qualify himself under paragraph (1)(B) if the defense official terminates the contact immediately. However, if an additional contact of the same or a similar nature is made by or with the defense contractor, the covered defense official shall report (as provided in paragraph (1)) the contact and all contacts of the same or a similar nature made by or with the defense contractor during the 90-day period ending on the date the additional contact is made.

(c) A report required by subsection (b)(1) shall include

(1) the date of each contact covered by the report; and

(2) a brief description of the substance of the contact. (d)(1)(A) If the Secretary of Defense determines under paragraph (2) that a person has failed promptly to make a report required by subsection (b)(1)(A) or (b)(2) or has failed to disqualify himself in any case in which he is required to do so under subsection (b)(1)(B)—

(i) the person may not accept or continue employment with the defense contractor during the 10-year period beginning with the date of separation from Government service; and

(ii) the Secretary may impose on the person an administrative penalty in the amount of $10,000, or in such lesser amount as may be prescribed by the Secretary, taking into consideration all the circumstances.

(B) An individual who accepts or continues employment prohibited by subparagraph (A)(i) shall be liable to the United States for an administrative penalty as provided in subparagraph (A)(ii). Such penalty may be in addition to any penalty previously imposed on the individual under subparagraph (A)(ii) for failure promptly to make a report relating to the defense contractor by whom the individual is employed as required by subsection (b)(1)(A) or (b)(2).

(C) The Secretary of Defense may take action against an individual under this paragraph before, on, or after the date on which the individual's employment with the Government is terminated. (2)(A) The Secretary of Defense shall determine

(i) whether an individual has failed promptly to make a report required by subsection (b)(1)(A) or (b)(2) or has failed to disqualify himself in any case in which he is required to do so under subsection (bX1X(B) and whether to impose a penalty under paragraph (1)(A)(ii) and the amount of such penalty; and

(ii) whether an individual is liable to the United States for an administrative penalty under paragraph (1)(B) and the amount of such penalty.

There shall be a rebuttable presumption in favor of a covered defense official that failure to report a contact with a defense contractor or failure to disqualify himself from participation in the performance of certain procurement functions is not a violation of subsection (b)(1)(A) or (b)(2) or subsection (b)(1)(B), as the case may be, if the defense official has received an opinion in writing from the designated agency ethics official under subsection (e) stating that a report or disqualification by the official was not necessary.

(B) Determinations of the Secretary under subparagraph (A) shall be made on the record after opportunity for an agency hearing as provided in subchapter II of chapter 5 of title 5. The deter

minations of the Secretary shall be subject to judicial review under chapter 7 of such title.

(e) If a designated agency ethics official or his designee receives a report required by subsection (b) or a request for advice from a covered defense official relating to a contact described in such subsection, the designated agency ethics official or his designee may issue a written opinion regarding the necessity of a covered defense official to file a report or disqualify himself from participation in certain procurement functions, as the case may be.

(f) A covered defense official should request the advice of his supervisor and the appropriate designated agency ethics official (or his designee) on matters to which this section applies.

(Added P.L. 99-145, 8923(a)(1), Nov. 8, 1985, 99 Stat. 695, and amended P.L. 100-26, §7(kX2), April 21, 1987, 101 Stat. 284; P.L. 101-280, § 10(b), May 4, 1990, 104 Stat. 162.)

§ 2397b. Certain former Department of Defense procurement officials: limitations on employment by contractors

(a)(1) Subject to subsections (c) and (d), a person who is a former officer or employee of the Department of Defense or a former or retired member of the armed forces may not accept compensation from a contractor during the two-year period beginning on the date of such person's separation from service in the Department of Defense if

(A) on a majority of the person's working days during the two-year period ending on the date of such person's separation from service in the Department of Defense, the person performed a procurement function (relating to a contract of the Department of Defense) at a site or plant that is owned or operated by the contractor and that was the principal location of such person's performance of that procurement function;

(B) the person performed, on a majority of the person's working days during such two-year period, procurement functions relating to a major defense system and, in the performance of such functions, participated personally and substantially, and in a manner involving decisionmaking responsibilities, with respect to a contract for that system through contact with the contractor; or

(C) during such two-year period the person acted as one of the primary representatives of the United States

(i) in the negotiation of a Department of Defense contract in an amount in excess of $10,000,000 with the contractor; or

(ii) in the negotiation of a settlement of an unresolved claim of the contractor in an amount in excess of $10,000,000 under a Department of Defense contract.

(2) In the application of paragraph (1) to a former officer or employee of the Department of Defense or a former or retired member of the armed forces, a person's status as a contractor shall be determined as of the date of the separation from service in the Department of Defense of the officer or employee or member or former member involved.

(b)(1) Any person who knowingly violates subsection (a)(1) shall be subject to a civil fine, in an amount not to exceed

$250,000, in a civil action brought by the United States in the appropriate district court of the United States.

(2) Any person who knowingly offers or provides any compensation to another person, and who knew or should have known that the acceptance of such compensation is or would be in violation of subsection (a)(1), shall be subject to a civil fine, in an amount not to exceed $500,000, in a civil action brought by the United States in the appropriate district court of the United States. (c) This section does not apply to any person with respect to(1) duties described in clause (A) or (B) of subsection (a)(1) which were performed while such person was serving

(A) in a civilian position for which the rate of pay is less than the minimum rate of pay payable for grade GS13 of the General Schedule; or

(B) as a member of the armed forces in a pay grade below pay grade 0-4; or

(2) duties described in clause (C) of subsection (a)(1) which were performed while such person was serving

(A) in a civilian position for which the rate of pay is less than the minimum rate of pay payable for a Senior Executive Service position; or

(B) as a member of the armed forces in a pay grade below pay grade 0-7.

