§ 2351. Availability of appropriations

• (a) Funds appropriated to the Department of Defense for research and development remain available for obligation for a period of two consecutive years.
• (b) Funds appropriated to the Department of Defense for research and development may be used—
  • (1) for the purposes of section 2353 of this title ; and
  • (2) for purposes related to research and development for which expenditures are specifically authorized in other appropriations of the Department of Defense.

§ 2353. Contracts: acquisition, construction, or furnishing of test facilities and equipment

• (a) A contract of a military department for research or development, or both, may provide for the acquisition or construction by, or furnishing to, the contractor, of research, developmental, or test facilities and equipment that the Secretary of the military department concerned determines to be necessary for the performance of the contract. The acquisition or construction of these research, developmental, or test facilities shall be subject to the cost principles applicable to allowable contract expenses. The facilities and equipment, and specialized housing for them, may be acquired or constructed at the expense of the United States, and may be lent or leased to the contractor with or without reimbursement, or may be sold to him at fair value. This subsection does not authorize new construction or improvements having general utility. The Secretary of Defense and the Secretaries of the military departments shall promulgate regulations necessary to give full force and effect to this section.
• (b) Facilities that would not be readily removable or separable without unreasonable expense or unreasonable loss of value may not be installed or constructed under this section on property not owned by the United States, unless the contract contains—
  • (1) a provision for reimbursing the United States for the fair value of the facilities at the completion or termination of the contract or within a reasonable time thereafter;
  • (2) an option in the United States to acquire the underlying land; or
  • (3) an alternative provision that the Secretary concerned considers to be adequate to protect the interests of the United States in the facilities.
• (c) Proceeds of sales or reimbursements under this section shall be paid into the Treasury as miscellaneous receipts, except to the extent otherwise authorized by law with respect to property acquired by the contractor.

§ 2354. Contracts: indemnification provisions

• (a) With the approval of the Secretary of the military department concerned, any contract of a military department for research or development, or both, may provide that the United States will indemnify the contractor against either or both of the following, but only to the extent that they arise out of the direct performance of the contract and to the extent not compensated by insurance or otherwise:
  • (1) Claims (including reasonable expenses of litigation or settlement) by third persons, including employees of the contractor, for death, bodily injury, or loss of or damage to property, from a risk that the contract defines as unusually hazardous.
  • (2) Loss of or damage to property of the contractor from a risk that the contract defines as unusually hazardous.
• (b) A contract, made under subsection (a), that provides for indemnification must also provide for—
  • (1) notice to the United States of any claim or suit against the contractor for the death, bodily injury, or loss of or damage to property; and
  • (2) control of or assistance in the defense by the United States, at its election, of that suit or claim.
• (c) No payment may be made under subsection (a) unless the Secretary of the department concerned, or an officer or official of his department designated by him, certifies that the amount is just and reasonable.
• (d) Upon approval by the Secretary concerned, payments under subsection (a) may be made from—
  • (1) funds obligated for the performance of the contract concerned;
  • (2) funds available for research or development, or both, and not otherwise obligated; or
  • (3) funds appropriated for those payments.

§ 2357. Technology protection features activities

• (a) The Secretary of Defense shall carry out activities to develop and incorporate technology protection features in a designated system during the research and development phase of such system.
• (b) Any contract for the design or development of a system resulting from activities under subsection (a) for the purpose of enhancing or enabling the exportability of the system, either for the development of program protection strategies for the system or the design and incorporation of exportability features into the system, shall include a cost-sharing provision that requires the contractor to bear half of the cost of such activities, or such other portion of such cost as the Secretary considers appropriate upon showing of good cause.
• (c) In this section:
  • (1) The term “designated system” means any system (including a major system, as defined in section 2302(5) of title 10 , United States Code) that the Under Secretary of Defense for Acquisition and Sustainment designates for purposes of this section.
  • (2) The term “technology protection features” means the technical modifications necessary to protect critical program information, including anti-tamper technologies and other systems engineering activities intended to prevent or delay exploitation of critical technologies in a designated system.

