diplomacy, or defense policy.
(8) Durable competition depends on preserving manufacturing skills, qualifying alternative sources, obtaining appropriate sustainment rights, and addressing the financing and administrative barriers faced by independent suppliers.
In this Act:
(1) ADEQUATE PRICE COMPETITION. The term “adequate price competition” means competition in which at least 2 responsible offerors, not under common control and not coordinating their prices, submit independently developed priced offers meeting the material requirement; price is a substantial evaluation factor; and the contracting officer documents that the resulting price is reasonable. An exception expressly provided in section 404 may establish a reasonable market price without constituting adequate price competition.
(2) AFFILIATE; CONTROL. The term “affiliate” means a person controlling, controlled by, or under common control with another person. “Control” means the power to direct material management or business decisions through ownership, contract, governance rights, or another arrangement. Ownership of more than 50 percent of voting interests establishes control. A lesser interest establishes control only upon a reasoned finding of actual governance power; a passive investment, ordinary creditor protection, or diversified fund holding alone does not establish control.
(3) ANTITRUST AGENCIES. The term “antitrust agencies” means the Department of Justice and the Federal Trade Commission.
(4) APPROPRIATE CONGRESSIONAL COMMITTEES. The term means the Committees on Armed Services, Appropriations, and the Judiciary of the Senate and the House of Representatives, and the congressional committees with jurisdiction over the particular matter reported. A report concerning arms transfers shall also be transmitted to the Senate Committee on Foreign Relations and the House Committee on Foreign Affairs.
(5) COVERED ACQUISITION. The term means a procurement contract, order, agreement for research, prototype or production, or other transaction entered into by the Department, or by another executive agency substantially on its behalf, for defense goods or services. It includes a purchase administered by the Department for a foreign government. A grant is covered only by the provisions expressly governing grants or recipients of assistance.
(6) COVERED CONTRACTOR. The term means an offeror, awardee, consortium manager, or subcontractor at any tier participating in a covered acquisition. Except as expressly provided, an individual employed by such a person is not a covered contractor solely by reason of employment.
(7) CRITICAL DEFENSE INPUT. The term means a component, material, software capability, manufacturing process, test capability, or service designated under section 302 because its unavailability would materially impair an identified defense mission and substitution or qualification of another source cannot reasonably occur within the period needed for that mission.
(8) DEPARTMENT; SECRETARY. The terms mean the Department of Defense established by section 111 of title 10, United States Code, and its Secretary, including any lawfully designated successor exercising the same statutory functions. A secondary executive-branch designation does not alter coverage.
(9) DIRECTOR; OFFICE. The terms mean the Director and the Defense Competition and Pricing Office established by section 201.
(10) INDEPENDENT SUPPLIER. The term means a supplier not controlled by the relevant incumbent and possessing, or capable of obtaining under a funded qualification plan, the personnel, facilities, rights, and technical capability necessary to furnish the relevant product or service.
(11) MAJOR COVERED CONTRACTOR. The term means a person whose controlled corporate group received at least $1,000,000,000 in covered acquisition obligations during the preceding fiscal year. An entity is responsible for group reporting only to the extent provided in section 607.
(12) MATERIAL. The term, with respect to a statement, omission, failure, or breach, means having a natural tendency to influence, or being capable of influencing, the Government decision, payment, or performance determination in question. A harmless clerical error is not material.
(13) NONCOMPETITIVE ACQUISITION. The term means a covered acquisition for which the price of the item or work being reviewed is not established through adequate price competition. Competition for an original platform does not by itself establish competition for a later replacement part or sustainment service.
(14) PERSON. The term includes an individual, corporation, partnership, association, trust, consortium, and other legal entity, but does not include a sovereign foreign government for purposes of a civil penalty absent an independently applicable basis for jurisdiction and an applicable exception to immunity.
(15) QUALIFIED SUPPLIER. The term means a person with demonstrated legal authority, technical competence, security eligibility, quality controls, and practical capacity to furnish the relevant requirement within a commercially and operationally reasonable period.
(16) SMALL BUSINESS CONCERN. The term has the meaning given in section 3 of the Small Business Act (15 U.S.C. 632), including applicable affiliation standards.
(17) SUBCONTRACT. The term includes an agreement at any tier to furnish supplies or services for performance of a covered acquisition and an economically equivalent transfer between affiliates. It does not include an unrelated ordinary-business purchase lacking a material connection to performance.
(18) TECHNICAL DATA. The term means recorded scientific or technical information, including specifications, drawings, maintenance information, and interface documentation. Computer software, source code, executable code, and associated documentation are separately covered where expressly stated.
(19) PROGRAM YEAR. The term has the meaning given in section 1701.
(20) KNOWINGLY. The term means with actual knowledge, deliberate ignorance, or reckless disregard of the truth or applicable facts. No specific intent to defraud is required unless expressly stated. Mere negligence, a reasonable disclosed interpretation of an ambiguous requirement, and a documented good-faith estimate do not satisfy this definition.
(21) MAJOR WEAPON SYSTEM. The term, solely for this Act, means a weapon platform or integrated weapons capability with expected acquisition expenditures of at least $100,000,000, or a system otherwise designated a major weapon system under applicable defense-acquisition law. This definition does not alter a threshold governing a separate statutory acquisition category.
(22) MISSION-CRITICAL SOFTWARE. The term means software whose loss, disabling, or unavailability would materially impair an identified operational mission and for which a qualified substitute cannot reasonably be fielded within the mission’s required period.
(23) COMMISSION. The term means the Federal Trade Commission.
(a) GENERAL RULE. The Secretary shall apply this Act to covered acquisitions without regard to the label of the instrument, the identity of an intermediary, the use of a consortium, or the origin of funds administered by the Department, subject to the express exceptions and transition provisions of this Act.
(b) TIERS. A provision addressed to a subcontractor applies directly where its terms so provide. Otherwise the contracting officer shall require the prime contractor to incorporate the applicable obligation in the subcontract. Failure to include a required clause does not excuse a statutory duty expressly imposed directly on a person.
(c) ORDINARY COMMERCIAL PURCHASES. Except for anti-fraud requirements, records already required by law, and applicable ownership or integrity disclosures, routine purchases below $250,000 shall not be subjected to additional contractor reporting under this Act unless aggregated under section 106 or individually designated under section 401 with written reasons.
(d) INTELLIGENCE AND CLASSIFICATION. Classification changes the means of access and publication, not the substantive pricing or integrity standard. Intelligence-community acquisitions administered outside the Department are not brought within this Act merely because their products may have military utility.
(e) EXCLUDED TRANSACTIONS. Individual military and civilian compensation, statutory benefits, intergovernmental transfers not used for procurement, and procurement by a foreign government without United States administration or financial assistance are excluded.
(f) OTHER AGENCIES. An executive agency acting on behalf of the Department shall perform the duties assigned to a contracting officer and shall furnish required records to the Office. No department may evade this Act by shifting substantially unchanged procurement to another agency.
(a) PROCUREMENT AUTHORITY. This Act governs the expenditure and administration of federal defense procurement funds and the conduct expressly regulated herein. It does not authorize hostilities, enlarge an authorization for use of military force, alter the War Powers Resolution, or confer authority to conduct surveillance or military operations.
(b) LAWFUL ACTIVITY. Nothing in this Act prohibits lawful profit, collective bargaining, protected organizing, advocacy, petitioning, association, political contributions permitted by other law, or independent research. Liability shall rest on conduct and the elements of an applicable provision, not a disfavored viewpoint.
(c) EXISTING PROTECTIONS. Except for a specifically identified amendment or override, this Act does not diminish antitrust law, the False Claims Act, procurement-integrity law, labor protections, environmental law, export controls, sanctions, applicable small-business programs, or rights to judicial review.
(d) NO IMPLIED EXPROPRIATION. No officer may compel a transfer of intellectual property, a manufacturing asset, or privately funded technology except under an express authority of this Act or other law and the compensation requirements applicable to that authority.
(e) NO PRIVATE PROCUREMENT VETO. Consultation with a contractor, advisory committee, or industrial association shall not confer power to determine a governmental requirement, approve a competitor, or veto an enforcement action.
(f) NO ENTITLEMENT TO WAR-RELATED DEMAND. A contract shall not be interpreted to guarantee continuation of a military operation, armed conflict, or foreign-policy position. Lawful minimum-purchase, termination, and capacity-reservation obligations expressly agreed upon remain enforceable.
(a) CONTRACT VALUE. Unless otherwise specified, a dollar threshold shall be determined using the reasonably anticipated total value of the transaction, including options, contemplated related modifications, and associated orders over the stated ordering period. A contingent ceiling unsupported by a reasonable acquisition estimate shall not alone trigger coverage.
(b) RELATED PURCHASES. For sections 401 through 409, materially equivalent purchases from a controlled corporate group for the same requirement within a rolling 12-month period shall be aggregated where they are reasonably foreseeable to the purchasing agency. Aggregation is prospective when the threshold is first met or reasonably expected to be met; it shall not retroactively criminalize or penalize a completed purchase.
(c) PROHIBITION. A person shall not knowingly divide a requirement, route a purchase through an affiliate or intermediary, alter an instrument label, or use an option principally to avoid an applicable duty. A legitimate technical, funding, or operational division documented when made is not a violation.
(d) SEPARATE LINES. Reasonable segmentation of competitive and noncompetitive contract lines is permitted. The contracting officer shall apply enhanced requirements to the noncompetitive portion rather than unrelated competitively priced work when the portions can be reliably separated.
(e) THRESHOLD ADJUSTMENT. Beginning 5 years after enactment and every 5 years thereafter, the Secretary shall adjust this Act’s acquisition, reporting, and designation thresholds for cumulative inflation using the Consumer Price Index for All Urban Consumers, rounding to the nearest $10,000. This authority does not adjust appropriations, damages, statutory maximum penalties, or eligibility periods.
(a) PERFORMANCE OF DUTIES. Each duty imposed on an officer shall be assigned to a named position in implementing regulations. Delegation shall be in writing, remain within the delegating officer’s lawful authority, and preserve an express prohibition on further delegation.
(b) CONFLICTED PERSONNEL. A person participating in an investigation, source selection, audit, or adjudication shall disclose and resolve a material financial or employment conflict under applicable ethics law before participating. Investigation and final disputed-fact review shall be functionally separated.
(c) PROPORTIONALITY. An implementing rule shall use the least burdensome reliable information sufficient to administer the particular requirement. Small size does not excuse fraud; large size does not establish wrongdoing.
(d) DECISION RECORD. A material determination concerning a waiver, designation, price exception, exclusion, or financial remedy shall identify the governing standard, evidence considered, reasons, authorized official, duration, and available review process.
(e) NO UNFUNDED EXPANSION. Administrative planning duties shall be performed from amounts available for that purpose. No officer may make a grant, reserve capacity, acquire property, or incur a contractual obligation exceeding available budget authority or in violation of title 31, United States Code.
(a) ESTABLISHMENT. Not later than 90 days after enactment, the Secretary shall establish within the Office of the Secretary of Defense a Defense Competition and Pricing Office.
(b) DIRECTOR. The Secretary shall appoint the Director from persons with substantial expertise in public procurement, industrial economics, accounting, manufacturing, or competition policy. The Director shall be an inferior officer subject to the Secretary’s supervision, direction, and removal, and shall be compensated within otherwise applicable senior executive pay limits. No fixed tenure or removal restriction is created.
(c) FUNCTIONS. The Office shall conduct market mapping and economic analysis; coordinate supplemental price reviews; administer competition-restoration plans; maintain the records system required by title XIII; issue public methods and guidance; and refer evidence of misconduct to the appropriate enforcement authority.
(d) LIMITS. The Office shall not prosecute criminal cases, exercise the independent powers of the antitrust agencies, direct an Inspector General investigation, adjudicate punitive civil penalties, or supersede a contracting officer’s lawful responsibility to make an award decision.
(e) INTEGRATION. The Secretary shall consolidate duplicative analytic functions where lawful, retain personnel with necessary institutional knowledge, and report any consolidation that reduces independent audit capacity. Reorganization shall not extinguish an existing audit finding, record request, or investigative referral.
(f) ACCESS. Subject to title XIII and applicable privileges, the Office shall have timely access to Department acquisition and industrial-base information necessary to perform its duties. A disagreement over access shall be elevated to the Secretary within 10 business days and documented.
(a) EXISTING AGENCIES. The Defense Contract Audit Agency shall retain responsibility for independent contract-cost auditing within its authority. The Defense Contract Management Agency shall retain its contract administration responsibilities. The Inspector General shall retain all authorities and independence provided by chapter 4 of title 5, United States Code.
(b) NO SUPPRESSION. No officer may require alteration or withholding of a professional audit conclusion because the conclusion may impede an award, embarrass an agency or contractor, or adversely affect a stock price. Legal and factual disagreements may be appended with attribution.
(c) REFERRALS. Credible indications of fraud, obstruction, collusion, or reprisal shall be referred promptly to the Inspector General or the Department of Justice, as appropriate. Referral does not constitute a public finding of liability.
(d) RESOLUTION TRACKING. The Office shall track significant unresolved audit recommendations and identify the official responsible for disposition. A contracting officer declining a recommended price adjustment shall record the evidentiary and legal reasons.
(e) CONGRESSIONAL ACCESS. Nothing in this Act authorizes the withholding from Congress or the Comptroller General of information otherwise required to be provided by law. Classified and protected information shall be transmitted through authorized procedures; public publication is not required merely because congressional access is required.
(a) PLAN. Within 180 days after enactment, the Secretary shall submit a 5-year staffing and training plan identifying additional economists, pricing analysts, engineers, auditors, acquisition attorneys, digital specialists, and industrial-base analysts needed to implement this Act.
(b) PRIORITIES. Staffing shall first address critical-input reviews, noncompetitive sustainment purchases, subcontract visibility, technical-data negotiations, and high-risk production agreements. The plan shall state workload assumptions, hiring lead times, training costs, and retention measures.
(c) LIMITATION. Contractor personnel may provide technical assistance under conflict safeguards, but shall not exercise inherently governmental source-selection authority, determine final liability, conduct final debarment decisions, or supervise federal investigators.
(d) TECHNICAL FELLOWSHIPS. From funds under section 1703, the Secretary may establish time-limited public-service fellowships under existing appointment authorities, with conflict screening, confidentiality obligations, and post-service ethics counseling. No fellowship shall waive a statutory qualification or security requirement.
(e) MEASUREMENT. Annual reporting shall distinguish authorized positions, funded positions, vacancies, experienced staff, and training completions. The Department shall not count a vacant billet as operational review capacity.
(a) COUNCIL. The Secretary shall convene a Defense Procurement Competition Council composed of designated senior officials of the Department, the Department of Justice, the Federal Trade Commission, the Small Business Administration, the Departments of Commerce and Labor, and the Office of Management and Budget.
(b) ROLE. The Council shall coordinate data standards, identify inconsistent requirements, and recommend corrective action. It shall not direct a case-specific enforcement outcome or exercise authority reserved to an agency head, a court, or Congress.
(c) CONSULTATION. The Council shall obtain balanced input from independent manufacturers, small businesses, technical experts, defense workers, service members, procurement professionals, and civil-liberties specialists. A private participant shall not receive a competitor’s protected information or privileged enforcement materials.
(d) ADVISORY COMMITTEES. A body including nonfederal members that performs an advisory-committee function shall comply with chapter 10 of title 5, United States Code, where applicable. An agency may not evade those requirements by relabeling a standing advisory group as an informal consortium.
(e) DISAGREEMENTS. Unresolved jurisdictional disagreements shall be reported with each agency’s position. No consensus requirement may prevent an agency from performing its independent statutory duty.
(a) INVENTORY. Within 1 year after enactment, the Office shall produce a secure inventory of critical defense markets, beginning with markets identified by existing Department assessments and audits. The inventory shall identify independent corporate ownership, qualified facilities, principal inputs, lead times, switching barriers, Government-owned assets, and material technical-data dependencies.
(b) METHOD. Market boundaries shall reflect substitutability, mission requirements, geography, qualification time, and capacity. Aggregate corporate revenue shall not substitute for a relevant product-market analysis.
(c) UPDATING. Critical-market information shall be updated at least annually and upon a material acquisition, closure, loss of qualification, or supply interruption of which the Department becomes aware.
(d) DATA QUALITY. The Office shall distinguish reported information, independently verified information, and analytical estimates. A contractor shall have a reasonable opportunity to correct factual ownership or capability errors without obtaining a veto over analysis.
(e) PUBLIC SUMMARY. The Office shall publish an annual declassified summary describing concentration trends and corrective measures. Plant vulnerabilities, sensitive inventories, controlled technical details, personal identifiers, and competitively sensitive current unit costs shall be withheld or aggregated in accordance with title XIII.
(a) DEADLINES. The Secretary shall publish proposed implementing rules within 180 days after enactment and final rules within 365 days. The Federal Acquisition Regulatory Council shall make conforming revisions within its jurisdiction. A delay in one rule shall not suspend an independently operative statutory duty.
(b) PROCESS. Rules under this Act shall be issued with notice and an opportunity for public comment under section 553 of title 5, United States Code, notwithstanding the exemption for military functions or contracts to the extent that exemption would otherwise excuse notice and comment for these rules. A properly supported good-cause exception remains available.
(c) CONTENTS. Rules shall include standardized risk screens, calibrated information requests, contract clauses, ownership reporting, confidentiality controls, review procedures, and model emergency terms. Guidance alone shall not create a new basis for a civil penalty.
(d) SMALL-ENTITY REVIEW. Before finalizing a rule, the Secretary shall assess effects on small entities, test whether ordinary commercial records suffice, and publish the reasons for rejecting a materially less burdensome alternative.
(e) RULEMAKING RECORD. The record shall identify the principal legal authority and economic assumptions relied upon. Material industry submissions supporting a rule shall disclose the submitter and any person paying specifically for that submission, subject to lawful protections.
(f) INTERIM ADMINISTRATION. Until final rules take effect, agencies may use existing authorities and the express self-executing provisions of this Act, but shall not impose an unpublished reporting format or retroactive penalty.
(a) PETITION. A person may submit a documented petition identifying a systemic competition, pricing, or implementation failure within the Office’s jurisdiction. The petition need not disclose classified information through an unclassified channel.
(b) RESPONSE. Within 60 days, the Office shall acknowledge jurisdiction and identify whether further review is warranted. Within 180 days, it shall provide a reasoned disposition or a status explanation and a date for decision not more than 180 additional days later.
(c) PRIORITIZATION. The Office may consolidate repetitive petitions, decline matters without a material defense nexus, and protect ongoing investigations. It shall not reject a petition because it criticizes a contractor or governmental policy.
(d) LIMITS. A petition does not stay a procurement, toll a bid-protest deadline, create standing absent concrete injury, or compel a prosecution. A denial of a petition does not extinguish rights otherwise available under law.
(e) RECURRING FAILURES. Where substantially similar documented failures arise across programs, the Director shall recommend a uniform corrective rule or management action and identify the official responsible for response.
(a) REQUIREMENT. Before soliciting a covered acquisition exceeding $50,000,000, or a noncompetitive acquisition exceeding $10,000,000 for a critical defense input, the program executive officer shall approve a lifecycle competition and dependency plan.
(b) CONTENTS. The plan shall identify the number of independent qualified sources; ownership relationships among apparent bidders; material subcontract dependencies; likely costs of switching suppliers; maintenance and software dependencies; alternatives to proprietary interfaces; opportunities to compete separable work; and the estimated cost and time necessary to qualify a second source.
(c) DECISION RULE. The officer shall select the practicable alternative offering the best combination of lifecycle value, mission effectiveness, resilience, and competitive discipline. No automatic preference for a second source applies where duplication would be technically infeasible or exceed reasonably supported benefits.
(d) NONCOMPETITIVE JUSTIFICATION. A plan relying on one source shall explain why alternative sourcing, rights acquisition, modular procurement, or public capacity is not practicable and shall establish measurable steps to reduce avoidable dependence.
(e) UPDATES. The plan shall be revised at major production decisions, material scope changes, and at least every 3 years during sustainment. An expired plan does not ground equipment or invalidate a completed contract, but no new long-term noncompetitive commitment may be made without an updated plan or section 902 determination.
(f) REVIEW. The Office shall review high-risk plans and may require a written response to identified deficiencies. Final award authority remains with the authorized acquisition official.
(a) STANDARD. The Secretary may designate a critical defense input upon finding, supported by substantial evidence in a written administrative record, that loss of timely supply would materially impair a specified defense mission; substitutes cannot reasonably satisfy that mission in the required period; and the designation is necessary to administer a particular protection under this Act.
(b) PROCEDURE. An affected supplier shall receive notice describing the nonclassified factual basis, the duties resulting from designation, and 30 days to submit relevant information. A final determination shall address material objections and specify its duration, not exceeding 3 years without renewal.
(c) URGENT DESIGNATION. Where delay would create an imminent and substantial readiness risk, the Secretary may issue a temporary designation for not more than 90 days, provide notice within 5 business days, and complete the ordinary review during that period.
(d) LIMITS. Designation does not establish monopoly power, misconduct, a duty to sell at a loss, or entitlement to a subsidy. Security classification shall not eliminate meaningful notice consistent with section 1506.
(e) RECONSIDERATION. A supplier may seek reconsideration after a material market change. The Secretary shall decide within 90 days. Final designations are reviewable under section 1504, without displacing procurement jurisdiction under section 1505.
(a) COVERED TRANSACTION. Beginning 540 days after enactment, the acquiring and acquired persons shall provide joint notice to the antitrust agencies and the Office before consummating a transaction that transfers control of a business or substantially all assets of a product line and satisfies either of the following conditions:
(1) The transferred business received at least $50,000,000 in covered acquisition revenue during its preceding fiscal year.
(2) The transferred business furnishes a designated critical defense input, received at least $5,000,000 in covered acquisition revenue during that year, and has received actual notice of the applicable designation.
(b) EQUIVALENT TRANSFERS. An exclusive license, long-term exclusive management agreement, or series of related transactions transferring substantially the same competitive control shall be treated as a covered transaction. Related acquisitions agreed upon within 24 months shall be aggregated.
(c) INFORMATION. Notice shall include ownership and control, relevant products, affected facilities and rights, principal defense customers, existing exclusive arrangements, and internal ordinary-course analyses of competition and continuity prepared for the transaction. Privileged material need not be produced; a sufficient privilege description shall be provided.
(d) EXCLUSIONS. Internal reorganizations that do not alter ultimate control, ordinary-course nonexclusive licenses, passive holdings lacking control, and bona fide security interests not exercised to obtain control are excluded.
(e) COORDINATION. A filing under section 7A of the Clayton Act (15 U.S.C. 18a) may satisfy this section to the extent it contains the required information and is lawfully shared. No additional filing fee is imposed. The Office shall provide a simplified form for transactions below the otherwise applicable federal premerger-notification threshold.
(a) WAITING PERIOD. A transaction subject to section 303 shall not be consummated until 45 calendar days after a substantially complete notice is filed. Within 10 business days, the designated lead antitrust agency shall identify any material omission with particularity; otherwise the filing shall be treated as complete for this waiting period.
(b) EXTENSION. The lead antitrust agency may extend the period once, for not more than 45 additional days, by a written determination identifying a material unresolved competitive or continuity issue. A request for information does not otherwise restart the statutory clock.
(c) EARLY TERMINATION. The lead agency may terminate the period early upon a documented determination that additional review under this section is unnecessary. Notice to the Office shall precede such termination.
(d) SEPARATE AUTHORITIES. Expiration of this period does not terminate another waiting period, constitute approval under antitrust or national security law, or bar a later action. The Office shall provide technical advice; it shall have no independent power to prohibit a merger.
(e) JUDICIAL RELIEF. The Attorney General may seek an injunction in an appropriate United States district court to enforce the waiting period or prevent a transaction prohibited by section 305. Any preliminary injunction shall satisfy the applicable equitable standard. A permanent restraint or divestiture requires a lawful final judgment or consent decree.
(f) URGENT CONTINUITY. A court may authorize narrowly limited preservation arrangements pending review. Such arrangements shall not permit premature integration, exchange of competitively sensitive pricing information, or irreversible elimination of an independent source.
(a) PROHIBITION. No person shall consummate a transaction subject to section 303 where, in a relevant defense product or service market, the effect may be substantially to lessen competition or tend to create a monopoly. This prohibition is in addition to, and shall be interpreted consistently with, section 7 of the Clayton Act, except for the evidentiary rule expressly provided in subsection (b).
(b) REBUTTABLE PRESUMPTION. In an action brought by the United States under this section, a prima facie showing that a transaction combines 2 actual independent qualified suppliers and leaves 2 or fewer such suppliers in a properly established relevant market creates a rebuttable presumption of substantial lessening of competition. The Government shall establish the relevant market, independence, practical capacity, and likely competitive significance of the affected suppliers; nominal supplier counts alone are insufficient.
(c) REBUTTAL. Defendants may rebut the presumption with verifiable evidence demonstrating that the transaction is unlikely substantially to lessen competition, including timely and sufficient entry or a legally cognizable failing-firm defense. Claimed efficiencies shall be transaction-specific, verifiable, and likely to benefit the Government rather than merely transfer value to the combined firm. No defense is established solely by describing a party as strategically important.
(d) VERTICAL EFFECTS. The court shall consider evidence of likely foreclosure, discriminatory access to critical inputs, misuse of rivals’ information, loss of potential entry, and impairment of interoperability, without requiring that the parties previously sold identical end products.
(e) ENFORCEMENT. The Attorney General may enforce this section in district court. The Federal Trade Commission retains its existing authority under other law. No new private cause of action is created by this section, and existing private antitrust remedies are preserved.
(a) ADEQUATE RELIEF. In resolving an action under section 305, the Government shall seek relief sufficient to preserve or restore effective independent competition, which may include divestiture of a viable business, transfer of necessary assets or licenses on lawful terms, transition services, or prohibition of the transaction.
(b) BEHAVIORAL TERMS. A proposed conduct remedy shall identify the information needed for monitoring, the independent enforcement mechanism, duration, and consequences of breach. A promise not to discriminate is insufficient where structural incentives and inaccessible information make the promise impracticable to verify.
(c) CONTINUITY. Remedies shall address workforce, security qualifications, technical rights, production tooling, and customer relationships needed for an independent business to operate. A divestiture shall not be described as viable solely because legal title changes.
(d) MONITORING. The Office shall monitor significant defense transactions for which risks or remedies were identified for at least 5 years, subject to available appropriations. It shall refer material violations to the authority responsible for enforcement.
(e) NO IMMUNITY. A procurement accommodation, consent decree, or continuity plan shall not confer immunity from unrelated antitrust, fraud, export-control, or labor requirements.
(f) CONFIDENTIALITY. Monitoring reports may be shared among authorized agencies under applicable law. Public summaries shall omit protected competitive information while stating whether material remedial obligations were met.
(a) PROSPECTIVE CONTRACT CONDITION. A covered acquisition exceeding $10,000,000 that finances or relies on a designated critical defense input controlled by the prime contractor shall include terms prohibiting that contractor from using its control to exclude a qualified rival from a Government procurement through discriminatory delay, denial of necessary interface information already licensed for Government use, or conditioning supply on the rival’s withdrawal from competition.
