41 U.S.C. § 1821 SHORT TITLE.
“This subtitle may be cited as the ‘American Security Drone Act of 2023’.
USC Chapter 39
USC Chapter 39
in effect41 U.S.C. § 1822 DEFINITIONS.
“In this subtitle:
“(1) Covered foreign entity.—The term ‘covered foreign entity’ means an entity included on a list developed and maintained by the Federal Acquisition Security Council and published in the System for Award Management (SAM). This list will include entities in the following categories:“(A) An entity included on the Consolidated Screening List. “(B) Any entity that is subject to extrajudicial direction from a foreign government, as determined by the Secretary of Homeland Security. “(C) Any entity the Secretary of Homeland Security, in coordination with the Attorney General, Director of National Intelligence, and the Secretary of Defense, determines poses a national security risk. “(D) Any entity domiciled in the People’s Republic of China or subject to influence or control by the Government of the People’s Republic of China or the Communist Party of the People’s Republic of China, as determined by the Secretary of Homeland Security. “(E) Any subsidiary or affiliate of an entity described in subparagraphs (A) through (D).
“(2) Covered unmanned aircraft system.—The term ‘covered unmanned aircraft system’ has the meaning given the term ‘unmanned aircraft system’ in section 44801 of title 49, United States Code.
“(3) Intelligence; intelligence community.—The terms ‘intelligence’ and ‘intelligence community’ have the meanings given those terms in section 3 of the National Security Act of 1947 (50 U.S.C. 3003).
41 U.S.C. § 1823 PROHIBITION ON PROCUREMENT OF COVERED UNMANNED AIRCRAFT SYSTEMS FROM COVERED FOREIGN ENTITIES.
“(a) In General.—Except as provided under subsections (b) through (f), the head of an executive agency may not procure any covered unmanned aircraft system that is manufactured or assembled by a covered foreign entity, which includes associated elements related to the collection and transmission of sensitive information (consisting of communication links and the components that control the unmanned aircraft) that enable the operator to operate the aircraft in the National Airspace System. The Federal Acquisition Security Council, in coordination with the Secretary of Transportation, shall develop and update a list of associated elements.
“(b) Exemption.—The Secretary of Homeland Security, the Secretary of Defense, the Secretary of State, and the Attorney General are exempt from the restriction under subsection (a) if the procurement is required in the national interest of the United States and—“(1) is for the sole purposes of research, evaluation, training, testing, or analysis for electronic warfare, information warfare operations, cybersecurity, or development of unmanned aircraft system or counter-unmanned aircraft system technology; “(2) is for the sole purposes of conducting counterterrorism or counterintelligence activities, protective missions, or Federal criminal or national security investigations, including forensic examinations, or for electronic warfare, information warfare operations, cybersecurity, or development of an unmanned aircraft system or counter-unmanned aircraft system technology; or “(3) is an unmanned aircraft system that, as procured or as modified after procurement but before operational use, can no longer transfer to, or download data from, a covered foreign entity and otherwise poses no national security cybersecurity risks as determined by the exempting official.
“(c) Department of Transportation and Federal Aviation Administration Exemption.—The Secretary of Transportation is exempt from the restriction under subsection (a) if the operation or procurement is deemed to support the safe, secure, or efficient operation of the National Airspace System or maintenance of public safety, including activities carried out under the Federal Aviation Administration’s Alliance for System Safety of UAS through Research Excellence (ASSURE) Center of Excellence (COE) and any other activity deemed to support the safe, secure, or efficient operation of the National Airspace System or maintenance of public safety, as determined by the Secretary or the Secretary’s designee.
“(d) National Transportation Safety Board Exemption.—The National Transportation Safety Board, in consultation with the Secretary of Homeland Security, is exempt from the restriction under subsection (a) if the operation or procurement is necessary for the sole purpose of conducting safety investigations.
“(e) National Oceanic and Atmospheric Administration Exemption.—The Administrator of the National Oceanic and Atmospheric Administration (NOAA), in consultation with the Secretary of Homeland Security, is exempt from the restriction under subsection (a) if the procurement is necessary for the purpose of meeting NOAA’s science or management objectives or operational mission.