(d) This section does not prohibit any person from accepting compensation from any contractor that, during the fiscal year preceding the fiscal year in which such compensation is accepted, was not a Department of Defense contractor or was a contractor under Department of Defense contracts in a total amount less than $10,000,000.

(e)(1) Any person may, before accepting any compensation, request the appropriate designated agency ethics official to advise such person on the applicability of this section to the acceptance of such compensation. For purposes of the preceding sentence, the appropriate designated agency ethics official is the designated agency ethics official of the agency in which such person was serving at the time such person separated from service in the Department of Defense.

(2) A request for advice under paragraph (1) shall contain all information that is relevant to a determination by the designated agency ethics official on such request.

(3) Not later than 30 days after the date on which a designated agency ethics official receives a request for advice under paragraph (1), such official shall issue a written opinion on the applicability of this section to the acceptance of compensation covered by the request.

(4) If a designated agency ethics official, on the basis of a complete disclosure as required by paragraph (2), states in a written opinion furnished to any person under this subsection that this section is inapplicable to the acceptance of compensation by such person from a contractor in a particular case, there shall be a conclusive presumption in favor of such person, for the purposes of this section, that the person's acceptance of such compensation in such case is not a violation of subsection (a)(1).

(f) In this section:

(1) The term "compensation" includes any payment, gift, benefit, reward, favor, or gratuity—

(A) which is provided, directly or indirectly, for services rendered by the person accepting such payment, gift, benefit, reward, favor, or gratuity; and

(B) which is valued in excess of $250 at the prevailing market price.

(2)(A) The term "contractor" means a person

(i) that contracts to supply the Department of Defense with goods or services;

(ii) that controls or is controlled by a person described in clause (i); or

(iii) that is under common control with a person described in clause (i).

(B) Such term does not include—

(i) an affiliate or subsidiary of a person described in subparagraph (A) that is clearly not engaged in the performance of a Department of Defense contract;

(ii) a State or local government; or

(iii) any person who contracts to supply the Department of Defense only commercial items (as defined in section 4(12) of the Office of Federal Procurement Policy Act (41 U.S.C. 403(12))) 5

(3) The term "procurement function" includes, with respect to a contract, any function relating to

(A) the negotiation, award, administration, or approval of the contract;

(B) the selection of a contractor;

(C) the approval of changes in the contract;

(D) quality assurance, operational and developmental testing, the approval of payment, or auditing under the contract; or

(E) the management of the procurement program. (4) The term "armed forces" does not include the Coast Guard.

(5) The term "major defense system" has the meaning given the term "major system" in section 2302(5) of this title. (g) For the purposes of this section, a person who is a retired member or a former member of the armed forces shall be considered to have been separated from service in the Department of Defense upon the date of the person's discharge or release from active duty.

(Added by identical amendments P.L. 99-500, 99-591, 99-661, §§ 101(c) [8931(a)], 101(c) [§ 931(a)], 931(a), Oct. 18, Oct. 30, Nov. 14, 1986, 100 Stat. 1783-156, 3341-156, 3936, and amended P.L. 100-180, 8821, Dec. 4, 1987, 101 Stat. 1132; P.L. 103-355, §8105(e), Oct. 13, 1994, 108 Stat. 3392.)

§ 2397c. Defense

contractors:

requirements concerning former Department of Defense officials

(a)(1) Each contract for the procurement of goods or services in excess of $100,000 entered into by the Department of Defense shall include a provision under which the contractor agrees not to pro

So in law. A period should appear at the end of clause (iii) of subsection (f)(2)(B).

vide compensation to a person if the acceptance of such compensation by such person would violate section 2397b(a)(1) of this title.

(2) Such a contract shall also provide that if the contractor knowingly violates a contract provision required by paragraph (1) the contractor shall pay to the United States, as liquidated damages under the contract, an amount equal to the greater of(A) $100,000; or

(B) three times the amount of the compensation paid by the contractor to the person in violation of such contract provision.

(b)(1)(A) Any contractor that was awarded one or more contracts by the Department of Defense during the preceding fiscal year in an aggregate amount of at least $10,000,000 that is subject during a calendar year to a contract provision described in subsection (a) shall submit to the Secretary of Defense, not later than April 1 of the next year, a written report covering the preceding calendar year. Each such report shall list the name of each person (together with other information adequate for the Government to identify the person) who

(i) is a former officer or employee of the Department of Defense or a former or retired member of the armed forces; and

(ii) during the preceding calendar year was provided compensation by that contractor, if such compensation was provided within two years after such officer, employee, or member left service in the Department of Defense.

(B) In the case of each person named in a report submitted under subparagraph (A), the report shall

(i) identify the agency in which the person was employed or served on active duty during the last two years of the person's service with the Department of Defense;

(ii) state the person's job title and identify each major defense system, if any, on which the person performed any work with the Department of Defense during the last two years of the person's service with the Department;

(iii) contain a complete description of any work that the

person is performing on behalf of the contractor; and

(iv) identify each major defense system on which the person has performed any work on behalf of the contractor.

(2) A person who knowingly fails to file a report required by paragraph (1) shall be subject to an administrative penalty, not to exceed $10,000, imposed by the Secretary of Defense after an opportunity for an agency hearing on the record pursuant to regulations prescribed by the Secretary of Defense. The determinations of the Secretary shall be included in such record. The determinations of the Secretary shall be subject to judicial review under chapter 7 of title 5.

(3) The Secretary of Defense shall review each report under paragraph (1) for the purposes of (A) assessing the accuracy and completeness of the report, and (B) identifying possible violations of section 2397b(a)(1) of this title or of a contract provision required by subsection (a). The Secretary shall report any such possible violation to the Attorney General.

(4) The Secretary shall make reports submitted under this subsection available to any Member of Congress upon request.