(b) OBJECTIVE DIFFERENCES. Different terms based on quantities, credit risk, documented capacity constraints, security requirements, technical specifications, or demonstrable incremental costs are permitted. The contract shall require an explanation sufficient for confidential Government review.
(c) NO GENERAL DUTY TO DEAL. This section does not establish an unlimited duty to supply an unrelated private market, require disclosure of unlicensed technology, or compel a sale below an applicable lawful contract price. Required access shall be specified in the solicitation and priced in the contract.
(d) DISPUTES. The contracting officer may order compliance with an existing contractual access obligation, negotiate substitute performance, or pursue contract remedies. A rival’s procurement challenge remains subject to existing protest jurisdiction and standing requirements.
(e) INFORMATION FIREWALLS. Where a vertically integrated contractor receives a competitor’s protected technical or pricing information in performance, the contract shall require access restrictions, personnel separation where necessary, auditable logs, and remedies for unauthorized use.
(a) REVIEW. The Secretary shall not treat a teaming arrangement or joint venture as harmful merely because firms cooperate. Before approving a material exclusive teaming arrangement for a critical defense market, the contracting officer shall evaluate whether the arrangement combines complementary capabilities or unnecessarily removes a realistic competing bid.
(b) DISCLOSURE. Offerors shall disclose parties controlling price, material exclusive supply commitments, and any common ownership affecting independence. A prime contractor may not represent controlled affiliates as independent competing suppliers.
(c) PERMITTED COLLABORATION. Government-sponsored joint testing, standards development, workforce training, and emergency capacity coordination may proceed with written safeguards against exchange of unnecessary competitively sensitive information.
(d) ANTITRUST SAVINGS. Approval by a contracting officer is not antitrust immunity. Any defense-production agreement seeking immunity must satisfy an independently applicable statutory authority and its procedures.
(e) ACCESS. Shared facilities financed under this Act shall employ objective, published eligibility terms and confidential scheduling procedures that prevent an incumbent from learning a competitor’s unnecessary business information or excluding a qualified applicant without documented reasons.
(a) STUDY. Within 2 years after enactment, the Office shall identify completed transactions and exclusive arrangements associated with persistent defense supply dependence, extraordinary switching barriers, or material loss of independent manufacturing capability. Priority shall be given to markets with a single practical source.
(b) RESPONSES. For each priority market, the Secretary shall assess competitive reprocurement, qualification grants, negotiated rights, alternate designs, public tooling, public production capacity, and referral to the antitrust agencies.
(c) LIMITATION. This section does not make a previously lawful completed transaction unlawful by retroactive declaration and does not authorize administrative dissolution of a corporation. Existing antitrust authority to challenge a completed transaction is preserved.
(d) PROCUREMENT REMEDIES. Government investments to restore competition shall be based on prospective mission and value findings, not punishment of a named company. A recipient shall not receive public financing merely because it promises to underbid an incumbent temporarily.
(e) REPORT. The Secretary shall report the selected interventions, cost estimates, expected qualification dates, and measurable effects on supply independence. Contractor identities may be disclosed where lawful; sensitive operational dependencies shall be addressed in a classified annex.
(a) SCREENING. Beginning on the date specified in section 1801, a contracting officer shall apply a documented risk screen to each noncompetitive acquisition exceeding $250,000, including aggregated purchases under section 106.
(b) HIGH-RISK FINDING. Enhanced review is required where the purchase concerns a designated critical defense input; the supplier controls necessary replacement or repair rights and no practicable alternative exists; adjusted unit prices have increased by more than 25 percent within 24 months without a supported explanation; or reliable audit information identifies a material defect in the relevant price basis. A price increase alone triggers inquiry, not a finding of excess profit.
(c) INDEPENDENT REVIEW. A high-risk acquisition exceeding $10,000,000 shall receive review by the Office or an organizationally separate pricing team before award. Review shall ordinarily be completed within 30 business days after receipt of a complete submission, with one written extension not exceeding 30 business days. Urgent awards are governed by section 902.
(d) SCOPE. Review shall address the relevant price lines, quantities, risk allocation, supplied data, available benchmarks, affiliate costs, and alternatives. The Government shall not demand all corporate records when narrower evidence is sufficient.
(e) DOCUMENTATION. The price memorandum shall distinguish facts, estimates, judgments, missing data, and negotiated risk premiums. A conclusion that a supplier is indispensable shall not substitute for a conclusion that its price is reasonable.
(a) REQUIREMENT. For a high-risk noncompetitive acquisition identified under section 401 with an anticipated value of at least $2,000,000, the contracting officer shall require the offeror and any material noncompetitive subcontractor meeting that threshold to furnish the factual cost or pricing data reasonably necessary to establish a fair and reasonable price and to certify that, to the best of its knowledge and belief, such data are accurate, complete, and current as of the date of price agreement.
(b) INDEPENDENT REQUIREMENT. Subsection (a) applies notwithstanding the dollar thresholds, anticipated-number-of-bids limitation, commercial-product exceptions, or discretionary waivers in sections 3702 through 3704 of title 10, United States Code, but only to the transactions and data expressly covered by this section. The exceptions in subsection (c), section 404, and section 902 exclusively govern waiver of this supplemental requirement. Other applicable certification duties are not diminished.
(c) EXCEPTIONS. Certification under this section is not required to the extent the price is established by law or regulation, verified under section 404, or determined by adequate price competition for a genuinely separable portion. The exception shall be documented by the contracting officer and approved one level above that officer.
(d) ESTIMATES. A certification concerns factual inputs reasonably available to the certifying person, not a guarantee that a forecast, learning curve, future demand estimate, or engineering judgment will prove correct. Material assumptions and known contrary factual information shall be disclosed.
(e) SMALL RESEARCH PROJECTS. For an experimental research or prototype award to an independent small business below $7,500,000, ordinary records and a statement of the disclosed estimation method may substitute for certification unless the head of the contracting activity makes a written finding of a specific material pricing risk. Mature production quantities mislabeled as research do not qualify.
(f) FLOWDOWN. A prime contractor shall identify covered lower-tier work and obtain certification or arrange protected direct submission under section 406. A prime contractor’s commercial classification or waiver shall not automatically exempt a lower-tier sole-source component.
(a) NECESSARY DATA. For covered purchases not requiring certification, contracting officers shall obtain the data necessary to determine price reasonableness, consistent with section 3705 of title 10, United States Code, and the additional safeguards in this title.
(b) ORDER OF REQUEST. Officers shall first use reliable Government and independent information; then comparable transaction prices; and only then the cost, effort, capacity, or other factual information needed to resolve a material gap. Existing data shall not be rejected merely because it was maintained in a commercial rather than Government-prescribed accounting format.
(c) NO CATALOG SAFE HARBOR. A catalog entry, distributor quotation, affiliated sale, or previous Government price shall not alone establish reasonableness. The officer shall document the comparability and independence of the evidence.
(d) RESPONSE PERIOD. A written request shall identify the information, purpose, relevant period, confidentiality protections, and a reasonable response date ordinarily not less than 20 business days away. A supplier may explain within 10 business days why records do not exist, are not controlled by it, or can be supplied in a less burdensome equivalent form.
(e) RESOLUTION. The officer shall resolve a documented objection before treating a response as a refusal. A reasonable dispute over scope or privilege is not misconduct.
(f) NO IMPLIED CERTIFICATION. Compliance with this section does not by itself constitute the certification required by section 402 or make an offeror subject to penalties solely for an honestly disclosed estimate.
(a) SAFE HARBOR. A supplier may satisfy supplemental review through reliable evidence that the same or a genuinely comparable item is sold in substantial quantities to unaffiliated nongovernmental customers under reasonably comparable terms and that the proposed Government price, after documented adjustments, is no less favorable than the weighted median price in those transactions.
(b) SUBSTANTIAL QUANTITIES. Nongovernmental sales qualify when, during the preceding 24 months, they constitute at least 20 percent of the supplier’s unit sales of the item or comparable product family and include sales to at least 3 unaffiliated customers. Where those numerical conditions do not fairly describe an established market, the head of the contracting activity may approve an alternative showing supported by independent market evidence and written reasons.
(c) COMPARABILITY. Adjustments may account for volume, delivery, warranty, engineering changes, security, export restrictions, integration, financing, and quality requirements. An affiliate, intermediary acting principally for a government, or token transaction arranged to create an exemption shall not establish independent commercial demand.
(d) VERIFICATION. The Government may confidentially examine a representative sample of invoices and underlying terms sufficient to verify the showing. Customer identities may be provided directly to an authorized auditor rather than a competing prime contractor.
(e) EFFECT. Satisfaction establishes an exception from supplemental certification, not immunity from fraud investigation, proof of defective market evidence, or otherwise applicable contract obligations. Failure to satisfy this safe harbor does not automatically revoke commercial-product status under another law.
(f) REVIEW. The safe harbor shall be reevaluated when material product, ownership, market, or contract terms change, and at least every 3 years for recurring noncompetitive purchases.
(a) PUBLISHED METHOD. Within 365 days after enactment, the Office shall publish a methodology for analyzing noncompetitive prices using efficient expected costs, appropriate allocation of overhead, private capital genuinely at risk, technical uncertainty, production scale, financing, performance obligations, and a reasonable return.
(b) NO UNIFORM PROFIT CEILING. The methodology shall not impose a single profit rate across dissimilar products or retroactively confiscate returns from a lawfully priced fixed-price contract. Comparable-company or foreign-system benchmarks are relevant evidence, not conclusive legal limits.
(c) COST VERIFICATION. Review shall distinguish historical sunk costs from incremental costs, privately financed investment from Government-financed assets, recurring production from nonrecurring development, and actual supplier expenditure from related-party accounting transfers.
(d) EFFICIENCY. A contractor may retain efficiency gains under an accurate, lawfully negotiated fixed-price arrangement unless a prospective sharing or redetermination clause applies. The Government shall not reopen such a price solely because actual production proved more efficient than reasonably forecast.
(e) SCARCITY PREMIUMS. A proposed scarcity or surge premium shall identify the capacity, financing, delivery acceleration, or demonstrable opportunity cost it compensates. Mere absence of competition shall not be treated as an independent cost.
(f) DECISION. The contracting officer shall state the chosen method, important adjustments, negotiated fee, remaining uncertainty, and reasons a less expensive feasible alternative was not selected. A benchmark deviation supported by evidence is permissible.
(a) DIRECT ACCESS. A subcontractor may furnish protected cost or pricing data directly to an authorized Government auditor or contracting officer. The Government shall provide the prime contractor a conclusion and sufficient nonproprietary information to price and manage the subcontract without unnecessarily disclosing the subcontractor’s protected data.
(b) REFUSAL DETERMINATION. Where necessary information remains unavailable after a reasonable written request and resolution of good-faith objections, the contracting officer shall determine whether a fair and reasonable price can be established by another reliable method.
(c) AWARD LIMITATION. If it cannot, no award may be made unless authorized under section 902 or through a written, nondelegable finding by the head of the contracting activity that interruption would cause a specific substantial readiness harm. Such finding shall limit quantity and duration to the minimum reasonably needed, include a prospective audit or redetermination clause where practicable, and establish an alternative-source plan.
(d) REVIEW. A repeated finding for the same product within 24 months requires approval by the Secretary or Deputy Secretary. Approval shall not convert a supplier’s unsupported price into a finding of reasonableness.
(e) CONSEQUENCES. Good-faith inability to supply nonexistent data is not punishable. A knowing failure to comply with a binding statutory request after final review may be referred under title XIV, but no officer may impose a civil penalty administratively.
(f) PUBLIC REPORT. Aggregate refusal and exception information shall be reported annually without publishing protected prices or prejudging disputed liability.
(a) AUTHORITY. For a transaction subject to section 401, 402, 406(c), or 903, the Secretary, acting through authorized audit personnel, may examine records directly relevant to the information supplied, price basis, related-party transfers, and performance of the covered portion, notwithstanding a certification exemption or the fixed-price character of the instrument.
(b) RETENTION. A recipient of a written notice identifying coverage shall retain relevant ordinary-course and contract-required records until 6 years after final payment on the covered portion. A timely litigation or investigative preservation notice extends retention only for identified relevant records until lawful release. This subsection does not require recreation of records lawfully destroyed before notice or coverage.
(c) SUBPOENA. The Director of the Defense Contract Audit Agency may issue a nondelegable subpoena for records lawfully examinable under this section. The Attorney General may seek enforcement in district court. The recipient may seek to quash or modify the subpoena for lack of relevance, privilege, undue burden, or constitutional defect before a contempt sanction may issue.
(d) LIMITS. Access shall not include unrestricted remote entry into a contractor’s network, personal communications unrelated to performance, or wholesale extraction of unrelated trade secrets. Secure file transfer and supervised examination shall be preferred.
(e) EXISTING LAW. This authority supplements section 3841 of title 10, United States Code. Its 6-year retention and access period controls for records expressly covered here; other audit authorities and limitation periods remain unaffected.
(f) COSTS. Reasonable incremental compliance costs may be considered under otherwise applicable cost principles. No reimbursement is allowed for obstruction or destruction of records.
(a) CLAUSE. Each acquisition subject to section 402 or a redetermination requirement under this Act shall provide for a price reduction to the extent the United States proves that a materially inaccurate, incomplete, or noncurrent factual submission required for negotiation increased the agreed price. Interest shall accrue as provided by applicable federal contract-debt law.
(b) PROOF. The Government shall establish the duty to disclose, material defect, causal connection, and amount of the increase by a preponderance of the evidence. The contractor may show that the Government possessed and actually relied on accurate information, that the alleged defect did not affect negotiation, or that a properly related offset is due.
(c) NO HINDSIGHT LIABILITY. An honestly disclosed forecast or judgment is not defective solely because actual events differ. The recovery shall not include unrelated efficiency gains or profits from other contracts.
(d) PROCESS. For a procurement contract subject to chapter 71 of title 41, United States Code, a demand shall proceed through a contracting officer’s final decision and the applicable board or Court of Federal Claims process. For another instrument, the Government shall seek recovery in a court of competent jurisdiction or a voluntarily agreed contractual dispute process that preserves judicial review.
(e) NO DUPLICATION. Amounts recovered under this section shall be credited against recovery for the same loss under the False Claims Act or another remedy. Additional lawful penalties address culpability, not a second recovery of identical compensatory loss.
(f) NO UNIVERSAL RENEGOTIATION. An audit conclusion that a profit appears high does not itself authorize rewriting a completed contract lacking a lawful adjustment basis.
(a) PROHIBITED REIMBURSEMENT. In addition to costs unallowable under section 3744 of title 10, United States Code, and applicable acquisition regulations, no amount may be charged to a covered acquisition as a reimbursable or proposed allowable cost for a penalty imposed under this Act; an unlawful kickback; concealment or destruction of required records; an acquisition premium or goodwill arising from purchase of a contractor; or a shareholder distribution as such.
(b) RESTRUCTURING. A proposed charge for post-acquisition restructuring may be allowed only for identifiable productive changes, not transaction financing or a control premium, and only upon independent verification that reasonably expected Government savings exceed the charge over a specified period not exceeding 5 years. The agreement shall provide for adjustment if claimed savings used to justify reimbursement are materially unsupported.
(c) NO DOUBLE CAPITAL RECOVERY. Depreciation, amortization, rent, and return on capital shall exclude the portion of an asset already financed by a nonrepayable federal contribution, except for a separately identified and lawful payment for availability, maintenance, or private capital at risk. An affiliate transfer shall not erase that federal contribution.
(d) SEGREGATION. Contractors shall maintain records sufficient to distinguish allowable performance costs, corporate distributions, political-activity costs, and separately funded investment. This requirement does not impose full Cost Accounting Standards coverage on an otherwise exempt company.
(e) FIXED-PRICE CONTRACTS. This section governs cost allowability and factual negotiation inputs. It does not create an after-the-fact ban on lawful use of profit earned under an accurate fixed-price contract.
(a) QUALITY CONTROL. The Office shall annually evaluate a statistically described sample of high-risk reviews, including waived reviews and purchases from new entrants, for accuracy, consistency, burden, and actual effect on acquisition time and value.
(b) SAVINGS CLAIMS. A reported negotiation saving shall identify the comparison baseline and shall not equate a reduction from an unsupported opening offer with an independently verified budget saving. Recoveries, cost avoidance, reduced obligations, and reduced outlays shall be separately reported.
(c) RESPONSIBILITY. Pricing officials shall not receive a performance reward based solely on the nominal dollar value of negotiated reductions. Evaluation shall include defensibility, timeliness, contractor participation, and mission outcomes.
(d) DISAGREEMENTS. The Office shall publish anonymized interpretations of recurring methodological issues after providing an opportunity for comment. An interpretation may guide later negotiations but shall not retroactively establish a civil penalty.
(e) CORRECTIVE ACTION. Where review requirements materially delay delivery without demonstrated value, the Secretary shall modify administrative procedures within statutory limits, identify the cause publicly where lawful, and retain the minimum safeguards required by this title.
(a) WRITTEN DETERMINATION. For each covered acquisition exceeding $10,000,000, the contracting officer shall document the basis for selecting a fixed-price, cost-reimbursement, incentive, time-and-materials, or other authorized arrangement. The determination shall address technical maturity, requirements stability, measurable deliverables, private capital at risk, and the party best able to control each material uncertainty.
(b) PRODUCTION. Mature production with stable specifications shall ordinarily use a fixed-price or objectively adjustable incentive structure. Noncompetitive status shall not excuse price verification under title IV.
(c) RESEARCH. A cost-reimbursement arrangement may be used where developmental uncertainty makes realistic fixed pricing impracticable, provided the contract includes an enforceable funding ceiling, review milestones, cost visibility, and an exit or restructuring decision. A fixed-price mandate shall not be used to disguise unavoidable Government risk or encourage an unsupported bid.
(d) PROHIBITED STRUCTURE. No covered acquisition may compensate a contractor through a cost-plus-a-percentage-of-cost system. A permissible incentive arrangement shall identify the target, ceiling, share ratio, and adjustment method in advance.
(e) TIME-AND-MATERIALS. Such an arrangement shall include a ceiling and a documented determination that a more definite scope is not presently practicable. Continuation beyond 1 year requires reassessment and a plan to define measurable work.
(f) NO LIABILITY SHIFT BY LABEL. Calling an arrangement performance-based does not remove audit, payment, or acceptance duties imposed by its substance or this Act.
(a) OUTCOMES. An incentive-fee provision shall identify a verifiable outcome materially connected to military utility, including delivery, reliability, maintainability, availability, safety, interoperability, or cost control. The contract shall state the baseline, measurement source, denominator, exclusions, allocation of responsibility, and payment formula.
(b) NO PAYMENT FOR BASELINE DUTY. An award fee shall not be earned merely for complying with a material minimum contract obligation already compensated by the base price. A payment for superior performance shall describe the improvement being purchased.
(c) READINESS. Sustainment incentives shall be aligned with the relevant service’s approved readiness requirement or shall expressly disclose and justify an interim achievable target. An incentive shall not imply that the service’s requirement has been satisfied when only a lower contractual threshold has been met.
(d) VALIDATION. Government personnel or an independent evaluator shall validate material performance data before payment. Contractor-generated data may be used only with an auditable method and access to supporting records.
(e) RESPONSIBILITY. Adjustments shall fairly account for Government-furnished equipment, Government-directed changes, operational conditions outside the contractor’s agreed responsibility, and other documented excusable causes.
(f) RECOVERY. Unearned incentives paid because of materially false or erroneous data shall be recoverable through applicable contract procedures. No penalty shall attach to an immaterial error corrected before payment.
(a) BASELINE. A covered acquisition exceeding $50,000,000 shall establish a controlled baseline of quantities, technical requirements, schedule, expected lifecycle costs, and principal assumptions before production commitment.
(b) CHANGES. A modification increasing aggregate contract value by more than 15 percent or $25,000,000, whichever is less, shall state whether the increase arises from added scope, changed quantities, inflation under an agreed formula, contractor performance, or other causes. Related changes may not be divided to avoid review.
(c) RECOMPETITION. A material change beyond the competed scope shall be competed unless an applicable exception is independently justified. A modification shall not convert a small experimental award into an unlimited sole-source production franchise.
(d) BASELINE COMPARISON. Public reports shall show both the original and revised baseline. Resetting a baseline does not erase prior cost growth or delay.
(e) GOVERNMENT ACCOUNTABILITY. The program executive officer shall identify the official approving a material change, the expected operational benefit, alternatives considered, and funding source. Contractor penalties shall not be used to conceal Government-caused expansion.
(f) INDEPENDENT ESTIMATE. Before approving a change exceeding $100,000,000, the Secretary shall obtain an independent cost assessment or issue a section 902 determination explaining why immediate action is necessary.
(a) AUTHORITY PRESERVED. Nothing in this Act independently waives statutory authorization, cancellation-ceiling, or funding requirements for multiyear procurement. Where another law authorizes a multiyear commitment, its terms shall comply with this section.
(b) REQUIRED TERMS. A multiyear or capacity-reservation agreement shall identify minimum quantities or availability obligations; priced options; production and surge milestones; Government and private capital contributions; ownership and residual value of publicly financed assets; and termination or cancellation liability.
(c) SEPARATE PRICING. A payment to keep capacity available shall be separately priced from payment for delivered units. The contractor shall demonstrate the staffing, tooling, maintenance, and readiness actually purchased by the availability payment.
(d) VERIFICATION. The Government shall test reserved capacity at reasonable intervals, including through inspections, sample production, or independently verified readiness demonstrations. A reservation that exists only on paper shall not satisfy acceptance.
(e) VOLUME CHANGES. A price adjustment for reduced quantities shall reflect documented fixed-cost effects, not an automatic replacement of all lost anticipated revenue. Lost profits on unexercised options shall not be payable absent an express lawful contractual obligation.
(f) COMPETITION. A reservation shall not prevent qualified alternative suppliers from receiving orders or public qualification support unless a specific, time-limited exclusivity term is necessary, disclosed in the solicitation, and justified by value received.
(a) PLANNING. For mature equipment and recurring components, the contracting officer shall evaluate a warranty or comparable remedy addressing defects, premature failure, counterfeit content, and nonconformance. The decision shall consider warranty price, operational use, inspection capability, and enforceability.
(b) REMEDIES. Contracts shall identify inspection and acceptance rights, repair or replacement obligations, responsibility for consequential operational costs where negotiated, and limitations supported by risk allocation. Acceptance shall not waive latent-defect or fraud remedies available under law.
(c) LIFE-CYCLE COST. Source selections for systems expected to require more than 10 years of sustainment shall evaluate reasonably foreseeable operating, software, repair, upgrade, and disposal costs using stated assumptions and sensitivity ranges.
(d) COMPATIBILITY. A contractor shall not void a warranty solely because the Government uses an authorized independent repair provider, replacement component, or diagnostic tool. A denial may be based on evidence that the particular unauthorized or deficient intervention caused the claimed failure.
(e) SAFETY. No schedule or price target under this Act authorizes an unsafe substitution, bypass of qualification, falsification of testing, or acceptance of nonconforming equipment without an authorized technical determination.
(a) AGREEMENTS. A recipient of a grant, nonrepayable capital contribution, below-market use of Government facilities, or comparable production assistance under this Act shall enter into an enforceable agreement before disbursement.
(b) CONTENTS. The agreement shall state the public purpose, amount, milestones, eligible costs, private contribution, data and audit access, performance period, restrictions on diversion, residual federal property interest, and repayment formula for failure to perform.
(c) DISBURSEMENT. Payments shall be tied to verified expenditures or measurable milestones. Advance payments require a documented working-capital need and safeguards adequate to protect the United States.
(d) RECAPTURE. If the recipient knowingly diverts assistance, materially misrepresents eligibility, or disposes of supported capacity contrary to the agreement, the United States may recover the amount improperly used, plus applicable interest. For a nonfraudulent early closure, recapture shall be proportional to unfulfilled obligations and the remaining useful value of the assistance.
(e) COMPETITION AND WORKFORCE. Agreements shall prohibit use of funds to acquire a competitor without express approval under applicable law, include the workforce and transition duties of title XII, and preserve negotiated Government access and continuity rights.
(f) NO BLANK CHECK. Assistance does not guarantee future orders, profits, reimbursement of acquisition premiums, or protection from competition. A recipient shall disclose other federal assistance for the same asset or cost to prevent duplicate reimbursement.
(a) COVERED RECIPIENT. This section applies to a recipient that has received at least $50,000,000 in nonrepayable federal production assistance under section 506 during the preceding 3 years and has an outstanding material performance obligation supported by that assistance.
(b) LIMITED CONDITION. Each assistance agreement shall provide that, upon the findings and process in this section, discretionary repurchases of equity and extraordinary distributions by the recipient may be restricted to the extent necessary to preserve resources needed to cure the supported failure. A distribution by an affiliate is covered only to the extent it removes resources from the recipient or consists of the restricted assistance.
(c) FINDINGS. A restriction requires findings that a material production milestone is more than 90 days late or an agreed capacity requirement has been materially deficient for 2 consecutive quarters; the failure is substantially within the recipient’s responsibility; a feasible corrective investment has been identified; and the proposed distribution would materially impair that correction.
(d) PROCESS AND DURATION. The Secretary shall provide notice, supporting nonprivileged evidence, 30 days to respond, and a written decision under section 1503. A restriction shall specify an amount or objective liquidity condition, last no longer than 1 year, and end promptly when the deficiency is cured or sufficient corrective resources are irrevocably committed. Renewal requires new findings.
(e) EXCEPTIONS. Restrictions shall not prohibit ordinary employee compensation, legally required tax distributions reasonably attributable to the recipient’s income, bona fide preexisting debt service, routine employee equity withholding, or payments necessary to avoid insolvency that would worsen the Government’s position. Exceptions require documentation and shall not disguise an extraordinary distribution.
(f) LIMITS. This section is a prospective condition of specified assistance, not a general prohibition on dividends by defense companies. Contract and judicial remedies apply; administrative punitive fines are not authorized.
(a) ASSISTANCE CONDITION. A major covered contractor receiving assistance subject to section 507 shall provide a board-approved plan identifying how the variable compensation of officers directly responsible for supported production reflects delivery, quality, safety, and capacity commitments.
(b) MINIMUM CONNECTION. At least one-half of the performance-weighted measures applicable to the supported business unit’s long-term incentive award shall relate to verified operational performance or investment commitments rather than solely revenue, earnings per share, or share price. The requirement applies prospectively to awards granted during the assistance period.
(c) RECOVERY POLICY. The recipient shall maintain a policy to recover an incentive attributable to materially misstated production or performance data within the preceding 3 years, subject to notice, a reasonable opportunity to contest the calculation, and applicable employment law.
(d) NO DOUBLE RECOVERY. Amounts recovered under a securities-law clawback or another enforceable policy for the same incentive shall be credited. A recovery shall not exceed the portion improperly earned unless another law independently authorizes a penalty.
(e) LIMITATION. This section does not establish a Government salary schedule for private companies, penalize compensation earned before coverage, or make an officer personally liable merely because of title. Individual civil liability under title XIV requires personal culpable conduct.
