10 U.S.C. § 4022 (ARMED FORCES)
§ 4022. Authority of the Department of Defense to carry out certain prototype projects
(a) Authority.—
(1) Subject to paragraph (2), the Director of the Defense Advanced Research Projects Agency, the Director of the Defense Innovation Unit, the Secretary of a military department, or any other official designated by the Secretary of Defense may, under the authority of section 4021 of this title, carry out prototype projects that are directly relevant to enhancing the mission effectiveness of personnel of the Department of Defense or improving platforms, systems, components, or materials proposed to be acquired or developed by the Department of Defense, or to improvement of platforms, systems, components, or materials in use by the armed forces.
(2) The authority of this section—
(A) may be exercised for a transaction for a prototype project that is expected to cost the Department of Defense in excess of $100,000,000 but not in excess of $500,000,000 (including all options) only upon a written determination by the senior procurement executive for the agency as designated for the purpose of section 1702(c) of title 41, or, for the Defense Advanced Research Projects Agency, the Defense Innovation Unit, or the Missile Defense Agency, the director of the agency that—
(i) the requirements of subsection (d) will be met; and
(ii) the use of the authority of this section is essential to promoting the success of the prototype project;
(B) may be exercised for a transaction for a prototype project that is expected to cost the Department of Defense in excess of $500,000,000 (including all options) only if—
(i) the Under Secretary of Defense for Research and Engineering or the Under Secretary of Defense for Acquisition and Sustainment determines in writing that—
(I) the requirements of subsection (d) will be met; and
(II) the use of the authority of this section is essential to meet critical national security objectives; and
(ii) the congressional defense committees are notified in writing at least 30 days before such authority is exercised; and
(C) may be exercised for a transaction for a follow-on production contract or transaction that is awarded pursuant to subsection (f) and expected to cost the Department of Defense in excess of $100,000,000 (including all options) only if a covered official—
(i) determines in writing that—
(I) the requirements of subsection (d) were met for the prior transaction for the prototype project that provided for the award of the follow-on production contract or transaction, and the requirements of subsection (f) will be met; and
(II) the use of the authority of this section is essential to meet critical national security objectives; and
(ii) notifies the congressional defense committees in writing of the determinations required under clause (i) at the time such authority is exercised.
(3) The authority of a senior procurement executive or director of the Defense Advanced Research Projects Agency, Defense Innovation Unit, or Missile Defense Agency under paragraph (2)(A), and the authority of the Under Secretaries of Defense under paragraph (2)(B), may not be delegated.
(b) Exercise of Authority.—
(1) Subsection (e)(2) of such section 4021 shall not apply to projects carried out under subsection (a).
(2) To the maximum extent practicable, competitive procedures shall be used when entering into agreements to carry out the prototype projects under subsection (a).
(c) Comptroller General Access to Information.—
(1) Each agreement entered into by an official referred to in subsection (a) to carry out a project under that subsection that provides for payments in a total amount in excess of $5,000,000 shall include a clause that provides for the Comptroller General, in the discretion of the Comptroller General, to examine the records of any party to the agreement or any entity that participates in the performance of the agreement.
(2) The requirement in paragraph (1) shall not apply with respect to a party or entity, or a subordinate element of a party or entity, that has not entered into any other agreement that provides for audit access by a Government entity in the year prior to the date of the agreement.
(3)
(A) The right provided to the Comptroller General in a clause of an agreement under paragraph (1) is limited as provided in subparagraph (B) in the case of a party to the agreement, an entity that participates in the performance of the agreement, or a subordinate element of that party or entity if the only agreements or other transactions that the party, entity, or subordinate element entered into with Government entities in the year prior to the date of that agreement are cooperative agreements or transactions that were entered into under this section or section 4021 of this title.
(B) The only records of a party, other entity, or subordinate element referred to in subparagraph (A) that the Comptroller General may examine in the exercise of the right referred to in that subparagraph are records of the same type as the records that the Government has had the right to examine under the audit access clauses of the previous agreements or transactions referred to in such subparagraph that were entered into by that particular party, entity, or subordinate element.
