10 U.S.C. § 2324 (ARMED FORCES)
[§ 2324. Repealed. Pub. L. 116–283, div. A, title XVIII, § 1881(a), Jan. 1, 2021, 134 Stat. 4293]
text: Section, added Pub. L. 99–145, title IX, § 911(a)(1), Nov. 8, 1985, 99 Stat. 682; amended Pub. L. 99–190, § 101(b) [title VIII, § 8112(a)], Dec. 19, 1985, 99 Stat. 1185, 1223; Pub. L. 100–26, § 7(k)(3), Apr. 21, 1987, 101 Stat. 284; Pub. L. 100–180, div. A, title VIII, § 805(a), Dec. 4, 1987, 101 Stat. 1126; Pub. L. 100–370, § 1(f)(2)(A), (3)(A), July 19, 1988, 102 Stat. 846; Pub. L. 100–456, div. A, title III, § 322(a), title VIII, §§ 826(a), 832(a), Sept. 29, 1988, 102 Stat. 1952, 2022, 2023; Pub. L. 100–463, title VIII, § 8105(a), Oct. 1, 1988, 102 Stat. 2270–36; Pub. L. 100–526, title I, § 106(a)(2), Oct. 24, 1988, 102 Stat. 2625; Pub. L. 100–700, § 8(b), Nov. 19, 1988, 102 Stat. 4636; Pub. L. 101–189, div. A, title III, § 311(a)(1), title VIII, § 853(a)(1), (b)(3), Nov. 29, 1989, 103 Stat. 1411, 1518; Pub. L. 101–510, div. A, title XIII, § 1301(10), Nov. 5, 1990, 104 Stat. 1668; Pub. L. 102–190, div. A, title III, § 346(a), Dec. 5, 1991, 105 Stat. 1346; Pub. L. 102–484, div. A, title VIII, § 818(a), title X, § 1052(26), title XIII, § 1352(b), Oct. 23, 1992, 106 Stat. 2457, 2500, 2559; Pub. L. 103–355, title II, § 2101(a)–(d), Oct. 13, 1994, 108 Stat. 3306–3308; Pub. L. 104–106, div. D, title XLIII, § 4321(a)(5), (b)(9), Feb. 10, 1996, 110 Stat. 671, 672; Pub. L. 105–85, div. A, title VIII, § 808(a), Nov. 18, 1997, 111 Stat. 1836; Pub. L. 105–261, div. A, title VIII, § 804(a), Oct. 17, 1998, 112 Stat. 2083; Pub. L. 111–350, § 5(b)(19), Jan. 4, 2011, 124 Stat. 3844; Pub. L. 112–81, div. A, title VIII, § 803(a), (b), Dec. 31, 2011, 125 Stat. 1485; Pub. L. 112–239, div. A, title VIII, § 827(g), Jan. 2, 2013, 126 Stat. 1836; Pub. L. 113–66, div. A, title VIII, § 811(a), Dec. 26, 2013, 127 Stat. 806; Pub. L. 113–67, div. A, title VII, § 702(a)(2), Dec. 26, 2013, 127 Stat. 1189; Pub. L. 113–291, div. A, title VIII, § 857, Dec. 19, 2014, 128 Stat. 3460; Pub. L. 114–261, § 1(b)(1), Dec. 14, 2016, 130 Stat. 1362; Pub. L. 115–91, div. A, title VIII, § 811(e), Dec. 12, 2017, 131 Stat. 1460; Pub. L. 115–232, div. A, title VIII, § 836(c)(9), Aug. 13, 2018, 132 Stat. 1866; Pub. L. 116–283, div. A, title XVIII, § 1832(b)(1)–(3)(A), (4), (c)(1), (d)(1), (e)(1), (e), (f)(1), (g), (h), (i)(1)(A), (2), Jan. 1, 2021, 134 Stat. 4218, 4219, 4221, 4222, related to allowable costs under defense contracts. See, generally, subchapter I (§ 3741 et seq.) of chapter 273 of this title.
heading: Editorial Notes
heading: Prior Provisions
text: A prior section 2324 of this title was contained in chapter 138 and was renumbered section 2344 of this title.
heading: Statutory Notes and Related Subsidiaries
heading: Effective Date of Repeal
text: Repeal effective Jan. 1, 2022, with additional provisions for delayed implementation and applicability of existing law, see section 1801(d) of Pub. L. 116–283, set out as a note preceding section 3001 of this title.
heading: Regulations
text: Pub. L. 103–355, title II, § 2101(e), Oct. 13, 1994, 108 Stat. 3309, provided that: “The regulations of the Secretary of Defense implementing section 2324 of title 10, United States Code, shall remain in effect until the Federal Acquisition Regulation is revised to implement the amendments made by this section [amending this section].”
