10 U.S.C. § 4022: Authority of the Department of Defense to carry out certain prototype projects

Subject to paragraph (2), the Director of the Defense Advanced Research Projects Agency, the Director of the Defense Innovation Unit, the Secretary of a military department, or any other official designated by the Secretary of Defense may, under the authority of section 4021 of this title , carry out prototype projects that are directly relevant to enhancing the mission effectiveness of personnel of the Department of Defense or improving platforms, systems, components, or materials proposed to be acquired or developed by the Department of Defense, or to improvement of platforms, systems, components, or materials in use by the armed forces. the requirements of subsection (d) will be met; and the use of the authority of this section is essential to promoting the success of the prototype project; the requirements of subsection (d) will be met; and the use of the authority of this section is essential to meet critical national security objectives; and the congressional defense committees are notified in writing at least 30 days before such authority is exercised; and the requirements of subsection (d) were met for the prior transaction for the prototype project that provided for the award of the follow-on production contract or transaction, and the requirements of subsection (f) will be met; and the use of the authority of this section is essential to meet critical national security objectives; and notifies the congressional defense committees in writing of the determinations required under clause (i) at the time such authority is exercised. The authority of the head of the contracting activity, director of the Defense Advanced Research Projects Agency, director of the Defense Innovation Unit, director of the Missile Defense Agency, or the senior procurement executive, as applicable, under paragraph (2) may not be delegated. Subsection (e)(2) of such section 4021 shall not apply to projects carried out under subsection (a). To the maximum extent practicable, competitive procedures shall be used when entering into agreements to carry out the prototype projects under subsection (a). Each agreement entered into by an official referred to in subsection (a) to carry out a project under that subsection that provides for payments in a total amount in excess of $5,000,000 shall include a clause that provides for the Comptroller General, in the discretion of the Comptroller General, to examine the records of any party to the agreement or any entity that participates in the performance of the agreement. The requirement in paragraph (1) shall not apply with respect to a party or entity, or a subordinate element of a party or entity, that has not entered into any other agreement that provides for audit access by a Government entity in the year prior to the date of the agreement. The right provided to the Comptroller General in a clause of an agreement under paragraph (1) is limited as provided in subparagraph (B) in the case of a party to the agreement, an entity that participates in the performance of the agreement, or a subordinate element of that party or entity if the only agreements or other transactions that the party, entity, or subordinate element entered into with Government entities in the year prior to the date of that agreement are cooperative agreements or transactions that were entered into under this section or section 4021 of this title . The only records of a party, other entity, or subordinate element referred to in subparagraph (A) that the Comptroller General may examine in the exercise of the right referred to in that subparagraph are records of the same type as the records that the Government has had the right to examine under the audit access clauses of the previous agreements or transactions referred to in such subparagraph that were entered into by that particular party, entity, or subordinate element. The head of the contracting activity that is carrying out the agreement may waive the applicability of the requirement in paragraph (1) to the agreement if the head of the contracting activity determines that it would not be in the public interest to apply the requirement to the agreement. The waiver shall be effective with respect to the agreement only if the head of the contracting activity transmits a notification of the waiver to Congress and the Comptroller General before entering into the agreement. The notification shall include the rationale for the determination. The Comptroller General may not examine records pursuant to a clause included in an agreement under paragraph (1) more than three years after the final payment is made by the United States under the agreement. There is at least one nontraditional defense contractor or nonprofit research institution participating to a significant extent in the prototype project. All significant participants in the transaction other than the Federal Government are small businesses (including small businesses participating in a program described under section 9 of the Small Business Act ( 15 U.S.C. 638 )) or nontraditional defense contractors. At least one third of the total cost of the prototype project is to be paid out of funds provided by sources other than the Federal Government. The senior procurement executive for the agency determines in writing that exceptional circumstances justify the use of a transaction that provides for innovative business arrangements or structures that would not be feasible or appropriate under a contract, or would provide an opportunity to expand the defense supply base in a manner that would not be practical or feasible under a contract. Except as provided in subparagraph (B), the amounts counted for the purposes of this subsection as being provided, or to be provided, by a party to a transaction with respect to a prototype project that is entered into under this section other than the Federal Government do not include costs that were incurred before the date on which the transaction becomes effective. the party incurred the costs in anticipation of entering into the transaction; and it was appropriate for the party to incur the costs before the transaction became effective in order to ensure the successful implementation of the transaction. The requirements of this subsection do not apply to follow-on production contracts or transactions under subsection (f). a service acquisition executive; the Director of the Defense Advanced Research Projects Agency; the Director of the Defense Innovation Unit; the