“(f) Waiver.—The head of an executive agency may waive the prohibition under subsection (a) on a case-by-case basis—“(1) with the approval of the Director of the Office of Management and Budget, after consultation with the Federal Acquisition Security Council; and “(2) upon notification to—“(A) the Committee on Homeland Security and Governmental Affairs of the Senate; “(B) the Committee on Oversight and Accountability in the House of Representatives; and “(C) other appropriate congressional committees of jurisdiction.
41 U.S.C. § 1824 PROHIBITION ON OPERATION OF COVERED UNMANNED AIRCRAFT SYSTEMS FROM COVERED FOREIGN ENTITIES.
“(a) Prohibition.—“(1) In general.—Beginning on the date that is two years after the date of the enactment of this Act [Dec. 22, 2023], no Federal department or agency may operate a covered unmanned aircraft system manufactured or assembled by a covered foreign entity. “(2) Applicability to contracted services.—The prohibition under paragraph (1) applies to any covered unmanned aircraft systems that are being used by any executive agency through the method of contracting for the services of covered unmanned aircraft systems.
“(b) Exemption.—The Secretary of Homeland Security, the Secretary of Defense, the Secretary of State, and the Attorney General are exempt from the restriction under subsection (a) if the operation is required in the national interest of the United States and—“(1) is for the sole purposes of research, evaluation, training, testing, or analysis for electronic warfare, information warfare operations, cybersecurity, or development of unmanned aircraft system or counter-unmanned aircraft system technology; “(2) is for the sole purposes of conducting counterterrorism or counterintelligence activities, protective missions, or Federal criminal or national security investigations, including forensic examinations, or for electronic warfare, information warfare operations, cybersecurity, or development of an unmanned aircraft system or counter-unmanned aircraft system technology; or “(3) is an unmanned aircraft system that, as procured or as modified after procurement but before operational use, can no longer transfer to, or download data from, a covered foreign entity and otherwise poses no national security cybersecurity risks as determined by the exempting official.
“(c) Department of Transportation and Federal Aviation Administration Exemption.—The Secretary of Transportation is exempt from the restriction under subsection (a) if the operation is deemed to support the safe, secure, or efficient operation of the National Airspace System or maintenance of public safety, including activities carried out under the Federal Aviation Administration’s Alliance for System Safety of UAS through Research Excellence (ASSURE) Center of Excellence (COE) and any other activity deemed to support the safe, secure, or efficient operation of the National Airspace System or maintenance of public safety, as determined by the Secretary or the Secretary’s designee.
“(d) National Transportation Safety Board Exemption.—The National Transportation Safety Board, in consultation with the Secretary of Homeland Security, is exempt from the restriction under subsection (a) if the operation is necessary for the sole purpose of conducting safety investigations.
“(e) National Oceanic and Atmospheric Administration Exemption.—The Administrator of the National Oceanic and Atmospheric Administration (NOAA), in consultation with the Secretary of Homeland Security, is exempt from the restriction under subsection (a) if the procurement is necessary for the purpose of meeting NOAA’s science or management objectives or operational mission.
“(f) Waiver.—The head of an executive agency may waive the prohibition under subsection (a) on a case-by-case basis—“(1) with the approval of the Director of the Office of Management and Budget, after consultation with the Federal Acquisition Security Council; and “(2) upon notification to—“(A) the Committee on Homeland Security and Governmental Affairs of the Senate; “(B) the Committee on Oversight and Accountability in the House of Representatives; and “(C) other appropriate congressional committees of jurisdiction.
“(g) Regulations and Guidance.—Not later than 180 days after the date of the enactment of this Act [Dec. 22, 2023], the Secretary of Homeland Security, in consultation with the Attorney General and the Secretary of Transportation, shall prescribe regulations or guidance to implement this section.
41 U.S.C. § 1825 PROHIBITION ON USE OF FEDERAL FUNDS FOR PROCUREMENT AND OPERATION OF COVERED UNMANNED AIRCRAFT SYSTEMS FROM COVERED FOREIGN ENTITIES.
“(a) In General.—Beginning on the date that is two years after the date of the enactment of this Act [Dec. 22, 2023], except as provided in subsection (b), no Federal funds awarded through a contract, grant, or cooperative agreement, or otherwise made available may be used—“(1) to procure a covered unmanned aircraft system that is manufactured or assembled by a covered foreign entity; or “(2) in connection with the operation of such a drone or unmanned aircraft system.
