Never Contract With the Enemy Act

To prohibit contracting with the enemy. 1. Short title This Act may be cited as the Never Contract With the Enemy Act 2. Prohibition on contracting with the enemy (a) Statement of policy It shall be the policy of the United States that executive agencies shall not contract with the enemy or with a person or entity that has been identified as providing funds received under a contract, grant, or cooperative agreement directly or indirectly to an enemy of the United States or otherwise supporting those who are actively opposing the United States or coalition forces in a contingency operation. (b) Authority To terminate or void contracts, grants, and cooperative agreements and To restrict future award (1) In general Not later than 30 days after the date of the enactment of this Act, the Federal Acquisition Regulation shall be revised to provide that, upon notice from a Senior Procurement Executive or the commander of a geographic combatant command under subsection (e)(3), the head of contracting activity of an executive agency may do the following: (A) If the notice is that a person or entity has been identified as providing funds received under a contract, grant, or cooperative agreement of the executive agency directly or indirectly to an enemy of the United States or a person or entity who is actively supporting an enemy of the United States or otherwise supporting those who are actively opposing United States or coalition forces in a contingency operation— (i) either— (I) terminate for default the contract, grant, or cooperative agreement; or (II) void the contract, grant, or cooperative agreement in whole or in part; and (ii) restrict the future award to the person or entity so identified of contracts, grants, or cooperative agreements of the executive agency. (B) If the notice is that the person or entity has failed to exercise due diligence to ensure that none of the funds received under a contract, grant, or cooperative agreement of the executive entity are provided directly or indirectly to an enemy of the United States or a person or entity who is actively supporting an enemy of the United States or otherwise supporting those who are actively opposing United States or coalition forces in a contingency operation, terminate for default the contract, grant, or cooperative agreement. (2) Treatment as void For purposes of this section: (A) A contract, grant, or cooperative agreement that is void is unenforceable as contrary to public policy. (B) A contract, grant, or cooperative agreement that is void in part is unenforceable as contrary to public policy with regard to a segregable task or effort under the contract, grant, or cooperative agreement. (c) Contract clause (1) In general Not later than 30 days after the date of the enactment of this Act, the Federal Acquisition Regulation shall be revised to require that— (A) the clause described in paragraph (2) shall be included in each covered contract, grant, and cooperative agreement of an executive agency that is awarded on or after the date of the enactment of this Act; and (B) to the maximum extent practicable, each covered contract, grant, and cooperative agreement of an executive agency that is awarded before the date of the enactment of this Act shall be modified to include the clause described in paragraph (2), other than the matter provided for in subparagraph (A) of that paragraph. (2) Clause described The clause described in this paragraph is a clause that— (A) requires the contractor, or the recipient of the grant or cooperative agreement, to certify in connection with entry into the contract, grant, or cooperative agreement that the contractor or recipient, as the case may be, has never knowingly provided funds directly or indirectly to an enemy of the United States or a person or entity who is actively supporting an enemy of the United States or otherwise knowingly supported those who are actively opposing United States or coalition forces in a contingency operation; (B) requires the contractor, or the recipient of the grant or cooperative agreement, to exercise due diligence to ensure that none of the funds received under the contract, grant, or cooperative agreement are provided directly or indirectly to an enemy of the United States or a person or entity who is actively supporting an enemy of the United States or otherwise supporting those who are actively opposing United States or coalition forces in a contingency operation; and (C) notifies the contractor, or the recipient of the grant or cooperative agreement, of the authority of the head of the contracting activity to terminate or void the contract, grant, or cooperative agreement, in whole or in part, as provided in subsection (b). (3) Covered contract, grant, or cooperative agreement In this subsection, the term covered contract, grant, or cooperative agreement (d) Requirements following contract actions Not later than 30 days after the date of the enactment of this Act, the Federal Acquisition Regulation shall be revised as follows: (1) To require that any head of contracting activity taking an action under subsection (b) to terminate, void, or restrict a contract, grant, or cooperative agreement notify in writing the contractor or