(a) REQUIRED IDENTIFICATION. For a covered acquisition exceeding $10,000,000, the prime contractor shall identify each first-tier subcontract exceeding $1,000,000 and each known lower-tier source of a designated critical defense input, including legal entity, ultimate controlling parent, work performed, value or reasonable value range, and applicable exclusive rights.
(b) FLOWDOWN. A first-tier subcontractor shall furnish corresponding information concerning lower tiers performing material covered work. Reporting shall stop when a supplier furnishes an ordinary commercial input that is neither designated critical nor material to a high-risk price review.
(c) UPDATES. Material changes shall be reported within 60 days after they become known through reasonable performance diligence. The prime contractor is not strictly liable for a lower-tier ownership fact it could not reasonably discover and did not recklessly ignore.
(d) SINGLE SUBMISSION. The Government shall accept one annual corporate ownership submission supplemented by contract-specific work identifiers. The same protected record need not be resubmitted to multiple contracting offices if securely available to them.
(e) ANTI-EVASION. A consortium manager or reseller shall identify the actual performing members and its own fee. Routing funds through a nonprofit entity does not remove the duty to identify the commercial recipient performing the work.
(a) PRICE SUPPORT. A prime contractor or intermediate subcontractor proposing a management, integration, purchasing, or handling charge shall identify the actual functions, risks, and costs supporting that charge when the underlying work is subject to title IV.
(b) DISALLOWANCE. A charge attributable solely to an unnecessary contracting tier, without corresponding performance, management, financing, quality, or risk-bearing value, shall be excluded from allowable cost and from a cost-based negotiation position. No inference of unnecessary value arises solely from use of a subcontractor.
(c) DISCLOSED BASIS. Percentage-based handling charges may be used where the contracting officer verifies that the allocation reasonably reflects services and is not a prohibited cost-plus-a-percentage-of-cost arrangement.
(d) RELATED LAYERS. Markups imposed successively by controlled affiliates shall be evaluated on a consolidated economic basis. A transfer price shall not create a new profit entitlement merely because the same article moves between affiliates.
(e) REMEDIES. A materially false representation of value added is subject to title XIV. An ordinary disagreement about the appropriate amount of a disclosed charge shall be resolved through pricing or contract procedures, not treated as fraud without the required proof.
(a) DISCLOSURE. A covered contractor furnishing cost-based information shall disclose a material purchase, lease, royalty, or service arrangement with an affiliate, owner, officer, or entity controlled by such a person where the arrangement affects the proposed Government price.
(b) BENCHMARK. Allowable cost shall not exceed the amount supportable under applicable cost principles and a documented arm’s-length comparison, taking account of legitimate integration benefits and the actual cost of privately provided capital or services.
(c) ACQUISITION ACCOUNTING. A change in corporate ownership shall not by itself justify a higher Government price, accelerated amortization of goodwill, new royalties for rights already held by the Government, or revaluation of publicly financed tooling.
(d) OWNERSHIP RECORDS. Entities subject to section 601 shall disclose persons exercising control and natural persons owning at least 25 percent of voting or economic interests, to the extent reasonably ascertainable after documented inquiry. A publicly traded parent may identify public filings and known controlling persons instead of tracing every public shareholder.
(e) PRIVACY. Personal addresses, identification numbers, and nonpublic personal ownership details shall be restricted to authorized officials. Public reporting shall ordinarily identify the controlling legal entity, not expose natural persons’ private identifying information.
(f) NO SUBSTITUTION. This section does not alter obligations under anti-money-laundering, sanctions, or foreign-investment law.
(a) CONTRACT TERMS. Covered acquisitions exceeding $1,000,000 shall require prime contractors to pay an undisputed amount due to a subcontractor not later than 15 days after receipt of the corresponding Government payment or an earlier contractual due date.
(b) DISPUTES. A disputed withholding shall be supported by written reasons identifying the affected work and amount. The undisputed balance shall not be withheld to pressure the subcontractor to accept an unrelated concession, release a protected complaint, or provide unlicensed intellectual property.
(c) CERTIFICATION. A prime requesting payment shall not knowingly represent that a subcontractor has been paid when payment has not occurred. It shall promptly correct a materially inaccurate payment representation.
(d) ENFORCEMENT. The contracting officer may require a corrective plan, withhold an amount proportionate to the established payment failure under the prime contract, or refer repeated knowing violations under title XIV. This section does not make the United States a guarantor of a subcontractor debt or create contractual privity.
(e) PRIVATE TERMS. A subcontract shall provide reasonable interest on an improperly withheld undisputed amount and a dispute process not requiring a small supplier to waive statutory remedies. The clause may be enforced between the contracting parties under otherwise applicable law.
(f) CONTINUITY. Corrective action shall avoid interrupting wages or essential lower-tier performance unrelated to the dispute.
(a) REASONABLE DILIGENCE. A prime contractor shall maintain risk-based procedures to identify applicable flowdown duties, obtain necessary price support, review material exceptions, and act on credible evidence of lower-tier noncompliance.
(b) NO AUTOMATIC IMMUNITY. A prime contractor may not avoid a known material defect by relying solely on an unchecked subcontractor certification, a reseller’s commercial label, or a contractual disclaimer of responsibility.
(c) NO STRICT VICARIOUS PENALTY. A civil penalty against a prime for lower-tier conduct requires proof that the prime knowingly participated, caused the violation, concealed it, or recklessly disregarded an applicable duty of its own. Common participation in a supply chain alone is insufficient.
(d) DIRECT REPORTING. A lower-tier supplier may communicate a compliance concern directly to the contracting officer or Inspector General. The prime may require ordinary coordination of technical work but shall not prohibit protected reporting.
(e) COST. A small supplier shall not be required to finance a prime contractor’s general compliance infrastructure or unrelated legal expenses as a condition of receiving payment for properly performed work.
(a) LIMIT. A contract financed under this Act shall not require a supplier to refrain from offering an independently developed product to another Government prime contractor unless the restriction is reasonably necessary to protect a specifically identified confidential investment, fulfill an objectively limited capacity commitment, or comply with security law.
(b) TERMS. An allowed restriction shall be limited by product, duration, and purpose and shall not exceed the period reasonably necessary to protect the identified interest. A broad prohibition on competing in the defense sector is not justified by ordinary participation in a funded project.
(c) PROHIBITED RETALIATION. A prime contractor shall not knowingly threaten cancellation, deny an otherwise earned payment, or impose a materially adverse supply-chain penalty because a supplier makes a good-faith protected disclosure or lawfully seeks Government qualification as an alternative source.
(d) LEGITIMATE BUSINESS DECISIONS. This section does not require renewal of a subcontract, prohibit documented quality or performance decisions, or permit misuse of another person’s intellectual property.
(e) REMEDIES. The Government may enforce the required clause and seek relief under title XIV for a knowing statutory violation. Existing antitrust, labor, contract, and whistleblower remedies are preserved.
(a) GROUP FILING. A controlled corporate group may designate one responsible entity to file common ownership, ethics-policy, and audit-access information. Each performing entity remains responsible for its own price, performance, and payment representations.
(b) SAFE PROCEDURES. The Secretary shall publish a standard subcontract compliance schedule identifying duties by value, risk, and transaction type. A higher-tier contractor shall not represent a voluntary additional demand as a federal requirement.
(c) ASSISTANCE. Small suppliers may use technical assistance funded under title VIII to establish ordinary records and secure reporting. Assistance shall be available without requiring affiliation with an incumbent prime.
(d) PROHIBITION ON DUPLICATION. A contractor shall accept a valid Government verification or current equivalent audit for the same issue unless a material reason for additional review is documented. A prime’s commercial preference for another auditor does not create a reimbursable Government cost without agreement.
(e) ACCOUNTABILITY. The Office shall maintain a channel for suppliers to report unnecessary flowdown requirements, delayed payments, and misuse of certification demands, and shall publish anonymized corrective guidance.
(a) REQUIREMENT. Before awarding a new covered acquisition for a major weapon system, mission-critical software system, or sustainment arrangement exceeding $50,000,000, the program executive officer shall approve a lifecycle technical-rights strategy.
(b) CONTENTS. The strategy shall identify data and software needed for operation, maintenance, installation, training, cybersecurity support, interface management, competitive sustainment, and feasible second-source production. It shall distinguish rights already held by the United States, rights to be acquired, privately financed technology, mixed-funded development, and protected small-business research rights.
(c) DELIVERABLES AND RIGHTS. The strategy shall separately identify the recorded material to be delivered and the legal license to use it. Acquisition of a license without usable data, or delivery without sufficient usage rights, does not by itself satisfy the strategy.
(d) PRICE AND ALTERNATIVES. The contracting officer shall obtain separately evaluated prices for additional necessary rights and consider modular alternatives, nonproprietary interfaces, independent development, and total lifecycle cost.
(e) UPDATES. The strategy shall be updated before a material architecture change and at least every 3 years during sustainment. Unfunded desires for additional rights shall be identified as such and not counted as acquired capability.
(f) EXISTING RIGHTS. The Department shall exercise and enforce rights it already possesses before paying again for the same rights. A contractor’s restrictive marking shall not be accepted without review where it conflicts with the contract or applicable law.
(a) CONTRACT SCHEDULE. A new acquisition covered by section 701 shall specify the drawings, diagnostic information, parts identifiers, maintenance procedures, interface documents, software documentation, and other materials required by the approved strategy, with delivery dates, formats, version controls, and acceptance tests.
(b) USABILITY. Acceptance shall require that authorized personnel can locate, interpret, and use the materials with the tools and licenses purchased. An inaccessible proprietary format or an expiring credential does not satisfy an obligation to provide enduring use.
(c) UPDATES. Material changes affecting safe operation, maintenance, interoperability, or a licensed Government use shall be documented and delivered within the contractual schedule. The price shall identify ongoing update obligations.
(d) WITHHOLDING. A contract may provide a proportionate payment holdback tied to acceptance of these deliverables. The holdback shall not exceed the reasonably estimated value and performance risk of the missing material and shall be released when compliance is verified.
(e) SENSITIVE CONTENT. Secure transmission, classification controls, export restrictions, and access restrictions shall be incorporated at award. This section does not require public release of technical information.
(a) AUTHORITY. Notwithstanding section 3771(b)(8) of title 10, United States Code, the Secretary may require, as a separately identified and compensated deliverable in a solicitation issued after the applicable date in section 1801, a limited Government-purpose license in technical data and computer software necessary to operate, diagnose, maintain, repair, or integrate the equipment purchased under that solicitation.
(b) NECESSITY. The requirement may be imposed only upon a written finding that the material is necessary for a defined lifecycle function, existing rights are insufficient, a materially less intrusive practical alternative is unavailable or would have materially higher lifecycle cost, and the scope is proportional to the Government’s need.
(c) SCOPE. The license may authorize use by Government personnel and qualified support contractors solely for the licensed Government function, with confidentiality, access, and noncommercial-use restrictions. It shall not authorize unrelated commercial exploitation or automatic disclosure of detailed manufacturing or process data not necessary for the specified repair or integration function.
(d) COMPENSATION. The solicitation shall permit a separately priced license or an identified allocation within the total price, require evaluation of that price, and provide notice of the required rights before offers are due. No officer may acquire additional privately held rights by an unpriced unilateral demand under this section.
(e) LIMITATIONS. Patent rights, copyrights beyond the licensed use, trade secrets outside the defined deliverable, and statutory small-business research protections remain in force. A license in data does not alone grant a license in a patented invention.
(f) WAIVER. The Secretary may approve a narrower license or alternative sustainment arrangement upon a documented finding of equivalent practical capability or disproportionate cost. The waiver shall identify the residual dependence, mitigation, and next review date.
(g) EXISTING CONTRACTS. This section does not retroactively alter rights under an existing contract. Such rights may be obtained by voluntary agreement, exercise of an existing right, or another lawful compensated authority.
(a) RISK-BASED USE. For a mission-critical system dependent on proprietary software or a single repair source, the contracting officer shall assess whether secure escrow of specified technical materials, source code, build instructions, dependencies, signing procedures, or specialized tooling information is necessary for continuity.
(b) AGREEMENT. An escrow arrangement shall identify the materials, verification frequency, custodian, authorized users, existing and contingent license rights, compensation, release conditions, and process for resolving a dispute. Release conditions shall concern objectively defined failure to provide an essential contracted capability after notice and cure, not merely an unfavorable corporate financial condition.
(c) VERIFICATION. Deposit shall be tested sufficiently to establish that authorized personnel could restore the licensed function in the agreed environment. Incomplete code, missing dependencies, or an unusable encryption arrangement shall be treated as a failed deliverable.
(d) RELEASE. Except where a pre-agreed emergency condition requires immediate access to avoid substantial harm, the owner shall receive notice and an opportunity to contest whether the agreed condition has occurred. Emergency access shall be limited, logged, and promptly reviewed.
(e) BANKRUPTCY. A bankruptcy filing alone shall not constitute breach or trigger a forfeiture prohibited by title 11, United States Code. Escrow and license arrangements shall preserve rights available under that title and shall not purport to override an automatic stay or trustee authority.
(f) COMMERCIAL SOFTWARE. Escrow need not be required for widely available commercial software where verified alternatives, data portability, secure backups, and a funded replacement plan provide sufficient continuity.
(a) GOVERNMENT DATA. A covered software acquisition shall identify Government operational data, the authorized uses of such data, export formats, retention, and return or deletion obligations. A contractor shall not condition access to Government-owned operational data on purchase of unrelated services.
(b) CONTINUITY. Where continued operation depends on a recurring license, remote authentication, proprietary cloud service, or subscription, the contract shall identify the maximum interruption risk, transition assistance, offline capability where technically appropriate, and the price of continued access during an orderly transition.
(c) NO UNAUTHORIZED DISABLING. A contractor shall not intentionally disable, materially degrade, or remotely restrict an accepted defense capability in violation of the contract in order to compel payment of a disputed amount, surrender of a legal right, or acceptance of a new commercial term. Court orders, valid export restrictions, and pre-agreed emergency safety or cybersecurity controls are preserved.
(d) SECURITY ACTION. An emergency protective action shall be limited to the reasonably necessary duration and scope, promptly reported to the designated Government authority, and supported by an auditable technical explanation. It shall not be used as a pretext for commercial coercion.
(e) NO SOURCE-CODE GENERALIZATION. This section does not require all commercial software vendors to deliver source code. Necessary source access must arise under a particular license, escrow arrangement, or other lawful authority.
(a) DESIGN CHOICE. For a new major system or material modernization, the Department shall use a modular open systems approach where technically feasible and lifecycle-cost effective, consistent with section 4401 of title 10, United States Code.
(b) INTERFACES. The solicitation shall identify critical interfaces, applicable standards, conformance tests, necessary interface rights, and the process for admitting independently developed compatible components. An interface described as open shall not depend on an undisclosed mandatory proprietary element that prevents practical substitution.
(c) NO FAVORITISM. A conformance authority shall use objective technical and security criteria. An incumbent shall not possess unreviewable authority to determine whether a competitor’s component may be tested or integrated.
(d) EVOLUTION. Standards shall permit justified technical improvement and backward-compatibility planning rather than freezing obsolete designs. A change creating new proprietary dependence shall require a documented lifecycle justification.
(e) COMPENSATION AND SECURITY. Privately financed interface rights shall be compensated where required by law or contract. Openness does not require public disclosure of classified information, defeat of authentication, or access by an unqualified person.
(f) EVIDENCE. The Department shall test practical interchangeability where it relies on modularity to justify a projected saving.
(a) REVIEW. A contracting officer shall review a restrictive technical-data or software marking when credible evidence indicates that it exceeds the applicable license, the Government funded the relevant development, or the marking prevents an expressly purchased use.
(b) PROCESS. The owner shall receive the challenged marking, the legal and factual basis, and a reasonable opportunity to substantiate the restriction. Existing statutory validation procedures and burdens of proof are preserved except where this Act expressly provides otherwise.
(c) SEGREGABILITY. A disputed restriction shall be resolved at the lowest practicable component or data level. A dispute over one module shall not justify withholding unrelated materials that are due and undisputed.
(d) INTERIM MEASURES. Pending resolution, the Government shall protect the disputed information. Use may occur only under an existing license, a valid emergency right, agreement, or court order.
(e) NO DOUBLE PAYMENT. An unsupported marking shall not create a compensable right. Conversely, disagreement over a marking shall not justify uncompensated acquisition of a right the Government does not possess.
(f) REMEDIES. Contract disputes concerning these rights shall follow section 1505. Knowingly false ownership or funding representations may be referred under title XIV, subject to materiality and culpability requirements.
(a) PROGRAM. Within 2 years after enactment, the Secretary shall establish a process for qualifying Government depots and independent suppliers to perform repair functions for which the United States possesses adequate rights and operationally justified demand.
(b) REQUIREMENTS. Qualification shall address technical competence, quality, cybersecurity, export eligibility, facilities, traceability, and safety. It shall not require the incumbent manufacturer’s discretionary consent where that consent is not legally necessary.
(c) ACCESS. A qualified provider may receive the data, tools, diagnostic access, and parts information the Government is lawfully entitled to provide, subject to security and confidentiality controls. Qualification does not authorize use of unlicensed patented processes or technology.
(d) TESTING. The Government shall establish objective test and acceptance criteria and provide a reasonable opportunity to correct a remediable deficiency. Rejection shall state technical reasons and available review.
(e) FIELD REPAIR. Nothing in this section authorizes circumvention of lawful weapons-safety controls, nuclear surety requirements, cryptographic protections, or operational command authority.
(f) METRICS. Reporting shall distinguish providers legally qualified, providers with actual production capacity, repairs completed, turnaround times, and independently verified changes in readiness or cost.
(a) INVENTORY. Covered contractors possessing Government-owned tooling, test equipment, molds, fixtures, or production assets shall maintain an accurate, auditable inventory stating location, condition, use restrictions, and the contract to which each material asset relates.
(b) ACCESS AND TRANSFER. The Government may inspect and direct lawful use or transfer of its property under the governing contract. A contractor shall not assert a lien, storage condition, or proprietary claim inconsistent with Government ownership to block an authorized transfer.
(c) PRIVATE RIGHTS. Transfer of a physical asset shall not be construed to transfer unlicensed intellectual property. The contract shall identify complementary rights necessary for practical use and their acquisition cost.
(d) DISPOSAL. Before destruction, abandonment, or disposal of an asset material to a critical defense input, the contracting officer shall assess residual production value, alternate-source use, environmental duties, and preservation costs.
(e) PRICING. Storage, maintenance, and handling charges shall be separately supportable and shall not duplicate depreciation or costs already reimbursed.
(f) SECURITY. Movement, access, and disposition remain subject to security, export, safety, and property-management law.
(a) NEGOTIATION PROGRAM. From funds allocated under section 1703, the Secretary may purchase technical-data, software, repair, or production licenses where an independent lifecycle assessment shows that the purchase is likely to improve competition, continuity, or value.
(b) TERMS. A purchase shall identify the right obtained, permitted users, field of use, duration, compensation, delivery, and remedies. Compensation may be a lump sum, royalty, milestone payment, or another enforceable structure supported by available funds.
(c) ALTERNATIVES. The Secretary shall consider independent design, equivalent substitute products, Government-owned capacity, and existing license rights before acquiring an unnecessarily broad exclusive right.
(d) EXISTING COMPULSORY-USE LAW. Nothing in this Act enlarges or restricts section 1498 of title 28, United States Code, or treats that section as a general authority to seize trade secrets. Any use under another law shall satisfy that law’s conditions and compensation remedies.
(e) BUDGET. No license may be purchased without available budget authority sufficient for the Government’s contractual obligation. A contingent royalty shall be evaluated for its maximum reasonably estimable exposure and applicable funding requirements.
(f) REVIEW. The Office shall verify that a purchased license is actually used or remains reasonably necessary; unused rights shall not be counted as realized savings.
(a) ESTABLISHMENT. The Secretary shall establish a competitive program to support independent qualified suppliers and credible new entrants in markets identified under sections 205 and 302.
(b) ELIGIBLE SUPPORT. Awards may finance tooling, testing, qualification, engineering needed to adapt a lawful alternative, cybersecurity compliance, and limited working capital directly related to establishing an additional source. Funds shall not finance purchase of an incumbent competitor, ordinary shareholder distributions, political activity, or costs already reimbursed elsewhere.
(c) SELECTION. Awards shall be based on technical feasibility, genuine independence, identified Government need, prospective lifecycle value, financial viability, workforce readiness, and measurable time to qualification. The selection record shall disclose conflicts and reasons for rejecting a materially less costly qualified alternative.
(d) AMOUNTS. An award shall not exceed $50,000,000 without the Secretary’s nondelegable written approval and 30 days’ prior notice to the appropriate congressional committees. A corporate group shall not receive more than 15 percent of the program’s annual new obligations absent the same finding and notice.
(e) COST SHARE. The recipient shall ordinarily contribute at least 30 percent of project cost from nonfederal sources. The Secretary may reduce the share to 10 percent for a small business upon a documented financing-gap finding. In-kind contributions must be independently valued and necessary to the project.
(f) TERMS. Each award shall include section 506 protections, objective milestones, audit access, and a plan for maintaining independent supply. Selection creates no entitlement to a later production contract.
(a) QUALIFICATION PATH. Each diversification award shall identify the applicable technical qualification authority, test requirements, Government decision dates, needed rights, and funded tasks. A project shall not be represented as an additional source before it can meet an actual requirement.
(b) GOVERNMENT COMMITMENT. Where lawful and funded, the Department may use a limited initial purchase, sample order, or capacity reservation to validate the source. The agreement shall state that additional orders depend on need, performance, competition requirements, and available funds.
(c) EVALUATION. The Secretary shall compare the cost of duplicate capability with the expected value of resilience, competition, and reduced interruption risk. An unsupported assumption that two suppliers always cost less is prohibited.
(d) INDEPENDENCE. An award shall disclose an incumbent’s material equity, veto, exclusive licensing, or management rights in the proposed new source. An entity effectively controlled by the incumbent shall not be counted as an independent source.
(e) FAILURE. If qualification becomes technically or economically impracticable, the Secretary shall stop further disbursement, preserve useful public assets, and resolve termination and recapture under the agreement. Honest research failure shall not be treated as fraud.
(a) AUTHORITY. The Secretary may establish or modernize Government-owned test, tooling, depot, or limited manufacturing capacity under this Act when necessary to address a documented critical-input risk that private sourcing cannot reasonably remedy on acceptable terms.
(b) FINDINGS. Before obligation, the Secretary shall assess private and allied alternatives; lifecycle capital and operating costs; utilization; skilled workforce availability; environmental obligations; security; intellectual-property needs; and likely effects on private entry.
(c) PROJECT LIMIT. New construction or a major facility expansion under this authority shall have a total project cost not exceeding $100,000,000. A larger project requires separate specific statutory authorization. The Secretary shall notify the appropriate congressional committees at least 45 days before obligating construction funds, except for emergency stabilization necessary to protect life or existing property. Notification does not create a committee approval power.
(d) OPERATION. A facility may be Government-operated or competitively contractor-operated. The operator shall be selected under objective criteria and shall not use access control to favor its own competing product.
(e) ACCESS. Qualified users shall have access on published, nondiscriminatory terms consistent with mission priority and security. Fees shall recover authorized costs and be deposited as required by law unless another statute authorizes retention.
(f) LIMITS. This authority does not nationalize an existing corporation, waive environmental or labor requirements, or authorize compulsory acquisition of private intellectual property.
(a) STANDARD PATHWAYS. The Secretary shall publish unclassified qualification requirements and expected decision intervals for commonly procured components and repair services. Classified requirements shall be made available through an authorized secure process to eligible applicants.
(b) TIMELINESS. Within 30 days after a complete application, the responsible authority shall identify the testing plan and estimated decision date. An adverse determination shall state remediable deficiencies and available reconsideration.
(c) EQUIVALENCE. Agencies shall accept equivalent accredited tests and prior Government qualification where technically sufficient, rather than require duplicative testing without explanation. A security or safety difference may justify additional testing.
(d) FAIR SOLICITATIONS. Specifications shall describe performance and interoperability needs rather than a particular company’s proprietary design unless that specificity is justified by mission requirements and a lawful acquisition exception.
(e) NO GUARANTEE. This section does not require acceptance of an unsafe, unproven, or inadequately supported product. Administrative speed shall not replace substantive qualification.
(f) FEEDBACK. Unsuccessful applicants shall receive meaningful technical feedback consistent with procurement integrity and protection of competitors’ information.
(a) TOOLS. The Secretary may use existing lawful progress-payment, milestone-payment, advance-payment, and purchase-commitment authorities to address documented working-capital barriers for an otherwise qualified independent supplier.
(b) SAFEGUARDS. An accelerated payment shall be proportionate to completed work, acquired materials, or a verified financing need; protected against diversion; and reconciled with final delivery. Payment timing shall not be offered in exchange for an unnecessary exclusive supply restriction.
(c) COORDINATION. The Department shall coordinate with the Small Business Administration and other agencies concerning assistance available under their existing authorities. This Act does not create a new loan guarantee or waive federal credit-subsidy requirements.
(d) PROMPT PROCESSING. Payment offices shall identify and resolve administrative defects promptly, state the reason for rejecting an invoice, and preserve applicable prompt-payment interest rights.
(e) DISCLOSURE. A supplier shall disclose material overlapping public financing for the same costs. The Government shall not require commercially unreasonable personal guarantees unrelated to the risk where a less burdensome lawful safeguard is adequate.
(f) EVALUATION. The Office shall report whether financing assistance resulted in delivered capability and sustained supplier participation rather than merely accelerating cash to an incumbent.
(a) FLEXIBILITY PRESERVED. The Secretary may use research and prototype authorities, including sections 4021 and 4022 of title 10, United States Code, subject to applicable law and the express requirements of this Act.
(b) TRANSITION PLAN. Before a follow-on production commitment exceeding $25,000,000, the agreement officer shall document successful prototype completion, statutory eligibility for the chosen follow-on method, anticipated quantities, price basis, data rights, competition opportunities, and the reason for using an other transaction rather than a procurement contract.
(c) COMMON SAFEGUARDS. Titles IV, VI, IX, XIII, XIV, and XV apply to covered production other transactions to the extent their terms address the relevant conduct. A production agreement shall not be exempt merely because an earlier prototype used a flexible authority.
(d) CONSORTIA. The Government shall identify actual awardees, work packages, fees, and material affiliates rather than record only the consortium manager. An intermediary shall not convert a traditional prime into a nontraditional contractor by nominal membership.
(e) RESEARCH PROTECTION. Reporting for a small early-stage experiment shall remain proportionate under section 402(e). Technical failure in an honestly performed prototype does not establish nonperformance of a promise the recipient did not make.
(f) TRACKING. Each follow-on production instrument shall be linked to the originating prototype record so that cost, competition, and transition outcomes can be evaluated.
(a) ALLOCATION. At least 25 percent of amounts obligated for diversification awards under section 801 over each 3-year period shall support independent small business concerns, unless the Secretary demonstrates insufficient technically qualified demand after meaningful outreach. Unawarded funds remain subject to their statutory purpose and availability period.