(4) The head of the contracting activity that is carrying out the agreement may waive the applicability of the requirement in paragraph (1) to the agreement if the head of the contracting activity determines that it would not be in the public interest to apply the requirement to the agreement. The waiver shall be effective with respect to the agreement only if the head of the contracting activity transmits a notification of the waiver to Congress and the Comptroller General before entering into the agreement. The notification shall include the rationale for the determination.
(5) The Comptroller General may not examine records pursuant to a clause included in an agreement under paragraph (1) more than three years after the final payment is made by the United States under the agreement.
(d) Appropriate Use of Authority.—
(1) The Secretary of Defense shall ensure that no official of an agency enters into a transaction (other than a contract, grant, or cooperative agreement) for a prototype project under the authority of this section unless one of the following conditions is met:
(A) There is at least one nontraditional defense contractor or nonprofit research institution participating to a significant extent in the prototype project.
(B) All significant participants in the transaction other than the Federal Government are small businesses (including small businesses participating in a program described under section 9 of the Small Business Act (15 U.S.C. 638)) or nontraditional defense contractors.
(C) At least one third of the total cost of the prototype project is to be paid out of funds provided by sources other than the Federal Government.
(D) The senior procurement executive for the agency determines in writing that exceptional circumstances justify the use of a transaction that provides for innovative business arrangements or structures that would not be feasible or appropriate under a contract, or would provide an opportunity to expand the defense supply base in a manner that would not be practical or feasible under a contract.
(2)
(A) Except as provided in subparagraph (B), the amounts counted for the purposes of this subsection as being provided, or to be provided, by a party to a transaction with respect to a prototype project that is entered into under this section other than the Federal Government do not include costs that were incurred before the date on which the transaction becomes effective.
(B) Costs that were incurred for a prototype project by a party after the beginning of negotiations resulting in a transaction (other than a contract, grant, or cooperative agreement) with respect to the project before the date on which the transaction becomes effective may be counted for purposes of this subsection as being provided, or to be provided, by the party to the transaction if and to the extent that the official responsible for entering into the transaction determines in writing that—
(i) the party incurred the costs in anticipation of entering into the transaction; and
(ii) it was appropriate for the party to incur the costs before the transaction became effective in order to ensure the successful implementation of the transaction.
(3) The requirements of this subsection do not apply to follow-on production contracts or transactions under subsection (f).
(e) Definitions.—
In this section:
(1) The term “covered official” means—
(A) a service acquisition executive;
(B) the Director of the Defense Advanced Research Projects Agency;
(C) the Director of the Defense Innovation Unit;
(D) the Director of the Missile Defense Agency;
(E) the Undersecretary of Defense for Acquisition and Sustainment; or
(F) the Undersecretary of Defense for Research and Engineering.
(2) The term “nontraditional defense contractor” has the meaning given the term under section 3014 of this title.
(3) The term “service acquisition executive” has the meaning given that term in section 101(a) of this title.
(4) The term “small business” means a small business concern as defined under section 3 of the Small Business Act (15 U.S.C. 632).
(5) The term “prototype project” includes a project that addresses—
(A) a proof of concept, model, or process, including a business process;
(B) reverse engineering to address obsolescence;
(C) a pilot or novel application of commercial technologies for defense purposes;
(D) agile development activity;
(E) the creation, design, development, or demonstration of operational utility; or
(F) any combination of subparagraphs (A) through (E).
(f) Follow-on Production Contracts or Transactions.—
(1) A transaction entered into under this section for a prototype project may provide for the award of a follow-on production contract or transaction to the participants in the transaction. A transaction includes all individual prototype subprojects awarded under the transaction to a consortium of United States industry and academic institutions.
(2) A follow-on production contract or transaction provided for in a transaction under paragraph (1) may be awarded to the participants in the transaction without the use of competitive procedures, notwithstanding the requirements of chapter 221 of this title and even if explicit notification was not listed within the request for proposal for the transaction if—
(A) competitive procedures were used for the selection of parties for participation in the transaction; and
(B) the participants in the transaction successfully completed the prototype project provided for in the transaction.
(3) A follow-on production contract or transaction may be awarded, pursuant to this subsection, when the Department determines that an individual prototype or prototype subproject as part of a consortium is successfully completed by the participants.