recipient of the grant or cooperative agreement, as applicable, of the action. (2) To permit, in such manner as the Federal Acquisition Regulation as so revised shall provide, the contractor or recipient of a grant or cooperative agreement subject to an action taken under subsection (b) to terminate or void the contract, grant, or cooperative agreement, as the case may be, an opportunity to contest the action within 30 days of receipt of notice of the action. (e) Identification of supporters of the enemy (1) Identification Not later than 30 days after the date of the enactment of this Act, the Secretary of Defense and each Senior Procurement Executive shall carry out a program to use available intelligence (including information made available pursuant to subsection (g)(1)) to— (A) either— (i) in the case of the geographic combatant commands, review persons and entities who receive United States funds through contracts, grants, and cooperative agreements performed for such commands in their areas of responsibility; or (ii) in the case of the Senior Procurement Executives, review persons and entities who receive United States funds through contracts, grants, and cooperative agreements performed for their agencies; and (B) identify any such persons and entities who are providing funds received under a contract, grant, or cooperative agreement of an executive agency directly or indirectly to an enemy of the United States or a person or entity who is actively supporting an enemy of the United States or otherwise supporting those who are actively opposing United States or coalition forces in a contingency operation. (2) Discharge by DoD through commanders of combatant commands The Secretary of Defense shall carry out the program required by paragraph (1) through the commanders of the geographic combatant commands. (3) Notification of contracting activities If a Senior Procurement Executive or the commander of a geographic combatant command, acting pursuant to a program required by paragraph (1), identifies a person or entity as actively supporting an enemy of the United States or otherwise supporting those who are actively opposing United States or coalition forces in a contingency operation, the Senior Procurement Executive or commander, as the case may be, shall notify the heads of contracting activities of the executive agencies in writing of such identification. Any written notification pursuant to this paragraph shall be made in accordance with procedures established to implement the revisions to the Federal Acquisition Regulation required by this section. (4) Annual review As part of the programs required by paragraph (1), the Senior Procurement Executives and the commanders of the geographic combatant commands shall, on an annual basis, review the lists of persons and entities previously covered by a notice under paragraph (3) as having been identified pursuant to paragraph (1)(B) in order to determine whether or not such persons and entities continue to warrant identification pursuant to paragraph (1)(B). If a Senior Procurement Executive or commander determines pursuant to such a review that a person or entity no longer warrants identification pursuant to paragraph (1)(B), the Senior Procurement Executive or commander, as the case may be, shall notify the heads of contracting activities of the executive agencies in writing of such determination. (5) Protection of classified information Classified information relied upon to make an identification in accordance with this subsection may not be disclosed to a contractor or a recipient of a grant or cooperative agreement with respect to which an action is taken pursuant to the authority provided in subsection (b), or to their representatives, in the absence of a protective order issued by a court of competent jurisdiction established under Article I or Article III of the Constitution of the United States that specifically addresses the conditions upon which such classified information may be so disclosed. (f) Delegation of certain responsibilities (1) Responsibility to identify and provide notice A Senior Procurement Executive may delegate the responsibilities in paragraphs (1), (3), and (4) of subsection (e) to the designated deputy of such Executive. The commander of a geographic combatant command may delegate the responsibilities in such paragraphs to the deputy commander of that combatant command. Any delegation of responsibilities under this paragraph shall be made in writing. (2) Nondelegation of responsibility for contract actions The authority provided by subsection (b) to terminate, void, or restrict contracts, grants, and cooperative agreements may not be delegated below the level of head of contracting activity. (g) Additional responsibilities of executive agencies (1) Dissemination of information on supporters of the enemy The Secretary of Defense and the Administrator for Federal Procurement Policy shall jointly carry out a program through which the contracting activities of the executive agencies may provide information to Senior Procurement Executives and the commanders of the geographic combatant commands relating to persons or entities who may be providing funds received under contracts, grants, or cooperative agreements of