(b) NO SHELL QUALIFICATION. A nominally independent entity controlled by a major covered contractor shall not receive an independence preference inconsistent with applicable affiliation rules. Substantive collaboration that does not confer control is permitted.
(c) SUCCESSFUL EXIT. This Act does not prohibit a recipient’s lawful sale, investment, or public offering. A proposed transaction shall comply with title III where applicable and with contractual obligations to preserve supported capacity or repay an unfulfilled federal interest.
(d) BURDEN REDUCTION. The Secretary shall provide standard data templates, secure technical assistance, consolidated audits where practicable, and proportional security implementation support. A small supplier shall not be required to purchase a named consultant’s service as a condition of eligibility.
(e) OUTCOMES. Reports shall separately measure new entrants, returning suppliers, independent businesses surviving after 3 and 5 years, and businesses absorbed into existing groups. Aggregate dollars awarded to small businesses shall not substitute for these measures.
(a) STANDARD. The Secretary may designate a covered emergency for purposes of this title upon finding that a specific and time-sensitive defense requirement cannot be met through ordinary acquisition procedures without an imminent and substantial risk to life, an ongoing authorized operation, or essential military readiness.
(b) CONTENTS. The determination shall identify the requirement, existing legal authority for the acquisition, items or services covered, reasons ordinary timing is inadequate, estimated duration, and oversight plan. General reference to geopolitical uncertainty is insufficient.
(c) DURATION. A determination shall expire after 180 days unless renewed on updated findings. Renewal shall identify steps taken to restore ordinary procurement and shall not itself extend any contract.
(d) NOTICE. The Secretary shall transmit the determination to the appropriate congressional committees within 7 days and publish an unclassified summary within 30 days. Operational details may be provided in a classified annex.
(e) LIMITATION. A designation under this section creates no new authority to wage war, suspend appropriations restrictions, waive export or sanctions law, or make expenditures without available funds. It governs only the procedural accommodations expressly provided in this title.
(a) AUTHORITY. During a covered emergency, the Secretary or Deputy Secretary may defer a preaward pricing review, supplemental certification, or competition-planning deadline under this Act only to the extent delay would materially worsen the identified risk and no narrower practical accommodation is available.
(b) WRITTEN TERMS. The award file shall state the requirement deferred, reason, available price evidence, interim ceiling, minimum quantity and duration, data to be supplied later, audit access, adjustment mechanism, and responsible reviewing official.
(c) DURATION. A bridge award relying on this section shall cover not more than 180 days of the urgent requirement. One extension of not more than 180 days requires a new nondelegable determination and notice to Congress. A longer requirement shall be placed under an ordinary acquisition or another expressly authorized statutory procedure.
(d) MINIMUMS NOT WAIVABLE. This authority shall not waive the prohibition on knowingly false submissions, bribery, collusion, retaliation, unauthorized record destruction, or misuse of restricted information; the need for a written award and accountable recipient; judicial review; or applicable labor, safety, environmental, appropriations, and export law.
(e) EXTREME URGENCY. Where contemporaneous writing would itself endanger life or an authorized operation, an authorized officer may make an oral determination and complete the written record within 72 hours. The record shall identify the actual time and decision-maker.
(f) REVIEW. The Office shall review each exception exceeding $25,000,000 within 30 days after award and recommend corrective terms that can lawfully be implemented without interrupting essential delivery.
(a) PROSPECTIVE CLAUSE. An emergency award made before adequate price information is available shall include a ceiling, a deadline for supporting data, and a mutually stated mechanism for definitizing or redetermining the covered price. A supplier shall be informed of that mechanism before it accepts performance obligations.
(b) DEADLINE. The parties shall ordinarily definitize the price within 90 days after award and in all cases within 180 days unless the Secretary approves a specified extension based on documented complexity or operational necessity. The extension shall not remove audit rights.
(c) PAYMENT LIMIT. Before definitization, payments shall not exceed 50 percent of the interim ceiling unless the Secretary determines that additional payment is necessary to sustain essential performance and supported by verified incurred costs, delivered value, or protected advance-payment arrangements.
(d) RECONCILIATION. The final price shall credit advances, unused contingency amounts, duplicate capital support, and payments exceeding the agreed redetermined price. It shall include reasonable compensation for actual agreed emergency risk and investment.
(e) AUDIT. The Inspector General or authorized contract auditor shall have access to records relevant to the emergency award. The Office shall review a risk-based sample of smaller emergency awards and every award exceeding $100,000,000, without duplicating an adequate existing audit.
(f) NO EX POST SURPRISE. This section does not authorize unilateral retroactive imposition of a price-redetermination clause on a completed preexisting agreement.
(a) DELIVERY DATA. Emergency contracts shall require timely reporting of promised, completed, accepted, and rejected deliveries, with the reasons for material delays. Readiness urgency shall not permit counting an incomplete or unusable item as delivered capability.
(b) SUBSTITUTIONS. A substitute material, component, or production process shall require authorized technical approval where the change may affect safety, reliability, interoperability, or statutory sourcing requirements. The approval record shall identify the risk accepted and the responsible Government official.
(c) QUALITY RECORDS. Contractors shall preserve test results, traceability, and supplier information necessary to investigate defects or counterfeit content. Records shall not be omitted merely because production was accelerated.
(d) EMERGENCY PREMIUMS. A separately paid acceleration or surge premium shall be conditioned on the acceleration or capacity actually furnished, with fair adjustment for Government-caused delay.
(e) COORDINATION. The Department may coordinate delivery priorities under existing law, but an informal coordination arrangement shall not confer immunity for price fixing or market allocation.
(f) REVIEW. Material contract failures shall be evaluated for cause and responsibility. The Secretary shall not punish a contractor for declining to make an unsafe or legally prohibited delivery.
(a) AUTHORITY. From funds lawfully available for the relevant purpose, the Secretary may enter into competitively awarded or properly justified noncompetitive agreements purchasing verifiable production availability, repair capability, reserve tooling, or trained surge capacity without requiring actual consumption of weapons as a condition of payment.
(b) PURPOSE. The agreement shall compensate a defined readiness service rather than guarantee a supplier’s earnings or condition compensation on continuation of a conflict.
(c) TERMS. The agreement shall state the maintained capability, readiness test, staffing and maintenance requirements, activation price, performance period, termination terms, Government access, and treatment of overlapping production orders.
(d) NO DOUBLE PAYMENT. If reserved assets are used for a separately paid production order, the Government shall receive an appropriate credit for costs already covered by the availability payment.
(e) ALTERNATIVES. Before award, the Secretary shall compare stockpiling, commercial alternatives, allied capacity, public facilities, and shared availability arrangements. The findings shall include carrying costs and obsolescence risk.
(f) LIMITATION. This section creates no authority for an unfunded multiyear commitment or a standing subsidy without periodic performance verification. An agreement shall be reassessed at least every 2 years.
(a) PLAN. A material emergency acquisition or production-assistance agreement shall include an orderly drawdown plan addressing reduced demand, partially completed goods, specialized assets, workforce transition, environmental obligations, and residual Government rights.
(b) NO POLICY PENALTY. No agreement entered into under this Act may require the Government to continue hostilities, reject diplomacy, or adopt a particular foreign-policy position. A commercial term shall not penalize the exercise of those sovereign functions beyond otherwise lawful and expressly negotiated purchase, cancellation, or termination liabilities.
(c) COSTS. Termination settlements shall distinguish allowable incurred costs, reasonable settlement expenses, undelivered items of value, and compensation expressly due under the agreement from unsupported claims for anticipated future sales.
(d) TRANSITION. Where economical and mission-consistent, the Secretary may repurpose supported capacity for repair, stockpile rotation, allied orders lawfully approved, civilian emergency readiness, or other authorized dual-use production.
(e) RIGHTS. A drawdown does not waive employee rights, environmental remediation duties, bankruptcy protections, or an existing valid contractual claim.
(f) REPORT. For a drawdown exceeding $100,000,000 in affected obligations, the Secretary shall report projected and actual termination liabilities and the disposition of publicly financed assets.
(a) INDEPENDENT REQUIREMENTS. Military departments shall derive replenishment and reserve requirements from independently approved operational analysis, consumption data, uncertainty ranges, and lawful strategic direction, not a supplier’s revenue target.
(b) DISCLOSURE OF ASSUMPTIONS. A plan supporting a major replenishment acquisition shall distinguish replacement of consumed inventory, restoration of an approved reserve, modernization, alliance commitments, and an increase in the underlying requirement.
(c) AUDITABLE RECORD. The Department shall retain the methodological basis and material changes. Public summaries shall avoid revealing sensitive inventory levels or operational plans.
(d) LIFECYCLE MANAGEMENT. Plans shall address shelf life, inspection, rotation, demilitarization, disposal cost, surge capacity, and the risk of purchasing obsolete or excessive inventory.
(e) REVIEW. An emergency consumption surge shall trigger review of whether a temporary increase or sustained capacity commitment is appropriate. A contractor’s expectation of permanent demand shall not itself establish a Government need.
(f) AUTHORITY. This section does not constrain lawful military operational judgment or substitute the Office’s economic analysis for command decisions; it requires accountable procurement support for those decisions.
(a) REVIEW. Not later than 1 year after the expiration of a covered emergency determination, the Secretary shall complete an after-action procurement review, coordinated with but not substituting for independent audit or investigation.
(b) CONTENTS. The review shall address price definitization, competition exceptions, contractor performance, Government changes, data refusals, unsupported premiums, effects on supply independence, and opportunities to prepare better ordinary contracts before the next emergency.
(c) REPORTING. Results shall be submitted to the appropriate congressional committees and summarized publicly with necessary protections. An unresolved allegation shall be identified as unresolved, not presented as a final finding of misconduct.
(d) CORRECTION. Within 90 days after the review, the Secretary shall identify corrective actions, responsible officials, and completion dates. Unimplemented recommendations shall appear in the annual report until resolved or expressly rejected with reasons.
(e) NO DELAY OF ENFORCEMENT. The review shall not postpone an otherwise appropriate audit, preservation demand, recovery action, or referral.
(a) COST RULE. A covered contractor shall not charge to the Government, directly or through an indirect cost pool, affiliate, consultant, trade association, or intermediary, an amount for lobbying or political activity that is unallowable under section 3744 of title 10, United States Code, or applicable acquisition regulations.
(b) SEGREGATION. A contractor seeking reimbursement of association dues, public-affairs services, or consultant fees shall identify and exclude the portion attributable to unallowable activity using a reasonable documented allocation. An unsupported assertion that all activity was technical assistance is insufficient.
(c) AUTHORIZED COMMUNICATION. Reasonable costs of responding to a Government request, performing a contract, submitting a legally required report, or participating in an authorized proceeding remain governed by applicable cost principles; this section does not create a new blanket prohibition on such communications.
(d) AUDIT. Audits shall focus on amounts charged or proposed for reimbursement and supporting allocation records, not the viewpoint expressed or unrelated lawful expenditures from private funds.
(e) REMEDIES. Improperly reimbursed amounts may be recovered through applicable contract procedures. A civil penalty requires the elements of title XIV or another applicable law.
(f) EXISTING LAW. Restrictions on use of appropriated funds and on federal-contractor political contributions, including section 30119 of title 52, United States Code, remain governed by their own terms.
(a) GOVERNMENT RECORD. For a covered acquisition exceeding $25,000,000, the Department shall maintain a record of substantive nonpublic communications by an outside paid representative with a senior acquisition official seeking a particular award, material contract modification, sole-source exception, or relief from a specific contractual obligation.
(b) CONTENTS. The record shall state the date, Government office, represented entity, representative’s employer, contract or program, and specific action sought. It need not reproduce privileged legal advice, protected negotiations, or technical information unnecessary to identify the requested action.
(c) CONTRACTOR CONFIRMATION. A major covered contractor shall, quarterly, confirm or correct records of its reportable contacts made available to it by the Department. Existing lobbying disclosures may be incorporated rather than duplicated.
(d) EXCLUSIONS. Routine administration, public testimony, public rulemaking comments, protected whistleblowing, requests for legal advice, and communications concerning general foreign policy without a particular covered procurement request are excluded.
(e) PUBLICATION. An unclassified summary shall be published after the relevant award decision or 1 year after the contact, whichever is later, unless a particularized lawful confidentiality or investigative basis requires further withholding. The existence and category of withholding shall be reported.
(f) LIMITS. This section does not regulate congressional speech or debate, impose a duty on a Member of Congress to record legislative deliberations, or create a register of persons supporting or opposing a war.
(a) SCREENING. Before materially participating in source selection, pricing, technical-rights negotiation, or a competition-restoration decision under this Act, an executive-branch official shall complete the financial-conflict and employment-negotiation review required by applicable ethics law.
(b) RECUSAL. An official negotiating prospective employment with an affected contractor shall promptly notify the designated ethics official and recuse from matters requiring recusal under law. The official shall not participate through a subordinate or informal advisory channel in a matter from which the official is recused.
(c) DOCUMENTATION. The Department shall maintain a secure record of the matter, recusal, substitute decision-maker, and any lawful waiver. Public summaries shall exclude personal financial information not otherwise subject to disclosure.
(d) GIFTS AND BENEFITS. A contractor shall not knowingly offer a prohibited gift, compensated opportunity, or other improper personal benefit to influence a procurement decision. This subsection does not alter the elements of an existing criminal offense or convert a lawful broadly available benefit into bribery.
(e) TRAINING. Covered personnel shall receive annual practical instruction on employment discussions, gifts, nonpublic information, recusal, and reporting.
(f) NO PRESUMPTION. A prior lawful job in industry, by itself, does not establish a disqualifying conflict; the applicable financial interest and matter shall be evaluated.
(a) COVERED OFFICIAL. This section applies to an executive-branch officer or employee who, after the effective date of this section, personally and substantially approves source selection, negotiation of a material price, or administration of a covered acquisition exceeding $10,000,000 while serving as a contracting officer, program manager, senior executive, general or flag officer, or equivalent official with final decision responsibility.
(b) RESTRICTION. For 2 years after leaving that responsibility, the official shall not knowingly accept compensation from a covered contractor for representing, advising, or directing that contractor concerning the same acquisition or a substantially identical follow-on acquisition in which the official’s nonpublic procurement knowledge would create a material unfair advantage. The restriction includes behind-the-scenes compensated work directed specifically to that matter.
(c) LIMITS. The restriction does not prohibit unrelated employment, general technical work separated from the covered matter, public teaching, uncompensated testimony, or lawful advocacy about general policy. Existing broader restrictions under section 207 of title 18 and section 2104 of title 41, United States Code, are preserved.
(d) NOTICE AND ADVICE. Before separation or reassignment, the Department shall identify covered matters to the official and provide access to a written ethics opinion. A person acting in reasonable good-faith reliance on a fully informed written opinion shall not incur a civil penalty under this Act for the covered conduct unless material facts were concealed.
(e) EMPLOYER DUTY. A contractor shall not knowingly assign or compensate a former official in violation of this section and shall maintain a reasonable screening process.
(f) ENFORCEMENT. Violations are civil only under this Act and shall be enforced under title XIV. No new criminal offense is created.
(a) OFFICIAL USE. Before relying materially on an externally prepared recommendation in a procurement or requirements decision, the Department shall identify its authorship, the person commissioning it, and any disclosed financial relationship directly concerning the product, program, or outcome recommended.
(b) REQUESTED SUBMISSION. A contractor or paid adviser submitting a privately funded study in response to a Department request for procurement advice shall disclose the persons financing that specific work and any contingent compensation tied to the recommended procurement outcome.
(c) NARROW SCOPE. No disclosure of an organization’s general donor list, membership, unrelated research funders, or employees’ personal political views is required. Anonymous public advocacy outside a requested official procurement submission is not regulated by this section.
(d) REVIEW. A material interest shall be considered when assigning evidentiary weight and determining whether independent validation is needed. Disclosure does not automatically disqualify useful expertise.
(e) ADVISORY MEMBERS. Members of an official advisory body shall comply with applicable financial-disclosure, conflict, recusal, and advisory-committee requirements. A balanced panel does not mean allocating seats according to political viewpoint.
(f) ACCURACY. A knowing material false statement in a required disclosure may be referred under title XIV. A disputed prediction, interpretation, or policy opinion is not a false factual statement merely because the Government disagrees.
(a) PROHIBITION. No covered contractor shall knowingly offer, make, solicit, or accept a payment or benefit intended as an unlawful kickback, bribe, or compensation for prohibited use of nonpublic procurement information in connection with a covered acquisition.
(b) CONTRACT CONDITION. A covered acquisition exceeding $10,000,000 shall require disclosure of a commission or contingent fee paid to obtain that award, including the service, payee, amount or calculation, and any relationship to a Government official. Bona fide employee and established commercial selling arrangements shall be evaluated under existing law, not presumed corrupt.
(c) CONFLICT-CONTINGENT FEES. No federal funds furnished under a covered acquisition or assistance agreement may be used to pay an intermediary a fee expressly contingent on continuation or escalation of an armed conflict, defeat of a ceasefire, or initiation of hostilities. This limitation concerns federal payment, not an organization’s lawful privately financed advocacy.
(d) ENFORCEMENT. A violation of subsection (c) requires proof of the express contingency and use of covered funds. General sales growth or an ordinary commission on a lawful purchase does not alone establish that contingency.
(e) SAVINGS. Existing anti-kickback, foreign-bribery, lobbying, campaign-finance, and contingent-fee rules remain independently enforceable.
(a) INHERENTLY GOVERNMENTAL FUNCTIONS. The Department shall retain final authority to determine military requirements, evaluate whether an acquisition serves an authorized mission, assess a proposed termination, and recommend public policy. Such decisions shall not be delegated to a contractor with a financial interest in the outcome.
(b) CONTRACT SUPPORT. Private technical assistance may inform a decision if its scope, financial interest, assumptions, and limitations are disclosed to the responsible Government official and material conclusions are independently evaluated.
(c) PROCUREMENT RECORD. For a noncompetitive acquisition exceeding $100,000,000, the responsible official shall certify that the requirement rests on approved Government analysis and identify any material external support. The certification does not require public disclosure of operational plans.
(d) NO FOREIGN-POLICY TEST. Procurement eligibility shall not depend on whether a company endorses or opposes a diplomatic initiative, military operation, administration, or political party.
(e) REFERRAL. Credible evidence that a particular procurement was influenced by an unlawful benefit or concealed material conflict shall be referred for investigation. A company’s expectation of financial benefit from conflict is not, without additional evidence, proof of such influence.
(a) PROTECTED CONDUCT. No official implementing this Act may deny an award, designate an input, select an audit, impose a penalty, or restrict assistance because a person lawfully supports or opposes war, peace, diplomacy, defense expenditure, labor organizing, or another public-policy position.
(b) NARROW DISCLOSURES. A required disclosure under this title shall be limited to a specific procurement contact, charged expenditure, official advisory submission, relevant financial interest, or prohibited conduct expressly identified herein.
(c) EXEMPTION FOR THREATS. A person may request confidential treatment of otherwise publishable identifying information upon a particularized showing of a reasonable probability of threats, harassment, or reprisals. The Department shall decide within 30 days and use a less identifying public description where sufficient. Authorized enforcement access is preserved.
(d) NO COMPELLED VIEWPOINT. No contractor shall be required to endorse a Government statement, renounce a lawful political view, or disclose employee voting preferences to qualify for an award.
(e) REMEDIES. An aggrieved person with standing may seek appropriate nonmonetary review under section 1504 or the procurement forum required by section 1505. This section does not expand a damages remedy against the United States or individual officials.
(a) APPLICATION. Pricing, subcontract, technical-rights, audit, and integrity requirements of this Act apply to a covered acquisition administered by the Department for a foreign government, subject to the particular scope of each provision and applicable law.
(b) COST SEPARATION. The Department shall separately identify procurement price, authorized administrative charges, transportation, training, financing, support, and other material costs in the transaction record. The Government shall not describe the total transfer value as contractor profit.
(c) NOTICE TO PARTNER. Before acceptance of a new purchasing arrangement, the Department shall inform the partner government of applicable records access, pricing review, delivery conditions, and limitations on technical rights and retransfer.
(d) RIGHTS. A Government-purpose repair or software license acquired for United States use shall not automatically authorize disclosure to a foreign customer. Any additional foreign-use right shall be expressly negotiated and remain subject to export, security, and retransfer controls.
(e) ARMS EXPORT CONTROL ACT. This Act does not waive congressional notification, licensing, end-use, human-rights, or other requirements under the Arms Export Control Act or another law. A procurement approval is not an export authorization.
(f) EXISTING COMMITMENTS. New terms shall apply prospectively as provided in title XVIII; a prior international commitment shall be reviewed for lawful accommodation, not silently rewritten.
(a) ASSISTANCE TERMS. Where the United States provides financing or a grant administered by the Department for a foreign purchaser’s direct commercial acquisition, the assistance agreement shall require reasonable documentation of price, actual supplier identity, delivery, authorized use, and material commissions to the extent permitted by governing law and the United States’ contractual relationship.
(b) NO GENERAL EXTRATERRITORIAL REGULATION. This section does not subject an entirely foreign-funded and foreign-administered commercial transaction to United States procurement law solely because the supplier also conducts business with the Department.
(c) DISBURSEMENT. Assistance shall not be disbursed for a knowingly false invoice, an unidentified material intermediary, or a use prohibited by the assistance agreement. A disputed deficiency shall be addressed through notice, proportionate withholding, and an opportunity to provide reliable evidence.
(d) JURISDICTION. Remedies shall be pursued against persons and property subject to lawful jurisdiction, with respect for applicable sovereign immunity and international agreements.
(e) COORDINATION. The Secretaries of Defense and State shall coordinate compliance requirements to avoid conflicting instructions to the foreign purchaser or duplicate recovery of the same loss.
(a) DISCLOSURE. A covered contractor receiving at least $10,000,000 under a Government-administered foreign purchase shall disclose material brokers, agents, commissions, and offset obligations directly related to that acquisition to the authorized Government official.
(b) CONTENTS. Disclosure shall identify the service, recipient and controlling entity where reasonably ascertainable, amount or calculation, jurisdiction of payment, and known relationship to a public official involved in the transaction.
(c) OFFSET LIMIT. A contractor shall not charge the Government for an offset or commission cost that is unlawful, unrelated to an authorized contractual obligation, or already reimbursed by another source. Applicable statutory exceptions concerning indirect offsets remain in force except that they do not excuse a disclosure expressly required by this section.
(d) CONFIDENTIALITY. Commercial details may be protected from public release where lawfully exempt, but shall remain available to authorized auditors and enforcement officials.
(e) NO PRESUMPTION. A disclosed lawful commission or offset does not establish bribery. A knowing material concealment or false statement is enforceable under title XIV, and existing foreign-bribery and export-control law remains independently applicable.
(a) ACCURATE RECORDS. A contractor shall not knowingly falsify the recipient, destination, authorized end use, delivery status, or technical configuration of goods furnished under a covered acquisition.
(b) ASSISTANCE. Contracts shall require reasonable cooperation with authorized Government end-use monitoring and preservation of relevant delivery and configuration records. They shall not assign inherently governmental licensing or foreign-policy decisions to the supplier.
(c) DELIVERY HOLDS. Where another law requires withholding or suspension of a transfer, the Department shall document the legal basis and promptly assess lawful storage, preservation, contract modification, and termination obligations.
(d) NO AUTOMATIC EXPANSION. This Act does not create a new country-wide arms embargo or authorize delivery contrary to an existing restriction. Concerns requiring action under another statute shall be referred to the official responsible for that statute.
(e) INTEGRITY. A contractor’s ability to earn revenue from a proposed transfer shall not influence the Government’s independent legal determination of whether the transfer is authorized.
(a) EVALUATION. In a competition-restoration plan, the Secretary may consider a qualified allied source where consistent with domestic sourcing law, security requirements, export controls, and applicable international agreements.
(b) CRITERIA. Evaluation shall include actual production capacity, legal access during crisis, transportation, common ownership with existing sources, technical rights, enforceable delivery commitments, and vulnerabilities created by reliance on the same upstream supplier.
(c) NO AUTOMATIC WAIVER. This section does not waive the Buy American requirements, specialty-metals restrictions, domestic-source provisions, sanctions, or other procurement restrictions. Any exception shall arise under its own authority and be documented.
(d) COOPERATIVE PROJECTS. A cooperative qualification or production project financed under this Act shall identify the United States’ property and license rights, allocation of costs, dispute procedure, and limits on retransfer.
(e) RECIPROCITY. The Government may seek reciprocal access and fair treatment for United States suppliers, but shall not promise market access or security guarantees beyond lawful authority.
(a) NOTICE. A contractor claiming that foreign law prevents a required disclosure shall identify the specific legal restriction, affected records, ownership and custody, steps taken to obtain permission, and reasonably available substitute evidence.
(b) REVIEW. The contracting officer, with legal counsel and the relevant foreign-policy agency, shall determine whether an accommodation can provide substantially equivalent verification without violating law or exposing protected personal information unnecessarily.
(c) ALTERNATIVES. An accommodation may use an independent local audit, secure in-country inspection, redacted records, authenticated summaries, or other reliable evidence. It shall identify residual uncertainty and shall not amount to automatic acceptance of an unsupported price.
(d) NO COMPELLED ILLEGAL ACT. No penalty under this Act shall be imposed solely for failure to violate a genuine foreign legal prohibition where the person made a good-faith effort to comply and did not create the restriction to evade this Act.
(e) PROCUREMENT CONSEQUENCES. The Government may decline a future award when necessary verification cannot be obtained, subject to lawful emergency authority and review. This section creates no entitlement to an award or waiver of sanctions.
(a) PROGRAM. The Secretary of Labor, in consultation with the Secretary, shall use amounts provided by title XVII for competitive partnerships among qualified employers, community colleges, registered apprenticeship sponsors, labor organizations, and public workforce entities to develop skills needed for identified defense supply gaps.
(b) ELIGIBLE COSTS. Support may finance instruction, paid work-based learning, instructor development, portable credentials, safety training, and reasonable supportive services necessary for participation.
(c) SELECTION. Awards shall reflect documented skill demand, measurable completion and employment outcomes, wage quality, accessibility, and employer participation. A contractor’s projected revenue alone is not evidence of workforce need.
(d) PROTECTIONS. Participation shall be voluntary and consistent with nondiscrimination, disability access, wage-and-hour, collective-bargaining, and occupational-safety law. No person shall be required to waive organizing rights or accept an unlawful training repayment penalty.
(e) NO GUARANTEE. A training award does not guarantee a federal contract or permanent employment. Partners shall disclose realistic placement expectations and report outcomes rather than only enrollment.
(f) COORDINATION. Existing education and workforce programs may be used where they provide equivalent services without duplicate federal reimbursement.
(a) COVERAGE. A recipient of at least $10,000,000 in production assistance under this Act operating a supported facility with at least 100 employees shall include in its assistance agreement a continuity and transition plan.
(b) NOTICE. The agreement shall ordinarily require 180 days’ notice before a planned closure or relocation that would materially reduce the supported capability. An unforeseeable emergency, natural disaster, or sudden loss of lawful operations may excuse advance notice only to the extent impracticable, with notice as soon as reasonably possible.