Pub. L. 100–700, § 8(d), Nov. 19, 1988, 102 Stat. 4638, provided that:
“The regulations necessary for the implementation of section 306(e) of the Federal Property and Administrative Services Act of 1949 [now 41 U.S.C. 4304] (as added by subsection (a)) and section 2324(k)(5) of title 10, United States Code (as added by subsection (b))—
“(1) shall be prescribed not later than 120 days after the date of the enactment of this Act [Nov. 19, 1988]; and
“(2) shall apply to contracts entered into more than 30 days after the date on which such regulations are issued.”
Pub. L. 100–463, title VIII, § 8105(b), (c), Oct. 1, 1988, 102 Stat. 2270–37, provided for the promulgation of regulations and the preparation of a report in connection with the operation of subsec. (f)(5), as enacted by section 8105(a) of Pub. L. 100–463. Section 106(a)(2) of Pub. L. 100–526 provided that section 8105 of Pub. L. 100–463 “and the amendment made by that section shall cease to be effective”.
Pub. L. 100–456, div. A, title VIII, § 826(b), Sept. 29, 1988, 102 Stat. 2022, provided that: “The Secretary of Defense shall prescribe final regulations under paragraph (5) of section 2324(f) of title 10, United States Code (as added by subsection (a)), not later than 90 days after the date of the enactment of this Act [Sept. 29, 1988]. Such regulations shall apply with respect to costs referred to in such paragraph that are incurred by a Department of Defense contractor (or a subcontractor of such a contractor) on or after the first day of the contractor’s (or subcontractor’s) first fiscal year that begins on or after the date on which such final regulations are prescribed.”
Pub. L. 100–456, div. A, title VIII, § 832(b), Sept. 29, 1988, 102 Stat. 2024, related to regulations for the implementation of subsec. (e)(1)(N) of this section, prior to repeal by Pub. L. 100–700, § 8(c), Nov. 19, 1988, 102 Stat. 4638.
Pub. L. 99–190, 101(b) [title VIII, § 8112(b), (c)], Dec. 19, 1985, 99 Stat. 1185, 1223, required the regulations required under section 911(b) of Pub. L. 99–145, set out below, to be submitted to Congress before the publication of such regulations in accordance with former 41 U.S.C. 418b (now 41 U.S.C. 1707) and directed the Comptroller General, within 180 days of publication of the regulations, to submit to Congress a report on the Comptroller General’s initial evaluation under subsection (j)(1) of this section.
Pub. L. 99–145, title IX, § 911(b), Nov. 8, 1985, 99 Stat. 685, provided that:
“(1) Not later than 150 days after the date of the enactment of this Act [Nov. 8, 1985], the Secretary of Defense shall prescribe the regulations required by subsections (e) and (f) of section 2324 of title 10, United States Code, as added by subsection (a). Such regulations shall be published in accordance with section 22 of the Office of Federal Procurement Policy Act ([former] 41 U.S.C. 418b) [now 41 U.S.C. 1707].
“(2) The Secretary shall review such regulations at least once every five years. The results of each such review shall be made public.”
heading: Construction
text: Pub. L. 112–239, div. A, title VIII, § 827(h), Jan. 2, 2013, 126 Stat. 1836, provided that: “Nothing in this section, or the amendments made by this section [amending this section and section 2409 of this title and enacting provisions set out as a note under this section], shall be construed to provide any rights to disclose classified information not otherwise provided by law.”
heading: Transfer of Functions
text: For transfer of authorities, functions, personnel, and assets of the Coast Guard, including the authorities and functions of the Secretary of Transportation relating thereto, to the Department of Homeland Security, and for treatment of related references, see sections 468(b), 551(d), 552(d), and 557 of Title 6, Domestic Security, and the Department of Homeland Security Reorganization Plan of November 25, 2002, as modified, set out as a note under section 542 of Title 6.
