146 
(c) APPLICATION.—This section applies to a contract in an amount great-
er than $25,000. 
§ 4505. Payments for commercial items 
(a) TERMS AND CONDITIONS FOR PAYMENTS.—Payments under section 
4501 of this title for commercial items may be made under terms and condi-
tions that the head of the executive agency determines are appropriate or 
customary in the commercial marketplace and are in the best interests of 
the Federal Government. 
(b) SECURITY FOR PAYMENTS.—The head of the executive agency shall 
obtain adequate security for the payments. If the security is in the form 
of a lien in favor of the Federal Government, the lien is paramount to all 
other liens and is effective immediately on the first payment, without filing, 
notice, or other action by the Federal Government. 
(c) LIMITATION
ON ADVANCE PAYMENTS.—Advance payments made 
under section 4501 of this title for commercial items may include payments, 
in a total amount not more than 15 percent of the contract price, in ad-
vance of any performance of work under the contract. 
(d) NONAPPLICATION OF CERTAIN CONDITIONS.—The conditions of sec-
tions 4503 and 4504 of this title need not be applied if they would be incon-
sistent, as determined by the head of the executive agency, with commercial 
terms and conditions pursuant to this section. 
§ 4506. Action in case of fraud 
(a) DEFINITION.—In this section, the term ‘‘remedy coordination offi-
cial’’, with respect to an executive agency, means the individual or entity 
in that executive agency who coordinates within that executive agency the 
administration of criminal, civil, administrative, and contractual remedies 
resulting from investigations of fraud or corruption related to procurement 
activities. 
(b) RECOMMENDATION TO REDUCE OR SUSPEND PAYMENTS.—In any 
case in which the remedy coordination official of an executive agency finds 
that there is substantial evidence that the request of a contractor for ad-
vance, partial, or progress payment under a contract awarded by that execu-
tive agency is based on fraud, the remedy coordination official shall rec-
ommend that the executive agency reduce or suspend further payments to 
that contractor. 
(c) REDUCTION OR SUSPENSION OF PAYMENTS.—The head of an execu-
tive agency receiving a recommendation under subsection (b) in the case of 
a contractor’s request for payment under a contract shall determine whether 
there is substantial evidence that the request is based on fraud. On making 
an affirmative determination, the head of the executive agency may reduce 
or suspend further payments to the contractor under the contract.
147 
(d) EXTENT OF REDUCTION OR SUSPENSION.—The extent of any reduc-
tion or suspension of payments by an executive agency under subsection (c) 
on the basis of fraud shall be reasonably commensurate with the anticipated 
loss to the Federal Government resulting from the fraud. 
(e) WRITTEN JUSTIFICATION.—A written justification for each decision 
of the head of an executive agency whether to reduce or suspend payments 
under subsection (c), and for each recommendation received by the executive 
agency in connection with the decision, shall be prepared and be retained 
in the files of the executive agency. 
(f) NOTICE.—The head of each executive agency shall prescribe proce-
dures to ensure that, before the head of the executive agency decides to re-
duce or suspend payments in the case of a contractor under subsection (c), 
the contractor is afforded notice of the proposed reduction or suspension 
and an opportunity to submit matters to the executive agency in response 
to the proposed reduction or suspension. 
(g) REVIEW.—Not later than 180 days after the date on which the head 
of an executive agency reduces or suspends payments to a contractor under 
subsection (c), the remedy coordination official of the executive agency 
shall— 
(1) review the determination of fraud on which the reduction or sus-
pension is based; and 
(2) transmit a recommendation to the head of the executive agency 
whether the suspension or reduction should continue. 
(h) REPORT.—The head of each executive agency who receives rec-
ommendations made by the remedy coordination official of the executive 
agency to reduce or suspend payments under subsection (c) during a fiscal 
year shall prepare for that year a report that contains the recommendations, 
the actions taken on the recommendations and the reasons for those actions, 
and an assessment of the effects of those actions on the Federal Govern-
ment. The report shall be available to any Member of Congress on request. 
(i) RESTRICTION ON DELEGATION.—The head of an executive agency 
may not delegate responsibilities under this section to an individual in a po-
sition below level IV of the Executive Schedule. 
CHAPTER 47—MISCELLANEOUS 
Sec. 
4701.
Determinations and decisions. 
4702.
Prohibition on release of contractor proposals. 
4703.
Validation of proprietary data restrictions. 
4704.
Prohibition of contractors limiting subcontractor sales directly to Federal Government. 
4705.
Protection of contractor employees from reprisal for disclosure of certain information. 
4706.
Examination of facilities and records of contractor. 
4707.
Remission of liquidated damages. 
4708.
Payment of reimbursable indirect costs in cost-type research and development contracts 
with educational institutions. 
4709.
Implementation of electronic commerce capability.
