TITLE 10 - US CODE - SUBCHAPTER V - MISCELLANEOUS TECHNOLOGY BASE POLICIES AND PROGRAMS

10 USC 2531 - Defense memoranda of understanding and related agreements

(a) Considerations in Making and Implementing MOUs and Related Agreements.— 
In the negotiation, renegotiation, and implementation of any existing or proposed memorandum of understanding, or any existing or proposed agreement related to a memorandum of understanding, between the Secretary of Defense, acting on behalf of the United States, and one or more foreign countries (or any instrumentality of a foreign country) relating to research, development, or production of defense equipment, or to the reciprocal procurement of defense items, the Secretary of Defense shall
(1) consider the effects of such existing or proposed memorandum of understanding or related agreement on the defense technology and industrial base of the United States; and
(2) regularly solicit and consider comments and recommendations from the Secretary of Commerce with respect to the commercial implications of such memorandum of understanding or related agreement and the potential effects of such memorandum of understanding or related agreement on the international competitive position of United States industry.
(b) Inter-Agency Review of Effects on United States Industry.— 
Whenever the Secretary of Commerce has reason to believe that an existing or proposed memorandum of understanding or related agreement has, or threatens to have, a significant adverse effect on the international competitive position of United States industry, the Secretary may request an inter-agency review of the memorandum of understanding or related agreement. If, as a result of the review, the Secretary determines that the commercial interests of the United States are not being served or would not be served by adhering to the terms of such existing memorandum or related agreement or agreeing to such proposed memorandum or related agreement, as the case may be, the Secretary shall recommend to the President the renegotiation of the existing memorandum or related agreement or any modification to the proposed memorandum of understanding or related agreement that he considers necessary to ensure an appropriate balance of interests.
(c) Limitation on Entering into MOUs and Related Agreements.— 
A memorandum of understanding or related agreement referred to in subsection (a) may not be entered into or implemented if the President, taking into consideration the results of the inter-agency review, determines that such memorandum of understanding or related agreement has or is likely to have a significant adverse effect on United States industry that outweighs the benefits of entering into or implementing such memorandum or agreement.

10 USC 2532 - Offset policy; notification

(a) Establishment of Offset Policy.— 
The President shall establish, consistent with the requirements of this section, a comprehensive policy with respect to contractual offset arrangements in connection with the purchase of defense equipment or supplies which addresses the following:
(1) Transfer of technology in connection with offset arrangements.
(2) Application of offset arrangements, including cases in which United States funds are used to finance the purchase by a foreign government.
(3) Effects of offset arrangements on specific subsectors of the industrial base of the United States and for preventing or ameliorating any serious adverse effects on such subsectors.
(b) Technology Transfer.— 

(1) No official of the United States may enter into a memorandum of understanding or other agreement with a foreign government that would require the transfer of United States defense technology to a foreign country or a foreign firm in connection with a contract that is subject to an offset arrangement if the implementation of such memorandum or agreement would significantly and adversely affect the defense industrial base of the United States and would result in a substantial financial loss to a United States firm.
(2) Paragraph (1) shall not apply in the case of a memorandum of understanding or agreement described in paragraph (1) if the Secretary of Defense, in consultation with the Secretary of Commerce and the Secretary of State, determines that a transfer of United States defense technology pursuant to such understanding or agreement will result in strengthening the national security of the United States and so certifies to Congress.
(3) If a United States firm is required under the terms of a memorandum of understanding, or other agreement entered into by the United States with a foreign country, to transfer defense technology to a foreign country, the United States firm may protest the determination to the Secretary of Defense on the grounds that the transfer of such technology would adversely affect the defense industrial base of the United States and would result in substantial financial loss to the protesting firm. The Secretary of Defense, in consultation with the Secretary of Commerce and the Secretary of State, shall make the final determination of the validity of the protesting firms claim.
(c) Notification Regarding Offsets.— 
If at any time a United States firm enters into a contract for the sale of a weapon system or defense-related item to a foreign country or foreign firm and such contract is subject to an offset arrangement exceeding $50,000,000 in value, such firm shall notify the Secretary of Defense of the proposed sale. Notification shall be made under this subsection in accordance with regulations prescribed by the Secretary of Defense in consultation with the Secretary of Commerce.
(d) Definitions.— 
In this section:
(1) The term United States firm means a business entity that performs substantially all of its manufacturing, production, and research and development activities in the United States.
(2) The term foreign firm means a business entity other than a United States firm.