heading: Inclusion of Contract Clause in Contracts Awarded Before Effective Date
text: Pub. L. 114–261, § 1(c), Dec. 14, 2016, 130 Stat. 1363, provided that: “At the time of any major modification to a contract that was awarded before the date of the enactment of this Act [Dec. 14, 2016], the head of the contracting agency shall make best efforts to include in the contract a contract clause providing for the applicability of the amendments made by this section [amending this section, section 2409 of this title, and sections 4304, 4310, and 4712 of Title 41, Public Contracts] and section 827 of the National Defense Authorization Act for Fiscal Year 2013 (Public Law 112–239; 126 Stat. 1833) [amending this section and section 2409 of this title].”
heading: Report and Regulations on Excessive Pass-Through Charges
text: Pub. L. 109–364, div. A, title VIII, § 852, Oct. 17, 2006, 120 Stat. 2340, as amended by Pub. L. 113–291, div. A, title X, § 1071(b)(3)(B), Dec. 19, 2014, 128 Stat. 3506; Pub. L. 115–232, div. A, title VIII, § 836(f)(5), Aug. 13, 2018, 132 Stat. 1871, provided that:
“(a) Comptroller General Report on Excessive Pass-Through Charges.—
“(1) In general.—
Not later than 180 days after the date of the enactment of this Act [Oct. 17, 2006], the Comptroller General shall issue a report on pass-through charges on contracts or subcontracts (or task or delivery orders) that are entered into for or on behalf of the Department of Defense.
“(2) Matters covered.—
The report issued under this subsection—
“(A) shall assess the extent to which the Department of Defense has paid excessive pass-through charges to contractors who provided little or no value to the performance of the contract;
“(B) shall assess the extent to which the Department has been particularly vulnerable to excessive pass-through charges on any specific category of contracts or by any specific category of contractors (including any category of small business); and
“(C) shall determine the extent to which any prohibition on excessive pass-through charges would be inconsistent with existing commercial practices for any specific category of contracts or have an unjustified adverse effect on any specific category of contractors (including any category of small business).
“(b) Regulations Required.—
“(1) In general.—
Not later than May 1, 2007, the Secretary of Defense shall prescribe regulations to ensure that pass-through charges on contracts or subcontracts (or task or delivery orders) that are entered into for or on behalf of the Department of Defense are not excessive in relation to the cost of work performed by the relevant contractor or subcontractor.
“(2) Scope of regulations.—
The regulations prescribed under this subsection—
“(A) shall not apply to any firm, fixed-price contract or subcontract (or task or delivery order) that is—
“(i) awarded on the basis of adequate price competition; or
“(ii) for the acquisition of a commercial product or a commercial service, as defined in sections 103 and 103a, respectively, of title 41, United States Code; and
“(B) may include such additional exceptions as the Secretary determines to be necessary in the interest of the national defense.
“(3) Definition.—
In this section, the term ‘excessive pass-through charge’, with respect to a contractor or subcontractor that adds no, or negligible, value to a contract or subcontract, means a charge to the Government by the contractor or subcontractor that is for overhead or profit on work performed by a lower-tier contractor or subcontractor (other than charges for the direct costs of managing lower-tier contracts and subcontracts and overhead and profit based on such direct costs).
“(4) Report.—
Not later than one year after the date of the enactment of this Act [Oct. 17, 2006], the Secretary of Defense shall submit to the congressional defense committees [Committees on Armed Services and Appropriations of the Senate and the House of Representatives] a report on the steps taken to implement the requirements of this subsection, including—
“(A) any standards for determining when no, or negligible, value has been added to a contract by a contractor or subcontractor;
“(B) any procedures established for preventing excessive pass-through charges; and
“(C) any exceptions determined by the Secretary to be necessary in the interest of the national defense.