§ 2358. Research and development projects

• (a) The Secretary of Defense or the Secretary of a military department may engage in basic research, applied research, advanced research, and development projects that—
  • (1) are necessary to the responsibilities of such Secretary’s department in the field of research and development; and
  • (2) either—
    • (A) relate to weapon systems and other military needs; or
    • (B) are of potential interest to the Department of Defense.
• (b) The Secretary of Defense or the Secretary of a military department may perform research and development projects—
  • (1) by contract, cooperative agreement, or grant, in accordance with chapter 63 of title 31;
  • (2) through one or more military departments;
  • (3) by using employees and consultants of the Department of Defense;
  • (4) by mutual agreement with the head of any other department or agency of the Federal Government;
  • (5) by transactions (other than contracts, cooperative agreements, and grants) entered into pursuant to section 2371 or 2371b of this title; or
  • (6) by purchases through procurement for experimental purposes pursuant to section 2373 of this title .
• (c) Funds appropriated to the Department of Defense or to a military department may not be used to finance any research project or study unless the project or study is, in the opinion of the Secretary of Defense or the Secretary of that military department, respectively, of potential interest to the Department of Defense or to such military department, respectively.
• (d) Additional authorities, conditions, and requirements relating to certain cooperative agreements authorized by this section are provided in sections 2371 and 2371a of this title.

§ 2358a. Authorities for certain positions at science and technology reinvention laboratories