(4) Award of a follow-on production contract or transaction pursuant to the terms under this subsection is not contingent upon the successful completion of all activities within a consortium as a condition for an award for follow-on production of a successfully completed prototype or prototype subproject within that consortium.
(5) Contracts and transactions entered into pursuant to this subsection may be awarded using the authority in subsection (a), under the authority of chapter 137 1 of this title, or under such procedures, terms, and conditions as the Secretary of Defense may establish by regulation.
(g) Authority To Provide Prototypes and Follow-on Production Items as Government-furnished Equipment.—
An agreement entered into pursuant to the authority of subsection (a) or a follow-on contract or transaction entered into pursuant to the authority of subsection (f) may provide for prototypes or follow-on production items to be provided to another contractor as Government-furnished equipment.
(h) Applicability of Procurement Ethics Requirements.—
An agreement entered into under the authority of this section shall be treated as a Federal agency procurement for the purposes of chapter 21 of title 41.
(i) Pilot Authority for Use of Other Transactions for Installation or Facility Prototyping.—
(1) In general.—
The Secretary of Defense or the Secretary of a military department may establish a pilot program under which the Secretary may, under the authority of this section, carry out prototype projects that are directly relevant to enhancing the ability of the Department of Defense to prototype the design, development, or demonstration of new construction techniques or technologies to improve military installations or facilities (as such terms are defined in section 2801 of this title).
(2) Limits.—
In carrying out prototype projects under the pilot program established under paragraph (1)—
(A) except for projects carried out for the purpose of repairing a facility, not more than two prototype projects may begin to be carried out per fiscal year under such pilot program; and
(B) the aggregate value of all transactions entered into under such pilot program may not exceed $300,000,000.
(3) Use of amounts.—
The Secretary of Defense or the Secretary of a military department may carry out prototype projects under the pilot program established under paragraph (1) using amounts available to the Secretary of Defense or the Secretary of a military department (as applicable) for military construction, operation and maintenance, or research, development, test, and evaluation, notwithstanding—
(A) subchapters I and III of chapter 169 of this title; and
(B) chapters 221 and 223 of this title.
(4) Sunset.—
(A) In general.—
Except as provided in subparagraph (B), the authority to carry out prototype projects under the pilot program established under paragraph (1) shall terminate on September 30, 2025.
(B) Ongoing project exception.—
Subparagraph (A) shall not apply with respect to prototype projects being carried out under the pilot program established under paragraph (1) on the date described in subparagraph (A).
(Added Pub. L. 114–92, div. A, title VIII, § 815(a)(1), Nov. 25, 2015, 129 Stat. 893, § 2371b; amended Pub. L. 115–91, div. A, title II, § 216, title VIII, § 864, Dec. 12, 2017, 131 Stat. 1328, 1494; Pub. L. 115–232, div. A, title II, § 211, Aug. 13, 2018, 132 Stat. 1674; Pub. L. 116–92, div. A, title XVII, § 1731(a)(46), Dec. 20, 2019, 133 Stat. 1814; renumbered § 4022 and amended Pub. L. 116–283, div. A, title XVIII, §§ 1841(b)(1), (2)(C), 1883(b)(2), Jan. 1, 2021, 134 Stat. 4243, 4294; Pub. L. 117–81, div. A, title VIII, § 821(b), title XVII, § 1701(u)(2)(B), (F)(i)(IV), Dec. 27, 2021, 135 Stat. 1825, 2151; Pub. L. 117–263, div. A, title VIII, §§ 842, 843, Dec. 23, 2022, 136 Stat. 2717, 2718; Pub. L. 118–31, div. A, title VIII, §§ 821, 822(a), title IX, § 913(a), Dec. 22, 2023, 137 Stat. 326, 327, 367.)
heading: Editorial Notes
heading: References in Text
text: Chapter 137 of this title, referred to in subsec. (f)(5), was repealed by Pub. L. 116–283, div. A, title XVIII, § 1881(a), Jan. 1, 2021, 134 Stat. 4293, effective Jan. 1, 2022, in conjunction with the transfer and reorganization of acquisition provisions in this title by Pub. L. 116–283, div. A, title XVIII, Jan. 1, 2022, 134 Stat. 4149. For definition of “chapter 137 legacy provisions”, see section 3016 of this title.