the executive agencies directly or indirectly to an enemy of the United States or a person or entity who is actively supporting an enemy of the United States or otherwise supporting those who are actively opposing United States or coalition forces in a contingency operation. The program shall be designed to facilitate and encourage the sharing of information between executive agencies and the geographic combatant commands. (2) Inclusion of information on contract actions in FAPIIS Upon the termination, voiding, or restriction of a contract, grant, or cooperative agreement of an executive agency under subsection (b), the head of contracting activity of the executive agency shall provide for the inclusion in the Federal Awardee Performance and Integrity Information System (FAPIIS), or other formal system of records on contractors or entities, of appropriate information on the termination, voiding, or restriction, as the case may be, of the contract, grant, or cooperative agreement. (3) Reports The head of contracting activity that receives a notice pursuant to subsection (e)(3) shall submit to the Senior Procurement Executives and the commanders of the geographic combatant commands a report on the action, if any, taken by the head of contracting activity pursuant to subsection (b), including a determination not to terminate, void, or restrict the contract, grant, or cooperative agreement as otherwise authorized by subsection (b). (h) Reports (1) In general Not later than March 1 each year, the Secretary of Defense shall, in consultation with the heads of other executive agencies, submit to the appropriate committees of Congress a report on the use of the authorities in this section in the preceding calendar year, including the following: (A) For each instance in which an executive agency exercised the authority to terminate, void, or restrict a contract, grant, and cooperative agreement pursuant to subsection (b), the following: (i) The executive agency taking such action. (ii) An explanation of the basis for the action taken. (iii) The value of the contract, grant, or cooperative agreement voided or terminated. (iv) The value of all contracts, grants, or cooperative agreements of the executive agency in force with the person or entity concerned at the time the contract, grant, or cooperative agreement was terminated or voided. (B) For each instance in which an executive agency did not exercise the authority to terminate, void, or restrict a contract, grant, and cooperative agreement pursuant to subsection (b) as requested pursuant to subsection (e)(3), the following: (i) The executive agency concerned. (ii) An explanation why the action was not taken. (2) Form Any report under this subsection may be submitted in classified form. (i) Other definitions In this section: (1) The term appropriate committees of Congress (A) the Committee on Armed Services, the Committee on Homeland Security and Governmental Affairs, and the Committee on Appropriations of the Senate; and (B) the Committee on Armed Services, the Committee on Oversight and Government Reform, and the Committee on Appropriations of the House of Representatives. (2) The term combatant command (3) The term contingency operation (4) The term enemy of the United States (A) Any person or organization determined by the Secretary of Defense or the Secretary of State to be hostile to United States forces or interests or providing support to any person or organization hostile to United States forces or interests during the time of a declared war, peacekeeping operation, or other military or contingency operation. (B) Any organization designated as a terrorist organization under section 219(a) of the Immigration and Nationality Act ( 8 U.S.C. 1189(a) (5) The term executive agency (6) The term head of contracting activity (7) The term Senior Procurement Executive section 1702 (j) Coordination with current authorities applicable to CENTCOM (1) Repeal of superseded authority Effective 30 days after the date of the enactment of this Act, section 841 of the National Defense Authorization Act for Fiscal Year 2012 ( Public Law 112–81 (2) Use of superseded authorities in discharge of requirements In providing for the discharge of the requirements of this section by the Department of Defense, the Secretary of Defense may use and modify for that purpose requirements and procedures established by the Secretary for purposes of the discharge of the requirements of section 841 of the National Defense Authorization Act for Fiscal Year 2012. 