• (a)
  • (1) The director of any Science and Technology Reinvention Laboratory (hereinafter in this section referred to as an “STRL”) may appoint qualified candidates possessing a bachelor’s degree to positions described in paragraph (1) of subsection (b) as an employee in a laboratory described in that paragraph without regard to the provisions of subchapter I of chapter 33 of title 5 (other than sections 3303 and 3328 of such title).
  • (2) The director of any STRL may appoint qualified veteran candidates to positions described in paragraph (2) of subsection (b) as an employee at a laboratory, agency, or organization specified in that paragraph without regard to the provisions of subchapter I of chapter 33 of title 5.
  • (3) The director of any STRL may appoint qualified candidates enrolled in a program of undergraduate or graduate instruction leading to a bachelor’s or an advanced degree in a scientific, technical, engineering or mathematical course of study at an institution of higher education (as that term is defined in sections 101 and 102 of the Higher Education Act of 1965 ( 20 U.S.C. 1001 , 1002)) to positions described in paragraph (3) of subsection (b) as an employee in a laboratory described in that paragraph without regard to the provisions of subchapter I of chapter 33 of title 5 (other than sections 3303 and 3328 of such title).
  • (4) With respect to any student appointed by the director of an STRL under paragraph (3) to a temporary or term appointment, upon graduation from the applicable institution of higher education (as defined in such paragraph), the director may noncompetitively convert such student to another temporary appointment or to a term or permanent appointment within the STRL without regard to the provisions of subchapter I of chapter 33 of title 5 (other than sections 3303 and 3328 of such title), provided the student meets all eligibility and Office of Personnel Management qualification requirements for the position.
• (b)
  • (1) The positions described in this paragraph are scientific and engineering positions that may be temporary, term, or permanent in any laboratory designated by section 1105(a) of the National Defense Authorization Act for Fiscal Year 2010 ( Public Law 111–84 ; 10 U.S.C. 2358 note) as a Department of Defense science and technology reinvention laboratory.
  • (2) The positions described in this paragraph are scientific, technical, engineering, and mathematics positions, including technicians, in the following:
    • (A) Any laboratory referred to in paragraph (1).
    • (B) Any other Department of Defense research and engineering agency or organization designated by the Secretary for purposes of subsection (a)(2).
  • (3) The positions described in this paragraph are scientific and engineering positions that may be temporary or term in any laboratory designated by section 1105(a) of the National Defense Authorization Act for Fiscal Year 2010 ( Public Law 111–84 ; 10 U.S.C. 2358 note) as a Department of Defense science and technology reinvention laboratory.
• (c) The authority under subsection (a) may not, in any calendar year and with respect to any laboratory, agency, or organization described in subsection (b), be exercised with respect to a number of candidates greater than the following:
  • (1) In the case of a laboratory described in subsection (b)(1), with respect to appointment authority under subsection (a)(1), the number equal to 6 percent of the total number of scientific and engineering positions in such laboratory that are filled as of the close of the fiscal year last ending before the start of such calendar year.
  • (2) In the case of a laboratory, agency, or organization described in subsection (b)(2), with respect to appointment authority under subsection (a)(2), the number equal to 3 percent of the total number of scientific, technical, engineering, mathematics, and technician positions in such laboratory, agency, or organization that are filled as of the close of the fiscal year last ending before the start of such calendar year.
  • (3) In the case of a laboratory described in subsection (b)(3), with respect to appointment authority under subsection (a)(3), the number equal to 10 percent of the total number of scientific and engineering positions in such laboratory that are filled as of the close of the fiscal year last ending before the start of such calendar year.
• (d)
  • (1) There is hereby established in each STRL, each facility of the Major Range and Test Facility Base, and the Defense Test Resource Management Center a category of senior professional scientific and technical positions, the incumbents of which shall be designated as “senior scientific technical managers” and which shall be positions classified above GS–15 of the General Schedule, notwithstanding section 5108(a) of title 5 . The primary functions of such positions shall be—
    • (A) to engage in research and development in the physical, biological, medical, or engineering sciences, or another field closely related to the mission of such STRL, of such facility of the Major Range and Test Facility Base, or the Defense Test Resource Management Center; and
    • (B) to carry out technical supervisory responsibilities.
  • (2)
    • (A) The laboratory positions described in paragraph (1) may be filled, and shall be managed, by the director of the STRL involved, under criteria established pursuant to section 342(b) of the National Defense Authorization Act for Fiscal Year 1995 ( Public Law 103–337 ; 10 U.S.C. 2358 note), relating to personnel demonstration projects at laboratories of the Department of Defense, except that the director of the laboratory involved shall determine the number of such positions at such laboratory, not to exceed 2 percent of the number of scientists and engineers employed at such laboratory as of the close of the last fiscal year before the fiscal year in which any appointments subject to that numerical limitation are made.
    • (B) The test and evaluation positions described in paragraph (1) may be filled, and shall be managed, by the director of the Major Range and Test Facility Base, in the case of a position at a facility of the Major Range and Test Facility Base, and the director of the Defense Test Resource Management Center, in the case of a position at such center, under criteria established pursuant to section 342(b) of the National Defense Authorization Act for Fiscal Year 1995 ( Public Law 103–337 ; 10 U.S.C. 2358 note), relating to personnel demonstration projects at laboratories of the Department of Defense, except that the director involved shall determine the number of such positions at each facility of the Major Range and Test Facility Base and the Defense Test Resource Management Center, not to exceed two percent of the number of scientists and engineers, but at least one position, employed at the Major Range and Test Facility Base or the Defense Test Resource Management Center, as the case may be, as of the close of the last fiscal year before the fiscal year in which any appointments subject to those numerical limitations are made.
• (e)
  • (1) The director of an STRL shall manage the workforce strength, structure, positions, and compensation of such STRL—
    • (A) without regard to any limitation on appointments, positions, or funding with respect to such STRL, subject to subparagraph (B); and
    • (B) in a manner consistent with the budget available with respect to such STRL.
  • (2) Paragraph (1) shall not apply to Senior Executive Service positions (as defined in section 3132(a) of title 5 ) or scientific and professional positions authorized under section 3104 of such title.
• (f) In this section:
  • (1) The term “Defense Test Resource Management Center” means the Department of Defense Test Resource Management Center established under section 196 of this title .
  • (2) The term “employee” has the meaning given that term in section 2105 of title 5 .
  • (3) The term “Major Range and Test Facility Base” means the test and evaluation facilities and resources that are designated by the Secretary of Defense as facilities and resources comprising the Major Range and Test Facility Base.
  • (4) The term “veteran” has the meaning given that term in section 101 of title 38 .