(c) CONTENTS. The plan shall address worker notice, consultation with lawful representatives, retraining, retention of essential skills, disposition of Government property, continuation of critical supply, and environmental obligations.
(d) EXISTING RIGHTS. The plan supplements and does not replace the Worker Adjustment and Retraining Notification Act, a collective-bargaining agreement, or more protective applicable law.
(e) LIMITS. This section does not compel indefinite operation of a privately owned facility. Contractual recapture shall be proportional under section 506, and the Government may purchase a specifically valued transition service only with available funds.
(f) PRIVACY. Workforce reporting shall use aggregate information unless identifiable data is necessary and lawfully protected.
(a) AUTHORITY. Within the diversification program, the Secretary may support technically credible conversion of underused publicly supported capacity to an authorized defense, repair, disaster-readiness, or dual-use purpose when that use offers greater public value than abandonment.
(b) REVIEW. A conversion plan shall identify actual customers or authorized public demand, required new investment, intellectual-property constraints, workforce transferability, environmental costs, and risk of duplicating existing viable private capacity.
(c) NO PERPETUAL SUBSIDY. Support shall be time-limited and milestone-based. An expectation that another conflict will eventually restore demand shall not alone justify maintaining an uneconomic facility.
(d) PUBLIC INTEREST. Any sale or repurposing of federally supported assets shall protect the residual federal interest and comply with property-disposal law. A transfer shall not provide a windfall through undervaluation of publicly financed equipment.
(e) LABOR AND COMMUNITY INPUT. The responsible agency shall consult affected workers and public workforce entities while preserving lawful management authority and confidential business information.
(a) COMPLIANCE. A project funded under this Act shall comply with applicable environmental review, hazardous-materials, occupational-safety, permitting, and cleanup requirements. Procurement urgency does not create an exemption not otherwise provided by law.
(b) COSTING. A facility or production proposal shall identify reasonably foreseeable waste management, contamination prevention, decommissioning, and remediation costs rather than omit them from lifecycle estimates.
(c) RESPONSIBILITY. Assistance agreements shall allocate responsibility for preexisting contamination and new project-related releases to the extent lawful, without waiving liability otherwise imposed by environmental law.
(d) SAFETY DATA. Material safety incidents and falsified compliance records affecting covered performance shall be reported through applicable channels. Protected employee reporting shall not be restricted.
(e) NO DOUBLE RECOVERY. A cost already funded under an environmental settlement or another federal award shall not be charged again to this program.
(f) REVIEW. The Secretary shall consider a technically feasible lower-risk production process where lifecycle value and mission requirements support it, without requiring an unqualified substitute solely to meet a procurement deadline.
(a) RISK PLAN. A contractor furnishing a critical defense input shall maintain a proportionate plan for material authenticity, traceability, obsolescence, and disruption risks relevant to its contractual performance.
(b) RECORDS. Required records shall identify the origin and verification of material components where necessary for safety, reliability, statutory sourcing, or an identified supply-chain risk. The requirement shall be calibrated rather than impose complete traceability of every immaterial commercial consumable.
(c) DISCLOSURE. A contractor shall promptly notify the contracting officer of credible evidence that a delivered item is counterfeit, materially nonconforming, or dependent on an unlawful source. The notice shall distinguish confirmed facts from matters under investigation.
(d) REMEDIATION. The contract shall identify quarantine, testing, replacement, and cost responsibility. Good-faith disclosure and prompt mitigation shall be considered in enforcement, without excusing knowingly fraudulent delivery.
(e) DIVERSIFICATION. The Secretary shall assess whether nominally separate prime contractors depend on the same upstream material or facility before describing the supply chain as resilient.
(a) ANALYSIS. A major competition-restoration action or publicly financed facility project shall assess effects on workers, skill retention, and affected communities alongside price and readiness. Local employment alone shall not justify preserving an anticompetitive arrangement that violates law.
(b) CONTRACT COMPLIANCE. Recipients shall comply with applicable prevailing-wage, wage-and-hour, equal-employment, and collective-bargaining requirements. This Act does not exempt a recipient from such requirements or extend a prevailing-wage statute to a transaction beyond its lawful scope.
(c) NO PERSONAL RETALIATION. A worker shall not be penalized under this Act for a corporation’s violation absent the worker’s own culpable conduct. Remedial arrangements shall preserve earned wages, lawful benefits, and retirement interests where practicable and legally required.
(d) ASSISTANCE. Transition support shall be awarded on objective need and program criteria, not political affiliation or support for a contractor.
(e) REPORTING. Employment claims associated with an award shall distinguish temporary construction work, retained jobs, new ongoing positions, and indirect estimates, with the method and uncertainty stated.
(a) SYSTEM. Within 2 years after enactment, the Secretary shall establish an interoperable record linking each material covered acquisition to its awardee, ultimate controlling entity, instrument type, competition basis, relevant prototype predecessor, major subcontractors, pricing review, technical-rights strategy, performance measures, and public assistance.
(b) EXISTING SYSTEMS. The Secretary shall integrate existing acquisition, financial, property, and integrity systems where practical rather than build duplicative repositories. Identifiers shall permit authorized analysts to distinguish subsidiaries from genuinely independent suppliers.
(c) ACCURACY. The system shall record the source, date, verification status, and correction history for material information. An adverse allegation shall not be displayed as a final adjudication.
(d) ACCESS TIERS. Separate access controls shall distinguish public information, procurement-sensitive information, proprietary information, personal information, and classified material. Classification and privacy shall be applied to the specific information, not used as a blanket reason to withhold all program results.
(e) PORTABILITY. Contracts for the system shall provide Government data ownership, documented interfaces, exportable records, and a funded exit plan. A transparency system shall not itself create avoidable supplier lock-in.
(a) PUBLIC DASHBOARD. The Department shall publish searchable, machine-readable summaries of covered obligations, competition methods, major corporate recipients, waivers, performance outcomes, and final enforcement dispositions, subject to lawful protections.
(b) PRICE DATA. Public unit-price information shall be adjusted or accompanied by material differences in quantity, configuration, delivery, and support. A misleading comparison between materially different products shall not be published as evidence of overpricing.
(c) SENSITIVE BENCHMARKS. Current proprietary cost data shall not be publicly released under this section. Aggregated historical benchmarks may be published after at least 24 months if disclosure will not reasonably reveal a protected supplier-specific price, facilitate collusion, or expose a sensitive operational vulnerability.
(d) SMALL MARKETS. In a market with too few independent suppliers to protect confidential information, the Department shall publish the analytical method and aggregate finding rather than a reversibly identifiable statistic.
(e) ERROR CORRECTION. A person identified in a proposed material adverse factual entry shall ordinarily have 15 business days to identify an error before publication. That review does not confer a veto over a lawful disclosure or delay an urgent safety warning.
(f) EXISTING DISCLOSURE. Nothing in this section narrows a disclosure duty otherwise imposed by law.
(a) ORDINARY RECORDS. Agencies shall accept reliable records in the format ordinarily maintained by a supplier unless a different format is reasonably necessary for verification or secure interoperability.
(b) STANDARDIZATION. The Secretary shall publish nonproprietary schemas for ownership, contract linkage, price-support inventories, and performance measures. A reporting requirement shall not mandate purchase of a particular vendor’s software.
(c) MINIMIZATION. Agencies shall request the relevant period, product, and transaction rather than all enterprise records when a narrower request is adequate. Small suppliers shall be offered simplified templates and secure submission assistance.
(d) RETENTION. Contractor retention shall follow section 407 for covered audit records and otherwise applicable law. Government records shall be retained or disposed of under approved federal records schedules, with preservation for pending litigation, audit, or investigation.
(e) CORRECTIONS. A corrected submission shall preserve the prior version and reason for correction. A good-faith correction shall not be obscured or treated as evidence of fraud solely because it was necessary.
(f) PERFORMANCE. The Office shall annually report average reporting hours and recurring burdens by supplier size and instrument type.
(a) CONTROLS. Systems under this Act shall employ least-privilege access, strong authentication, encryption appropriate to information sensitivity, audit logs, separation of duties, tested backups, and incident-response procedures consistent with applicable federal cybersecurity requirements.
(b) ACCESS PURPOSE. Protected contractor information may be used only for authorized acquisition, audit, competition, security, oversight, or enforcement functions. It shall not be provided to a competitor for commercial advantage.
(c) EXTERNAL EXPERTS. An outside expert receiving protected information shall undergo conflict screening, execute enforceable confidentiality and use restrictions, and receive only the information necessary for the assigned work.
(d) NETWORK LIMIT. A contractor shall not be required by this Act to grant continuous unrestricted Government access to its financial or production network. A secure, scoped interface may be used by agreement after a documented security assessment.
(e) LOGS AND REVIEW. Access to sensitive information shall be logged and periodically audited. Unauthorized access or disclosure shall be investigated under applicable law and may result in personnel, contractual, or civil remedies as appropriate.
(f) CLASSIFIED SYSTEMS. Classified information shall remain in authorized systems and channels. An unclassified dashboard shall never be used as a substitute.
(a) PROTECTION. Agencies shall protect personal information, trade secrets, confidential commercial information, privileged communications, and classified information in accordance with applicable law, including sections 552 and 552a of title 5 and section 1905 of title 18, United States Code.
(b) NO NEW BLANKET EXEMPTION. This Act does not create a categorical exemption under section 552(b)(3) of title 5, United States Code. A disclosure decision shall identify an existing applicable legal basis and release reasonably segregable nonexempt material.
(c) NOTICE. Before public disclosure of information submitted with a substantiated confidentiality claim, the agency shall provide notice and a reasonable opportunity to explain the claim where required by law, except for a properly justified urgent disclosure.
(d) OVERSIGHT ACCESS. Confidentiality does not bar lawful access by authorized auditors, inspectors general, antitrust agencies, courts, or Congress. Such recipients shall employ applicable protective procedures.
(e) PRIVILEGE. Submission of nonprivileged factual records does not waive an otherwise valid attorney-client or work-product protection. A person asserting privilege shall identify the claim sufficiently for review without revealing the protected advice.
(f) NO CONFIDENTIALITY GAG. A trade-secret claim shall not prohibit a protected disclosure through a legally authorized whistleblower channel.
(a) REPORT. A contractor operating a reporting system or holding protected information furnished under this Act shall notify the designated Government security official within 72 hours after discovery of credible evidence of a compromise materially affecting that information, unless a shorter independently applicable deadline governs.
(b) CONTENTS. Initial notice shall identify known facts, affected systems or data categories, protective steps, and a contact. Incomplete forensic knowledge shall not excuse failure to report; an initial notice shall not be treated as a final admission of fault.
(c) COORDINATION. A report satisfying an equivalent existing Department reporting requirement shall satisfy this section if delivered to the responsible official and containing the required information.
(d) RESPONSE. The contractor shall preserve relevant evidence, cooperate with lawful investigation, and implement proportionate mitigation. Government requests for access shall remain within lawful scope and security controls.
(e) PUBLIC NOTICE. Notice to affected individuals or the public shall be governed by applicable law and a risk-based determination; operational details and exploitable information shall be protected.
(f) NO STRICT LIABILITY. A compromise alone does not establish a violation. Liability requires proof of an applicable duty, culpability where required, and the relevant conduct.
(a) PERMITTED USE. Agencies may use automated tools to identify anomalies, map ownership, compare prices, and prioritize review, subject to validation, access controls, and the limitations of this section.
(b) NO SOLE BASIS. No civil penalty, debarment, critical-input designation, or material adverse pricing determination may rest solely on an automated score without a responsible official’s review of the underlying evidence and governing legal standard.
(c) VALIDATION. Tools shall be tested for data quality, false positives, false negatives, unexplained differential treatment, security, and stability. Material limitations shall be disclosed to officials using the output.
(d) EXPLANATION. An affected person shall receive a meaningful explanation of the factual basis for a material adverse decision, including sufficient information to contest an automated inference, subject to lawful protection of sensitive information.
(e) PROCUREMENT. A vendor’s proprietary model shall not prevent the Government from obtaining the documentation necessary to validate a system used for legally consequential decisions.
(f) NO NEW SURVEILLANCE. This section does not authorize collection of unrelated personal communications, political activity, or protected association.
(a) DEADLINE. Beginning 18 months after enactment and annually thereafter, the Secretary shall submit an integrated report to the appropriate congressional committees and publish a protected public version.
(b) CONTENTS. The report shall cover independent supplier counts; critical-market designations; merger reviews and monitoring; noncompetitive obligations; pricing-data requests and refusals; review times; verified price corrections; repair rights acquired and used; performance incentives; assistance and capital-distribution restrictions; emergency exceptions; supplier payments; workforce outcomes; enforcement dispositions; and program expenditures.
(c) FINANCIAL DISTINCTIONS. The report shall distinguish budget authority, obligations, outlays, refunds, penalties, estimated cost avoidance, and independently validated net savings. No sum shall be counted twice because it appears in both a contract adjustment and a settlement.
(d) METHODS. Estimates shall identify baselines, price-year assumptions, uncertainty, and material data gaps. A change in product mix shall not be reported as a price saving without adjustment.
(e) STATUS. The report shall identify overdue duties and corrective actions. Agency disagreement with an audit finding shall be stated with reasons rather than erase the finding.
(a) CIVIL VIOLATIONS. A person violates this section if, after the applicable effective date, the person knowingly commits any of the following acts:
(1) Makes or causes a materially false factual statement, certification, invoice, ownership disclosure, or performance representation expressly required by this Act, or conceals a material fact that a specific provision requires the person to disclose.
(2) Divides, routes, relabels, or structures a transaction principally to evade an applicable duty in violation of section 106(c).
(3) Destroys, materially alters, or conceals a record required to be preserved under section 407 after the retention duty attaches, with the purpose of impairing an authorized examination.
(4) Fails to obey a final, judicially enforceable records requirement under section 407 after receiving notice and a reasonable opportunity to comply, excluding a failure excused by section 1106 or a valid privilege.
(5) Diverts restricted assistance or effects a prohibited distribution with the purpose of defeating a binding condition under section 506 or 507.
(6) Violates the express prohibitions on unauthorized disabling, supplier retaliation, post-employment work, prohibited contingent payments, or unauthorized use of protected information in sections 705(c), 606(c), 1004, 1006, or 1304(b).
(7) Consummates a transaction in knowing violation of a waiting period under section 304.
(8) Interferes with a protected disclosure or retaliates in violation of section 1501 or 1507.
(b) LIMITED BASIS. An audit disagreement, high profit, lawful merger, good-faith forecast, protected opinion, technical failure, or ordinary breach of contract does not constitute a violation of this section without proof of the specified conduct and required culpability.
(c) INDIVIDUAL RESPONSIBILITY. An officer, employee, or owner is personally liable only for conduct the individual knowingly commits, directs, authorizes, or materially assists. Corporate title, ownership, or service on a board alone is insufficient.
(d) EXISTING OFFENSES. This Act creates no new criminal offense and does not alter the elements or defenses of an existing criminal or civil law.
(a) ACTION. The Attorney General may bring a civil action in an appropriate United States district court to enforce section 1401, obtain the penalties authorized by section 1403, recover a loss caused by the violation, or seek appropriate declaratory or injunctive relief.
(b) JURISDICTION. District courts shall have original jurisdiction over an action under this section. Venue shall lie where a defendant resides, is found, or transacts business materially connected to the violation, or where a substantial part of the violation occurred, subject to constitutional limits on personal jurisdiction.
(c) BURDEN. The United States shall prove each element by a preponderance of the evidence. A defendant shall have the right to trial by jury on an issue for which the Constitution provides that right. The Federal Rules of Civil Procedure and Evidence shall apply.
(d) EQUITABLE RELIEF. An injunction shall satisfy applicable equitable standards and be tailored to prevent or remedy the proven violation. This section does not authorize an agency to impose a punitive monetary sanction through an internal adjudication.
(e) RELATION TO CONTRACT CLAIMS. A dispute solely concerning a contract price adjustment, entitlement, or performance remedy under chapter 71 of title 41, United States Code, shall proceed through the forum prescribed by that chapter. The Government shall not relabel an ordinary contract dispute as a section 1401 violation without pleading and proving the additional elements.
(f) SETTLEMENT AUTHORITY. Settlement remains subject to the Attorney General’s lawful authority and section 1407. No Department procurement official may promise immunity from an independent enforcement action.
(a) ORDINARY MAXIMUM. For a violation of section 1401 other than a waiting-period violation, a court may impose a civil penalty not exceeding $250,000 for each material course of conduct concerning a covered acquisition during a 12-month period. Related documents or submissions implementing the same course of conduct shall not be counted as separate violations merely because they are numerous.
(b) AGGRAVATED CONDUCT. Where the United States proves that the violation involved intentional fraud, bribery, obstruction, or intentional diversion of assistance, the maximum under subsection (a) shall instead be the greater of $1,000,000 or twice the pecuniary gain directly attributable to that course of conduct.
(c) WAITING PERIOD. For a knowing violation of section 304, the court may impose not more than $50,000 for each day of unlawful consummation before the required period ends or compliance is restored, not exceeding $10,000,000 for one transaction. A good-faith material dispute over whether notice is required shall be considered in determining culpability and amount.
(d) FACTORS. The court shall consider seriousness, actual or threatened harm, gain, intent, duration, prior adjudicated violations, financial resources, cooperation, remediation, effects on innocent workers and suppliers, and constitutional proportionality. No minimum penalty is required.
(e) DUPLICATE SANCTIONS. The court shall credit monetary penalties already paid under another federal proceeding to the extent they punish the same conduct and harm, while separately accounting for compensatory recovery and remedies for distinct misconduct.
(f) INFLATION. Penalty amounts shall be adjusted under the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended. The Secretary’s threshold authority under section 106(e) does not apply to penalties.
(g) NO STOCK-PRICE DAMAGES. Market capitalization changes and anticipated future war-related sales shall not be treated as Government loss under this Act.
(a) REMEDIES. Subject to the governing contract and applicable law, a contracting officer may require cure, reject nonconforming performance, withhold an unearned amount, exercise a warranty, adjust a price under an applicable clause, terminate for default or convenience where authorized, or pursue a Government claim.
(b) NOTICE. Except for immediate protective action justified by law or contract, the officer shall identify the deficiency, requested correction, reasonable cure period, amount at issue, and available dispute process.
(c) PROPORTIONAL WITHHOLDING. A withholding shall be limited to the disputed or reasonably protected amount and shall not be used as a de facto punitive fine or to coerce waiver of judicial review. Earned, undisputed payments shall be processed under applicable law.
(d) CAUSATION. A contractor shall not bear costs caused solely by a Government-directed change or failure where the governing contract allocates that risk to the Government. Shared responsibility shall be apportioned on the evidence and contract terms.
(e) GOVERNMENT LOSS. Recovery shall reflect actual overpayment, contractual entitlement, or a remedy expressly authorized by law. A projected saving is not a recoverable debt merely because the Government would have preferred a lower price.
(f) CONTINUITY. Corrective action shall include a plan for essential deliveries and affected subcontractors where interruption poses a substantial readiness risk. Continuity planning does not excuse an established debt or violation.
(a) REFERRAL. A final civil judgment, criminal conviction, material admitted misconduct, or supported evidence of repeated serious noncompliance shall be referred to the appropriate suspending and debarring official for a present-responsibility assessment.
(b) PROCEDURE. Suspension and debarment shall be protective rather than punitive and shall follow applicable federal procedures, including notice, an opportunity to contest material facts where required, a reasoned decision, scope and duration limits, and available judicial review.
(c) NO AUTOMATIC EXCLUSION. Size, profitability, an unresolved allegation, a lawful political position, or a settlement expressly denying liability does not by itself require debarment. The official shall assess the underlying reliable evidence and present responsibility.
(d) REMEDIAL AGREEMENTS. A responsibility agreement may require independent monitoring, removal of culpable personnel from covered work, improved controls, audit access, verified restitution, and milestones. The official shall explain why the agreement adequately protects the Government.
(e) INDISPENSABLE SUPPLY. A compelling-reason exception permitting a specified award to an excluded or restricted supplier shall identify the indispensable item, minimum quantity and duration, independent monitoring, price safeguards, and funded alternative-source actions. The exception shall be reviewed at least every 180 days.
(f) NO LIABILITY AMNESTY. An exception under subsection (e) affects only the specified procurement eligibility. It shall not release a debt, terminate an investigation, waive a penalty, or immunize an officer or affiliate.
(a) LIABILITY STANDARD. A parent or affiliate is liable under this Act for its own knowing participation, direction, concealment, or material assistance, or where liability follows under otherwise applicable agency, alter-ego, fraudulent-transfer, or successor law. Common ownership alone does not create strict liability.
(b) PERFORMANCE SECURITY. Before furnishing substantial production assistance, the Government may require a reasonable parent guarantee, lien in financed assets, performance security, or other protection proportionate to the award and the recipient’s financial condition.
(c) TRANSFERS. A recipient shall not transfer supported assets or obligations to a shell entity with the purpose of defeating a known federal repayment or performance duty. A lawful sale shall address the residual federal interest, assumption of relevant obligations, or repayment required by the agreement.
(d) INNOCENT PURCHASERS. Acquisition of assets for fair value does not automatically impose unrelated civil penalties on a purchaser that neither participated in misconduct nor assumed liability. Existing fraudulent-transfer and successor doctrines remain applicable.
(e) CONTINUITY. A novation or reorganization shall preserve Government contract rights, pending claims, property ownership, and applicable records duties. The Government shall not approve a transaction merely to erase an adverse responsibility record.
(a) CONTENTS. A settlement resolving a material violation under this Act shall identify the conduct resolved, legal claims, payment components, admissions or express absence of admissions, monitoring obligations, and reservations concerning other proceedings.
(b) PUBLICATION. The responsible agency shall publish a lawful public version within 60 days after final execution, subject to judicial orders, privileges, classified information, and protected personal or commercial material. A confidentiality term shall not conceal the amount of a federal recovery or the existence of a final public enforcement action absent a specific legal basis.
(c) MONITORS. A monitor shall be selected through documented independence and qualification criteria, have a defined scope and term, disclose conflicts, and report material noncompliance to the responsible authority. The regulated company shall not possess an unreviewable veto over the monitor’s findings.
(d) CREDIT. Cooperation and voluntary remediation may reduce a penalty when genuine, timely, and supported. Payment of a fine alone shall not establish restored present responsibility.
(e) NO GAG. A settlement shall not prohibit protected employee disclosures, lawful cooperation with Congress or an Inspector General, or reporting of future misconduct.
(f) NO PURCHASED EXEMPTION. A settlement may not prospectively exempt unrelated future contracts from this Act’s mandatory duties.
(a) NEW CIVIL ACTIONS. An action for a penalty under section 1402 shall be commenced not later than 5 years after the violation. Each independently completed violation accrues when it occurs; mere continuing effects do not indefinitely restart the period.
(b) CONTRACT CLAIMS. Limitation periods for claims under chapter 71 of title 41, United States Code, remain governed by that chapter. A records-retention period does not enlarge a claim’s limitation period.
(c) OTHER STATUTES. The False Claims Act, antitrust law, criminal law, and other independent causes retain their own periods, accrual rules, and tolling provisions.
(d) PRESERVATION. A lawful records-preservation direction does not itself toll a limitation period. The parties may enter a lawful written tolling agreement, and a court may apply otherwise available equitable doctrines.
(e) RETALIATION. An action under section 1501 shall follow the period specified in that section.
(f) NO REVIVAL. Nothing in this Act revives a claim finally extinguished before enactment or reopens a final judgment.
(a) COORDINATION. The Attorney General, the Secretary, the Inspector General, and other responsible agencies shall coordinate parallel proceedings to preserve evidence, avoid inconsistent demands, and prevent duplicate compensatory recovery, without compromising independent statutory authority.
(b) PRIORITY. Enforcement priorities shall reflect reliable evidence of material taxpayer loss, readiness harm, corruption, repeated obstruction, or retaliation, not a company’s prominence or political viewpoint.
(c) RECEIPTS. Fines, penalties, and other miscellaneous receipts shall be deposited in the general fund of the Treasury as required by section 3302 of title 31, United States Code. Contract refunds shall be credited only as otherwise authorized by appropriations law. No investigating office may retain a percentage of a recovery to finance its operations under this Act.
(d) REPORTING. Annual enforcement reports shall distinguish allegations, filed actions, adjudicated findings, settlements, collected amounts, and uncollected judgments.
(e) NO PRIVATE GENERAL ACTION. Except for section 1501 and rights of review expressly preserved or provided, this Act creates no private cause of action. Existing private rights under antitrust, false-claims, employment, contract, and other law are not displaced.
(a) PROTECTED PERSON. An employee, former employee, applicant, or individual independent contractor of a nonfederal covered contractor, subcontractor, consortium manager, or recipient of assistance under this Act is protected against a materially adverse employment or contracting action because of a protected disclosure or lawful assistance in an investigation.
(b) PROTECTED DISCLOSURE. A disclosure is protected when the person reasonably believes it evidences a violation of law related to a covered acquisition or award, gross waste, gross mismanagement, abuse of authority, a substantial and specific danger to public safety, or material price or performance falsification, and makes the disclosure to an Inspector General, Congress, an authorized law-enforcement official, the Government Accountability Office, a responsible Government contract official, or an appropriate internal compliance or supervisory recipient.
(c) CLASSIFIED INFORMATION. Protection for classified or legally restricted information applies only to disclosure through a channel authorized to receive it. This section does not authorize public release, unlawful access, or indiscriminate copying of unrelated records.
(d) STANDARD. The claimant shall show by a preponderance of the evidence that protected conduct was a contributing factor in the adverse action. The respondent may avoid liability by clear and convincing evidence that it would have taken the same action absent the protected conduct.
(e) COMPLAINT AND ACTION. A complaint may be filed with the Department’s Inspector General. After 180 days without a final agency resolution, unless delay results from the claimant’s bad faith, the claimant may bring a de novo action against the nonfederal retaliating person in an appropriate United States district court. This supplemental process shall not shorten an existing right under section 4701 of title 10 or section 4712 of title 41, United States Code.
(f) REMEDIES. A court may order reinstatement or equivalent relief, back pay with interest, compensatory damages proved to result from the reprisal, reasonable attorney fees and costs, and appropriate injunctive relief. A jury shall decide issues for which a jury right applies. No punitive damages are authorized by this section.
(g) LIMITATION. The action shall be filed within 3 years after the adverse action. Timely filing of an Inspector General complaint tolls that period during administrative consideration and for 90 days after its conclusion. Duplicate compensation under overlapping statutes is prohibited.
(h) IMMUNITY. This section creates no damages claim against the United States and does not abrogate a State’s or Indian tribe’s sovereign immunity.
(a) COVERED DETERMINATIONS. This section governs a final critical-input designation, compulsory supplemental information determination, capital-distribution restriction, assistance recapture determination, or other material adverse administrative decision expressly made reviewable under this Act, except where a more specific procurement or enforcement procedure controls.
(b) NOTICE. Notice shall identify the legal authority, material facts, proposed action, period for response, and review rights. Supporting nonprivileged evidence shall be provided sufficiently to permit a meaningful response, subject to section 1506.
(c) RESPONSE. The affected person shall ordinarily have at least 30 days to respond, submit relevant evidence, and propose a less burdensome lawful alternative. A shorter period requires specific urgency findings and prompt subsequent review.
