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through the Advanced Research Projects Agency, and the Secretary of each military department, in carrying out research projects, may permit the director of any federally funded research and development center to enter into cooperative research and development agreements with any person, any agency or instrumentality of the United States, any unit of State or local government, and any other entity under the authority granted by section 12 of the StevensonWydler Technology Innovation Act of 1980 (15 U.S.C. 3710a). Technology may be transferred to a non-Federal party to such an agreement consistent with the provisions of sections 11 and 12 of such Act (15 U.S.C. 3710, 3710a).

(Added P.L. 101-189, §251(a)(1), Nov. 29, 1989, 103 Stat. 1403, and amended P.L. 101-510, § 1484(k)(9), Nov. 5, 1990, 104 Stat. 1719; P.L. 102-190, § 826, Dec. 5, 1991, 105 Stat. 1442; P.L. 102-484, §217, Oct. 23, 1992, 106 Stat. 2352; P.L. 103-35, §201(c)4), May 31, 1993, 107 Stat. 98; P.L. 103-160, §§ 827(b), 1182(a)(6), Nov. 30, 1993, 107 Stat. 1712; revised in its entirety P.L. 103–355, § 1301(b), Oct. 13, 1994, 108 Stat. 3285.)

§ 2372. Independent research and development and bid and proposal costs: payments to contractors

(a) REGULATIONS.-The Secretary of Defense shall prescribe regulations governing the payment, by the Department of Defense, of expenses incurred by contractors for independent research and development and bid and proposal costs.

(b) COSTS ALLOWABLE AS INDIRECT EXPENSES.-The regulations prescribed pursuant to subsection (a) shall provide that independent research and development and bid and proposal costs shall be allowable as indirect expenses on covered contracts to the extent that those costs are allocable, reasonable, and not otherwise unallowable by law or under the Federal Acquisition Regulation.

(c) ADDITIONAL CONTROLS.-Subject to subsection (f), the regulations prescribed pursuant to subsection (a) may include the following provisions:

(1) A limitation on the allowability of independent research and development and bid and proposal costs to work which the Secretary of Defense determines is of potential interest to the Department of Defense.

(2) For each of fiscal years 1993 through 1995, a limitation in the case of major contractors that the total amount of the independent research and development and bid and proposal costs that are allowable as expenses of the contractor's covered segments may not exceed the contractor's adjusted maximum reimbursement amount.

(3) Implementation of regular methods for transmission(A) from the Department of Defense to contractors, in a reasonable manner, of timely and comprehensive information regarding planned or expected Department of Defense future needs; and

(B) from contractors to the Department of Defense, in a reasonable manner, of information regarding progress by the contractor on the contractor's independent research and development programs.

(d) ADJUSTED MAXIMUM REIMBURSEMENT AMOUNT.-For purposes of subsection (c)(2), the adjusted maximum reimbursement amount for a major contractor for a fiscal year is the sum of—

(1) the total amount of the allowable independent research and development and bid and proposal costs incurred by the contractor during the preceding fiscal year;

(2) 5 percent of the amount referred to in paragraph (1);

and

(3) if the projected total amount of the independent research and development and bid and proposal costs incurred by the contractor for such fiscal year is greater than the total amount of the independent research and development and bid and proposal costs incurred by the contractor for the preceding fiscal year, the amount that is determined by multiplying the amount referred to in paragraph (1) by the lesser of

(A) the percentage by which the projected total amount of such incurred costs for such fiscal year exceeds the total amount of the incurred costs of the contractor for the preceding fiscal year; or

(B) the estimated percentage rate of inflation from the end of the preceding fiscal year to the end of the fiscal year for which the amount of the limitation is being computed.

(e) WAIVER OF ADJUSTED MAXIMUM REIMBURSEMENT AMOUNT.-The Secretary of Defense may waive the applicability of any limitation prescribed under subsection (c)(2) to any contractor for a fiscal year to the extent that the Secretary determines that allowing the contractor to exceed the contractor's adjusted maximum reimbursement amount for such year

(1) is necessary to reimburse such contractor at least to the extent that would have been allowed under regulations as in effect on December 4, 1991; or

(2) is otherwise in the best interest of the Government. (f) LIMITATIONS ON REGULATIONS.-Regulations prescribed pursuant to subsection (c) may not include provisions that would infringe on the independence of a contractor to choose which technologies to pursue in its independent research and development program.

(g) ENCOURAGEMENT OF CERTAIN CONTRACTOR ACTIVITIES.The regulations under subsection (a) shall encourage contractors to engage in research and development activities of potential interest to the Department of Defense, including activities intended to accomplish any of the following:

(1) Enabling superior performance of future United States weapon systems and components.

(2) Reducing acquisition costs and life-cycle costs of military systems.

(3) Strengthening the defense industrial base and the technology base of the United States.

(4) Enhancing the industrial competitiveness of the United States.

(5) Promoting the development of technologies identified as critical under section 2506 of this title.

(6) Increasing the development and promotion of efficient and effective applications of dual-use technologies.

(7) Providing efficient and effective technologies for achieving such environmental benefits as improved environmental

data gathering, environmental cleanup and restoration, pollution reduction in manufacturing, environmental conservation, and environmentally safe management of facilities.

(h) MAJOR CONTRACTORS.-A contractor shall be considered to be a major contractor for the purposes of subsection (c) for any fiscal year if for the preceding fiscal year the contractor's covered segments allocated to Department of Defense contracts a total of more than $10,000,000 in independent research and development and bid and proposal costs.