10 USC 2533 - Determinations of public interest under the Buy American Act

(a) In determining under section 2 of the Buy American Act (41 U.S.C. 10a) whether application of such Act is inconsistent with the public interest, the Secretary of Defense shall consider the following:
(1) The bids or proposals of small business firms in the United States which have offered to furnish American goods.
(2) The bids or proposals of all other firms in the United States which have offered to furnish American goods.
(3) The United States balance of payments.
(4) The cost of shipping goods which are other than American goods.
(5) Any duty, tariff, or surcharge which may enter into the cost of using goods which are other than American goods.
(6) A need to ensure that the Department of Defense has access to advanced, state-of-the-art commercial technology.
(7) The need to protect the national technology and industrial base, to preserve and enhance the national technology employment base, and to provide for a defense mobilization base.
(8) A need to ensure that application of different rules of origin for United States end items and foreign end items does not result in an award to a firm other than a firm providing a product produced in the United States.
(9) Any need
(A) to maintain the same source of supply for spare and replacement parts for an end item that qualifies as an American good; or
(B) to maintain the same source of supply for spare and replacement parts in order not to impair integration of the military and commercial industrial base.
(10) The national security interests of the United States.
(b) In this section, the term goods which are other than American goods means
(1) an end product that is not mined, produced, or manufactured in the United States; or
(2) an end product that is manufactured in the United States but which includes components mined, produced, or manufactured outside the United States the aggregate cost of which exceeds the aggregate cost of the components of such end product that are mined, produced, or manufactured in the United States.

10 USC 2533a - Requirement to buy certain articles from American sources; exceptions

(a) Requirement.— 
Except as provided in subsections (c) through (h), funds appropriated or otherwise available to the Department of Defense may not be used for the procurement of an item described in subsection (b) if the item is not grown, reprocessed, reused, or produced in the United States.
(b) Covered Items.— 
An item referred to in subsection (a) is any of the following:
(1) An article or item of
(A) food;
(B) clothing and the materials and components thereof, other than sensors, electronics, or other items added to, and not normally associated with, clothing (and the materials and components thereof);
(C) tents, tarpaulins, or covers;
(D) cotton and other natural fiber products, woven silk or woven silk blends, spun silk yarn for cartridge cloth, synthetic fabric or coated synthetic fabric (including all textile fibers and yarns that are for use in such fabrics), canvas products, or wool (whether in the form of fiber or yarn or contained in fabrics, materials, or manufactured articles); or
(E) any item of individual equipment manufactured from or containing such fibers, yarns, fabrics, or materials.
(2) Hand or measuring tools.
(c) Availability Exception.— 
Subsection (a) does not apply to the extent that the Secretary of Defense or the Secretary of the military department concerned determines that satisfactory quality and sufficient quantity of any such article or item described in subsection (b)(1) grown, reprocessed, reused, or produced in the United States cannot be procured as and when needed at United States market prices.
(d) Exception for Certain Procurements.— 
Subsection (a) does not apply to the following:
(1) Procurements outside the United States in support of combat operations or procurements of any item listed in subsection (b)(1)(A), (b)(2), or (b)(3) in support of contingency operations.
(2) Procurements by vessels in foreign waters.
(3) Emergency procurements or procurements of perishable foods by, or for, an establishment located outside the United States for the personnel attached to such establishment.
(4) Procurements of any item listed in subsection (b)(1)(A), (b)(2), or (b)(3) for which the use of procedures other than competitive procedures has been approved on the basis of section 2304 (c)(2) of this title, relating to unusual and compelling urgency of need.
(e) Exception for Chemical Warfare Protective Clothing.— 
Subsection (a) does not preclude the procurement of chemical warfare protective clothing produced outside the United States if
(1) such procurement is necessary
(A) to comply with agreements with foreign governments requiring the United States to purchase supplies from foreign sources for the purposes of offsetting sales made by the United States Government or United States firms under approved programs serving defense requirements; or
(B) in furtherance of agreements with foreign governments in which both such governments agree to remove barriers to purchases of supplies produced in the other country or services performed by sources of the other country; and
(2) any such agreement with a foreign government complies, where applicable, with the requirements of section 36 of the Arms Export Control Act (22 U.S.C. 2776) and with section 2457 of this title.
(f) Exceptions for Certain Other Commodities and Items.— 
Subsection (a) does not preclude the procurement of the following:
(1) Foods manufactured or processed in the United States.
(2) Waste and byproducts of cotton and wool fiber for use in the production of propellants and explosives.
(g) Exception for Commissaries, Exchanges, and Other Nonappropriated Fund Instrumentalities.— 
Subsection (a) does not apply to items purchased for resale purposes in commissaries, exchanges, or nonappropriated fund instrumentalities operated by the Department of Defense.
(h) Exception for Small Purchases.— 
Subsection (a) does not apply to purchases for amounts not greater than the simplified acquisition threshold referred to in section 2304 (g) of this title.
(i) Applicability to Contracts and Subcontracts for Procurement of Commercial Items.— 
This section is applicable to contracts and subcontracts for the procurement of commercial items notwithstanding section 34 of the Office of Federal Procurement Policy Act (41 U.S.C. 430).
(j) Geographic Coverage.— 
In this section, the term United States includes the possessions of the United States.
(k) Notification Required Within 7 Days After Contract Award If Certain Exceptions Applied.— 
In the case of any contract for the procurement of an item described in subparagraph (B), (C), (D), or (E) of subsection (b)(1), if the Secretary of Defense or of the military department concerned applies an exception set forth in subsection (c) or (e) with respect to that contract, the Secretary shall, not later than 7 days after the award of the contract, post a notification that the exception has been applied on the Internet site maintained by the General Services Administration known as FedBizOps.gov[1] (or any successor site).
[1] See References in Text note below.