“(b) Exemption.—The Secretary of Homeland Security, the Secretary of Defense, the Secretary of State, and the Attorney General are exempt from the restriction under subsection (a) if the procurement or operation is required in the national interest of the United States and—“(1) is for the sole purposes of research, evaluation, training, testing, or analysis for electronic warfare, information warfare operations, cybersecurity, or development of unmanned aircraft system or counter-unmanned aircraft system technology; “(2) is for the sole purposes of conducting counterterrorism or counterintelligence activities, protective missions, or Federal criminal or national security investigations, including forensic examinations, or for electronic warfare, information warfare operations, cybersecurity, or development of an unmanned aircraft system or counter-unmanned aircraft system technology; or “(3) is an unmanned aircraft system that, as procured or as modified after procurement but before operational use, can no longer transfer to, or download data from, a covered foreign entity and otherwise poses no national security cybersecurity risks as determined by the exempting official.
“(c) Department of Transportation and Federal Aviation Administration Exemption.—The Secretary of Transportation is exempt from the restriction under subsection (a) if the operation or procurement is deemed to support the safe, secure, or efficient operation of the National Airspace System or maintenance of public safety, including activities carried out under the Federal Aviation Administration’s Alliance for System Safety of UAS through Research Excellence (ASSURE) Center of Excellence (COE) and any other activity deemed to support the safe, secure, or efficient operation of the National Airspace System or maintenance of public safety, as determined by the Secretary or the Secretary’s designee.
“(d) National Oceanic and Atmospheric Administration Exemption.—The Administrator of the National Oceanic and Atmospheric Administration (NOAA), in consultation with the Secretary of Homeland Security, is exempt from the restriction under subsection (a) if the operation or procurement is necessary for the purpose of meeting NOAA’s science or management objectives or operational mission.
“(e) Waiver.—The head of an executive agency may waive the prohibition under subsection (a) on a case-by-case basis—“(1) with the approval of the Director of the Office of Management and Budget, after consultation with the Federal Acquisition Security Council; and “(2) upon notification to—“(A) the Committee on Homeland Security and Governmental Affairs of the Senate; “(B) the Committee on Oversight and Accountability in the House of Representatives; and “(C) other appropriate congressional committees of jurisdiction.
“(f) Regulations.—Not later than 180 days after the date of the enactment of this Act, the Federal Acquisition Regulatory Council shall prescribe regulations or guidance, as necessary, to implement the requirements of this section pertaining to Federal contracts.
41 U.S.C. § 1826 PROHIBITION ON USE OF GOVERNMENT-ISSUED PURCHASE CARDS TO PURCHASE COVERED UNMANNED AIRCRAFT SYSTEMS FROM COVERED FOREIGN ENTITIES.
“Effective immediately, Government-issued Purchase Cards may not be used to procure any covered unmanned aircraft system from a covered foreign entity.
41 U.S.C. § 1827 MANAGEMENT OF EXISTING INVENTORIES OF COVERED UNMANNED AIRCRAFT SYSTEMS FROM COVERED FOREIGN ENTITIES.
“(a) In General.—All executive agencies must account for existing inventories of covered unmanned aircraft systems manufactured or assembled by a covered foreign entity in their personal property accounting systems, within one year of the date of enactment of this Act [Dec. 22, 2023], regardless of the original procurement cost, or the purpose of procurement due to the special monitoring and accounting measures necessary to track the items’ capabilities.
“(b) Classified Tracking.—Due to the sensitive nature of missions and operations conducted by the United States Government, inventory data related to covered unmanned aircraft systems manufactured or assembled by a covered foreign entity may be tracked at a classified level, as determined by the Secretary of Homeland Security or the Secretary’s designee.
“(c) Exceptions.—The Department of Defense, the Department of Homeland Security, the Department of Justice, the Department of Transportation, and the National Oceanic and Atmospheric Administration may exclude from the full inventory process, covered unmanned aircraft systems that are deemed expendable due to mission risk such as recovery issues, or that are one-time-use covered unmanned aircraft due to requirements and low cost.
“(d) Intelligence Community Exception.—Nothing in this section shall apply to any element of the intelligence community.