Director of the Missile Defense Agency; the Under Secretary of Defense for Acquisition and Sustainment; or the Under Secretary of Defense for Research and Engineering. The term “nontraditional defense contractor” has the meaning given the term under section 3014 of this title . The term “service acquisition executive” has the meaning given that term in section 101(a) of this title . The term “small business” means a small business concern as defined under section 3 of the Small Business Act ( 15 U.S.C. 632 ). a proof of concept, model, or process, including a business process; reverse engineering to address obsolescence; a pilot or novel application of commercial technologies for defense purposes; agile development activity; the creation, design, development, or demonstration of operational utility; or any combination of subparagraphs (A) through (E). The term “follow-on production contract or transaction” means a contract or transaction to produce, sustain, or otherwise implement the results of a successfully completed prototype project for continued or expanded use by the Department of Defense. A transaction entered into under this section for a prototype project may provide for the award of a follow-on production contract or transaction to the participants in the transaction. A transaction includes all individual prototype subprojects awarded under the transaction to a consortium of United States industry and academic institutions. A follow-on production award may be provided for in a transaction entered into under this section for a prototype project, awarded with respect to such a transaction as one or more separate awards, or a combination thereof. competitive procedures were used for the selection of parties for participation in the transaction; and the participants in the transaction successfully completed the prototype project provided for in the transaction. A follow-on production contract or transaction may be awarded, pursuant to this subsection, when the Department determines that an individual prototype or prototype subproject as part of a consortium is successfully completed by the participants. Award of a follow-on production contract or transaction pursuant to the terms under this subsection is not contingent upon the successful completion of all activities within a consortium as a condition for an award for follow-on production of a successfully completed prototype or prototype subproject within that consortium. Contracts and transactions entered into pursuant to this subsection may be awarded using the authority in subsection (a), under the authority of chapter 137 1 of this title, or under such procedures, terms, and conditions as the Secretary of Defense may establish by regulation. 1 See References in Text note below. An agreement entered into pursuant to the authority of subsection (a) or a follow-on contract or transaction entered into pursuant to the authority of subsection (f) may provide for prototypes or follow-on production items to be provided to another contractor as Government-furnished equipment. An agreement entered into under the authority of this section shall be treated as a Federal agency procurement for the purposes of chapter 21 of title 41. The Secretary of Defense or the Secretary of a military department may establish a pilot program under which the Secretary may, under the authority of this section, carry out prototype projects that are directly relevant to enhancing the ability of the Department of Defense to prototype the design, development, or demonstration of new construction techniques or technologies to improve military installations or facilities (as such terms are defined in section 2801 of this title ). not more than two prototype projects may begin to be carried out per fiscal year under such pilot program; and the aggregate value of all transactions entered into under such pilot program may not exceed $300,000,000. The requirements of this paragraph shall not apply to projects carried out for the purpose of repairing a facility. subchapters I and III of chapter 169 of this title; and chapters 221 and 223 of this title. Except as provided in subparagraph (B), the authority to carry out prototype projects under the pilot program established under paragraph (1) shall terminate on September 30, 2030 . Subparagraph (A) shall not apply with respect to prototype projects being carried out under the pilot program established under paragraph (1) on the date described in subparagraph (A). The Secretary of Defense may conduct an unaccompanied housing project under section 4022(i) of title 10 , United States Code, that is not subject to the limits under paragraph (2) of such section. The Secretary may use the authority under subsection (a) for not more than one project. The project conducted under subsection (a) shall be located at a joint base of the Department of Defense for medical training. The aggregate value of all transactions entered into under the project conducted under subsection (a) may not exceed $500,000,000.” Notwithstanding paragraph (3) of section 2371b(a) of title 10 , United States Code [now 10 U.S.C. 4022(a) ], the authority of a senior procurement executive or director of the Defense Advanced Research Projects Agency or Missile Defense Agency under paragraph (2)(A) of such section [probably should be “subsection”], and the authority of the Under Secretaries of Defense under paragraph (2)(B) of such section [probably should be “subsection”], for any transaction related to the national emergency for the Coronavirus Disease 2019 (COVID–19) may be delegated to such officials in the Department of Defense as the Secretary of Defense shall specify for purposes of this section. Notwithstanding clause (ii) of section 2371b(a)(2)(B) of title 10 , United States Code [now 10 U.S.C. 4022(a)(2)(B) ], no advance notice to Congress is required under that clause for transitions described in that section that are related to the national emergency for the Coronavirus Disease 2019 (COVID–19). In the event a transaction covered by paragraph (1) is carried out, the Under Secretary of Defense for Research and Engineering or the Under Secretary of Defense for Acquisition and Sustainment, as applicable, shall submit to the congressional defense committees a notice on the carrying out of such transaction as soon as is practicable after the commencement of the carrying out of such transaction. In this subsection, the term ‘congressional defense committees’ has the meaning given such term in section 101(a)(16) of title 10 , United States Code.”