(i) DEFINITIONS.-In this section:

(1) COVERED CONTRACT.-The term "covered contract" has the meaning given that term in section 2324(m) 5 of this title. (2) COVERED SEGMENT.-The term "covered segment", with respect to a contractor, means a product division of the contractor that allocated more than $1,000,000 in independent research and development and bid and proposal costs to Department of Defense contracts during the preceding fiscal year. In the case of a contractor that has no product divisions, such term means the contractor as a whole.

(Added P.L. 101-510, § 824(a), Nov. 5, 1990, 104 Stat. 1603, and amended P.L. 102-25, § 701(c), April 6, 1991, 105 Stat. 113; P.L. 102-190, §802(a)(1), Dec. 5, 1991, 105 Stat. 1412; P.L. 102484, § 1052(27), Oct. 23, 1992, 106 Stat. 2500; P.L. 103–35, §201(c)(5), May 31, 1993, 107 Stat. 98.)

§ 2373. Procurement for experimental purposes

(a) AUTHORITY.-The Secretary of Defense and the Secretaries of the military departments may each buy ordnance, signal, chemical activity, and aeronautical supplies, including parts and accessories, and designs thereof, that the Secretary of Defense or the Secretary concerned considers necessary for experimental or test purposes in the development of the best supplies that are needed. for the national defense.

(b) PROCEDURES.-Purchases under this section may be made inside or outside the United States and by contract or otherwise. Chapter 137 of this title applies when such purchases are made in quantity.

(Added P.L. 103-160, § 822(c)(1), Nov. 30, 1993, 107 Stat. 1706, and amended P.L. 103-337, 1070(g), Oct. 5, 1994, 108 Stat. 2859.)

§ 2374. Merit-based award of grants for research and development

(a) It is the policy of Congress that an agency named in section 2303(a) of this title should not be required by legislation to award a new grant for research, development, test, or evaluation to a nonFederal Government entity. It is further the policy of Congress that any program, project, or technology identified in legislation be awarded through merit-based selection procedures.

(b) A provision of law may not be construed as requiring a new grant to be awarded to a specified non-Federal Government entity unless that provision of law

(1) specifically refers to this subsection;

Section 2324(m) of this title, referred to in subsection (i)(1), was repealed by section 2101(d) of P.L. 103-355 (108 Stat. 3308). The term "covered contract" is now defined in section 2324(1)(1).

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(2) specifically identifies the particular non-Federal Government entity involved; and

(3) specifically states that the award to that entity is required by such provision of law in contravention of the policy set forth in subsection (a).

(c) For purposes of this section, a grant is a new grant unless the work provided for in the grant is a continuation of the work performed by the specified entity under a preceding grant.

(d) This section shall not apply with respect to any grant that calls upon the National Academy of Sciences to investigate, examine, or experiment upon any subject of science or art of significance to an agency named in section 2303(a) of this title and to report on such matters to the Congress or any agency of the Federal Gov

ernment.

(Added P.L. 103–355, § 7203(a)(2), Oct. 13, 1994, 108 Stat. 3380.)

Sec.

2375.

2376.

2377.

CHAPTER 140-PROCUREMENT OF COMMERCIAL
ITEMS 1

Relationship of commercial item provisions to other provisions of law.
Definitions.

Preference for acquisition of commercial items.

§ 2375. Relationship of commercial item provisions to other provisions of law

(a) APPLICABILITY OF TITLE.-Unless otherwise specifically provided, nothing in this chapter shall be construed as providing that any other provision of this title relating to procurement is inapplicable to the procurement of commercial items.

(b) LIST OF LAWS INAPPLICABLE TO CONTRACTS FOR THE ACQUISITION OF COMMERCIAL ITEMS.-No contract for the procurement of a commercial item entered into by the head of an agency shall be subject to any law properly listed in the Federal Acquisition Regulation (pursuant to section 34 of the Office of Federal Procurement Policy Act).

(c) CROSS REFERENCE TO EXCEPTION TO COST OR PRICING DATA REQUIREMENTS FOR COMMERCIAL ITEMS.-For provisions relating to exceptions for requirements for cost or pricing data for contracts for the procurement of commercial items, see section 2306a(d) of this title.

(Added P.L. 103–355, §8102, Oct. 13, 1994, 108 Stat. 3390.)

§2376. Definitions

In this chapter:

(1) The terms "commercial item", "nondevelopmental item", "component", and "commercial component" have the meanings provided in section 4 of the Office of Federal Procurement Policy Act. 2

(2) The term "head of an agency" means the Secretary of Defense, the Secretary of Transportation, and the Administrator of the National Aeronautics and Space Administration. (3) The term "agency" means the Department of Defense, the Coast Guard, and the National Aeronautics and Space Administration.

(Added P.L. 103–355, § 8103, Oct. 13, 1994, 108 Stat. 3390.)

§ 2377. Preference for acquisition of commercial items

(a) PREFERENCE.-The head of an agency shall ensure that, to the maximum extent practicable

1 For a provision on regulations implementing chapter 140, see section 8002 of the Federal Acquisition Streamlining Act of 1994 (P.L. 103–355; 41 U.S.C. 264 note), set forth beginning on page 466.

Section 4 of the Office of Federal Procurement Policy Act, referred to in section 2376(1), is set forth beginning on page 542.

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