41 U.S.C. § 1828 COMPTROLLER GENERAL REPORT.
“Not later than 275 days after the date of the enactment of this Act [Dec. 22, 2023], the Comptroller General of the United States shall submit to Congress a report on the amount of commercial off-the-shelf drones and covered unmanned aircraft systems procured by Federal departments and agencies from covered foreign entities, except that nothing in this section shall apply to any element of the intelligence community.
41 U.S.C. § 1829 GOVERNMENT-WIDE POLICY FOR PROCUREMENT OF UNMANNED AIRCRAFT SYSTEMS.
“(a) In General.—Not later than 180 days after the date of the enactment of this Act, the Director of the Office of Management and Budget, in coordination with the Department of Homeland Security, Department of Transportation, the Department of Justice, and other Departments as determined by the Director of the Office of Management and Budget, and in consultation with the National Institute of Standards and Technology, shall establish a government-wide policy for the procurement of an unmanned aircraft system—“(1) for non-Department of Defense and non-intelligence community operations; and “(2) through grants and cooperative agreements entered into with non-Federal entities.
“(b) Information Security.—The policy developed under subsection (a) shall include the following specifications, which to the extent practicable, shall be based on industry standards and technical guidance from the National Institute of Standards and Technology, to address the risks associated with processing, storing, and transmitting Federal information in an unmanned aircraft system:“(1) Protections to ensure controlled access to an unmanned aircraft system. “(2) Protecting software, firmware, and hardware by ensuring changes to an unmanned aircraft system are properly managed, including by ensuring an unmanned aircraft system can be updated using a secure, controlled, and configurable mechanism. “(3) Cryptographically securing sensitive collected, stored, and transmitted data, including proper handling of privacy data and other controlled unclassified information. “(4) Appropriate safeguards necessary to protect sensitive information, including during and after use of an unmanned aircraft system. “(5) Appropriate data security to ensure that data is not transmitted to or stored in non-approved locations. “(6) The ability to opt out of the uploading, downloading, or transmitting of data that is not required by law or regulation and an ability to choose with whom and where information is shared when it is required.
“(c) Requirement.—The policy developed under subsection (a) shall reflect an appropriate risk-based approach to information security related to use of an unmanned aircraft system.
“(d) Revision of Acquisition Regulations.—Not later than 180 days after the date on which the policy required under subsection (a) is issued—“(1) the Federal Acquisition Regulatory Council shall revise the Federal Acquisition Regulation, as necessary, to implement the policy; and “(2) any Federal department or agency or other Federal entity not subject to, or not subject solely to, the Federal Acquisition Regulation shall revise applicable policy, guidance, or regulations, as necessary, to implement the policy.
“(e) Exemption.—In developing the policy required under subsection (a), the Director of the Office of Management and Budget shall—“(1) incorporate policies to implement the exemptions contained in this subtitle; and “(2) incorporate an exemption to the policy in the case of a head of the procuring department or agency determining, in writing, that no product that complies with the information security requirements described in subsection (b) is capable of fulfilling mission critical performance requirements, and such determination—“(A) may not be delegated below the level of the Deputy Secretary, or Administrator, of the procuring department or agency; “(B) shall specify—“(i) the quantity of end items to which the waiver applies and the procurement value of those items; and “(ii) the time period over which the waiver applies, which shall not exceed three years; “(C) shall be reported to the Office of Management and Budget following issuance of such a determination; and “(D) not later than 30 days after the date on which the determination is made, shall be provided to the Committee on Homeland Security and Governmental Affairs of the Senate and the Committee on Oversight and Accountability of the House of Representatives.
41 U.S.C. § 1830 STATE, LOCAL, AND TERRITORIAL LAW ENFORCEMENT AND EMERGENCY SERVICE EXEMPTION.
“(a) Rule of Construction.—Nothing in this subtitle shall prevent a State, local, or territorial law enforcement or emergency service agency from procuring or operating a covered unmanned aircraft system purchased with non-Federal dollars.
“(b) Continuity of Arrangements.—The Federal Government may continue entering into contracts, grants, and cooperative agreements or other Federal funding instruments with State, local, or territorial law enforcement or emergency service agencies under which a covered unmanned aircraft system will be purchased or operated if the agency has received approval or waiver to purchase or operate a covered unmanned aircraft system pursuant to section 1825.