1. Short title This Act may be cited as the Never Contract With the Enemy Act 2. Prohibition on providing funds to the enemy (a) Identification of persons and entities The Secretary of Defense shall, in conjunction with the Director of National Intelligence and in consultation with the Secretary of State, establish in each covered combatant command a program to identify persons and entities within the area of responsibility of such command that— (1) provide funds, including goods and services, received under a contract, grant, or cooperative agreement of an executive agency directly or indirectly to a covered person or entity; or (2) fail to exercise due diligence to ensure that none of the funds, including goods and services, received under a contract, grant, or cooperative agreement of an executive agency are provided directly or indirectly to a covered person or entity. (b) Notice of identified persons and entities (1) Notice Upon the identification of a person or entity as being described by subsection (a), the head of an executive agency (or the designee of such head) or the commander of a covered combatant command (or the specified deputies of the commander) shall be notified, in writing, of such identification of the person or entity. (2) Responsive actions Upon receipt of a notice under paragraph (1), the head of an executive agency (or the designee of such head) or the commander of a covered combatant command (or the specified deputies of the commander) may notify the heads of contracting activities, or other appropriate officials of the agency or command, in writing of such identification. (3) Making of notifications Any written notification pursuant to this subsection shall be made in accordance with procedures established to implement the revisions of regulations required by this section. (c) Authority to terminate or void contracts, grants, and cooperative agreements and to restrict future award Not later than 270 days after the date of the enactment of this Act, the Federal Acquisition Regulation, the Defense Federal Acquisition Regulation Supplement, and the Uniform Administrative Requirements, Cost Principles, and Account Requirements for Federal Awards shall be revised to provide that, upon notice from the head of an executive agency (or the designee of such head) or the commander of a covered combatant command (or the specified deputies of the commander) pursuant to subsection (b), the head of contracting activity of an executive agency, or other appropriate official, may do the following: (1) Restrict the award of contracts, grants, or cooperative agreements of the executive agency concerned upon a written determination by the head of contracting activity or other appropriate official that the contract, grant, or cooperative agreement would provide funds received under such contract, grant, or cooperative agreement directly or indirectly to a covered person or entity. (2) Terminate for default any contract, grant, or cooperative agreement of the executive agency concerned upon a written determination by the head of contracting activity or other appropriate official that the contractor, or the recipient of the grant or cooperative agreement, has failed to exercise due diligence to ensure that none of the funds received under the contract, grant, or cooperative agreement are provided directly or indirectly to a covered person or entity. (3) Void in whole or in part any contract, grant, or cooperative agreement of the executive agency concerned upon a written determination by the head of contracting activity or other appropriate official that the contract, grant, or cooperative agreement provides funds directly or indirectly to a covered person or entity. (d) Clause (1) In general Not later than 270 days after the date of the enactment of this Act, the Federal Acquisition Regulation, the Defense Federal Acquisition Regulation Supplement, and the Uniform Administrative Requirements, Cost Principles, and Account Requirements for Federal Awards shall be revised to require that— (A) the clause described in paragraph (2) shall be included in each covered contract, grant, and cooperative agreement of an executive agency that is awarded on or after the date that is 270 days after the date of the enactment of this Act; and (B) to the maximum extent practicable, each covered contract, grant, and cooperative agreement of an executive agency that is awarded before the date of the enactment of this Act shall be modified to include the clause described in paragraph (2). (2) Clause described The clause described in this paragraph is a clause that— (A) requires the contractor, or the recipient of the grant or cooperative agreement, to exercise due diligence to ensure that none of the funds, including goods and services, received under the contract, grant, or cooperative agreement are provided directly or indirectly to a covered person or entity; and (B) notifies the contractor, or the recipient of the grant or cooperative agreement, of the authority of the head of the contracting activity, or other appropriate official, to terminate or void the contract, grant, or cooperative agreement, in whole or in part, as provided in subsection (c). (3) Treatment as void For purposes of this section: (A) A contract, grant, or cooperative agreement that is void is unenforceable as contrary to public policy. (B) A contract, grant, or cooperative agreement that is void in part is unenforceable as contrary to public policy with regard to a segregable task or effort under the contract, grant, or cooperative agreement. (4) Public comment The President shall ensure that the process for amending regulations required by paragraph (1) shall include an opportunity for public comment, including an opportunity for comment on standards of due diligence required by this Act. (e) Requirements following contract actions Not later than 270 days after the date of the enactment of this Act, the Federal Acquisition Regulation, the Defense