(d) IMPARTIAL REVIEW. Material disputed facts shall be evaluated by an official not responsible for initiating the disputed investigation and free of a material conflict. The final decision shall address significant contrary evidence.
(e) STANDARD. The agency shall establish the facts supporting the action by a preponderance of the evidence unless a specific provision or governing law requires a higher standard. Predictive risk findings shall identify reliable evidence and uncertainty rather than imply certainty.
(f) NO PUNITIVE ADJUDICATION. Nothing in this section authorizes administrative imposition of a penalty reserved to a court under title XIV.
(a) REQUEST. An affected person may request reconsideration of a determination covered by section 1502 within 30 days after receipt, identifying a material factual error, legal error, new evidence, or disproportionate burden.
(b) DECISION. The designated reviewing official shall decide within 60 days or provide a written extension not exceeding 60 additional days. Failure to decide within that period shall permit review of the original final determination without further exhaustion.
(c) STAY. Filing does not automatically stay an action. The agency or reviewing court may grant a stay based on likely merit, irreparable harm, harm to the Government or others, and the public interest.
(d) PROTECTIVE ACTION. An interim measure needed to prevent imminent and substantial loss or readiness harm shall be limited in scope and duration and subject to prompt review. It shall not operate as an indefinite exclusion without final process.
(e) RECORD. Reconsideration materials and disposition shall be included in the administrative record. An official shall not omit unfavorable evidence or use undisclosed extra-record communications to decide disputed material facts.
(f) OTHER DEADLINES. A reconsideration request shall not toll an independent bid-protest or contract-appeal deadline unless the governing law so provides. The notice shall clearly state that limitation.
(a) REVIEW. A person suffering legal wrong or adversely affected within the meaning of applicable law may seek review of final agency action under this Act in accordance with chapter 7 of title 5, United States Code, subject to section 1505 and any other specific statutory review provision.
(b) RELIEF. For an action seeking relief other than money damages, the United States waives sovereign immunity to the extent provided by section 702 of title 5. This Act does not create a separate damages remedy or enlarge the waiver beyond its stated terms.
(c) STANDARD. A court shall independently determine questions of statutory authority and constitutional law and apply the review standards prescribed by section 706 of title 5. An agency interpretation is not conclusive merely because the statute is ambiguous.
(d) STANDING. This section does not eliminate constitutional standing, ripeness, finality, exhaustion where lawfully required, or the requirement of reviewable agency action. General taxpayer disagreement with defense policy alone does not create standing.
(e) DISCRETION. Nothing in this Act creates a right to compel prosecution, a particular settlement, or an exercise of military command.
(f) REMAND. A court may set aside or remand unlawful action and grant appropriate relief within its jurisdiction, while considering lawful measures necessary to avoid an abrupt interruption of essential supply.
(a) PROCUREMENT CHALLENGES. A challenge in connection with a procurement or proposed procurement shall remain subject to the jurisdictional and procedural requirements of section 1491(b) of title 28, United States Code, and applicable Government Accountability Office bid-protest law. This Act does not create a parallel district-court route to evade those requirements.
(b) CONTRACT CLAIMS. Claims relating to a procurement contract covered by chapter 71 of title 41, United States Code, shall proceed through that chapter, including contracting officer decisions, board appeals, and the United States Court of Federal Claims as applicable.
(c) OTHER TRANSACTIONS. A research, prototype, or production other transaction is not converted into a procurement contract solely because this Act imposes integrity or reporting duties. The instrument shall identify its lawful dispute mechanism and judicial forum. This Act does not supply jurisdiction otherwise absent for a monetary contract claim against the United States.
(d) DISTINCT ENFORCEMENT. District-court jurisdiction under section 1402 governs the distinct civil violations and penalties specified there, not an ordinary dispute about contractual entitlement.
(e) PRESERVATION. Filing under an incorrect forum does not automatically toll another statute’s deadline. Required notices shall explain the applicable route sufficiently to avoid misleading an affected person.
(a) SECURE PROCESS. Agencies shall use cleared personnel, secure facilities, protective orders where authorized, and segregated records to provide access necessary for lawful oversight and adjudication without unauthorized disclosure.
(b) NOTICE. An affected person shall receive the fullest unclassified statement of material reasons reasonably possible. Classified status shall not be used to conceal nonclassified commercial misconduct or avoid an ordinary factual explanation.
(c) COURTS. A court shall determine claims of privilege and requests for protected treatment under applicable law. This Act does not abrogate the state-secrets privilege, compel unauthorized disclosure, or dictate a result where withholding prevents a party from fairly litigating an essential issue.
(d) ALTERNATIVES. The agency and parties shall consider substitutions, summaries, admissions, and limited protective access where lawful and adequate.
(e) NO SECRET PENALTY. A civil penalty under section 1402 may not be imposed solely on undisclosed evidence without the process required by the Constitution and applicable judicial rules.
(f) INTEGRITY. An official’s assertion of sensitivity shall be documented and subject to review through lawful channels; it shall not establish the merits of a pricing or misconduct allegation.
(a) PROHIBITION. A covered contractor or assistance recipient shall not require a person to obtain prior permission to make a protected disclosure, notify the employer before communicating with an authorized investigator, waive a nonwaivable statutory protection, or accept a financial penalty for lawful cooperation with Congress or an Inspector General.
(b) AGREEMENTS. A confidentiality agreement shall expressly preserve lawful reporting while continuing to protect classified information, trade secrets outside authorized reporting, and unrelated confidential material.
(c) ARBITRATION. Notwithstanding chapter 1 of title 9, United States Code, a predispute agreement entered into after this section takes effect shall not require arbitration of a claim arising under section 1501. A voluntary agreement to arbitrate after the dispute arises is permitted if informed and not a condition of continued employment or payment already due.
(d) REMEDIES. An inconsistent contractual term is unenforceable to the extent of the conflict. The Government may require correction of the term and notice to affected persons. Knowing interference is enforceable under section 1401, and individual retaliation remedies remain available under section 1501.
(e) NO LICENSE TO STEAL. Protection of reporting does not authorize theft, unlawful access, public disclosure of classified information, or use of protected information for unrelated competitive purposes.
(a) EXISTING RIGHTS. This Act preserves otherwise available constitutional claims, defenses, equitable relief, statutory fee rights, and remedies under federal or State law except to the extent of an express, valid conflict.
(b) NO GENERAL PREEMPTION. This Act does not occupy the field of corporate, labor, contract, professional-responsibility, or competition law. A State requirement is displaced only to the extent compliance with both laws is impossible or the requirement is otherwise preempted under established federal law.
(c) NO IMPUTED GUILT. A legislative finding, critical-input designation, audit recommendation, or procurement exception shall not be treated as a judicial finding that a named person committed fraud, monopolization, or another offense.
(d) CONSTITUTIONAL LIMITS. Remedies shall respect the First, Fifth, Seventh, and Eighth Amendments and Article III. The existence of a defense mission does not eliminate an applicable constitutional safeguard.
(e) GOVERNMENT LIABILITY. No provision creates a general waiver of sovereign immunity, personal damages liability of a federal official, or entitlement to an award beyond the specific terms of an applicable law.
(a) PLAN. Not later than 90 days after enactment, the Secretary shall issue an integrated implementation plan identifying each responsible official, statutory deadline, necessary appropriation, personnel requirement, acquisition-system change, and interagency dependency under this Act. The plan shall distinguish duties immediately authorized from duties applicable to future transactions under section 1801.
(b) PHASES. The plan shall provide for establishment of the Office within 90 days; workforce and proposed-rule actions within 180 days; final implementing rules within 365 days; prospective transaction requirements beginning on the 540th day; and the principal integrated data capability within 2 years, except where a provision expressly specifies another date.
(c) ACCOUNTABILITY. Each department or agency receiving amounts under title XVII shall designate an accountable implementation official. Such designation shall not transfer an Inspector General’s independence, the Attorney General’s litigation authority, the Commission’s statutory authority, or the Comptroller General’s legislative responsibilities to the Secretary.
(d) PUBLICATION. The Secretary shall publish an unclassified plan and quarterly progress updates. Classified or protected schedules shall be provided through appropriate congressional channels. A missed deadline shall be accompanied by a corrective schedule and explanation of the operational consequence.
(e) NO BLANKET EXTENSION. A plan, guidance document, funding allocation, or failure to complete a regulation shall not postpone a statutory effective date. Relief from an applicable obligation shall be granted only under an express provision of this Act or other applicable law.
(f) USABILITY. Before requiring a new reporting interface, the Secretary shall test it with contracting officers, auditors, small businesses, and a representative range of suppliers. An agency-caused technical failure shall not be treated as knowing noncompliance by a person that timely uses a reasonable alternative submission method.
(a) AUTHORITY. During the implementation period, the Secretary may conduct pilots using existing lawful authority or voluntarily agreed terms to test price verification, second-source qualification, technical-data delivery, and interoperable reporting. A pilot may not impose a mandatory duty before its applicable effective date.
(b) DESIGN. Each pilot shall state its hypothesis, comparison method, expenditure ceiling, eligible population, selection criteria, privacy protections, intended duration, and measurable outcomes before implementation. Selection shall include relevant differences in firm size, technical complexity, contract type, and actual competition.
(c) BASELINE. Evaluators shall distinguish a price change attributable to the pilot from changes in quantity, specification, inflation, production maturity, exchange rates, Government requirements, and risk allocation. An earlier questioned price shall not be presumed to be an accurate counterfactual.
(d) LIMITATIONS. A pilot shall not waive an anti-fraud statute, civil-rights protection, security requirement, environmental obligation, appropriations limitation, or jurisdictional rule. Participation shall not confer immunity from independent investigation.
(e) RESULTS. Within 180 days after completion, the Secretary shall publish an appropriately protected evaluation, including adverse results, administrative cost, supplier withdrawal, delivery delay, and whether the pilot should be modified or discontinued. A contractor shall have an opportunity to identify factual errors but shall not possess publication approval authority.
(a) MEASURES. The Secretary shall establish reproducible measures of independent qualified suppliers, credible bid participation, supplier retention, adjusted prices, timely delivery, mission availability, repair turnaround, Government technical-data usability, small-business entry, administrative burden, and security incidents associated with implementation.
(b) FINANCIAL INTEGRITY. Reports shall separately state appropriations, obligations, outlays, contract price adjustments, recoveries, estimated cost avoidance, and costs of creating alternate capacity. An amount shall not be counted more than once as a saving because it appears in several agency systems.
(c) COMPETITION. Common ownership, indispensable dependence on an incumbent’s unlicensed input, and lack of actual qualification shall be considered before treating nominal bidders as independent alternatives.
(d) ADVERSE EFFECTS. Metrics shall identify whether a requirement disproportionately delays small suppliers, deters technically qualified entrants, increases contingency premiums, or displaces necessary production investment. The Secretary shall propose a lawful corrective action where a material adverse effect is verified.
(e) NO QUOTAS FOR FINDINGS. Employee performance standards shall not reward a minimum number of fraud referrals, adverse pricing findings, penalties, or merger challenges without regard to evidentiary merit and actual outcomes.
(f) METHODS. Material methodology revisions shall be disclosed with enough information to reconcile prior reports. A change in methodology shall not be presented as an operational improvement.
(a) REVIEWS. The Comptroller General shall review implementation not later than 2 years, 5 years, and 10 years after enactment, subject to the Comptroller General’s authorities and professional standards.
(b) CONTENT. Each review shall assess statutory compliance, fiscal execution, agency capacity, competition, industrial resilience, pricing outcomes, procurement timeliness, data protections, judicial and administrative disputes, and burdens on independent suppliers. The 5-year and 10-year reviews shall assess whether measured benefits reasonably justify continuing expenditures.
(c) ACCESS. Agencies shall provide records within the Comptroller General’s existing legal access authority. This Act does not diminish protections for classified material or confer on a contractor a veto over a lawful congressional audit.
(d) RESPONSE. Within 120 days after a final review, each affected executive agency shall submit a response identifying accepted recommendations, disputed findings with reasons, corrective actions, and requested legislation or funding.
(e) SEPARATION OF FUNCTIONS. The Comptroller General shall not approve executive contracts, allocate executive appropriations, adjudicate penalties, or control an executive enforcement decision under this Act.
(a) REVIEW. During the fifth year after enactment, the Secretary, in consultation with the Attorney General, the Federal Trade Commission, and the Secretary of Labor, shall submit recommendations for continuation or revision of the authorities and appropriations in this Act.
(b) CRITERIA. Recommendations shall address whether reporting thresholds remain proportionate, emergency exceptions remain narrow, data licenses preserve investment incentives, second sources remain viable, conflicts rules remain tied to governmental functions, and oversight produces verifiable rather than merely asserted benefits.
(c) NO AUTOMATIC REPEAL. A review deadline does not terminate a right, duty, pending proceeding, record-retention requirement, or contract term. Future spending remains subject to title XVII and subsequent Acts of Congress.
(d) CONGRESSIONAL ACTION. A committee report, recommendation, or failure to act shall not amend this Act or authorize the expenditure of additional funds. Any statutory continuation of appropriations shall be enacted through the constitutionally prescribed legislative process.
(a) CONTINUITY PLAN. Each implementing agency shall maintain a plan for loss of critical personnel, cyber disruption, litigation affecting a particular provision, and interruptions in available appropriations. The plan shall prioritize lawful protection of records, payment processing, whistleblower channels, and urgent military readiness.
(b) FUNDING LIMIT. No continuity plan authorizes an obligation in excess of available budget authority or an exception to the Antideficiency Act. Excepted activities during a lapse shall be determined under applicable law.
(c) ALTERNATIVE CHANNELS. Agencies shall maintain secure methods for time-sensitive submissions when the primary system is unavailable. The date of an adequately documented alternative submission shall govern timeliness.
(d) DISRUPTION REVIEW. A material implementation failure shall be reviewed by an official independent of the failed operational function where practicable. Findings and corrective measures shall be included in the next report under section 1308.
(e) BUSINESS CONTINUITY. A statutory review or pending disagreement shall not excuse a contractor’s undisputed performance obligations, nor authorize withholding an undisputed Government payment, except as otherwise lawfully provided.
(a) PROGRAM YEAR. For purposes of this Act, program year 1 is the first full fiscal year beginning after enactment. Each successive program year is the next fiscal year. The transition period begins on enactment and ends on the day preceding program year 1.
(b) ACCOUNTS. The Secretary of the Treasury shall establish separate accounts, or identifiable account subdivisions consistent with federal accounting law, for the appropriations made to each recipient agency by sections 1702 and 1703. Funds appropriated to the Comptroller General shall remain legislative-branch funds and shall not be administered by an executive department.
(c) DEFINITIONS. Budget authority, obligation, outlay, transfer, and reprogramming shall have their established meanings under federal fiscal law. The monetary amounts appropriated by this title are nominal dollar amounts and are not adjusted under section 106.
(d) PURPOSE. These appropriations support implementation, oversight, rights acquisition, industrial diversification, and workforce measures authorized by this Act. They are not a general appropriation for weapons purchases, combat operations, or unrelated agency functions.
(a) DIRECT APPROPRIATIONS. In addition to amounts otherwise available, there are appropriated, out of any money in the Treasury not otherwise appropriated, for allocation under section 1703:
(1) $500,000,000, available on enactment, for the transition period;
(2) $1,500,000,000, available on the first day of program year 1;
(3) $2,250,000,000 for each of program years 2 through 5, available on the first day of the respective program year; and
(4) $1,800,000,000 for each of program years 6 through 10, available on the first day of the respective program year.
(b) AVAILABILITY. Each appropriation under subsection (a) shall remain available for new obligations until the end of the second fiscal year following the fiscal year in which that appropriation first becomes available. After expiration, adjustment, liquidation, and cancellation of accounts shall be governed by chapter 15 of title 31, United States Code.
(c) TOTAL. The aggregate amount appropriated by subsection (a) is $20,000,000,000. No amount for a program year may be obligated before the date on which it becomes available.
(d) NO IMPLIED OFFSET. This title does not enact a tax, impose a general contractor assessment, rescind a separate appropriation, or credit a projected saving as budget authority. Recoveries are governed by section 1706.
(e) SUBSEQUENT YEARS. No additional amount is appropriated by this Act for program year 11 or a later program year. Continuing statutory duties may be carried out with amounts otherwise lawfully available for their purposes, but this subsection supplies no independent authority to incur an unfunded obligation.
(f) RULE OF CONSTRUCTION. Subsection (a) makes appropriations and is not merely an authorization of future appropriations. Nothing in this Act exempts the legislation from otherwise applicable congressional or statutory budget-enforcement procedures.
(a) ALLOCATION. Each amount appropriated by section 1702 constitutes appropriations to the specified officers or agencies in the following shares, without duplication of the aggregate amount:
(1) Fifty percent to the Secretary for industrial diversification, second-source qualification, shared productive capacity, and associated technical assistance under title VIII, including performance-linked assistance under section 506.
(2) Twenty percent to the Secretary for the Office, acquisition personnel, price and cost analysis, contract administration, competition assessment, and implementation under titles II through VI and XVI, including additional capacity of the Defense Contract Audit Agency and Defense Contract Management Agency.
(3) Fifteen percent to the Secretary for acquisition and validation of technical-data and software rights, secure escrow, interoperable data infrastructure, and cybersecurity under titles VII and XIII.
(4) Five percent to the Secretary of Labor for workforce, apprenticeship, and transition programs under title XII.
(5) Four percent to the Attorney General for antitrust analysis, procurement-integrity investigation, and civil enforcement under this Act and complementary existing authorities.
(6) Three percent to the Federal Trade Commission for defense-market merger analysis, monitoring, and enforcement within its lawful jurisdiction.
(7) Two percent to the Inspector General of the Department for independent oversight relating to this Act.
(8) One percent to the Comptroller General for independent legislative-branch evaluation relating to this Act.
(b) SEPARATE CONTROL. No amount allocated under paragraphs (4) through (8) of subsection (a) may be transferred to the Secretary, subjected to the Office’s approval, or diverted to another recipient under an executive reprogramming action.
(c) LIMITED DEFENSE TRANSFER. The Secretary may transfer amounts between the purposes in paragraphs (1), (2), and (3) of subsection (a) if the transfer is necessary to implement this Act, does not increase or decrease a purpose’s annual original allocation by more than 10 percent, and is reported with reasons to the appropriate congressional committees at least 30 days before execution. The notice does not require committee approval and confers no legislative veto. A transferred amount retains its original period of availability.
(d) ADMINISTRATION. Not more than 5 percent of the amount allocated under subsection (a)(1) may be used for direct grant administration rather than industrial assistance or qualification. This limit does not restrict separately allocated audit or enforcement funds.
(e) NONDUPLICATION. Costs funded under one paragraph shall not also be charged to another paragraph, an existing weapons contract, or a foreign purchaser. Agencies shall identify the allocation that supports each material obligation.
(a) PLANS. Within 90 days after enactment and before each subsequent program year, each recipient agency shall submit a spending plan identifying purposes, staffing, major acquisitions, grant competitions, expected obligations and outlays, implementation risks, and unobligated balances. The first plan may be revised to reflect actual transition-period length.
(b) APPORTIONMENT. Executive-branch amounts shall be apportioned and allotted in accordance with applicable fiscal law. Funds shall not be withheld for a reason prohibited by the Congressional Budget and Impoundment Control Act of 1974. Submission of a plan shall not authorize an agency or committee to rescind or increase an appropriation without law.
(c) COMMITMENTS. An award shall identify the amount presently obligated, any lawful contingent future amount, performance milestones, repayment terms, and the account charged. An agency shall not characterize an unfunded intention as a binding future order.
(d) COMPETITIVE USE. Assistance and procurement shall use the competitive procedures applicable under this Act and other law. A funding allocation to an agency does not earmark an award to a named company or locality.
(e) ADVANCE FUNDING. Advance payments, progress payments, and shared facilities shall comply with applicable statutory authority and documented risk controls. This title creates no new loan or loan-guarantee authority and does not displace the Federal Credit Reform Act of 1990.
(f) QUARTERLY REPORT. Agencies shall report obligations, outlays, unobligated balances, material reallocations, and forecast cost changes each quarter. Sensitive project detail may be protected, but aggregate account execution shall be public.
(a) AGREEMENTS. A grant or cooperative agreement under this Act shall contain measurable deliverables, eligible-cost rules, Government access to relevant records, proportionate suspension and repayment terms, protections against duplicate reimbursement, and an identified process for resolving disputes.
(b) MATCHING FUNDS. Required nonfederal contributions shall be valued at actual supportable cost. Funds from another federal award shall not count as nonfederal matching funds unless an Act of Congress expressly permits that use. Unrelated speculative goodwill and the market value of anticipated future Government orders shall not constitute a matching contribution.
(c) PROPERTY. Agreements shall identify title, use restrictions, disposition, and the Government’s residual financial interest in funded facilities, tooling, or licenses. Recapture shall reflect unfulfilled obligations and residual value rather than an automatic confiscation of an entire going concern.
(d) DUPLICATE CAPITAL RECOVERY. A recipient shall not recover a capital cost through both this assistance and depreciation or other pricing charges to the Government without a corresponding credit. Reasonable privately funded capital and authorized operating costs remain eligible under the applicable arrangement.
(e) SUBRECIPIENTS. Material safeguards shall follow funds to a subrecipient performing the supported activity. A prime recipient shall exercise reasonable oversight but shall not be strictly liable for another person’s concealed wrongdoing absent its own breach, knowing participation, or an applicable guarantee.
(f) NOTICE. Before discretionary suspension or recapture, the agency shall apply title XV and pay an undisputed amount lawfully due. Immediate protective action may be taken only on documented grounds subject to prompt review.
(a) RECEIPTS. Civil penalties and other Government recoveries under this Act shall be deposited in the general fund of the Treasury as miscellaneous receipts, except to the extent another express statute requires a refund or credit to a particular appropriation. This Act establishes no revolving enforcement fund.
(b) CONTRACT CREDITS. A price reduction, refund, or disallowance shall be recorded in the account legally entitled to the adjustment. Expired-account and canceled-account rules shall apply. The same adjustment shall not also be reported as a separate penalty recovery or prospective saving.
(c) NO AUTOMATIC SPENDING. An estimate of lower future prices or avoided costs does not authorize a new obligation or transfer. Amounts may be reobligated only if actual budget authority remains legally available for the purpose and period.
(d) PUBLIC FISCAL STATEMENT. The annual report under section 1308 shall reconcile the original appropriation schedule, transfers, obligations, outlays, recoveries, and estimated cost avoidance, with a description of uncertainties and methods.
(e) INDEPENDENCE. An investigator, auditor, adjudicator, or agency budget shall not receive a contingent percentage of penalties assessed or collected under this Act.
(a) ASSESSMENT. With the fifth-year review, the Director of the Office of Management and Budget, in consultation with the implementing agencies, shall submit a 10-year prospective fiscal assessment and a 30-year illustrative assessment of capital maintenance, staffing, technology replacement, supplier qualification, and continuing oversight.
(b) SCENARIOS. Assessments shall state nominal and constant-dollar assumptions, distinguish legally enacted funding from hypothetical extensions, and present favorable, central, and adverse scenarios. A projected price reduction shall not be described as an enacted budget saving.
(c) LEGISLATIVE ASSISTANCE. Agencies shall provide technical information requested by the Congressional Budget Office and congressional committees for independent estimates, consistent with lawful confidentiality protections. An executive estimate shall not be represented as a Congressional Budget Office score.
(d) MAINTENANCE LIABILITIES. Before acquiring a facility or a license requiring substantial recurring expenditures after program year 10, the responsible agency shall document the expected maintenance obligation, available legal funding source, and a feasible exit or transfer plan.
(e) NO ENTITLEMENT. An assessment, appropriation, successful pilot, or prior grant creates no private entitlement to a subsequent contract, renewal, compensation for the absence of hostilities, or continuation of a federal program.
(a) GENERAL RULE. Except as otherwise provided, this Act takes effect 180 days after enactment.
(b) IMMEDIATE PROVISIONS. Administrative establishment, planning, rulemaking, hiring preparation, interagency coordination, title XVII, this title, and provisions expressly measured from enactment take effect on enactment. Expenditures and voluntary pilots before mandatory transaction requirements begin shall remain within existing law and the express authorities of this Act.
(c) PROSPECTIVE TRANSACTIONS. Mandatory new acquisition, grant, pricing, audit-retention, subcontract, intellectual-property, and performance-clause requirements apply to solicitations issued, or awards made without a solicitation, on or after the 540th day after enactment. The merger notification and waiting requirements in sections 303 and 304 apply to transactions consummated on or after that day; a filing may be made sufficiently earlier to complete the applicable waiting period.
(d) SPECIFIC CIVIL DUTIES. Section 1004 applies to an official’s participation in covered responsibilities on or after the 540th day after enactment. Sections 1501 and 1507 apply beginning on the 180th day after enactment to disclosures, retaliation, interference, and agreements within their respective terms, including conduct associated with an existing covered contract. No new penalty applies to conduct completed before the violated duty became effective.
(e) REMEDIES. Titles XIV and XV apply when the underlying substantive duty applies. They do not retroactively create liability for an earlier act or revive an expired claim. Existing remedies remain governed by their own effective dates and limitations periods.
(f) INDEPENDENT OBLIGATIONS. An independently applicable statutory prohibition, reporting right, merger duty, or award condition is not suspended because a required regulation or contract clause has been omitted. Section 1803 governs corrective treatment of an omitted clause.
(g) CALENDAR. Unless expressly stated otherwise, a day means a calendar day. A business day excludes Saturday, Sunday, and a federal legal holiday. A filing due when the receiving federal office is closed may be made on the next business day without default.
(a) EXISTING COMMITMENTS. This Act does not unilaterally reduce a lawfully agreed fixed price, eliminate accrued payment rights, confiscate an existing intellectual-property interest, or rewrite a fully priced contractual option awarded before the applicable transaction effective date.
(b) NEW SCOPE. A material new scope of work, a separately negotiated extension beyond previously priced commitments, or a new production award after the date in section 1801(c) shall be treated as a new transaction for the affected prospective portion. An administrative modification, funding increment within an existing priced obligation, or exercise of an existing priced option is not alone a new transaction.
(c) NEGOTIATED UPGRADES. The Government may negotiate earlier adoption of improved data rights, competition arrangements, reporting, or performance terms if the agreement states the consideration, funding, and allocation of new obligations. A contractor shall not be compelled to surrender an existing property right without lawful authority and required compensation.
(d) UNPRICED ARRANGEMENTS. An unpriced extension shall not evade this Act merely because the parties contemplated a future negotiation before the effective date. The contracting officer shall identify the portion actually committed and priced before that date.
(e) OPEN PROCEEDINGS. A pending audit, claim, investigation, protest, or litigation under existing law shall continue under the authority that governs it. This Act neither validates prior misconduct nor supplies a new retroactive penalty.
(f) MATERIAL RELIANCE. Implementing officials shall account for documented reliance, reasonable qualification periods, and current mission needs when selecting lawful prospective remedies. Reliance shall not authorize a waiver beyond an express statutory exception.