41 U.S.C. § 1831 STUDY.
“(a) Study on the Supply Chain for Unmanned Aircraft Systems and Components.—“(1) Report required.—Not later than one year after the date of the enactment of this Act [Dec. 22, 2023], the Under Secretary of Defense for Acquisition and Sustainment shall provide to the appropriate congressional committees a report on the supply chain for covered unmanned aircraft systems, including a discussion of current and projected future demand for covered unmanned aircraft systems. “(2) Elements.—The report under paragraph (1) shall include the following:“(A) A description of the current and future global and domestic market for covered unmanned aircraft systems that are not widely commercially available except from a covered foreign entity. “(B) A description of the sustainability, availability, cost, and quality of secure sources of covered unmanned aircraft systems domestically and from sources in allied and partner countries. “(C) The plan of the Secretary of Defense to address any gaps or deficiencies identified in subparagraph (B), including through the use of funds available under the Defense Production Act of 1950 (50 U.S.C. 4501 et seq.) and partnerships with the National Aeronautics and Space Administration and other interested persons. “(D) Such other information as the Under Secretary of Defense for Acquisition and Sustainment determines to be appropriate. “(3) Appropriate congressional committees defined.—In this section, the term ‘appropriate congressional committees’ means the following:“(A) The Committees on Armed Services of the Senate and the House of Representatives. “(B) The Committee on Homeland Security and Governmental Affairs of the Senate and the Committee on Oversight and Accountability of the House of Representatives. “(C) The Committee on Commerce, Science, and Transportation of the Senate and the Committee on Science, Space, and Technology of the House of Representatives. “(D) The Select Committee on Intelligence of the Senate and the Permanent Select Committee on Intelligence of the House of Representatives. “(E) The Committee on Transportation and Infrastructure of the House of Representatives. “(F) The Committee on Homeland Security of the House of Representatives. “(G) The Committee on Foreign Relations of the Senate and the Committee on Foreign Affairs of the House of Representatives.
41 U.S.C. § 1832 EXCEPTIONS.
“(a) Exception for Wildfire Management Operations and Search and Rescue Operations.—The appropriate Federal agencies, in consultation with the Secretary of Homeland Security, are exempt from the procurement and operation restrictions under sections 1823, 1824, and 1825 to the extent the procurement or operation is necessary for the purpose of supporting the full range of wildfire management operations or search and rescue operations.
“(b) Exception for Intelligence Activities.—Sections 1823, 1824, and 1825 shall not apply to any activity subject to the reporting requirements under title V of the National Security Act of 1947 (50 U.S.C. 3091 et seq.), any authorized intelligence activities of the United States, or any activity or procurement that supports an authorized intelligence activity.
“(c) Exception for Tribal Law Enforcement or Emergency Service Agency.—Tribal law enforcement or Tribal emergency service agencies, in consultation with the Secretary of Homeland Security, are exempt from the procurement, operation, and purchase restrictions under sections 1823, 1824, and 1825 to the extent the procurement or operation is necessary for the purpose of supporting the full range of law enforcement operations or search and rescue operations on Indian lands.
41 U.S.C. § 1833 SUNSET.
“Sections 1823, 1824, and 1825 shall cease to have effect on the date that is five years after the date of the enactment of this Act [Dec. 22, 2023].”
41 U.S.C. § 3901 Contracts awarded using procedures other than sealed-bid procedures
(a) Authorized Types.—Except as provided in section 3905 of this title, contracts awarded after using procedures other than sealed-bid procedures may be of any type which in the opinion of the agency head will promote the best interests of the Federal Government.
(b) Required Warranty.—(1) Content.—Every contract awarded after using procedures other than sealed-bid procedures shall contain a suitable warranty, as determined by the agency head, by the contractor that no person or selling agency has been employed or retained to solicit or secure the contract on an agreement or understanding for a commission, percentage, brokerage, or contingent fee, except for bona fide employees or bona fide established commercial or selling agencies the contractor maintains to secure business. (2) Remedy for breach or violation.—For the breach or violation of the warranty, the Federal Government may annul the contract without liability or deduct from the contract price or consideration the full amount of the commission, percentage, brokerage, or contingent fee. (3) Nonapplication.—Paragraph (1) does not apply to a contract for an amount that is not greater than the simplified acquisition threshold or to a contract for the acquisition of commercial products or commercial services.