148 
4710.
Limitations on tiering of subcontractors. 
4711.
Linking of award and incentive fees to acquisition outcomes. 
§ 4701. Determinations and decisions 
(a) INDIVIDUAL OR CLASS DETERMINATIONS AND DECISIONS AUTHOR-
IZED.— 
(1) IN GENERAL.—Determinations and decisions required to be made 
under this division by the head of an executive agency or provided in 
this division or chapters 1 to 11 of title 40 to be made by the Adminis-
trator of General Services or other agency head may be made for an 
individual purchase or contract or, except for determinations or deci-
sions made under sections 3105, 3301, 3303 to 3305, 3306(a)–(e), and 
3308, chapter 37, and section 4702 of this title or to the extent ex-
pressly prohibited by another law, for a class of purchases or contracts. 
(2) DELEGATION.—Except as provided in section 3304(a)(7) of this 
title, and except as provided in section 121(d)(1) and (2) of title 40 
with respect to the Administrator of General Services, the agency head, 
in the discretion and subject to the direction of the agency head, may 
delegate powers provided by this division or chapters 1 to 11 of title 
40, including the making of determinations and decisions described in 
paragraph (1), to other officers or officials of the agency. 
(3) FINALITY.—The determinations and decisions are final. 
(b) WRITTEN FINDINGS.— 
(1) BASIS FOR CERTAIN DETERMINATIONS.—Each determination or 
decision under section 3901, 3905, 4503, or 4706(d)(2)(B) of this title 
shall be based on a written finding by the individual making the deter-
mination or decision. A finding under section 4503 or 4706(d)(2)(B) 
shall set out facts and circumstances that support the determination 
or decision. 
(2) FINALITY.—Each finding referred to in paragraph (1) is final. 
(3) MAINTAINING COPIES OF FINDINGS.—The head of an executive 
agency shall maintain for a period of not less than 6 years a copy of 
each finding referred to in paragraph (1) that is made by an individual 
in that executive agency. The period begins on the date of the deter-
mination or decision to which the finding relates. 
§ 4702. Prohibition on release of contractor proposals 
(a) DEFINITION.—In this section, the term ‘‘proposal’’ means a proposal, 
including a technical, management, or cost proposal, submitted by a con-
tractor in response to the requirements of a solicitation for a competitive 
proposal. 
(b) PROHIBITION.—A proposal in the possession or control of an execu-
tive agency may not be made available to any person under section 552 of 
title 5.
149 
(c) NONAPPLICATION.—Subsection (b) does not apply to a proposal that 
is set forth or incorporated by reference in a contract entered into between 
the agency and the contractor that submitted the proposal. 
§ 4703. Validation of proprietary data restrictions 
(a) CONTRACT THAT PROVIDES FOR DELIVERY OF TECHNICAL DATA.— 
A contract for property or services entered into by an executive agency that 
provides for the delivery of technical data shall provide that— 
(1) a contractor or subcontractor at any tier shall be prepared to 
furnish to the contracting officer a written justification for any restric-
tion the contractor or subcontractor asserts on the right of the Federal 
Government to use the data; and 
(2) the contracting officer may review the validity of a restriction the 
contractor or subcontractor asserts under the contract on the right of 
the Federal Government to use technical data furnished to the Federal 
Government under the contract if the contracting officer determines 
that reasonable grounds exist to question the current validity of the as-
serted restriction and that the continued adherence to the asserted re-
striction by the Federal Government would make it impracticable to 
procure the item competitively at a later time. 
(b) CHALLENGE OF RESTRICTION.—If after a review the contracting offi-
cer determines that a challenge to the asserted restriction is warranted, the 
contracting officer shall provide written notice to the contractor or subcon-
tractor asserting the restriction. The notice shall state— 
(1) the grounds for challenging the asserted restriction; and 
(2) the requirement for a response within 60 days justifying the cur-
rent validity of the asserted restriction. 
(c) ADDITIONAL TIME FOR RESPONSES.—If a contractor or subcontractor 
asserting a restriction subject to this section submits to the contracting offi-
cer a written request showing the need for additional time to comply with 
the requirement to justify the current validity of the asserted restriction, the 
contracting officer shall provide appropriate additional time to adequately 
permit the justification to be submitted. 
(d) MULTIPLE CHALLENGES.—If a party asserting a restriction receives 
notices of challenges to restrictions on technical data from more than one 
contracting officer, and notifies each contracting officer of the existence of 
more than one challenge, the contracting officer initiating the earliest chal-
lenge, after consultation with the party asserting the restriction and the 
other contracting officers, shall formulate a schedule of responses to each 
of the challenges that will afford the party asserting the restriction with an 
equitable opportunity to respond to each challenge. 
(e) DECISION ON VALIDITY OF ASSERTED RESTRICTION.—