Federal Acquisition Regulation Supplement, and the Uniform Administrative Requirements, Cost Principles, and Account Requirements for Federal Awards shall be revised as follows: (1) To require that any head of contracting activity, or other appropriate official, taking an action under subsection (c) to terminate, void, or restrict a contract, grant, or cooperative agreement notify in writing the contractor or recipient of the grant or cooperative agreement, as applicable, of the action. (2) To permit the contractor or recipient of a grant or cooperative agreement subject to an action taken under subsection (c) to terminate or void the contract, grant, or cooperative agreement, as the case may be, an opportunity to challenge the action by requesting an administrative review of the action under the procedures of the executive agency concerned not later than 30 days after receipt of notice of the action. (f) Annual review; protection of classified information (1) Annual review The Secretary of Defense, in conjunction with the Director of National Intelligence and in consultation with the Secretary of State shall, on an annual basis, review the lists of persons and entities previously covered by a notice under subsection (b) as having been identified as described by subsection (a) in order to determine whether or not such persons and entities continue to warrant identification as described by subsection (a). If a determination is made pursuant to such a review that a person or entity no longer warrants identification as described by subsection (a), the Secretary of Defense shall notify the head of an executive agency (or designee) or commander (or deputy), as the case may be, in writing of such determination. (2) Protection of classified information Classified information relied upon to make an identification in accordance with subsection (a) may not be disclosed to a contractor or a recipient of a grant or cooperative agreement with respect to which an action is taken pursuant to the authority provided in subsection (c), or to their representatives, in the absence of a protective order issued by a court of competent jurisdiction established under Article I or Article III of the Constitution of the United States that specifically addresses the conditions upon which such classified information may be so disclosed. (g) Delegation of certain responsibilities (1) Combatant command responsibilities The commander of a covered combatant command may delegate the responsibilities in this section to any deputies of the commander specified by the commander for purposes of this section. Any delegation of responsibilities under this paragraph shall be made in writing. (2) Nondelegation of responsibility for certain actions The authority provided by subsection (c) to terminate, void, or restrict contracts, grants, and cooperative agreements, in whole or in part, may not be delegated below the level of head of contracting activity, or equivalent official for purposes of grants or cooperative agreements. (h) Additional responsibilities of executive agencies (1) Sharing of information on supporters of the enemy The Secretary of Defense shall, in consultation with the Director of the Office of Management and Budget, carry out a program through which agency components may provide information to heads of executive agencies (or the designees of such heads) and the commanders of the covered combatant commands (or the specified deputies of the commanders) relating to persons or entities who may be providing funds, including goods and services, received under contracts, grants, or cooperative agreements of the executive agencies directly or indirectly to a covered person or entity. The program shall be designed to facilitate and encourage the sharing of risk and threat information between executive agencies and the covered combatant commands. (2) Inclusion of information on contract actions in fapiis and other systems Upon the termination, voiding, or restriction of a contract, grant, or cooperative agreement of an executive agency under subsection (c), the head of contracting activity of the executive agency shall provide for the inclusion in the Federal Awardee Performance and Integrity Information System (FAPIIS), or other formal system of records on contractors or entities, of appropriate information on the termination, voiding, or restriction, as the case may be, of the contract, grant, or cooperative agreement. (3) Reports The head of contracting activity that receives a notice pursuant to subsection (b) shall submit to the head of the executive agency (or designee) concerned or the appropriate covered combatant command, as the case may be, a report on the action, if any, taken by the head of contracting activity pursuant to subsection (c), including a determination not to terminate, void, or restrict the contract, grant, or cooperative agreement as otherwise authorized by subsection (c). (i) Reports (1) In general Not later than March 1 of 2016, 2017, and 2018, the Director of the Office of Management and Budget shall submit to the appropriate committees of Congress a report on the use of the authorities in this section in the preceding calendar year, including the following: (A) For each instance in which an