10 USC 2533b - Requirement to buy strategic materials critical to national security from American sources; exceptions

(a) Requirement.— 
Except as provided in subsections (b) through (m), the acquisition by the Department of Defense of the following items is prohibited:
(1) The following types of end items, or components thereof, containing a specialty metal not melted or produced in the United States: aircraft, missile and space systems, ships, tank and automotive items, weapon systems, or ammunition.
(2) A specialty metal that is not melted or produced in the United States and that is to be purchased directly by the Department of Defense or a prime contractor of the Department.
(b) Availability Exception.— 

(1) Subsection (a) does not apply to the extent that the Secretary of Defense or the Secretary of the military department concerned determines that compliant specialty metal of satisfactory quality and sufficient quantity, and in the required form, cannot be procured as and when needed. For purposes of the preceding sentence, the term compliant specialty metal means specialty metal melted or produced in the United States.
(2) This subsection applies to prime contracts and subcontracts at any tier under such contracts.
(c) Exception for Certain Acquisitions.— 
Subsection (a) does not apply to the following:
(1) Acquisitions outside the United States in support of combat operations or in support of contingency operations.
(2) Acquisitions for which the use of procedures other than competitive procedures has been approved on the basis of section 2304 (c)(2) of this title, relating to unusual and compelling urgency of need.
(d) Exception Relating to Agreements With Foreign Governments.— 
Subsection (a)(1) does not preclude the acquisition of a specialty metal if
(1) the acquisition is necessary
(A) to comply with agreements with foreign governments requiring the United States to purchase supplies from foreign sources for the purposes of offsetting sales made by the United States Government or United States firms under approved programs serving defense requirements; or
(B) in furtherance of agreements with foreign governments in which both such governments agree to remove barriers to purchases of supplies produced in the other country or services performed by sources of the other country; and
(2) any such agreement with a foreign government complies, where applicable, with the requirements of section 36 of the Arms Export Control Act (22 U.S.C. 2776) and with section 2457 of this title.
(e) Exception for Commissaries, Exchanges, and Other Nonappropriated Fund Instrumentalities.— 
Subsection (a) does not apply to items purchased for resale purposes in commissaries, exchanges, and nonappropriated fund instrumentalities operated by the Department of Defense.
(f) Exception for Small Purchases.— 
Subsection (a) does not apply to acquisitions in amounts not greater than the simplified acquisition threshold referred to in section 2304 (g) of this title.
(g) Exception for Purchases of Electronic Components.— 
Subsection (a) does not apply to acquisitions of electronic components, unless the Secretary of Defense, upon the recommendation of the Strategic Materials Protection Board pursuant to section 187 of this title, determines that the domestic availability of a particular electronic component is critical to national security.
(h) Applicability to Acquisitions of Commercial Items.— 

(1) Except as provided in paragraphs (2) and (3), this section applies to acquisitions of commercial items, notwithstanding sections 34 and 35 of the Office of Federal Procurement Policy Act (41 U.S.C. 430 and 431).
(2) This section does not apply to contracts or subcontracts for the acquisition of commercially available off-the-shelf items, as defined in section 35(c) of the Office of Federal Procurement Policy Act (41 U.S.C. 431 (c)), other than
(A) contracts or subcontracts for the acquisition of specialty metals, including mill products, such as bar, billet, slab, wire, plate and sheet, that have not been incorporated into end items, subsystems, assemblies, or components;
(B) contracts or subcontracts for the acquisition of forgings or castings of specialty metals, unless such forgings or castings are incorporated into commercially available off-the-shelf end items, subsystems, or assemblies;
(C) contracts or subcontracts for commercially available high performance magnets unless such high performance magnets are incorporated into commercially available off-the-shelf-end items or subsystems; and
(D) contracts or subcontracts for commercially available off-the-shelf fasteners, unless such fasteners are
(i) incorporated into commercially available off-the-shelf end items, subsystems, assemblies, or components; or
(ii) purchased as provided in paragraph (3).
(3) This section does not apply to fasteners that are commercial items that are purchased under a contract or subcontract with a manufacturer of such fasteners, if the manufacturer has certified that it will purchase, during the relevant calendar year, an amount of domestically melted specialty metal, in the required form, for use in the production of such fasteners for sale to the Department of Defense and other customers, that is not less than 50 percent of the total amount of the specialty metal that it will purchase to carry out the production of such fasteners.
(i) Exceptions for Purchases of Specialty Metals Below Minimum Threshold.— 

(1) Notwithstanding subsection (a), the Secretary of Defense or the Secretary of a military department may accept delivery of an item containing specialty metals that were not melted in the United States if the total amount of noncompliant specialty metals in the item does not exceed 2 percent of the total weight of specialty metals in the item.
(2) This subsection does not apply to high performance magnets.
(j) Streamlined Compliance for Commercial Derivative Military Articles.— 