heading: Prior Provisions
text: A prior section 4022, act Aug. 10, 1956, ch. 1041, 70A Stat. 233, related to employment of contract surgeons in an emergency, prior to repeal by Pub. L. 98–94, title IX, § 932(b)(1), (f) Sept. 24, 1983, 97 Stat. 650, effective Oct. 1, 1983, with continuation provision for existing contracts.
heading: Amendments
text: 2023—Subsec. (a)(1). Pub. L. 118–31, § 913(a)(3)(A)(i), inserted “the Director of the Defense Innovation Unit,” after “Defense Advanced Research Projects Agency,”.
Subsec. (a)(2)(A). Pub. L. 118–31, § 913(a)(3)(A)(ii), inserted “, the Defense Innovation Unit,” after “Defense Advanced Research Projects Agency” in introductory provisions.
Subsec. (a)(2)(C)(i)(I). Pub. L. 118–31, § 821(1), inserted “were met for the prior transaction for the prototype project that provided for the award of the follow-on production contract or transaction, and the requirements of subsection (f)” after “subsection (d)”.
Subsec. (a)(3). Pub. L. 118–31, § 913(a)(3)(A)(iii), inserted “, Defense Innovation Unit,” after “Defense Advanced Research Projects Agency”.
Subsec. (d)(3). Pub. L. 118–31, § 821(2), added par. (3).
Subsec. (e)(1)(C) to (F). Pub. L. 118–31, § 913(a)(3)(B), added subpar. (C) and redesignated former subpars. (C) to (E) as (D) to (F), respectively.
Subsec. (i)(2)(A). Pub. L. 118–31, § 822(a)(1)(A), inserted “except for projects carried out for the purpose of repairing a facility,” before “not more”.
Subsec. (i)(2)(B). Pub. L. 118–31, § 822(a)(1)(B), substituted “$300,000,000” for “$200,000,000”.
Subsec. (i)(3), (4). Pub. L. 118–31, § 822(a)(2), (3), added par. (3) and redesignated former par. (3) as (4).
2022—Subsec. (a)(1). Pub. L. 117–263, § 843(1), substituted “personnel of the Department of Defense or improving” for “military personnel and the supporting”.
Subsec. (a)(2). Pub. L. 117–263, § 842(1)(A), struck out “, and any follow-on production contract or transaction that is awarded pursuant to subsection (f),” after “a prototype project” in two places.
Subsec. (a)(2)(C). Pub. L. 117–263, § 842(1)(B)–(D), added subpar. (C).
Subsec. (e)(1) to (4). Pub. L. 117–263, § 842(2), added pars. (1) and (3) and redesignated former pars. (1) and (2) as (2) and (4), respectively.
Subsec. (e)(5). Pub. L. 117–263, § 843(2), added par. (5).
Subsec. (f)(2). Pub. L. 117–263, § 842(3), substituted “of chapter 221 of this title and even if explicit notification was not listed within the request for proposal for the transaction” for “of section 2304 of this title,”.
Subsec. (i). Pub. L. 117–263, § 843(3), added subsec. (i).
2021—Pub. L. 116–283, § 1841(b)(1), as amended by Pub. L. 117–81, § 1701(u)(2)(B), renumbered section 2371b of this title as this section.
Subsec. (a)(1). Pub. L. 116–283, § 1841(b)(2)(C), as amended by Pub. L. 117–81, § 1701(u)(2)(F)(i)(IV), substituted “section 4021” for “section 2371”.
Subsec. (b)(1). Pub. L. 117–81, § 821(b), substituted “Subsection (e)(2)” for “Subsections (e)(1)(B) and (e)(2)”.
Pub. L. 116–283, § 1841(b)(2)(C), as amended by Pub. L. 117–81, § 1701(u)(2)(F)(i)(IV), substituted “section 4021” for “section 2371”.
Subsec. (c)(3)(A). Pub. L. 116–283, § 1841(b)(2)(C), as amended by Pub. L. 117–81, § 1701(u)(2)(F)(i)(IV), substituted “section 4021” for “section 2371”.