executive agency exercised the authority to terminate, void, or restrict a contract, grant, and cooperative agreement pursuant to subsection (c), based on a notification under subsection (b), the following: (i) The executive agency taking such action. (ii) An explanation of the basis for the action taken. (iii) The value of the contract, grant, or cooperative agreement voided or terminated. (iv) The value of all contracts, grants, or cooperative agreements of the executive agency in force with the person or entity concerned at the time the contract, grant, or cooperative agreement was terminated or voided. (B) For each instance in which an executive agency did not exercise the authority to terminate, void, or restrict a contract, grant, and cooperative agreement pursuant to subsection (c), based on a notification under subsection (b), the following: (i) The executive agency concerned. (ii) An explanation why the action was not taken. (2) Form Any report under this subsection may, at the election of the Director— (A) be submitted in unclassified form, but with a classified annex; or (B) be submitted in classified form. (j) National security exception Nothing in this section shall apply to the authorized intelligence or law enforcement activities of the United States Government. (k) Construction with other authorities Except as provided in subsection (l), the authorities in this section shall be in addition to, and not to the exclusion of, any other authorities available to executive agencies to implement policies and purposes similar to those set forth in this section. (l) Coordination with current authorities (1) Repeal of superseded authority related to CENTCOM Effective 270 days after the date of the enactment of this Act, section 841 of the National Defense Authorization Act for Fiscal Year 2012 ( Public Law 112–81 10 U.S.C. 2313 (2) Repeal of superseded authority related to Department of Defense Effective 270 days after the date of the enactment of this Act, section 831 of the National Defense Authorization Act for Fiscal Year 2014 ( Public Law 113–66 10 U.S.C. 2302 (3) Use of superseded authorities in discharge of requirements In providing for the discharge of the requirements of this section by the Department of Defense, the Secretary of Defense may use and modify for that purpose the regulations and procedures established for purposes of the discharge of the requirements of section 841 of the National Defense Authorization Act for Fiscal Year 2012 and section 831 of the National Defense Authorization Act for Fiscal Year 2014. (m) Sunset The provisions of this section shall cease to be effective on December 31, 2019. 3. Additional access to records (a) Contracts, grants, and cooperative agreements (1) In general Not later than 270 days after the date of the enactment of this Act, applicable regulations shall be revised to provide that the clause described in paragraph (2) may, as appropriate, be included in each covered contract, grant, and cooperative agreement of an executive agency that is awarded on or after the date of the enactment of this Act. (2) Clause The clause described in this paragraph is a clause authorizing the head of the executive agency concerned, upon a written determination pursuant to paragraph (3), to examine any records of the contractor, the recipient of a grant or cooperative agreement, or any subcontractor or subgrantee under such contract, grant, or cooperative agreement to the extent necessary to ensure that funds, including goods and services, available under the contract, grant, or cooperative agreement are not provided directly or indirectly to a covered person or entity. (3) Written determination The authority to examine records pursuant to the contract clause described in paragraph (2) may be exercised only upon a written determination by the contracting officer or comparable official responsible for a grant or cooperative agreement, upon a finding by the commander of a covered combatant command (or the specified deputies of the commander) or the head of an executive agency (or the designee of such head) that there is reason to believe that funds, including goods and services, available under the contract, grant, or cooperative agreement concerned may have been provided directly or indirectly to a covered person or entity. (4) Flowdown A clause described in paragraph (2) may also be included in any subcontract or subgrant under a covered contract, grant, or cooperative agreement if the subcontract or subgrant has an estimated value in excess of $50,000. (b) Reports (1) In general Not later than March 1 of 2016, 2017, and 2018, the Director of the Office of Management and Budget shall submit to the appropriate committees of Congress a report on the use of the authority provided by this section in the preceding calendar year. (2) Elements Each report under this subsection shall identify, for the calendar year covered by such report, each instance in which an executive agency exercised the authority provided under this section to examine records, explain the basis for the action taken, and summarize the results of any examination of records so undertaken. (3) Form Any report under this subsection may be submitted in classified form. (c) Coordination with current authorities applicable to CENTCOM (1) Repeal of superseded authority Effective 270 days after the date of the enactment of this Act, section 842 of the National Defense Authorization Act for Fiscal Year 2012 ( Public Law 112–81 10 U.S.C. 2302 (2) Use of superseded authorities in discharge of requirements In providing for the discharge of the requirements of this section by the Department of Defense, the Secretary of Defense may use and modify for that purpose requirements and procedures established by the Secretary for purposes of the discharge of the requirements of section 842 of the National Defense Authorization Act for Fiscal Year 2012. 