(1) Subsection (a) shall not apply to an item acquired under a prime contract if the Secretary of Defense or the Secretary of a military department determines that
(A) the item is a commercial derivative military article; and
(B) the contractor certifies that the contractor and its subcontractors have entered into a contractual agreement, or agreements, to purchase an amount of domestically melted specialty metal in the required form, for use during the period of contract performance in the production of the commercial derivative military article and the related commercial article, that is not less than the greater of
(i) an amount equivalent to 120 percent of the amount of specialty metal that is required to carry out the production of the commercial derivative military article (including the work performed under each subcontract); or
(ii) an amount equivalent to 50 percent of the amount of specialty metal that is purchased by the contractor and its subcontractors for use during such period in the production of the commercial derivative military article and the related commercial article.
(2) For the purposes of this subsection, the amount of specialty metal that is required to carry out the production of the commercial derivative military article includes specialty metal contained in any item, including commercially available off-the-shelf items, incorporated into such commercial derivative military article.
(k) National Security Waiver.— 

(1) Notwithstanding subsection (a), the Secretary of Defense may accept the delivery of an end item containing noncompliant materials if the Secretary determines in writing that acceptance of such end item is necessary to the national security interests of the United States.
(2) A written determination under paragraph (1)
(A) may not be delegated below the level of the Deputy Secretary of Defense or the Under Secretary of Defense for Acquisition, Technology, and Logistics;
(B) shall specify the quantity of end items to which the waiver applies and the time period over which the waiver applies; and
(C) shall be provided to the congressional defense committees prior to making such a determination (except that in the case of an urgent national security requirement, such certification may be provided to the defense committees up to 7 days after it is made).
(3) 
(A) In any case in which the Secretary makes a determination under paragraph (1), the Secretary shall determine whether or not the noncompliance was knowing and willful.
(B) If the Secretary determines that the noncompliance was not knowing or willful, the Secretary shall ensure that the contractor or subcontractor responsible for the noncompliance develops and implements an effective plan to ensure future compliance.
(C) If the Secretary determines that the noncompliance was knowing or willful, the Secretary shall
(i) require the development and implementation of a plan to ensure future compliance; and
(ii) consider suspending or debarring the contractor or subcontractor until such time as the contractor or subcontractor has effectively addressed the issues that lead to such noncompliance.
(l) Specialty Metal Defined.— 
In this section, the term specialty metal means any of the following:
(1) Steel
(A) with a maximum alloy content exceeding one or more of the following limits: manganese, 1.65 percent; silicon, 0.60 percent; or copper, 0.60 percent; or
(B) containing more than 0.25 percent of any of the following elements: aluminum, chromium, cobalt, columbium, molybdenum, nickel, titanium, tungsten, or vanadium.
(2) Metal alloys consisting of nickel, iron-nickel, and cobalt base alloys containing a total of other alloying metals (except iron) in excess of 10 percent.
(3) Titanium and titanium alloys.
(4) Zirconium and zirconium base alloys.
(m) Additional Definitions.— 
In this section:
(1) The term United States includes possessions of the United States.
(2) The term component has the meaning provided in section 4 of the Office of Federal Procurement Policy Act (41 U.S.C. 403).
(3) The term acquisition has the meaning provided in section 4 of the Office of Federal Procurement Policy Act (41 U.S.C. 403).
(4) The term required form shall not apply to end items or to their components at any tier. The term required form means in the form of mill product, such as bar, billet, wire, slab, plate or sheet, and in the grade appropriate for the production of
(A) a finished end item delivered to the Department of Defense; or
(B) a finished component assembled into an end item delivered to the Department of Defense.
(5) The term commercially available off-the-shelf, has the meaning provided in section 35(c) of the Office of Federal Procurement Policy Act (41 U.S.C. 431 (c)).
(6) The term assemblies means items forming a portion of a system or subsystem that can be provisioned and replaced as an entity and which incorporates multiple, replaceable parts.
(7) The term commercial derivative military article means an item procured by the Department of Defense that is or will be produced using the same production facilities, a common supply chain, and the same or similar production processes that are used for the production of articles predominantly used by the general public or by nongovernmental entities for purposes other than governmental purposes.
(8) The term subsystem means a functional grouping of items that combine to perform a major function within an end item, such as electrical power, attitude control, and propulsion.
(9) The term end item means the final production product when assembled or completed, and ready for issue, delivery, or deployment.
(10) The term subcontract includes a subcontract at any tier.

10 USC 2534 - Miscellaneous limitations on the procurement of goods other than United States goods

(a) Limitation on Certain Procurements.— 
The Secretary of Defense may procure any of the following items only if the manufacturer of the item satisfies the requirements of subsection (b):
(1) Buses.— 
Multipassenger motor vehicles (buses).
(2) Chemical weapons antidote.— 
Chemical weapons antidote contained in automatic injectors (and components for such injectors).
(3) Components for naval vessels.— 