41 U.S.C. § 3902 Severable services contracts for periods crossing fiscal years
(a) Authority To Enter Into Contract.—The head of an executive agency may enter into a contract for the procurement of severable services for a period that begins in one fiscal year and ends in the next fiscal year if (without regard to any option to extend the period of the contract) the contract period does not exceed one year.
(b) Obligation of Funds.—Funds made available for a fiscal year may be obligated for the total amount of a contract entered into under the authority of this section.
41 U.S.C. § 3903 Multiyear contracts
(a) Definition.—In this section, a multiyear contract is a contract for the purchase of property or services for more than one, but not more than 5, program years.
(b) Authority To Enter Into Contract.—An executive agency may enter into a multiyear contract for the acquisition of property or services if—(1) funds are available and obligated for the contract, for the full period of the contract or for the first fiscal year in which the contract is in effect, and for the estimated costs associated with a necessary termination of the contract; and (2) the executive agency determines that—(A) the need for the property or services is reasonably firm and continuing over the period of the contract; and (B) a multiyear contract will serve the best interests of the Federal Government by encouraging full and open competition or promoting economy in administration, performance, and operation of the agency’s programs.
(c) Termination Clause.—A multiyear contract entered into under the authority of this section shall include a clause that provides that the contract shall be terminated if funds are not made available for the continuation of the contract in a fiscal year covered by the contract. Funds available for paying termination costs shall remain available for that purpose until the costs associated with termination of the contract are paid.
(d) Cancellation Ceiling Notice.—Before a contract described in subsection (b) that contains a clause setting forth a cancellation ceiling in excess of $10,000,000 may be awarded, the executive agency shall give written notification of the proposed contract and of the proposed cancellation ceiling for that contract to Congress. The contract may not be awarded until the end of the 30-day period beginning on the date of the notification.
(e) Contingency Clause for Appropriation of Funds.—A multiyear contract may provide that performance under the contract after the first year of the contract is contingent on the appropriation of funds and (if the contract does so provide) that a cancellation payment shall be made to the contractor if the funds are not appropriated.
(f) Other Law Not Affected.—This section does not modify or affect any other provision of law that authorizes multiyear contracts.
41 U.S.C. § 3904 Contract authority for severable services contracts and multiyear contracts
(a) Comptroller General.—The Comptroller General may use available funds to enter into contracts for the procurement of severable services for a period that begins in one fiscal year and ends in the next fiscal year and to enter into multiyear contracts for the acquisition of property and nonaudit-related services to the same extent as executive agencies under sections 3902 and 3903 of this title.
(b) Library of Congress.—The Library of Congress may use available funds to enter into contracts for the lease or procurement of severable services for a period that begins in one fiscal year and ends in the next fiscal year and to enter into multiyear contracts for the acquisition of property and services pursuant to sections 3902 and 3903 of this title.
(c) Chief Administrative Officer of the House of Representatives.—The Chief Administrative Officer of the House of Representatives may enter into—(1) contracts for the procurement of severable services for a period that begins in one fiscal year and ends in the next fiscal year to the same extent as the head of an executive agency under the authority of section 3902 of this title; and (2) multiyear contracts for the acquisitions of property and nonaudit-related services to the same extent as executive agencies under the authority of section 3903 of this title.
(d) Congressional Budget Office.—The Congressional Budget Office may use available funds to enter into contracts for the procurement of severable services for a period that begins in one fiscal year and ends in the next fiscal year and may enter into multiyear contracts for the acquisition of property and services to the same extent as executive agencies under the authority of sections 3902 and 3903 of this title.
(e) Secretary and Sergeant at Arms and Doorkeeper of the Senate.—Subject to regulations prescribed by the Committee on Rules and Administration of the Senate, the Secretary and the Sergeant at Arms and Doorkeeper of the Senate may enter into—(1) contracts for the procurement of severable services for a period that begins in one fiscal year and ends in the next fiscal year to the same extent and under the same conditions as the head of an executive agency under the authority of section 3902 of this title; and (2) multiyear contracts for the acquisition of property and services to the same extent and under the same conditions as executive agencies under the authority of section 3903 of this title.
(f) Capitol Police.—The United States Capitol Police may enter into—(1) contracts for the procurement of severable services for a period that begins in one fiscal year and ends in the next fiscal year to the same extent as the head of an executive agency under the authority of section 3902 of this title; and (2) multiyear contracts for the acquisitions of property and nonaudit-related services to the same extent as executive agencies under the authority of section 3903 of this title.