4. Definitions In this Act: (1) Appropriate committees of Congress The term appropriate committees of Congress (A) the Committee on Armed Services, the Committee on Homeland Security and Governmental Affairs, the Committee on Foreign Relations, and the Committee on Appropriations of the Senate; and (B) the Committee on Armed Services, the Committee on Oversight and Government Reform, the Committee on Foreign Affairs, and the Committee on Appropriations of the House of Representatives. (2) Contingency operation The term contingency operation section 101(a)(13) (3) Contract The term contract (4) Covered combatant command The term covered combatant command (A) The United States Africa Command. (B) The United States Central Command. (C) The United States European Command. (D) The United States Pacific Command. (E) The United States Southern Command. (5) Covered contract, grant, or cooperative agreement defined The term covered contract, grant, or cooperative agreement (6) Covered person or entity The term covered person or entity (7) Executive agency The term executive agency section 133 (8) Head of contracting activity The term head of contracting activity July 23, 2014 Reported with an amendment

Summary: Never Contract With the Enemy Act - (Sec. 2) Directs the Secretary of Defense, in conjunction with the Director of National Intelligence and in consultation with the Secretary of State, to establish in each covered combatant command (i.e., the U.S. Africa Command, Central Command, European Command, Pacific Command, and Southern Command) a program to identify persons and entities within the area of responsibility of such command that: (1) provide funds, including goods and services, received under a contract, grant, or cooperative agreement of an executive agency to a person or entity that is actively opposing U.S. or coalition forces involved in a contingency operation in which members of the Armed Forces are actively engaged in hostilities (covered person or entity); or (2) fail to exercise due diligence to ensure that none of such funds are provided to a covered person or entity. Requires written notification of the identification of a covered person or entity to the head of an executive agency or the commander of a covered command, who shall then notify the heads of contracting activities or other appropriate officials. Requires the revision of applicable procurement regulations to: (1) authorize the head of contracting activity of an executive agency, upon receiving notice of a covered person or entity, to restrict, terminate, or void the award of contracts, grants, or cooperative agreements that would provide funds to such covered person or entity; (2) require the inclusion of a clause in each covered contract, grant, or cooperative agreement requiring the recipient of funds to exercise due diligence to ensure that funds are not provided to a covered person or entity; and (3) require written notification to a contractor or recipient of a grant or cooperative agreement&nbsp;of an action to restrict, terminate, or void a grant, contract, or cooperative agreement and permit such contractor or recipient to challenge such action by requesting an administrative review. Defines "covered contract, grant, or cooperative agreement" as a contract, grant, or cooperative agreement with an estimated value in excess of $50,000 that is performed outside the United States. Requires the Secretary of Defense to review annually the lists of previously identified covered persons and entities to determine whether such persons or entities warrant further identification as such. Requires the Director of the Office of Management and Budget (OMB), not later than March 1 of 2016, 2017, and 2018, to submit to specified congressional committees a report on the use of authority under this Act to identify covered persons or entities. Provides that nothing in this Act shall apply to the authorized intelligence or law enforcement activities of the U.S. government. Terminates the provisions of this section on December 31, 2019. (Sec. 3) Requires the revision of applicable procurement regulations to allow for inclusion of a clause in each covered contract, grant, and cooperative agreement authorizing an executive agency head to examine any records of the recipient upon a written determination that funds under the contract, grant, or cooperative agreement have been provided to a covered person or entity. Requires the OMB Director, not later than March 1 of 2016, 2017, and 2018, to submit a report on the use of such authority to examine records in the preceding calendar year.