(A) The following components:
(i) Air circuit breakers.
(ii) Welded shipboard anchor and mooring chain with a diameter of four inches or less.
(iii) Vessel propellers with a diameter of six feet or more.
(B) The following components of vessels, to the extent they are unique to marine applications: gyrocompasses, electronic navigation chart systems, steering controls, pumps, propulsion and machinery control systems, and totally enclosed lifeboats.
(4) Valves and machine tools.— 
Items in the following categories:
(A) Powered and non-powered valves in Federal Supply Classes 4810 and 4820 used in piping for naval surface ships and submarines.
(B) Machine tools in the Federal Supply Classes for metal-working machinery numbered 3405, 3408, 3410 through 3419, 3426, 3433, 3438, 3441 through 3443, 3445, 3446, 3448, 3449, 3460, and 3461.
(5) Ball bearings and roller bearings.— 
Ball bearings and roller bearings, in accordance with subpart 225.71 of part 225 of the Defense Federal Acquisition Regulation Supplement, as in effect on October 23, 1992, except ball bearings and roller bearings being procured for use in an end product manufactured by a manufacturer that does not satisfy the requirements of subsection (b) or in a component part manufactured by such a manufacturer.
(b) Manufacturer in the National Technology and Industrial Base.— 

(1) General requirement.— 
A manufacturer meets the requirements of this subsection if the manufacturer is part of the national technology and industrial base.
(2) Manufacturers of chemical weapons antidote.— 
In the case of a procurement of chemical weapons antidote referred to in subsection (a)(2), a manufacturer meets the requirements of this subsection only if the manufacturer
(A) meets the requirement set forth in paragraph (1);
(B) is an existing producer under the industrial preparedness program at the time the contract is awarded;
(C) has received all required regulatory approvals; and
(D) when the contract for the procurement is awarded, has in existence in the national technology and industrial base the plant, equipment, and personnel necessary to perform the contract.
(3) Manufacturer of vessel propellers.— 
In the case of a procurement of vessel propellers referred to in subsection (a)(3)(A)(iii), the manufacturer of the propellers meets the requirements of this subsection only if
(A) the manufacturer meets the requirements set forth in paragraph (1); and
(B) all castings incorporated into such propellers are poured and finished in the United States.
(c) Applicability to Certain Items.— 

(1) Components for naval vessels.— 
Subsection (a) does not apply to a procurement of spare or repair parts needed to support components for naval vessels produced or manufactured outside the United States.
(2) Valves and machine tools.— 

(A) Contracts to which subsection (a) applies include the following contracts for the procurement of items described in paragraph (4) of such subsection:
(i) A contract for procurement of such an item for use in property under the control of the Department of Defense, including any Government-owned, contractor-operated facility.
(ii) A contract that is entered into by a contractor on behalf of the Department of Defense for the purpose of providing such an item to another contractor as Government-furnished equipment.
(B) In any case in which a contract for items described in subsection (a)(4) includes the procurement of more than one Federal Supply Class of machine tools or machine tools and accessories, each supply class shall be evaluated separately for purposes of determining whether the limitation in subsection (a) applies.
(C) Subsection (a)(4) and this paragraph shall cease to be effective on October 1, 1996.
(3) Ball bearings and roller bearings.— 
Subsection (a)(5) and this paragraph shall cease to be effective on October 1, 2005.
(4) Vessel propellers.— 
Subsection (a)(3)(A)(iii) and this paragraph shall cease to be effective on February 10, 1998.
(d) Waiver Authority.— 
The Secretary of Defense may waive the limitation in subsection (a) with respect to the procurement of an item listed in that subsection if the Secretary determines that any of the following apply:
(1) Application of the limitation would cause unreasonable costs or delays to be incurred.
(2) United States producers of the item would not be jeopardized by competition from a foreign country, and that country does not discriminate against defense items produced in the United States to a greater degree than the United States discriminates against defense items produced in that country.
(3) Application of the limitation would impede cooperative programs entered into between the Department of Defense and a foreign country, or would impede the reciprocal procurement of defense items under a memorandum of understanding providing for reciprocal procurement of defense items that is entered into under section 2531 of this title, and that country does not discriminate against defense items produced in the United States to a greater degree than the United States discriminates against defense items produced in that country.
(4) Satisfactory quality items manufactured by an entity that is part of the national technology and industrial base (as defined in section 2500 (1) of this title) are not available.
(5) Application of the limitation would result in the existence of only one source for the item that is an entity that is part of the national technology and industrial base (as defined in section 2500 (1) of this title).
(6) The procurement is for an amount less than the simplified acquisition threshold and simplified purchase procedures are being used.
(7) Application of the limitation is not in the national security interests of the United States.
(8) Application of the limitation would adversely affect a United States company.
(e) Sonobuoys.— 

(1) Limitation.— 
The Secretary of Defense may not procure a sonobuoy manufactured in a foreign country if United States firms that manufacture sonobuoys are not permitted to compete on an equal basis with foreign manufacturing firms for the sale of sonobuoys in that foreign country.
(2) Waiver authority.— 
The Secretary may waive the limitation in paragraph (1) with respect to a particular procurement of sonobuoys if the Secretary determines that such procurement is in the national security interests of the United States.
(3) Definition.— 
In this subsection, the term United States firm has the meaning given such term in section 2532 (d)(1) of this title.
(f) Principle of Construction With Future Laws.— 
A provision of law may not be construed as modifying or superseding the provisions of this section, or as requiring funds to be limited, or made available, by the Secretary of Defense to a particular domestic source by contract, unless that provision of law
(1) specifically refers to this section;
(2) specifically states that such provision of law modifies or supersedes the provisions of this section; and
(3) specifically identifies the particular domestic source involved and states that the contract to be awarded pursuant to such provision of law is being awarded in contravention of this section.
(g) Inapplicability to Contracts under Simplified Acquisition Threshold.— 