(g) Architect of the Capitol.—The Architect of the Capitol may enter into—(1) contracts for the procurement of severable services for a period that begins in one fiscal year and ends in the next fiscal year to the same extent as the head of an executive agency under the authority of section 3902 of this title; and (2) multiyear contracts for the acquisitions of property and nonaudit-related services to the same extent as executive agencies under the authority of section 3903 of this title.
(h) Secretary of the Smithsonian Institution.—The Secretary of the Smithsonian Institution may enter into—(1) contracts for the procurement of severable services for a period that begins in one fiscal year and ends in the next fiscal year under the authority of section 3902 of this title; and (2) multiyear contracts for the acquisition of property and services under the authority of section 3903 of this title.
41 U.S.C. § 3905 Cost contracts
(a) Cost-Plus-A-Percentage-Of-Cost Contracts Disallowed.—The cost-plus-a-percentage-of-cost system of contracting shall not be used.
(b) Cost-Plus-A-Fixed-Fee Contracts.—(1) In general.—Except as provided in paragraphs (2) and (3), the fee in a cost-plus-a-fixed-fee contract shall not exceed 10 percent of the estimated cost of the contract, not including the fee, as determined by the agency head at the time of entering into the contract. (2) Experimental, developmental, or research work.—The fee in a cost-plus-a-fixed-fee contract for experimental, developmental, or research work shall not exceed 15 percent of the estimated cost of the contract, not including the fee. (3) Architectural or engineering services.—The fee in a cost-plus-a-fixed-fee contract for architectural or engineering services relating to any public works or utility project may include the contractor’s costs and shall not exceed 6 percent of the estimated cost, not including the fee, as determined by the agency head at the time of entering into the contract, of the project to which the fee applies.
(c) Notification.—All cost and cost-plus-a-fixed-fee contracts shall provide for advance notification by the contractor to the procuring agency of any subcontract on a cost-plus-a-fixed-fee basis and of any fixed-price subcontract or purchase order which exceeds in dollar amount either the simplified acquisition threshold or 5 percent of the total estimated cost of the prime contract.
(d) Right To Audit.—A procuring agency, through any authorized representative thereof, has the right to inspect the plans and to audit the books and records of a prime contractor or subcontractor engaged in the performance of a cost or cost-plus-a-fixed-fee contract.
41 U.S.C. § 3906 Cost-reimbursement contracts
(a) Definition.—In this section, the term “executive agency” has the same meaning given in section 133 of this title.
(b) Regulations on the Use of Cost-Reimbursement Contracts.—The Federal Acquisition Regulation shall address the use of cost-reimbursement contracts.
(c) Content.—The regulations promulgated under subsection (b) shall include guidance regarding—(1) when and under what circumstances cost-reimbursement contracts are appropriate; (2) the acquisition plan findings necessary to support a decision to use cost-reimbursement contracts; and (3) the acquisition workforce resources necessary to award and manage cost-reimbursement contracts.
(d) Annual Report.—(1) In general.—The Director of the Office of Management and Budget shall submit an annual report to Congressional committees identified in subsection (e) on the use of cost-reimbursement contracts and task or delivery orders by all executive agencies. (2) Contents.—The report shall include—(A) the total number and value of contracts awarded and orders issued during the covered fiscal year; (B) the total number and value of cost-reimbursement contracts awarded and orders issued during the covered fiscal year; and (C) an assessment of the effectiveness of the regulations promulgated pursuant to subsection (b) in ensuring the appropriate use of cost-reimbursement contracts. (3) Time requirements.—(A) Deadline.—The report shall be submitted no later than March 1 and shall cover the fiscal year ending September 30 of the prior year. (B) Limitation.—The report shall be submitted from March 1, 2009, until March 1, 2014.
(e) Congressional Committees.—The report required by subsection (d) shall be submitted to—(1) the Committee on Oversight and Government Reform of the House of Representatives; (2) the Committee on Homeland Security and Governmental Affairs of the Senate; (3) the Committees on Appropriations of the House of Representatives and the Senate; and (4) in the case of the Department of Defense and the Department of Energy, the Committees on Armed Services of the Senate and the House of Representatives.