Subsec. (e)(1). Pub. L. 116–283, § 1883(b)(2), substituted “section 3014” for “section 2302(9)”.
Subsec. (f)(2). Pub. L. 116–283, § 1883(b)(2), which directed that each reference in the text of title 10 to a section that was redesignated by title XVIII of Pub. L. 116–283, as such section was in effect before the redesignation, be amended by striking such reference and inserting a reference to the appropriate redesignated section, was not executed with respect to “section 2304”, which was redesignated as multiple sections.
2019—Subsec. (d)(1)(C). Pub. L. 116–92 substituted “sources other than” for “sources other than other than”.
2018—Subsec. (a)(2)(A). Pub. L. 115–232, § 211(1)(A), substituted “for a prototype project, and any follow-on production contract or transaction that is awarded pursuant to subsection (f),” for “(for a prototype project)” in introductory provisions.
Subsec. (a)(2)(B). Pub. L. 115–232, § 211(1)(B)(i), substituted “for a prototype project, and any follow-on production contract or transaction that is awarded pursuant to subsection (f),” for “(for a prototype project)” in introductory provisions.
Subsec. (a)(2)(B)(i). Pub. L. 115–232, § 211(1)(B)(ii), substituted “Under Secretary of Defense for Research and Engineering or the Under Secretary of Defense for Acquisition and Sustainment” for “Under Secretary of Defense for Acquisition, Technology, and Logistics” in introductory provisions.
Subsec. (a)(3). Pub. L. 115–232, § 211(1)(C), which directed substitution of “Under Secretaries of Defense” for “Under Secretary of Defense for Acquisition, Technology, and Logistics” in par. (3) of subsec. (a)(2), was executed by making the substitution in par. (3) of subsec. (a), to reflect the probable intent of Congress.
Subsec. (b)(2). Pub. L. 115–232, § 211(2), inserted “the prototype” after “carry out”.
Subsec. (f)(3) to (5). Pub. L. 115–232, § 211(3), added pars. (3) and (4) and redesignated former par. (3) as (5).
2017—Subsec. (a)(2)(A). Pub. L. 115–91, § 864(a)(1), (2), in introductory provisions, substituted “for a transaction (for a prototype project)” for “for a prototype project”, “$100,000,000” for “$50,000,000”, and “$500,000,000” for “$250,000,000”.
Subsec. (a)(2)(B). Pub. L. 115–91, § 864(a)(1), (3), in introductory provisions, substituted “for a transaction (for a prototype project)” for “for a prototype project” and “$500,000,000” for “$250,000,000”.
Subsec. (d)(1)(A). Pub. L. 115–91, § 216, inserted “or nonprofit research institution” after “defense contractor”.
Subsec. (d)(1)(B). Pub. L. 115–91, § 864(b), inserted “(including small businesses participating in a program described under section 9 of the Small Business Act (15 U.S.C. 638))” after “small businesses”.
Subsec. (d)(1)(C). Pub. L. 115–91, § 864(c), substituted “provided by sources other than” for “provided by parties to the transaction”.
Subsec. (f)(1). Pub. L. 115–91, § 864(d), inserted at end “A transaction includes all individual prototype subprojects awarded under the transaction to a consortium of United States industry and academic institutions.”
heading: Statutory Notes and Related Subsidiaries
heading: Effective Date of 2023 Amendment; Implementation
text: Pub. L. 118–31, div. A, title VIII, § 822(b), Dec. 22, 2023, 137 Stat. 327, provided that: “The amendments made by this section [amending this section] shall apply with respect to transactions entered into on or after the date of the enactment of this Act [Dec. 22, 2023].”
Amendment by section 913(a)(3) of Pub. L. 118–31 effective 180 days after Dec. 22, 2023, with additional implementation requirements, see section 913(b)(1), (2) of Pub. L. 118–31, set out as notes under section 1766 of this title.
heading: Effective Date of 2021 Amendment
text: Amendment by section 1701(u)(2)(B), (F)(i)(IV) of Pub. L. 117–81 applicable as if included in the enactment of title XVIII of Pub. L. 116–283 as enacted, see section 1701(a)(2) of Pub. L. 117–81, set out in a note preceding section 3001 of this title and note below.