(1) This section does not apply to a contract or subcontract for an amount that does not exceed the simplified acquisition threshold.
(2) Paragraph (1) does not apply to contracts for items described in subsection (a)(5) (relating to ball bearings and roller bearings), notwithstanding section 33 of the Office of Federal Procurement Policy Act (41 U.S.C. 429).
(h) Implementation of Naval Vessel Component Limitation.— 
In implementing subsection (a)(3)(B), the Secretary of Defense
(1) may not use contract clauses or certifications; and
(2) shall use management and oversight techniques that achieve the objective of the subsection without imposing a significant management burden on the Government or the contractor involved.
(i) Implementation of Certain Waiver Authority.— 

(1) The Secretary of Defense may exercise the waiver authority described in paragraph (2) only if the waiver is made for a particular item listed in subsection (a) and for a particular foreign country.
(2) This subsection applies to the waiver authority provided by subsection (d) on the basis of the applicability of paragraph (2) or (3) of that subsection.
(3) The waiver authority described in paragraph (2) may not be delegated below the Under Secretary of Defense for Acquisition, Technology, and Logistics.
(4) At least 15 days before the effective date of any waiver made under the waiver authority described in paragraph (2), the Secretary shall publish in the Federal Register and submit to the congressional defense committees a notice of the determination to exercise the waiver authority.
(5) Any waiver made by the Secretary under the waiver authority described in paragraph (2) shall be in effect for a period not greater than one year, as determined by the Secretary.
(j) Inapplicability to Certain Contracts To Purchase Ball Bearings or Roller Bearings.— 

(1) This section does not apply with respect to a contract or subcontract to purchase items described in subsection (a)(5) (relating to ball bearings and roller bearings) for which
(A) the amount of the purchase does not exceed $2,500;
(B) the precision level of the ball or roller bearings to be procured under the contract or subcontract is rated lower than the rating known as Annual Bearing Engineering Committee (ABEC) 5 or Roller Bearing Engineering Committee (RBEC) 5, or an equivalent of such rating;
(C) at least two manufacturers in the national technology and industrial base that are capable of producing the ball or roller bearings have not responded to a request for quotation issued by the contracting activity for that contract or subcontract; and
(D) no bearing to be procured under the contract or subcontract has a basic outside diameter (exclusive of flange diameters) in excess of 30 millimeters.
(2) Paragraph (1) does not apply to a purchase if such purchase would result in the total amount of purchases of ball bearings and roller bearings to satisfy requirements under Department of Defense contracts, using the authority provided in such paragraph, to exceed $200,000 during the fiscal year of such purchase.

10 USC 2535 - Defense Industrial Reserve

(a) Declaration of Purpose and Policy.— 
It is the intent of Congress
(1) to provide a comprehensive and continuous program for the future safety and for the defense of the United States by providing adequate measures whereby an essential nucleus of Government-owned industrial plants and an industrial reserve of machine tools and other industrial manufacturing equipment may be assured for immediate use to supply the needs of the armed forces in time of national emergency or in anticipation thereof;
(2) that such Government-owned plants and such reserve shall not exceed in number or kind the minimum requirements for immediate use in time of national emergency, and that any such items which shall become excess to such requirements shall be disposed of as expeditiously as possible;
(3) that to the maximum extent practicable, reliance will be placed upon private industry for support of defense production; and
(4) that machine tools and other industrial manufacturing equipment may be held in plant equipment packages or in a general reserve to maintain a high state of readiness for production of critical items of defense materiel, to provide production capacity not available in private industry for defense materiel, or to assist private industry in time of national disaster.
(b) Powers and Duties of the Secretary of Defense.— 