§ 2358b. Joint reserve detachment of the Defense Innovation Unit

• (a) The Secretary of Defense, in consultation with the Secretaries of the military departments, may establish a joint reserve detachment (referred to in this section as the “Detachment”) composed of members of the reserve components described in subsection (b) to be assigned to each office of the Defense Innovation Unit to—
  • (1) support engagement and collaboration with private-sector industry and the community surrounding the location of such office; and
  • (2) to 1 1 So in original. The word “to” probably should not appear. accelerate the use and adoption of commercially-developed technologies for national security purposes.
• (b) Each Secretary of a military department shall select for the Detachment, and make efforts to retain, members of the reserve components who possess relevant private-sector experience in the fields of business, acquisition, intelligence, engineering, technology transfer, science, mathematics, program management, logistics, cybersecurity, or such other fields as determined by the Under Secretary of Defense for Research and Engineering.
• (c) The Detachment shall have the following duties:
  • (1) Providing the Department of Defense with—
    • (A) expertise on and analysis of commercially-developed technologies;
    • (B) commercially-developed technologies to be used as alternatives for technologies in use by the Department; and
    • (C) opportunities for greater engagement and collaboration between the Department and private-sector industry on innovative technologies.
  • (2) On an ongoing basis—
    • (A) partnering with the military departments, the combatant commands, and other Department of Defense organizations to—
      • (i) identify and rapidly prototype commercially-developed technologies; and
      • (ii) use alternative contracting mechanisms to procure such technologies;
    • (B) increasing awareness of—
      • (i) the work of the Defense Innovation Unit; and
      • (ii) the technology requirements of the Department of Defense as identified in the National Defense Science and Technology Strategy developed under section 218 of the John S. McCain National Defense Authorization Act for Fiscal Year 2019 ( Public Law 115–232 ; 132 Stat. 1679 ); and
    • (C) using the investment in research and development made by private-sector industry in assessing and developing dual-use technologies.
  • (3) Carrying out other activities as directed by the Under Secretary of Defense for Research and Engineering.
• (d) Assignment to a Detachment shall not qualify as a joint duty assignment, as defined in section 668(b)(1) of title 10 , United States Code, unless approved by the Secretary of Defense.

§ 2359. Science and technology programs to be conducted so as to foster the transition of science and technology to higher levels of research, development, test, and evaluation

• (a) Each official specified in subsection (b) shall ensure that the management and conduct of the science and technology programs under the authority of that official are carried out in a manner that will foster the transition of science and technology to higher levels of research, development, test, and evaluation.
• (b) Subsection (a) applies to the following officials of the Department of Defense:
  • (1) The Under Secretary of Defense for Research and Engineering.
  • (2) The Secretary of each military department.
  • (3) The Director of the Defense Advanced Research Projects Agency.
  • (4) The directors and heads of other offices and agencies of the Department of Defense with assigned research, development, test, and evaluation responsibilities.

§ 2359a. Defense Research and Development Rapid Innovation Program

• (a)
  • (1) The Secretary of Defense shall establish a competitive, merit-based program to accelerate the fielding of technologies developed pursuant to phase II Small Business Innovation Research Program projects, phase II Small Business Technology Transfer Program projects, technologies developed by the defense laboratories, and other innovative technologies (including dual use technologies).
  • (2) The purpose of this program is to stimulate innovative technologies and reduce acquisition or lifecycle costs, address technical risks, improve the timeliness and thoroughness of test and evaluation outcomes, and rapidly insert such products directly in support of primarily major defense acquisition programs, but also other defense acquisition programs that meet critical national security needs.
• (b) The Secretary shall issue guidelines for the operation of the program. At a minimum such guidance shall provide for the following:
  • (1) The issuance of one or more broad agency announcements or the use of any other competitive or merit-based processes by the Department of Defense for candidate proposals in support of defense acquisition programs as described in subsection (a).
  • (2) The review of candidate proposals by the Department of Defense and by each military department and the merit-based selection of the most promising cost-effective proposals for funding through contracts, cooperative agreements, and other transactions for the purposes of carrying out the program.
  • (3) The total amount of funding provided to any project under the program from funding provided under subsection (d) shall not exceed $6,000,000.
  • (4) No project shall receive more than a total of two years of funding under the program from funding provided under subsection (d), unless the Secretary, or the Secretary’s designee, approves funding for any additional year.
  • (5) Mechanisms to facilitate transition of follow-on or current projects carried out under the program into defense acquisition programs, through the use of the authorities of section 2302e of this title or such other authorities as may be appropriate to conduct further testing, low rate production, or full rate production of technologies developed under the program.
  • (6) Projects are selected using merit-based selection procedures and the selection of projects is not subject to undue influence by Congress or other Federal agencies.
  • (7) A preference under the program for funding small business concerns.
• (c) Nothing in this section shall be interpreted to require or enable any official of the Department of Defense to provide funding under this section to any earmark as defined pursuant to House Rule XXI, clause 9, or any congressionally directed spending item as defined pursuant to Senate Rule XLIV, paragraph 5.
• (d)
  • (1) Subject to the availability of appropriations for such purpose and to the limitation under paragraph (2), the amounts authorized to be appropriated for research, development, test, and evaluation for a fiscal year may be used for such fiscal year for the program established under subsection (a).
  • (2) During any fiscal year, the total amount of awards in an amount greater than $3,000,000 made under the program established under subsection (a) may not exceed 25 percent of the amount made available to carry out such program during such fiscal year.
• (e)
  • (1) The Secretary may transfer funds available for the program to the research, development, test, and evaluation accounts of a military department, defense agency, or the unified combatant command for special operations forces pursuant to a proposal, or any part of a proposal, that the Secretary determines would directly support the purposes of the program.
  • (2) The transfer authority provided in this subsection is in addition to any other transfer authority available to the Department of Defense.