Amendment by Pub. L. 116–283 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: Limitation on Missile Defense Agency Production of Satellites and Ground Systems Associated With Operation of Such Satellites
text: Pub. L. 117–81, div. A, title XVI, § 1662(a), Dec. 27, 2021, 135 Stat. 2103, provided that:
“(1) Production of satellites and ground systems.—
The Director of the Missile Defense Agency may not authorize or obligate funding for a program of record for the production of satellites or ground systems associated with the operation of such satellites.
“(2) Prototype satellites.—
“(A) Authority.—
The Director, with the concurrence of the Space Acquisition Council established by section 9021 of title 10, United States Code, may authorize the production of one or more prototype satellites, consistent with the requirements of the Missile Defense Agency.
“(B) Report.—
Not later than 30 days after the date on which the Space Acquisition Council concurs with the Director with respect to authorizing the production of a prototype satellite under subparagraph (A), the chair of the Council shall submit to the congressional defense committees [Committees on Armed Services and Appropriations of the Senate and the House of Representatives] a report explaining the reasons for such concurrence.
“(C) Obligation of funds.—
The Director may not obligate funds for the production of a prototype satellite under subparagraph (A) before the date on which the Space Acquisition Council submits the report for such prototype satellite under subparagraph (B).”
heading: Relaxation of Department of Defense Other Transaction Authority Requirements Related to the National Emergency for the Coronavirus Disease 2019
text: Pub. L. 116–136, div. B, title III, § 13006, Mar. 27, 2020, 134 Stat. 522, provided that:
“(a) Notwithstanding paragraph (3) of section 2371b(a) of title 10, United States Code [now 10 U.S.C. 4022(a)], the authority of a senior procurement executive or director of the Defense Advanced Research Projects Agency or Missile Defense Agency under paragraph (2)(A) of such section [probably should be “subsection”], and the authority of the Under Secretaries of Defense under paragraph (2)(B) of such section [probably should be “subsection”], for any transaction related to the national emergency for the Coronavirus Disease 2019 (COVID–19) may be delegated to such officials in the Department of Defense as the Secretary of Defense shall specify for purposes of this section.
“(b)
(1) Notwithstanding clause (ii) of section 2371b(a)(2)(B) of title 10, United States Code [now 10 U.S.C. 4022(a)(2)(B)], no advance notice to Congress is required under that clause for transitions described in that section that are related to the national emergency for the Coronavirus Disease 2019 (COVID–19).
“(2) In the event a transaction covered by paragraph (1) is carried out, the Under Secretary of Defense for Research and Engineering or the Under Secretary of Defense for Acquisition and Sustainment, as applicable, shall submit to the congressional defense committees a notice on the carrying out of such transaction as soon as is practicable after the commencement of the carrying out of such transaction.
“(3) In this subsection, the term ‘congressional defense committees’ has the meaning given such term in section 101(a)(16) of title 10, United States Code.”
heading: Repeal of Obsolete Authority; Transition Provision
text: Pub. L. 114–92, div. A, title VIII, § 815(c), Nov. 25, 2015, 129 Stat. 896, provided that: “Section 845 of the National Defense Authorization Act for Fiscal Year 1994 (Public Law 103–160; [former] 10 U.S.C. 2371 note) is hereby repealed. Transactions entered into under the authority of such section 845 shall remain in force and effect and shall be modified as appropriate to reflect the amendments made by this section [enacting this section, amending former section 2302 of this title, and amending provisions set out as a note under section 4001 of this title].”
heading: Updated Guidance
text: Pub. L. 114–92, div. A, title VIII, § 815(e), Nov. 25, 2015, 129 Stat. 896, provided that: “Not later than 180 days after the date of the enactment of this Act [Nov. 25, 2015], the Secretary of Defense shall issue updated guidance to implement the amendments made by this section [enacting this section, amending former section 2302 of this title, amending provisions set out as a note under section 4001 of this title, and repealing provisions formerly set out as a note under section 2371 of this title].”