(1) To execute the policy set forth in subsection (a), the Secretary of Defense shall
(A) determine which industrial plants and installations (including machine tools and other industrial manufacturing equipment) should become a part of the Defense Industrial Reserve;
(B) designate what excess industrial property shall be disposed of;
(C) establish general policies and provide for the transportation, handling, care, storage, protection, maintenance, repair, rebuilding, utilization, recording, leasing and security of such property;
(D) direct the transfer without reimbursement of such property to other Government agencies with the consent of such agencies;
(E) direct the leasing of any of such property to designated lessees;
(F) authorize the disposition in accordance with existing law of any of such property when in the opinion of the Secretary such property is no longer needed by the Department of Defense; and
(G) notwithstanding chapter 5 of title 40 and any other provision of law, authorize the transfer to a nonprofit">nonprofit educational institution or training school, on a nonreimbursable basis, of any such property already in the possession of such institution or school whenever the program proposed by such institution or school for the use of such property is in the public interest.
(2) 
(A) The Secretary of a military department to which equipment or other property is transferred from the Defense Industrial Reserve shall reimburse appropriations available for the purposes of the Defense Industrial Reserve for the full cost (including direct and indirect costs) of
(i) storage of such property;
(ii) repair and maintenance of such property; and
(iii) overhead allocated to such property.
(B) The Secretary of Defense shall prescribe regulations establishing general policies and fee schedules for reimbursements under subparagraph (A).
(c) Definitions.— 
In this section:
(1) The term Defense Industrial Reserve means
(A) a general reserve of industrial manufacturing equipment, including machine tools, selected by the Secretary of Defense for retention for national defense or for other emergency use;
(B) those industrial plants and installations held by and under the control of the Department of Defense in active or inactive status, including Government-owned/Government-operated plants and installations and Government-owned/contractor-operated plants and installations which are retained for use in their entirety, or in part, for production of military weapons systems, munitions, components, or supplies; and
(C) those industrial plants and installations under the control of the Secretary which are not required for the immediate need of any department or agency of the Government and which should be sold, leased, or otherwise disposed of.
(2) The term plant equipment package means a complement of active and idle machine tools and other industrial manufacturing equipment held by and under the control of the Department of Defense and approved by the Secretary for retention to produce particular defense materiel or defense supporting items at a specific level of output in the event of emergency.

10 USC 2536 - Award of certain contracts to entities controlled by a foreign government: prohibition

(a) In General.— 
A Department of Defense contract or Department of Energy contract under a national security program may not be awarded to an entity controlled by a foreign government if it is necessary for that entity to be given access to information in a proscribed category of information in order to perform the contract.
(b) Waiver Authority.— 

(1) The Secretary concerned may waive the application of subsection (a) to a contract award if
(A) the Secretary concerned determines that the waiver is essential to the national security interests of the United States; or
(B) in the case of a contract awarded for environmental restoration, remediation, or waste management at a Department of Defense or Department of Energy facility
(i) the Secretary concerned determines that the waiver will advance the environmental restoration, remediation, or waste management objectives of the department concerned and will not harm the national security interests of the United States; and
(ii) the entity to which the contract is awarded is controlled by a foreign government with which the Secretary concerned is authorized to exchange Restricted Data under section 144 c. of the Atomic Energy Act of 1954 (42 U.S.C. 2164 (c)).
(2) The Secretary concerned shall notify Congress of any decision to grant a waiver under paragraph (1)(B) with respect to a contract. The contract may be awarded only after the end of the 45-day period beginning on the date the notification is received by the committees.
(c) Definitions.— 
In this section:
(1) The term entity controlled by a foreign government includes
(A) any domestic or foreign organization or corporation that is effectively owned or controlled by a foreign government; and
(B) any individual acting on behalf of a foreign government,

as determined by the Secretary concerned. Such term does not include an organization or corporation that is owned, but is not controlled, either directly or indirectly, by a foreign government if the ownership of that organization or corporation by that foreign government was effective before October 23, 1992.

(2) The term proscribed category of information means a category of information that
(A) with respect to Department of Defense contracts
(i) includes special access information;
(ii) is determined by the Secretary of Defense to include information the disclosure of which to an entity controlled by a foreign government is not in the national security interests of the United States; and
(iii) is defined in regulations prescribed by the Secretary of Defense for the purposes of this section; and
(B) with respect to Department of Energy contracts
(i) is determined by the Secretary of Energy to include information described in subparagraph (A)(ii); and
(ii) is defined in regulations prescribed by the Secretary of Energy for the purposes of this section.
(3) The term Secretary concerned means
(A) the Secretary of Defense, with respect to Department of Defense contracts; and
(B) the Secretary of Energy, with respect to Department of Energy contracts.

10 USC 2537 - Improved national defense control of technology diversions overseas

(a) Collection of Information on Foreign-Controlled Contractors.— 
The Secretary of Defense and the Secretary of Energy shall each collect and maintain a data base containing a list of, and other pertinent information on, all contractors with the Department of Defense and the Department of Energy, respectively, that are controlled by foreign persons. The data base shall contain information on such contractors for 1988 and thereafter in all cases where they are awarded contracts exceeding $10,000,000 in any single year by the Department of Defense or the Department of Energy.
(b) Annual Report to Congress.— 
The Secretary of Defense, the Secretary of Energy, and the Secretary of Commerce shall submit to the Congress, by March 31 of each year, beginning in 1994, a report containing a summary and analysis of the information collected under subsection (a) for the year covered by the report. The report shall include an analysis of accumulated foreign ownership of United States firms engaged in the development of defense critical technologies.
(c) Technology Risk Assessment Requirement.— 

(1) If the Secretary of Defense is acting as a designee of the President under section 721(a) of the Defense Production Act of 1950 (50 App. U.S.C. 2170 (a)) and if the Secretary determines that a proposed or pending merger, acquisition, or takeover may involve a firm engaged in the development of a defense critical technology or is otherwise important to the defense industrial and technology base, then the Secretary shall require the appropriate entity or entities from the list set forth in paragraph (2) to conduct an assessment of the risk of diversion of defense critical technology posed by such proposed or pending action.
(2) The entities referred to in paragraph (1) are the following:
(A) The Defense Intelligence Agency.
(B) The Army Foreign Technology Science Center.
(C) The Naval Maritime Intelligence Center.
(D) The Air Force Foreign Aerospace Science and Technology Center.