(a) STANDARD CLAUSES. By the deadline for final regulations, the Secretary shall publish standard clauses, data-delivery formats, threshold guidance, and model notices implementing this Act. Clauses shall identify the applicable duty, records, safeguards, remedy, and dispute forum.
(b) SOLICITATION NOTICE. A solicitation subject to this Act shall identify material applicable requirements before offers are due. An amendment materially changing those requirements shall provide a reasonable opportunity for offerors to revise proposals.
(c) OMISSION. On discovery of an omitted mandatory clause in a new covered award, the contracting officer shall promptly notify the contractor and seek a corrective modification. Statutory duties independently imposed on the contractor remain enforceable; an agency shall not use the omission to impose an undisclosed retrospective performance obligation or deny an equitable adjustment otherwise required by law.
(d) CONSISTENCY. The Federal Acquisition Regulation and defense supplements shall be conformed to this Act through the required rulemaking process. This Act does not authorize an inconsistent regulation to supersede a statutory right or threshold.
(e) PUBLIC GUIDANCE. Agencies shall provide a consolidated, accessible explanation for small businesses and lower-tier suppliers. Informal guidance shall identify itself as nonbinding except to the extent it restates an independently binding requirement.
(a) PRICING DATA. Section 3702 of title 10, United States Code, is amended by adding at the end the following:
“(h) Supplemental Defense Pricing Requirements. The requirements of this section are supplemented, for transactions within its scope, by section 402 of the Defense Industry Normalization Act. The exceptions and safeguards expressly provided in that Act govern its supplemental requirements.”.
(b) TECHNICAL DATA. Section 3771 of title 10, United States Code, is amended by adding at the end the following:
“(d) Limited Maintenance and Continuity Rights. Section 703 of the Defense Industry Normalization Act authorizes the prospective, separately identified acquisition of limited technical-data and software rights under the findings, compensation, scope, and protection requirements specified in that section, notwithstanding subsection (b)(8) to the limited extent expressly stated in that Act.”.
(c) RECORDS. Section 3841 of title 10, United States Code, is amended by adding at the end the following:
“(j) Supplemental Records Authority. Section 407 of the Defense Industry Normalization Act provides additional, specifically scoped authority for relevant records, retention, protected examination, and judicial enforcement. Its retention period governs records expressly subject to that section; otherwise this section continues to apply according to its terms.”.
(d) APPLICATION. Amendments made by this section take effect with the corresponding substantive requirement under section 1801 and do not independently expand the scope of that requirement.
(a) EXPRESS DISPLACEMENT. Except for a specific conflict expressly resolved by this Act, existing procurement, appropriations, antitrust, ethics, export-control, labor, environmental, privacy, and judicial-review law remains in effect. A general statement of purpose does not repeal a specific statutory protection.
(b) EXECUTIVE ACTION. An executive order, departmental designation, procurement memorandum, or policy may supplement this Act consistently with law but may not waive a statutory duty, expand a penalty, or substitute administrative approval for judicial authority required by this Act.
(c) DEPARTMENTAL SUCCESSION. A secondary departmental title or lawful transfer of a covered defense-acquisition function shall not terminate the responsibilities attached to that function. Nothing in this Act itself changes the statutory name, organization, or constitutional responsibilities of a military department or the Department.
(d) NO MILITARY AUTHORIZATION. This Act is not an authorization for use of military force, a declaration of war, an approval of an arms transfer otherwise requiring review, or an exemption from congressional control of appropriations.
(e) TREATIES AND IMMUNITY. This Act shall be applied consistently with applicable treaties, constitutionally valid subsequent federal law, and controlling sovereign-immunity rules. An implementing official shall identify an actual conflict and seek lawful resolution rather than presume an unlimited national-security exception.
(a) GENERAL RULE. If a provision of this Act, an amendment made by this Act, or its application to a person or circumstance is held invalid, the remainder and its application to other persons or circumstances shall not be affected, to the extent the remaining provisions can operate lawfully and consistently with the purposes stated in section 101.
(b) RIGHTS AND PRICING. Invalidity of a compulsory prospective licensing condition shall not invalidate voluntary negotiated rights, escrow lawfully agreed by the parties, technical-data delivery within an existing license, or separate pricing and competition requirements. Invalidity of one pricing presumption shall not eliminate the Government’s duty to establish a reasonable price through lawful evidence.
(c) ENFORCEMENT. Invalidity of a particular civil penalty shall not create administrative authority to impose that penalty. Independently authorized contract remedies, judicial equitable relief, and protected reporting rights remain available within their own legal limits.
(d) FUNDING. Invalidity of a program-specific expenditure shall leave other allocations intact. Unavailable or invalidly authorized amounts shall not automatically transfer to another purpose without lawful transfer authority or subsequent legislation.
(e) REVIEW. A court’s remedy shall be tailored to the legal violation and parties before it as required by applicable law. This section does not eliminate standing, jurisdiction, due process, or the authority of a court to grant an otherwise lawful remedy.
END OF LEGISLATIVE TEXT
The appendices that follow are explanatory only and are not part of the proposed Act.
NONSTATUTORY COUNSEL’S MATERIAL
This volume contains a complete proposed federal statute and separate explanatory appendices. It is a legislative discussion draft prepared for policy development, not an introduced bill, enacted law, official congressional committee product, or legal opinion of a government office. No sponsor, bill number, chamber action, or official fiscal score is represented. The operative legislation ends at section 1806. Everything in these appendices is nonstatutory and cannot enlarge a duty, waive an exception, or supply an appropriation.
The draft replaces an undifferentiated complaint about corporate profit with enforceable rules for competition, price evidence, repair independence, public investment, and procurement integrity. It permits a lawful return on risk and efficiency while making supplier exclusivity a reason for stronger verification. It does not order the breakup of named companies, impose a universal profit ceiling, presume that an investor statement proves corruption, or prohibit advocacy for a foreign-policy position. Those distinctions are substantive limits, not discretionary assurances.
The findings draw on documented institutional problems rather than a contested quotation or an inference that all defense spending is attributable to war. GAO has identified deficiencies in merger monitoring, acquisition planning for intellectual property, sustainment incentives, and other-transaction reporting. These support the bill’s problem definitions, but do not establish that every defense market is concentrated or every contract overpriced. The bill therefore requires transaction-specific and market-specific evidence. [1–4]
The draft uses the Department of Defense identified by 10 U.S.C. § 111 and covers any lawful successor exercising the same functions. The 2025 executive designation permitting “Department of War” did not itself eliminate statutory references. Section 1805 makes coverage function-based without purporting to rename the department. This drafting avoids dependence on the terminology of a particular administration. [5]
Existing law already provides important pricing, cost-data, antitrust, audit, procurement-integrity, and false-claims authorities. In particular, 10 U.S.C. § 3705 addresses necessary noncertified pricing information and limits reliance on historical government prices alone. The draft strengthens practical leverage and selected coverage instead of presenting all of those concepts as new. Its supplemental certification rule is narrower than a department-wide reversal of every simplified-acquisition exception. [6–10]
| Subject | Proposed setting and limitation |
|---|---|
| Coverage | DOD acquisitions and purchases substantially on its behalf, including research, production other transactions, covered subcontract tiers, and DOD-administered foreign purchases. Grants are covered only where expressly stated. |
| Risk review | Noncompetitive acquisitions above $250,000 receive risk screening. Selected high-risk acquisitions above $10 million receive independent pricing review. |
| Supplemental certification | A $2 million threshold for the defined high-risk, noncompetitive subset, with verified-market, narrow research, and emergency safeguards. It is not a universal $2 million reporting requirement. |
| Supplemental merger notice | Control transactions meeting $50 million target revenue, or $5 million for designated critical-input firms with actual notice, subject to aggregation and specified exclusions. |
| Repair rights | Prospective, necessity-based, separately identified rights with compensation, limited governmental purposes, security controls, and protection of unrelated private technology. |
| Public industrial investment | $20 billion of new direct appropriations across the transition period and ten program years; no tax, automatic industry levy, or assumed savings offset. |
| Capital distributions | Targeted conditions for substantial production-assistance recipients following specified contractor-attributable failure and an investment-related finding, not a general dividend ban. |
| Main application dates | Administrative preparation immediately; general operation and protected-reporting rights after 180 days; new transaction requirements after 540 days. |
The Office is located within the Department instead of becoming a new independent commission. It supplies analysis and coordination; contracting officers retain contractual responsibilities, inspectors general retain independence, DOJ controls new court enforcement, and FTC retains its existing jurisdiction. Congress receives independent GAO evaluations rather than a power to approve individual executive decisions by committee notice. This reduces duplicated authority while funding additional expertise.
The spending level, notification thresholds, 20 percent commercial-sales benchmark, limited two-year representation restriction, grant cost share, and targeted capital-distribution test are legislative design choices. They are not empirically proven optimal values. The draft provides review mechanisms, but changing the statute’s substantive thresholds still requires the authority and process it specifies. Congress should obtain contract-population and small-supplier data before deciding whether those settings are appropriately calibrated.
NONSTATUTORY COUNSEL’S MATERIAL
Each entry explains the proposed legal effect. This commentary is not part of the Act and does not substitute for the precise trigger, exception, deadline, or remedy in the legislative text.
Section 101. Short title; purposes. States the short title, procurement objectives, and principle that lawful profit or conflict-related demand alone is not a violation.
Section 102. Congressional findings. Supplies institutional findings without legislatively adjudicating a named contractor’s guilt or treating consolidation as invariably harmful.
Section 103. Definitions. Defines scope, actual control, independent and qualified suppliers, materiality, knowledge, covered instruments, and mission-critical capabilities.
Section 104. Scope and calibrated application. Applies requirements across contracting forms while preserving express small-purchase, classified-information, and jurisdictional boundaries.
Section 105. Rights, authority, and construction. Preserves constitutional protections and existing authority; the bill does not authorize military force or imply general power to confiscate property.
Section 106. Valuation, aggregation, and anti-evasion. Aggregates foreseeable related requirements and economically equivalent transactions, prohibits intentional threshold evasion, and limits inflation adjustments.
Section 107. Implementation standards and minimum safeguards. Requires proportionate implementation, clear responsibility, lawful appropriations, and protection of sensitive information.
Section 201. Defense Competition and Pricing Office. Creates a supervised Defense Competition and Pricing Office without placing final prosecution or adjudication inside its analytical function.
Section 202. Preservation of audit and investigative independence. Preserves audit and inspector-general independence and requires reasons for declining significant corrective recommendations.
Section 203. Acquisition and audit workforce. Funds and plans specialized federal capacity while reserving inherently governmental decisions to government personnel.
Section 204. Interagency coordination. Coordinates agencies and balanced consultation without private vetoes or control over another agency’s enforcement cases.
Section 205. Industrial-base market map. Maps actual industrial dependencies and common ownership instead of equating contract-entity counts with independent manufacturing capacity.
Section 206. Rules, standard clauses, and consultation. Requires proposed and final rules on defined schedules and expressly applies notice-and-comment protections to implementing rules.
Section 207. Petitions and correction of systemic failures. Creates a channel for systemic complaints with response deadlines while preserving ordinary protest deadlines and prosecution discretion.
Section 301. Competition and dependency plans. Requires life-cycle competition planning before major acquisitions and reassessment of lock-in during later sustainment.
Section 302. Designation of critical defense inputs. Creates evidence-based, time-limited critical-input designations with notice, review, and a narrow urgent pathway.
Section 303. Supplemental notice of defense-industry transactions. Adds defense-specific acquisition notice below or alongside general merger thresholds where a qualifying target or critical capability is involved.
Section 304. Review period and coordination with antitrust authorities. Establishes a bounded waiting period and limited extension; a contested effort to prevent closing requires judicial authority.
Section 305. Defense-market competition standard. Creates a supplemental defense-market competition standard and rebuttable presumption for defined reductions in viable independent suppliers.
Section 306. Remedies and monitoring of transactions. Prioritizes workable structural remedies and monitors compliance without automatically ordering divestiture of every historical merger.
Section 307. Access to essential contract inputs. Uses prospective, priced contractual access obligations to limit foreclosure of essential inputs while protecting legitimate rights and production costs.
Section 308. Joint ventures, teaming, and collective production. Preserves legitimate teaming and joint development but does not immunize bid coordination or disguise control as collaboration.
Section 309. Retrospective review and restoration of competition. Reviews past concentration and funds prospective alternatives without making an old, lawful merger newly unlawful merely because it occurred.
Section 401. Risk-based pricing review. Screens noncompetitive prices using dependency and pricing-risk indicators; larger high-risk cases receive independent review with deadlines.
Section 402. Supplemental certified factual pricing data. Requires certified factual pricing information for the specified high-risk subset and expressly resolves conflicts with otherwise applicable exemptions.
Section 403. Data other than certified cost or pricing data. Sequences noncertified requests from available market evidence to necessary records and provides a process for concrete objections.
Section 404. Verified commercial-market evidence. Creates an evidentiary safe harbor for verified, comparable nongovernment sales rather than treating a catalog or classification as sufficient.
Section 405. Price methodology and reasonable return. Requires a defensible risk-adjusted negotiation methodology and preserves genuine fixed-price efficiency gains instead of imposing a universal margin cap.
Section 406. Data refusal; protected lower-tier submission. Permits protected direct supplier submissions and requires a documented, limited readiness decision where price verification cannot be completed.
Section 407. Supplemental audit and records authority. Adds scoped audit and six-year record requirements with nondelegable subpoena controls and judicial enforcement, not unlimited network access.
Section 408. Price correction and recovery of unsupported payments. Allows causally supported price correction and preserves the contract-claims forum; a later high realized margin alone does not establish liability.
Section 409. Unallowable charges and public investment accounting. Clarifies disallowed cost shifting, acquisition premiums, restructuring safeguards, and credits for publicly financed capital without imposing universal accounting coverage.
Section 410. Pricing review quality and accountability. Measures whether additional price oversight works and identifies administrative burden and unintended supplier effects.
Section 501. Selection of contract type and allocation of risk. Matches fixed-price or cost-reimbursement arrangements to actual production and development risk rather than requiring unsuitable contract types.
Section 502. Meaningful incentives and acceptance standards. Connects incentives to independently verified outcomes and distinguishes baseline obligations from genuinely additional performance.
Section 503. Requirements changes, modifications, and cost growth. Requires credible cost and schedule baselines and scrutiny of material changes, including government-directed scope changes.
Section 504. Multiyear procurement and capacity reservations. Supports lawful multiyear purchasing and separately priced readiness capacity without creating unfunded future commitments.
Section 505. Warranties, quality, and lifecycle accountability. Requires life-cycle and warranty planning and prevents denial of warranty protection merely because an authorized independent repair occurred.
Section 506. Conditions on production assistance. Conditions production assistance on measurable milestones, residual-property terms, and proportional recapture for unmet obligations.
Section 507. Capital distributions during an uncured publicly supported production failure. Restricts specified distributions only after the assistance, nonperformance, investment-need, and procedural predicates are established.
Section 508. Executive incentive integrity. Links prospective covered incentive compensation to operational performance and permits recovery of incentive payments based on materially erroneous results.
Section 601. Visibility through subcontracting tiers. Identifies actual subcontract performers and critical tiers using calibrated thresholds and reasonable-knowledge standards.
Section 602. Pass-through charges and value added. Requires demonstrable value for pass-through charges and prevents multiple affiliate markups for work not actually performed.
Section 603. Related-party transactions and ownership diligence. Discloses relevant affiliate interests and cost bases while protecting personal ownership information from unnecessary public release.
Section 604. Timely and accurate payment of subcontractors. Protects timely payment of undisputed subcontract amounts after corresponding federal payment without creating general subcontract privity with the United States.
Section 605. Responsibility for lower-tier compliance. Requires reasonable prime-contractor diligence and preserves direct reporting, without automatically attributing concealed wrongdoing to an innocent prime.
Section 606. Exclusivity and supplier retaliation. Limits unsupported exclusivity and supplier retaliation while allowing justified, specific protections for funded development and legitimate confidentiality.
Section 607. Consolidated compliance and small-supplier relief. Consolidates group compliance and prevents fabricated federal flowdowns from becoming unnecessary barriers to small suppliers.
Section 701. Lifecycle technical-rights strategy. Requires an acquisition-stage strategy for the actual rights, data, interfaces, and delivery formats needed for sustainment.
Section 702. Delivery and verification of maintenance information. Makes usable technical delivery and updates an enforceable deliverable rather than assuming that a legal license alone supplies practical repair capability.
Section 703. Prospective repair and sustainment license. Expressly authorizes a narrow, compensated prospective repair-license condition, overriding the existing restriction only within stated limits.
Section 704. Escrow and continuity arrangements. Permits tested, protected escrow with defined continuity triggers while preserving bankruptcy law and avoiding unnecessary source-code demands.
Section 705. Software access, portability, and disabling restrictions. Protects operational-data portability and authorized continuity; it forbids specified coercive disabling without prohibiting legitimate security interventions.
Section 706. Modular architecture and open interfaces. Requires workable modular interfaces and independent qualification while distinguishing interface access from rights to unrelated proprietary technology.
Section 707. Validation of restrictions and dispute resolution. Provides procedures to validate restrictive markings and correct unsupported claims without treating every dispute as fraud.
Section 708. Authorized independent repair. Builds independent repair capacity subject to actual licensing, quality, safety, and security requirements.
Section 709. Government-owned tooling and production assets. Inventories and makes lawful use of government-owned tooling without assuming ownership of a tool conveys every necessary intellectual-property right.
Section 710. Licensing assistance and lawful compensation. Funds negotiated rights and preserves existing compensation authorities without inventing a general trade-secret seizure power.
Section 801. Defense supplier diversification program. Establishes competitive diversification assistance with award limits, cost sharing, performance conditions, and controls on concentration of assistance.
Section 802. Second-source qualification and demand discipline. Funds genuine second-source qualification and requires evaluation of life-cycle resilience, not merely an additional nominal bidder.
Section 803. Shared facilities and public production options. Permits limited public or shared productive capacity after a market-gap analysis and preserves separate authorization for larger construction projects.
Section 804. Qualification, testing, and solicitation access. Makes qualification more transparent and timely without waiving technical readiness, security, or safety standards.
Section 805. Working capital and payment assistance. Uses existing lawful financing tools and assistance to reduce working-capital barriers without creating an unscored new guarantee program.
Section 806. Research-to-production transition and other transactions. Preserves experimental other transactions while applying defined safeguards to larger production pathways and actual consortium performers.
Section 807. Small-business access and continued independence. Targets independent small-business participation and protects supported capabilities without prohibiting every acquisition or lawful business exit.
Section 901. Covered emergency determination. Requires a specific emergency determination, bounded duration, and oversight notice; no new authority to initiate hostilities is supplied.
Section 902. Narrowly tailored emergency exceptions. Allows only specified temporary procurement deferrals with a bounded bridge and retains fraud, rights, records, and appropriations constraints.
Section 903. Emergency price definitization and audit. Requires agreed ceilings and timely definitization for emergency arrangements and does not impose retrospective repricing absent lawful authority.
Section 904. Emergency delivery, substitution, and integrity. Conditions surge compensation on verifiable delivery, quality, and availability rather than unsupported representations about emergency effort.
Section 905. Readiness availability agreements. Permits payments for independently justified readiness capacity, not payments contingent on weapons consumption or continuing combat.
Section 906. Orderly drawdown and termination. Plans orderly drawdown and honors lawful termination costs without making the government financially promise to continue a conflict.
Section 907. Stockpile and production planning. Keeps demand and stockpile planning governmental and distinguishes supplier forecasts from validated military requirements.
Section 908. Independent review after emergency use. Requires emergency after-action audits and corrective plans so exceptional purchasing does not become unreviewed permanent practice.
Section 1001. No reimbursement of political influence costs. Enforces restrictions on charging political costs to federal contracts while preserving lawful spending from private resources.
Section 1002. Procurement-contact records. Records specified nonpublic procurement contacts and delays appropriate public disclosure; it is not a general register of political opinion.
Section 1003. Financial conflicts of acquisition officials. Requires relevant financial-conflict screening and recusal without disqualifying every person with prior industry experience.
Section 1004. Program-specific post-employment safeguard. Creates a narrow program-specific post-responsibility representation restriction with prospective application and a documented ethics-advice defense.
Section 1005. Advisory research and material financial interests. Discloses project-specific funding behind requested official advice without compelling broad public donor or membership lists.
Section 1006. Improper contingent payments and influence arrangements. Addresses improper benefits and expressly conflict-contingent compensation charged to federal funds, requiring proof beyond ordinary sales incentives.
Section 1007. Independent governmental requirements and policy judgments. Preserves public control of requirements and rejects private authority over sovereign decisions concerning operations and diplomacy.
Section 1008. First Amendment and associational safeguards. Protects advocacy, association, and petitioning and forbids adverse procurement treatment based on a lawful viewpoint.
Section 1101. Government-administered foreign military purchases. Applies relevant safeguards to DOD-administered foreign purchases without automatically transferring sensitive technical rights to foreign recipients.
Section 1102. Direct commercial purchases supported by federal assistance. Conditions defined federal assistance connected with commercial exports without regulating every transaction financed entirely outside the United States.
Section 1103. Brokers, commissions, and offset arrangements. Discloses material transaction-specific agents, commissions, and offsets without assuming every intermediary is improper.
Section 1104. End-use compliance and delivery representations. Preserves licensing and end-use safeguards and assigns official determinations to the responsible governmental authorities.
Section 1105. Allied competition and reciprocal capability. Allows lawful allied cooperation while retaining domestic-source, security, and actual-capacity requirements.
Section 1106. Foreign-law conflicts and unavailable records. Provides a process for genuine foreign-law conflicts without allowing unsupported conflict claims to erase oversight.
Section 1201. Defense industrial workforce partnerships. Funds paid training, apprenticeships, and measurable industrial skills through Labor-administered partnerships.
Section 1202. Workforce and facility continuity plans. Requires advance planning for qualifying assisted-facility closures while preserving existing worker-notice law and unforeseen-event exceptions.
Section 1203. Transition to alternative and dual-use production. Supports realistic dual-use conversion rather than assuming future hostilities are necessary to preserve a community’s employment.
Section 1204. Environmental, safety, and remediation obligations. Preserves environmental, worker-safety, and cleanup obligations during accelerated capacity expansion.
Section 1205. Materials, counterfeit prevention, and supply continuity. Targets critical-material traceability and counterfeit prevention without requiring an unlimited audit of unrelated ordinary purchases.
Section 1206. Fair treatment of workers and regional impacts. Protects workers from collective punishment and retains labor rights while rejecting employment impact as an automatic defense to unlawful conduct.
Section 1301. Unified covered-acquisition record. Builds a secure integrated record connecting awards, ownership, real performers, rights, and performance without requiring a single private-vendor platform.
Section 1302. Public reporting and price transparency. Publishes usable public information with aggregation, corrections, and security protections against exposing vulnerable inventories or competitively sensitive costs.
Section 1303. Records formats and burden controls. Uses interoperable formats and reliable retention instead of requiring suppliers to buy a favored proprietary reporting system.
Section 1304. Security and authorized access. Limits access by role and purpose and prohibits use of confidential contractor information for private competitive advantage.
Section 1305. Privacy, trade secrets, and lawful disclosure. Preserves FOIA, privacy, classified-information, and trade-secret rules without creating a sweeping new secrecy exemption.
Section 1306. Incident reporting and remediation. Requires coordinated notification of credible security compromises and avoids treating every cyber incident as automatic culpable misconduct.
Section 1307. Automated analysis and human decision-making. Requires accountable human review of material automated judgments and protects the ability to understand and challenge adverse decisions.
Section 1308. Annual integrated report. Creates recurring public and congressional reporting with separate financial categories and protected annexes.
Section 1401. Specified prohibited conduct. Enumerates knowing civil violations and distinguishes them from ordinary breach, negligence, lawful profit, and political expression.
Section 1402. Civil enforcement by the United States. Places the new punitive civil action in federal district court with government burden of proof and constitutionally required jury rights.
Section 1403. Civil penalties and proportionality. Sets maximum rather than mandatory penalties, limits multiplication of violations, and requires proportionality and credits for overlapping punishment.
Section 1404. Contractual corrections and recovery procedures. Preserves tailored contractual correction, cure, and recovery while protecting undisputed payment and accounting for government-caused failure.
Section 1405. Suspension, debarment, and indispensable suppliers. Treats suspension and debarment as responsibility protections and limits indispensable-supplier exceptions rather than using dependency as immunity.
Section 1406. Parents, affiliates, successors, and asset transfers. Bases parent and successor consequences on culpability, ordinary succession rules, and lawful prospective guarantees rather than automatic group guilt.
Section 1407. Settlements, monitors, and public accountability. Requires appropriately protected settlement transparency and monitoring while distinguishing an admission from settlement of disputed allegations.
Section 1408. Limitations periods and relation to other claims. Sets a limitations period for new penalties and preserves the different clocks applicable to contract, fraud, and retaliation claims.
Section 1409. Enforcement coordination and use of recoveries. Coordinates investigations and Treasury receipts without creating a general new private damages action or agency bounty.
Section 1501. Supplemental protection against retaliation. Protects qualifying disclosures and provides a defined retaliation claim, proof standards, remedies, exhaustion period, and limitation period.
Section 1502. Administrative fairness and separation of functions. Requires meaningful notice and an opportunity to contest adverse administrative facts before nonemergency action.
Section 1503. Administrative reconsideration and interim protection. Supplies reconsideration procedures with deadlines while avoiding an automatic stay or silent extension of a bid-protest clock.
Section 1504. Review of final agency action. Preserves review of final agency action within APA jurisdictional limits and requires independent judicial resolution of legal questions.
Section 1505. Procurement and contract dispute forums. Respects the established divisions among procurement protests, contract claims, and other-transaction disputes rather than inventing a universal forum.
Section 1506. Classified evidence, privilege, and meaningful response. Provides the fullest lawful explanation and protected process for sensitive evidence without overriding judicial privilege rules.
Section 1507. No waiver of reporting and anti-retaliation rights. Invalidates specified reporting restraints and future predispute arbitration terms for the new retaliation right, with lawful-security safeguards.
Section 1508. Judicial and remedial savings. Preserves other rights, constitutional limits, and federalism without broadly waiving sovereign immunity or creating personal official damages liability.
Section 1601. Integrated implementation plan. Assigns implementation responsibility and aligns preparatory work with the separate effective dates for future private obligations.
Section 1602. Controlled pilots and independent baselines. Uses bounded pilots, preannounced methods, and real counterfactuals before treating a proposed control as proven successful.
Section 1603. Outcome measures and corrective action. Measures actual competition, readiness, cost, and administrative effects and prohibits quotas that reward unsupported adverse findings.
Section 1604. Independent congressional evaluation. Provides independent GAO reviews while preventing legislative-branch evaluators from administering executive programs.
Section 1605. Five-year policy review and continuing duties. Requires a five-year policy review without silently repealing rights or treating committee recommendations as law.
Section 1606. Continuity, incident response, and orderly administration. Maintains incident and continuity plans while preserving the Antideficiency Act and undisputed performance obligations.
Section 1701. Program years and budget accounts. Defines program years and separate accounts so the funding schedule remains administrable regardless of the actual enactment date.