§ 2359b. Defense Acquisition Challenge Program

• (a)
  • (1) The Secretary of Defense, acting through the Under Secretary of Defense for Research and Engineering, shall carry out a program to provide opportunities for the increased introduction of innovative and cost-saving technology in acquisition programs of the Department of Defense.
  • (2) The program, to be known as the Defense Acquisition Challenge Program (hereinafter in this section referred to as the “Challenge Program”), shall provide any person or activity within or outside the Department of Defense with the opportunity to propose alternatives, to be known as challenge proposals, at the component, subsystem, system, or system-of-systems level of an existing Department of Defense acquisition program, or to address any broader functional challenge to Department of Defense missions that may not fall within an acquisition program, that would result in improvements in performance, affordability, manufacturability, or operational capability of that acquisition program or function.
• (b) The Under Secretary shall establish one or more panels of highly qualified scientists and engineers (hereinafter in this section referred to as “Panels”) to provide preliminary evaluations of challenge proposals under subsection (c).
• (c)
  • (1) Under procedures prescribed by the Under Secretary, a person or activity within or outside the Department of Defense may submit challenge proposals to a Panel, through the unsolicited proposal process or in response to a broad agency announcement.
  • (2) The Under Secretary shall establish procedures pursuant to which appropriate officials of the Department of Defense may identify proposals submitted through the unsolicited proposal process as challenge proposals. The procedures shall provide for the expeditious referral of such proposals to a Panel for preliminary evaluation under this subsection.
  • (3) The Under Secretary shall issue on an annual basis not less than one such broad agency announcement inviting interested parties to submit challenge proposals. Such announcements may also identify particular technology areas and acquisition programs or functions that will be given priority in the evaluation of challenge proposals.
  • (4)
    • (A) The Under Secretary shall establish procedures for the prompt issuance of a solicitation for challenge proposals addressing—
      • (i) any acquisition program for which, since the last such announcement, the Secretary concerned has determined under section 2433(d) of this title that the program’s acquisition unit cost or procurement unit cost has increased by a percentage equal to or greater than the critical cost growth threshold for the program (in this section referred to as a “critical cost growth threshold breach”);
      • (ii) any design, engineering, manufacturing, or technology integration issues, in accordance with the assessment required by section 2433(e)(2)(A) of this title , that have contributed significantly to the cost growth of such program; and
      • (iii) any functional challenges of importance to Department of Defense missions.
    • (B) A solicitation under this paragraph may be included in a broad agency announcement issued pursuant to paragraph (3) as long as the broad agency announcement is released in an expeditious manner following the determination of the Secretary concerned that a critical cost growth threshold breach has occurred with respect to a major defense acquisition program.
  • (5) Under procedures established by the Under Secretary, a Panel shall carry out a preliminary evaluation of each challenge proposal submitted in response to a broad agency announcement, or submitted through the unsolicited proposal process and identified as a challenge proposal in accordance with paragraph (2), to determine each of the following:
    • (A) Whether the challenge proposal has merit.
    • (B) Whether the challenge proposal is likely to result in improvements in performance, affordability, manufacturability, or operational capability at the component, subsystem, system, or system-of-systems level of an acquisition program.
    • (C) Whether the challenge proposal could be implemented in the acquisition program rapidly, at an acceptable cost, and without unacceptable disruption to the acquisition program.