“(5) Effective date.—
The regulations prescribed under this subsection shall apply to contracts awarded for or on behalf of the Department of Defense on or after May 1, 2007.”
heading: Payment of Restructuring Costs Under Defense Contracts
text: Pub. L. 103–337, div. A, title VIII, § 818, Oct. 5, 1994, 108 Stat. 2821, as amended by Pub. L. 105–85, div. A, title VIII, § 804(d), Nov. 18, 1997, 111 Stat. 1834, which related to regulations concerning allowability of restructuring costs associated with business combinations under defense contracts, was repealed by Pub. L. 115–232, div. A, title VIII, § 812(b)(20), Aug. 13, 2018, 132 Stat. 1848.
heading: Reimbursement of Indirect Costs of Institutions of Higher Education Under Department of Defense Contracts
text: Pub. L. 103–160, div. A, title VIII, § 841, Nov. 30, 1993, 107 Stat. 1719, as amended by Pub. L. 105–244, title I, § 102(a)(2)(C), Oct. 7, 1998, 112 Stat. 1617, provided that:
“(a) Prohibition.—
The Secretary of Defense may not by regulation place a limitation on the amount that the Department of Defense may reimburse an institution of higher education for allowable indirect costs incurred by the institution for work performed for the Department of Defense under a Department of Defense contract unless that same limitation is applied uniformly to all other organizations performing similar work for the Department of Defense under Department of Defense contracts.
“(b) Waiver.—
The Secretary of Defense may waive the application of the prohibition in subsection (a) in the case of a particular institution of higher education if the governing body of the institution requests the waiver in order to simplify the overall management by that institution of cost reimbursements by the Department of Defense for contracts awarded by the Department to the institution.
“(c) Definitions.—
In this section:
“(1) The term ‘allowable indirect costs’ means costs that are generally considered allowable as indirect costs under regulations that establish the cost reimbursement principles applicable to an institution of higher education for purposes of Department of Defense contracts.
“(2) The term ‘institution of higher education’ has the meaning given such term in section 101 of the Higher Education Act of 1965 [20 U.S.C. 1001].”
heading: Assessment of Regulations Relating to Allowability of Costs To Promote Export of Defense Products; Report to Congress
text: Pub. L. 100–456, div. A, title VIII, § 826(c), Sept. 29, 1988, 102 Stat. 2022, as amended by Pub. L. 100–526, title I, § 106(a)(1)(A), Oct. 24, 1988, 102 Stat. 2625, directed Comptroller General of United States and Inspector General of Department of Defense, not later than 2 years after Sept. 29, 1988, to submit to Congress a report including an assessment of whether the regulations required by subsec. (f)(5) of this section provide the appropriate incentives to stimulate exports by the United States defense industry and provide cost savings to the United States and whether such regulations provide appropriate criteria to ensure that costs allowed are reasonably likely to provide future cost savings to the United States.
heading: Air Travel Expenses of Defense Contractor Personnel
text: Pub. L. 100–456, div. A, title VIII, § 833, Sept. 29, 1988, 102 Stat. 2024, as amended by Pub. L. 101–189, div. A, title VIII, § 853(a)(2), Nov. 29, 1989, 103 Stat. 1518, directed the Administrator of General Services to enter into negotiations with commercial air carriers for agreements that would permit personnel of contractors who were traveling solely in the performance of covered contracts to be transported by such carriers at the same discount rates as such carriers charged for travel by Federal Government employees traveling at Government expense, directed the Secretary of Defense, not later than 120 days after the first such agreement would go into effect, to prescribe regulations that would provide that costs in excess of the rates established under the agreement were not allowable if the rate had been available and travel could have reasonably been performed under the conditions required by the air carrier to qualify for such rate, and provided that section 833 of Pub. L. 100–456 would cease to be effective three years after Sept. 29, 1988.
heading: Burden of Proof in Government Contract Dispute Resolution
text: Pub. L. 99–145, title IX, § 933, Nov. 8, 1985, 99 Stat. 700, which provided that in proceeding before the Armed Services Board of Contract Appeals, United States Claims Court, or any other Federal court in which reasonableness of indirect costs for which a contractor seeks reimbursement from Department of Defense is in issue, the burden of proof is upon the contractor to establish that such costs are reasonable, was repealed and restated in subsec. (j) of this section by Pub. L. 100–370, § 1(f)(3)(A)(ii), (B), July 19, 1988, 102 Stat. 846.