Section 1702. Appropriations; period of availability. Directly appropriates $20 billion on specified availability dates and makes clear that no further funding or revenue offset is enacted.
Section 1703. Allocation by purpose and agency. Allocates every dollar by agency and function, preserves independent oversight funds, and bounds transfers among DOD purposes.
Section 1704. Execution plans and limitations on obligations. Requires execution plans, lawful commitments, quarterly accounting, and adherence to budget and impoundment controls.
Section 1705. Assistance safeguards and cost sharing. Provides grant cost-share, property, audit, and repayment rules and prevents the same publicly financed cost being reimbursed twice.
Section 1706. Recoveries, savings, and public accounting. Separates receipts, price credits, and estimates and prohibits automatic spending of hypothetical savings or contingent agency rewards.
Section 1707. Long-term fiscal assessment. Requires long-term fiscal scenarios and maintenance planning without portraying executive projections as an official congressional score.
Section 1801. Effective dates and phased application. Specifies immediate, 180-day, and 540-day application rules and prevents retroactive penalties or confusion about calendar deadlines.
Section 1802. Existing contracts and transition protection. Protects existing priced commitments while bringing genuinely new scope and newly negotiated extensions within prospective requirements.
Section 1803. Clauses, notices, and contractor access to requirements. Requires accessible clauses and solicitation notice and governs correction of omissions without creating undisclosed retrospective performance burdens.
Section 1804. Conforming amendments to title 10, United States Code. Adds narrow cross-references to current Title 10 pricing, data-rights, and audit provisions so the supplemental rules are explicit.
Section 1805. Relationship to other law and executive action. Preserves existing law except for stated conflicts and prevents executive terminology or policy from erasing statutory protections.
Section 1806. Severability and remedial independence. Separates remedies, funding purposes, licensing, and other authorities so a limited invalidation need not disable the entire framework.
NONSTATUTORY COUNSEL’S MATERIAL
The principal constitutional bases are Article I, section 8, clauses 1, 11 through 14, and 18: federal spending, military establishment and regulation, and necessary and proper implementing legislation. The law regulates federal purchasing and closely connected assistance, not every private industrial transaction. Merger duties require a defined defense nexus. Grant conditions are stated prospectively and linked to the supported activity. Broader regulation of wholly private foreign transactions is deliberately omitted. No court outcome is guaranteed by identifying these authorities. [30]
The supplemental pricing duty expressly addresses 10 U.S.C. §§ 3702–3704 rather than assuming regulations can override statutory exceptions. Section 703 specifically addresses the award-condition restriction in § 3771(b)(8), and section 407 supplies a separate scoped records authority alongside § 3841. The three conforming amendments are signposts to the controlling new sections, not a claim that all existing procurement rules are displaced. The current statutory architecture must be recited against the actual introduction-date code before filing. [7–12]
A ban on advocacy favoring military operations would target protected views. The draft instead regulates specific procurement contacts, project-specific paid advice, conflicts, improper benefits, and public cost charging. It expressly protects positions favoring war, peace, diplomacy, or increased defense spending. That reduces but does not eliminate First Amendment risk. Contact disclosures and the narrow representation restriction should be supported by a documented record of access-related conflicts and alternatives. A donor list unrelated to the official submission is not required. Existing lobbying-cost and federal-contractor contribution rules remain separate. [13–15]
Section 1004 concerns paid representation on a program for which the official held specified substantive responsibility; it does not generally bar employment, unrelated engineering work, or public commentary. Existing 18 U.S.C. § 207 and 41 U.S.C. § 2104 remain in force. The new behind-the-scenes coverage is a substantive expansion and deserves separate constitutional and workforce analysis. Written, fully informed ethics guidance provides a limited defense, not immunity for concealed facts. Recruitment and retention effects remain uncertain. [16–17]
A government right to repair is not identical to ownership of all supplier inventions. The bill requires prospective identification, necessity findings, separate pricing, scope limits, and protective handling. Existing contracts are not silently rewritten. Section 710 preserves 28 U.S.C. § 1498 only within its actual reach; patent and copyright compensation does not create a general power to take trade secrets. A coercive or uncompensated application of the licensing condition could still face a Fifth Amendment challenge. Implementation must preserve a genuine, documented rights valuation and lawful refusal or alternative-source pathway. [11,18]
In SEC v. Jarkesy, the Supreme Court required a jury in the government’s civil-penalty action for securities fraud. That holding does not make every administrative procurement decision unconstitutional. Nevertheless, the draft avoids using an executive pricing office to try the new punitive monetary violations. DOJ brings them in district court, the government bears the burden, and jury rights are preserved where the Constitution requires. Contract price adjustments follow contract-claims procedures rather than being relabeled as punitive fines. [19–20]
The bill specifies triggering facts, thresholds, exceptions, deadlines, decision makers, and review standards. Loper Bright requires courts to exercise independent judgment on statutory meaning; statutory ambiguity alone does not supply deference to an agency’s preferred legal interpretation. Section 1504 reflects that distinction while preserving lawful factfinding and delegated discretion. The Office director is supervised and removable by the Secretary, and does not receive independent prosecution or final punitive adjudication powers. Any additional appointment authority must remain consistent with the Appointments Clause. [21]
Existing Clayton Act authority is preserved. The supplemental presumption is rebuttable and requires a properly defined market, genuinely viable suppliers, and proof of the transaction’s effect. Courts retain responsibility for contested restraints and remedies; the Department does not receive an unbounded merger veto. Entry, efficiencies, and failing-business evidence must be substantiated, not merely asserted. The procurement access clause is prospective and priced, limiting the risk of an uncompensated general duty to deal. Historical transactions are reviewed for present risks, not automatically punished under a newly enacted prohibition. [22–23]
Administrative decisions require notice, reasons, and a meaningful response pathway, with narrow urgent measures and later review. New penalties require knowledge and materiality, use bounded aggregation, and credit overlapping punishment. Civil debarment remains a prospective responsibility measure, consistent with the existing FAR framework, not automatic punishment for an allegation. Record subpoenas require the specified senior decision and judicial enforcement. Sensitive evidence procedures preserve constitutional defenses without promising disclosure that another controlling law forbids. [12,24]
Procurement protests, Contract Disputes Act claims, APA review, and other-transaction disputes do not all belong in the same court. The draft preserves those distinctions and does not make a nonprocurement agreement a procurement contract solely to manufacture jurisdiction. The new retaliation action is expressly defined; a general competitor damages action is not created. State, tribal, foreign, and federal immunity limitations remain relevant. In particular, the bill does not purport to abrogate state immunity for every public-institution grant recipient. That is a coverage limit requiring attention when designing alternative employment protections. [20,25–26]
The bill addresses the economic dependence of procurement on continued conflict, but does not resolve the separate constitutional allocation of war powers. It forbids certain conflict-contingent federal compensation while preserving lawful termination obligations and readiness purchasing. The appropriations are finite direct budget authority. They neither guarantee future military orders nor bind a future Congress to fund a century of operations. Congressional notification is not committee approval and does not operate as a legislative veto.
The most contestable provisions are supplemental merger presumptions, narrowly compelled prospective repair licenses, project-linked financial disclosures, and behind-the-scenes representation restrictions. The strongest risk controls are express statutory authority, defined predicates, compensation, prospective application, independent judicial enforcement, and severability. These mechanisms improve defensibility; they do not make the Act immune from challenge. Before introduction, congressional counsel should conduct a fresh case-law and code reconciliation, and committees should develop an evidentiary record for each sensitive expansion.
NONSTATUTORY COUNSEL’S MATERIAL
This is an author-developed planning note, not a Congressional Budget Office estimate. The bill itself makes $20 billion in new direct appropriations. It contains no revenue increase, mandatory corporate assessment, or rescission that offsets that amount. No assumption about contractor overcharging or future enforcement recoveries is used to finance the appropriation. Any congressional budget-rule or statutory pay-as-you-go consequences require the applicable official scoring process.
| Availability | New budget authority | Cumulative authority |
|---|---|---|
| Transition period | $0.50 billion | $0.50 billion |
| Program year 1 | $1.50 billion | $2.00 billion |
| Program years 2–5 | $2.25 billion annually | $11.00 billion through year 5 |
| Program years 6–10 | $1.80 billion annually | $20.00 billion through year 10 |
| Program years 11–30 | $0 newly appropriated by this bill | $20.00 billion; no automatic extension |
The one-year window in this note combines transition funding with program year 1, not an assumed twelve-month period beginning on an unknown enactment date. Five- and ten-year windows mean through those program years. The transition period can be shorter than a year. Actual cash spending may occur later than the year budget authority becomes available. Expired-account adjustments, liquidation, and cancellation are governed by law; availability is not an instruction to spend every dollar immediately. [31]
| Purpose or recipient | Share | Ten-year plus transition total |
|---|---|---|
| Industrial diversification and productive capacity | 50% | $10.00 billion |
| DOD analysis, acquisition, audit, and administration | 20% | $4.00 billion |
| Technical rights and secure information systems | 15% | $3.00 billion |
| Department of Labor workforce programs | 5% | $1.00 billion |
| Department of Justice | 4% | $0.80 billion |
| Federal Trade Commission | 3% | $0.60 billion |
| DOD Inspector General | 2% | $0.40 billion |
| Government Accountability Office | 1% | $0.20 billion |
| Total | 100% | $20.00 billion |
The schedule is budget authority, not a cash-flow forecast. Grants, facilities, negotiated licenses, and hiring will have different spend-out rates. Agency cost estimates are needed for staffing grades, clearances, procurement lead times, data systems, facilities maintenance, cybersecurity, appeals, and independent testing. Existing agency resources may also be used when lawfully available; therefore $20 billion is the new funding supplied by the bill, not proof that every public or private implementation cost fits within that amount. No government-wide procurement baseline is asserted as the population affected by every title.
For sensitivity testing only, assume a flat $100 billion annual pool of purchases susceptible to the new pricing and competition measures. This is a hypothetical eligible base, not a measured defense-contract dataset. Assume coverage of 0 percent in program year 1, 25 percent in year 2, 50 percent in year 3, 75 percent in year 4, and 100 percent in years 5–10. Assume an average price reduction on the covered pool of either 0 percent, 2 percent, or 5 percent. Quantities, specifications, inflation, and other requirements are held unchanged for this simple exercise. Values are undiscounted nominal illustrative dollars; holding the base flat is not an inflation forecast.
| Window | Adverse: 0% | Central assumption: 2% | Favorable: 5% |
|---|---|---|---|
| Through program year 1 | $0 | $0 | $0 |
| Through program year 5 | $0 | $5.0 billion | $12.5 billion |
| Through program year 10 | $0 | $15.0 billion | $37.5 billion |
The labels describe sensitivity cases, not assigned probabilities. Subtracting illustrative avoided obligations from the bill’s new budget authority gives ten-year comparisons of $20 billion net cost, $5 billion net cost, and $17.5 billion net benefit, respectively. That subtraction is not a deficit or outlay score because the fiscal concepts and timing differ. With the stated base and coverage path, a 2.67 percent average reduction would equal $20 billion in gross avoided obligations over ten program years. There is no claim that this reduction is achievable, attributable entirely to the Act, or available as spendable savings.
The legislation appropriates no additional money for program years 11–30, so a claim of thirty years of fully funded operation would be incorrect. A purely illustrative continuation at $1.8 billion annually for those twenty years would add $36 billion, bringing nominal new authority to $56 billion before inflation, maintenance surprises, or changes in scope. Such funding would require future legislation. Without a defensible continuation and outcome model, no thirty-year savings total is presented as a forecast. Statutory duties that remain in force must operate within lawfully available future funding.
Qualification and duplicate tooling can initially increase unit costs while improving resilience. Suppliers may change prices, exit low-volume product lines, demand a larger risk premium, or incur legal and accounting costs. Some firms may benefit from prompt payment and lower entry barriers. Government-funded rights may lower later maintenance costs but require substantial upfront compensation. Public facilities need workers, utilities, environmental compliance, and renewal. These effects can offset or exceed negotiated price reductions and must be modeled rather than assumed away.
The immediate financing burden falls on federal taxpayers or borrowing under the general budget, not a new industry levy. Benefits may accrue to service readiness, independent suppliers, workers, and future procurement accounts. Incumbents can lose exclusivity but retain lawful contractual and property rights. Congress should request an official score, an agency implementation cost model, a contract-population analysis, and a review of private compliance burdens. Recoveries, price credits, and cost avoidance must remain separate to prevent double counting. [32]
NONSTATUTORY COUNSEL’S MATERIAL
| Period | Lead actions | Principal controls |
|---|---|---|
| Enactment to day 90 | Create the Office; designate accountable officials; establish independent accounts; inventory existing systems and priorities. | Hiring authority, appropriation availability, inspector-general independence, no premature mandatory clauses. |
| Days 90–180 | Complete workforce planning; issue proposed rules; consult suppliers, labor, engineers, and rights specialists. | Notice and comment, ordinary-record alternatives, security classification, clear milestones. |
| Months 6–12 | Finalize core rules; run lawful or voluntary pilots; prepare model clauses and qualified technical reviewers. | No retroactive penalties, tested interfaces, stated comparison methods, operational fallback channels. |
| Months 12–18 | Train acquisition teams; provide solicitation guidance; test company reporting; prepare merger notifications and pricing reviews. | New transaction rules begin at day 540; existing priced commitments remain protected. |
| Year 2 | Deliver the principal integrated record capability; evaluate initial awards and independent qualification; complete GAO’s initial review. | Data access logs, limited disclosures, measurement of delay and supplier participation. |
| Years 3–5 | Scale justified second sources and repairs; reassess designations; review rights usability and distribution restrictions. | No nominal-source counting, time-limited findings, five-year fiscal and policy review. |
| Years 6–10 | Measure retained capability and life-cycle effects; update technology and workforce plans; prepare funding decision. | Independent ten-year review, maintenance-liability disclosures, no assumed program-year-11 appropriation. |
The contracting officer first identifies the actual requirement and related acquisitions, checks whether suppliers are genuinely independent, and applies the risk screen. Ordinary commercial evidence is considered before necessary cost records are requested. A supplier can invoke the verified-market pathway or state a specific objection. Qualifying high-risk purchases receive the supplemental certification and, at the larger threshold, independent review. A necessary emergency bridge uses explicit limits and records. The price decision is documented; later correction requires proof of a defect and its effect, not an assumption that all profit is improper.
The program identifies maintenance tasks and required data before award. Existing government rights are verified first. Missing prospective rights are scoped, valued, separately priced, and delivered in usable form. An independent repairer must hold the necessary license and satisfy security, safety, and qualification standards. Escrow is tested against defined events. A contract’s rights language and delivered engineering package are evaluated separately, because neither an unreadable file nor an unused legal entitlement creates actual repair capacity.
A contracting officer, worker, auditor, or supplier can report through the designated lawful channel. Technical disputes, mistakes, contractual breaches, and knowing misconduct are sorted rather than merged. Records are preserved with appropriate access controls. Contract remedies follow their own process. New punitive allegations go to DOJ for a district-court action, not to the pricing analyst for a fine. Retaliation follows the separate protected-reporting procedure and burden framework. Public announcements distinguish allegation, administrative finding, settlement, and judgment.
The largest risks are inadequate experienced staff, overbroad demands on small suppliers, technically useless data delivery, cyber exposure, slow second-source qualification, and loss of the only practical production line during enforcement. The bill addresses these through specialized funding, phased rules, calibrated records, qualified testing, protected access, and bounded indispensable-supplier decisions. These safeguards require active management; statutory language alone does not create engineers, usable factories, or independent production rights.
NONSTATUTORY COUNSEL’S MATERIAL
The intended benefit is equipment that arrives, works, can be maintained, and has a defensible price. The draft treats readiness as an outcome rather than assuming lower nominal prices always mean better value. Taxpayers finance new oversight and productive capacity before any saving is proven. The reporting system is designed to show when an intervention fails or shifts costs rather than hiding that result inside a gross recovery number.
The draft preserves lawful profits, independent innovation, ordinary capital distributions outside the specified assistance conditions, and contractual claims. It adds more demanding evidence requirements where a firm benefits from exclusive supply or substantial public assistance. An incumbent may lose an unsupported barrier to competition, but it is not required to surrender all privately developed technology without a lawful, compensated arrangement. Investors should not be told that every future revenue stream is guaranteed by readiness planning.
Second-source funding, qualification assistance, prompt-payment terms, and limited exclusivity can improve entry. New compliance burdens can nevertheless disproportionately affect smaller firms, so the law requires ordinary-record alternatives and evaluation. Workforce investment and conversion planning address skills and local dependence without making a particular company permanently entitled to federal orders. Labor, environmental, and safety obligations remain in force.
Acquisition agencies receive resources but also reporting and procedural duties. DOJ, FTC, the Inspector General, and GAO retain their separate roles. Allied purchasers receive applicable pricing protections without automatic access to sensitive American technology. Civil-liberties safeguards distinguish the government’s purchase of services from an attempt to regulate political belief, broad donor associations, or an employee’s lawful criticism.
No. It targets unsupported noncompetitive pricing, material false information, exclusionary dependence, and specified misuse of public assistance. An efficient fixed-price contractor can retain lawful gains. There is no universal margin ceiling.
No automatic breakup is ordered. The law creates evidence-based merger controls and review of current dependency. A contested remedy follows the applicable court process. Independently funded alternatives may sometimes address a vulnerability more effectively than dissolving a corporate group.
It does not prohibit a viewpoint. It addresses defined financial conflicts, misuse of reimbursed federal costs, procurement contacts, and expressly conflict-contingent compensation. Public advocacy remains protected. Preventing or ending a particular military operation would require separate constitutional and legislative action.
No. The public receives meaningful, appropriately aggregated information. Classified operational details, personal identifiers, trade secrets, and current sensitive cost records are protected under applicable law. Government oversight access and public disclosure are different legal questions.
A pricing dispute should not automatically prevent an urgent lawful mission from obtaining a critical item. The exceptions are documented, time-limited, reviewed, and connected to an alternative-source plan; they are not immunity from fraud, records duties, or constitutional protections.
It contains an actual proposed appropriation schedule, not an unfunded authorization. However, that schedule is not offset by new revenue or enacted cuts elsewhere. It would add $20 billion in direct budget authority, subject to official scoring. Potential savings are uncertain and are not used as fictional financing.
It is not a comprehensive campaign-finance rewrite, a general defense-budget reduction, an authorization or termination of war, nationalization of private industry, or a worldwide weapons-export prohibition. Non-DOD activities, sovereign immunity, and wholly foreign commercial transactions can remain outside particular remedies. Those boundaries are deliberate and should not be mistaken for claims that every adjacent policy issue is resolved.
NONSTATUTORY COUNSEL’S MATERIAL
Authorities were checked for this discussion draft on October 17, 2026. The register identifies the materials used to ground the design; it is not a representation that every pending bill, executive policy, procurement deviation, court decision, or classified program was exhaustively reviewed. Statutes should be reconciled again immediately before introduction. Research references support the explanatory appendices, not additional operative obligations. Hyperlinked source titles lead to the underlying materials.
[1] Government Accountability Office, GAO-24-106129, Defense Industrial Base: DOD Needs Better Insight into Risks from Mergers and Acquisitions (Oct. 17, 2023; recommendation-status updates reviewed). Supports market monitoring and post-merger institutional capacity, not a finding that every merger is unlawful.
[2] Government Accountability Office, GAO-25-107468, Weapon System Sustainment: DOD Can Improve Planning and Management of Data Rights (Sept. 29, 2025; reissued with revisions). Supports early rights planning, technical expertise, and usable sustainment access.
[3] Government Accountability Office, GAO-26-108113, F-35 Sustainment: Actions Needed to Ensure Updated Strategy Improves Persistent Readiness Challenges (June 11, 2026). Supports review of incentives, availability, and additional sustainment requirements; it is not evidence that every incentive payment was unlawful.
[4] Government Accountability Office, GAO-25-107546, Other Transaction Agreements: Improved Contracting Data Would Help DOD Assess Effectiveness (Sept. 3, 2025). Supports instrument-level visibility and linkage of prototype and production records.
[5] Executive Order 14347, Restoring the United States Department of War (Sept. 5, 2025). Secondary designation and preservation of statutory departmental references.
[6] Federal Acquisition Regulation, subpart 15.4, Contract Pricing. Existing price analysis, cost analysis, and supporting-data framework.
[7] 10 U.S.C. § 3702, Required cost or pricing data and certification. Current statutory certification structure; subsection (h) is proposed, not existing law.
[8] 10 U.S.C. § 3703, Exceptions. Commercial, competition, fixed-by-law, and waiver exceptions addressed by the supplemental duty.
[9] 10 U.S.C. § 3705, Submission of other information. Existing noncertified information, historical-pricing, and refusal-related authorities.
[10] 10 U.S.C. § 3744, Regulations on allowable costs. Existing treatment of specified unallowable costs; no claim that all exclusions originate in this draft.
[11] 10 U.S.C. § 3771, Rights in technical data: regulations. Funding-based rights and limits on mandatory surrender of private rights as an award condition.
[12] 10 U.S.C. § 3841, Examination of records of contractor. Existing audit, subpoena, retention, and contract-scope provisions supplemented by section 407.
[13] Federal Acquisition Regulation 31.205-22, Lobbying and political activity costs. Existing cost allowability rather than a general prohibition on political speech.
[14] 52 U.S.C. § 30119, Contributions by government contractors. Existing federal-contractor contribution provision, preserved rather than rewritten.
[15] Constitution of the United States, Amendments I, V, VII, and VIII. Speech, association, petition, property, due process, jury, and excessive-fines constraints.
[16] 18 U.S.C. § 207, Restrictions on former officers, employees, and elected officials of the executive and legislative branches. Existing post-employment restrictions remain separate from the narrow new restriction.
[17] 41 U.S.C. § 2104, Prohibition on former official’s acceptance of compensation from contractor. Existing procurement-related compensation restriction.
[18] 28 U.S.C. § 1498, Patent and copyright cases. Limited existing compensation jurisdiction, not a general license to obtain trade secrets.
[19] SEC v. Jarkesy, No. 22-859, Supreme Court of the United States (June 27, 2024). Civil-penalty jury holding informing the decision to use district-court enforcement.
[20] 41 U.S.C. § 7103, Decision by contracting officer. Contract-claim procedure and limitations, distinct from the new punitive civil action.
[21] Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024). Independent judicial interpretation under the Administrative Procedure Act.
[22] 15 U.S.C. § 18, Acquisition by one corporation of stock of another. Clayton Act merger standard retained alongside supplemental defense provisions.
[23] Federal Trade Commission, Lockheed/Aerojet Matter, File No. 211-0052 (2022). Illustrates existing enforcement against a proposed defense vertical transaction; not a judgment on all acquisitions.
[24] Federal Acquisition Regulation, subpart 9.4, Debarment, Suspension, and Ineligibility. Responsibility-based exclusion and procedural safeguards.
[25] 10 U.S.C. § 4701, Contractor employees: protection from reprisal for disclosure of certain information. Existing defense whistleblower rights preserved and supplemented.
[26] 10 U.S.C. § 4022, Authority of the Department of Defense to carry out certain prototype projects. Existing prototype and follow-on structure; the bill does not convert all other transactions into procurement contracts.
[27] 31 U.S.C. § 3729, False claims. Existing False Claims Act liability and knowledge standard, not displaced by the new civil remedies.
[28] Department of Justice, Raytheon Agrees to Pay Over $950 Million in Connection with Defective Pricing, Foreign Bribery, and Export Control Schemes (Oct. 16, 2024). Illustrates distinct misconduct categories and the need not to describe an entire multi-matter resolution as procurement overcharges.
[29] United Kingdom Single Source Regulations Office, Pricing Guidance. Comparative support for specialized noncompetitive pricing methods; no British profit rate is transplanted into this bill.
[30] Constitution of the United States, Article I, section 8; National Archives transcription. Federal spending, military, and necessary and proper legislative authorities.
[31] 31 U.S.C. § 1552, Procedure for appropriation accounts available for definite periods. Account expiration and cancellation framework; it does not turn budget authority into immediate cash spending.
[32] 31 U.S.C. § 3302, Custodians of money. Miscellaneous-receipts framework, subject to applicable express statutory exceptions.
The United Kingdom’s single-source regime is useful as a design comparison because it supplies specialized pricing guidance where ordinary competition is unavailable. The American draft does not adopt a British baseline profit rate, universal margin ceiling, or administrative structure. Different procurement scale, constitutional remedies, private rights, and accounting systems require a domestic design. The comparison informs a method of scrutiny, not a claim of proven U.S. savings. [29]
NONSTATUTORY COUNSEL’S MATERIAL
The operative text contains eighteen titles with unique numbered sections, defined terms, explicit coverage rules, and cross-references. Main transaction requirements begin at day 540, after rulemaking, while establishment and appropriations begin immediately and general protections begin at day 180. The funding total and allocation percentages reconcile. The supporting commentary is expressly outside the statute.
Procurement, assistance, competition, audit, and remedies are stated through identified federal actors. Specific overrides address certification exceptions, limited repair-right conditions, record retention, notice-and-comment treatment, and the new retaliation arbitration rule. The Act does not create a military authorization or use a departmental nickname as a source of legal power.
The draft contains viewpoint neutrality, compensation and prospective-rights limits, judicial penalties, jury protection, notice, impartial review, and severability. Merger presumptions, selected disclosures, representation restrictions, and mandatory prospective licensing remain provisions requiring especially careful committee findings and litigation review. No claim of constitutional invulnerability is made.
The responsible official, trigger, information requirement, time limit, and consequence are stated. Knowing civil misconduct, ordinary contract correction, responsibility proceedings, and retaliation are separated. New monetary penalties go to court; contract disputes retain the appropriate statutory forum. Remedies account for materiality, knowledge, causation, proportionality, and overlapping recoveries.
The appropriation is a real proposed $20 billion addition to budget authority, not an authorization dependent on a later funding bill. It is not offset, not officially scored, and not proven sufficient for every future duty. Savings scenarios are hypothetical and separately labeled. No money is appropriated for program years 11–30, and no automatic spending right arises from a projected saving.
Specialized staffing, working information systems, qualified second sources, usable data licenses, and lawful maintenance funding are essential. A paper competitor is not a factory; a license without technical delivery is not repair capacity. The phased schedule, pilots, independent reviews, and corrective reporting are designed to identify those failures early, not to deny that they can occur.
Congressional counsel should reconcile the proposed amendments against the introduction-date United States Code; obtain an official budget score and agency outlay model; test the thresholds against actual contract and merger populations; assess small-business cost; validate the availability of technical-rights valuations; consult workforce and security officials; review pending litigation affecting relevant remedies; and determine whether additional protections are needed for workers whose public employers retain sovereign immunity. These are introduction-stage diligence questions, not missing portions of the bill.
The proposed Act is designed to make defense procurement less dependent on concentrated suppliers, unverifiable prices, and continuing conflict-related commercial expectations while preserving operational readiness, lawful enterprise, and civil liberties. Its success would depend on execution and evidence. The text supplies enforceable mechanisms and funded responsibilities; it does not promise that legislation can eliminate all future evasion or resolve every decision about war and peace.