10 USC 2538 - Industrial mobilization: orders; priorities; possession of manufacturing plants; violations

(a) Ordering Authority.— 
In time of war or when war is imminent, the President, through the head of any department, may order from any person or organized manufacturing industry necessary products or materials of the type usually produced or capable of being produced by that person or industry.
(b) Compliance With Order Required.— 
A person or industry with whom an order is placed under subsection (a), or the responsible head thereof, shall comply with that order and give it precedence over all orders not placed under that subsection.
(c) Seizure of Manufacturing Plants Upon Noncompliance.— 
In time of war or when war is imminent, the President, through the head of any department, may take immediate possession of any plant that is equipped to manufacture, or that in the opinion of the head of that department is capable of being readily transformed into a plant for manufacturing, arms or ammunition, parts thereof, or necessary supplies for the armed forces if the person or industry owning or operating the plant, or the responsible head thereof, refuses
(1) to give precedence to the order as prescribed in subsection (b);
(2) to manufacture the kind, quantity, or quality of arms or ammunition, parts thereof, or necessary supplies, as ordered by the head of such department; or
(3) to furnish them at a reasonable price as determined by the head of such department.
(d) Use of Seized Plant.— 
The President, through the head of any department, may manufacture products that are needed in time of war or when war is imminent, in any plant that is seized under subsection (c).
(e) Compensation Required.— 
Each person or industry from whom products or materials are ordered under subsection (a) is entitled to fair and just compensation. Each person or industry whose plant is seized under subsection (c) is entitled to a fair and just rental.
(f) Criminal Penalty.— 
Whoever fails to comply with this section shall be imprisoned for not more than three years and fined under title 18.

10 USC 2539 - Industrial mobilization: plants; lists

(a) List of Plants Equipped to Manufacture Arms or Ammunition.— 
The Secretary of Defense may maintain a list of all privately owned plants in the United States, and the territories, Commonwealths, and possessions of the United States, that are equipped to manufacture for the armed forces arms or ammunition, or parts thereof, and may obtain complete information of the kinds of those products manufactured or capable of being manufactured by each of those plants, and of the equipment and capacity of each of those plants.
(b) List of Plants Convertible Into Ammunition Factories.— 
The Secretary of Defense may maintain a list of privately owned plants in the United States, and the territories, Commonwealths, and possessions of the United States, that are capable of being readily transformed into factories for the manufacture of ammunition for the armed forces and that have a capacity sufficient to warrant conversion into ammunition plants in time of war or when war is imminent, and may obtain complete information as to the equipment of each of those plants.
(c) Conversion Plans.— 
The Secretary of Defense may prepare comprehensive plans for converting each plant listed pursuant to subsection (b) into a factory for the manufacture of ammunition or parts thereof.

10 USC 2539a - Industrial mobilization: Board on Mobilization of Industries Essential for Military Preparedness

The President may appoint a nonpartisan Board on Mobilization of Industries Essential for Military Preparedness, and may provide necessary clerical assistance, to organize and coordinate operations under sections 2538 and 2539 of this title.

10 USC 2539b - Availability of samples, drawings, information, equipment, materials, and certain services

(a) Authority.— 
The Secretary of Defense and the Secretaries of the military departments, under regulations prescribed by the Secretary of Defense and when determined by the Secretary of Defense or the Secretary concerned to be in the interest of national defense, may each
(1) sell, rent, lend, or give samples, drawings, and manufacturing or other information (subject to the rights of third parties) to any person or entity;
(2) sell, rent, or lend government equipment or materials to any person or entity
(A) for use in independent research and development programs, subject to the condition that the equipment or material be used exclusively for such research and development; or
(B) for use in demonstrations to a friendly foreign government;
(3) make available to any person or entity, at an appropriate fee, the services of any government laboratory, center, range, or other testing facility for the testing of materials, equipment, models, computer software, and other items; and
(4) make available to any person or entity, through leases, contracts, or other appropriate arrangements, facilities, services, and equipment of any government laboratory, research center, or range, if the facilities, services, and equipment provided will not be in direct competition with the domestic private sector.
(b) Confidentiality of Test Results.— 
The results of tests performed with services made available under subsection (a)(3) are confidential and may not be disclosed outside the Federal Government without the consent of the persons for whom the tests are performed.
(c) Fees.— 
Fees made available under subsections (a)(3) and (a)(4) shall be established in the regulations prescribed pursuant to subsection (a). Such fees may not exceed the amount necessary to recoup the direct and indirect costs involved, such as direct costs of utilities, contractor support, and salaries of personnel that are incurred by the United States to provide for the testing.
(d) Use of Fees.— 
Fees received under subsections (a)(3) and (a)(4) may be credited to the appropriations or other funds of the activity making such services available.