    • (D) Whether the challenge proposal is likely to result in improvements to any functional challenges of importance to Department of Defense missions, and whether the proposal could be implemented rapidly, at an acceptable cost, and without unacceptable disruption to such missions.
  • (6) The Under Secretary—
    • (A) may establish procedures to ensure that the Challenge Program does not become an avenue for the repetitive submission of proposals that have been previously reviewed and found not to have merit; and
    • (B) may establish procedures to ensure that the Challenge Program establishes appropriate priorities for proposals from businesses that are not major contractors with the Department of Defense.
  • (7) If a Panel determines that a challenge proposal satisfies each of the criteria specified in paragraph (5), the person or activity submitting that challenge proposal shall be provided an opportunity to submit such challenge proposal for a full review and evaluation under subsection (d).
• (d)
  • (1) Under procedures prescribed by the Under Secretary, for each challenge proposal submitted for a full review and evaluation as provided in subsection (c)(7), the office carrying out the acquisition program to which the proposal relates shall, in consultation with the prime system contractor carrying out such program, conduct a full review and evaluation of the proposal.
  • (2) The full review and evaluation shall, independent of the determination of a Panel under subsection (c)(5), determine each of the matters specified in subparagraphs (A), (B), and (C) of such subsection. The full review and evaluation shall also include—
    • (A) an assessment of the cost of adopting the challenge proposal and implementing it in the acquisition program; and
    • (B) consideration of any intellectual property issues associated with the challenge proposal.
• (e)
  • (1) Under procedures prescribed by the Under Secretary, each challenge proposal determined under a full review and evaluation to satisfy each of the criteria specified in subsection (c)(5) with respect to an acquisition program shall be considered by the office carrying out the applicable acquisition program and the prime system contractor for incorporation into the acquisition program as a new technology insertion at the component, subsystem, system, or system-of-systems level.
  • (2) The Under Secretary shall encourage the adoption of each challenge proposal referred to in paragraph (1) by providing suitable incentives to the office carrying out the acquisition program and the prime system contractor carrying out such program.
  • (3) In the case of a challenge proposal submitted in response to a solicitation issued as a result of a critical cost growth threshold breach that is determined under full review and evaluation to satisfy each of the criteria specified in subsection (c)(5), the Under Secretary shall establish guidelines for covering the costs of the challenge proposal. If appropriate, such guidelines shall not be restricted to funding provided by the Defense Acquisition Challenge Program, but shall also consider alternative funding sources, such as the acquisition program with respect to which the breach occurred.
• (f) Under procedures prescribed by the Under Secretary, if a challenge proposal is determined by a Panel to satisfy each of the criteria specified in subsection (c)(5), but is not determined under a full review and evaluation to satisfy such criteria, the following provisions apply:
  • (1) The office carrying out the full review and evaluation shall provide to the Panel that conducted the preliminary evaluation a statement containing a summary of the rationale for the unfavorable evaluation.
  • (2) If the Panel disagrees with the rationale provided under paragraph (1), the Panel may return the challenge proposal to the office for further consideration.
• (g)
  • (1) Under procedures established by the Under Secretary, the technical resources of the laboratories, research, development, and engineering centers, test and evaluation activities, and other elements of the Department may be called upon to support the activities of the Challenge Program.
  • (2) Funds available to carry out this program may be used to compensate such laboratories, centers, activities, and elements for technical assistance provided to a Panel pursuant to paragraph (1).
• (h) In carrying out each preliminary evaluation under subsection (c) and full review under subsection (d), the Under Secretary shall ensure the elimination of conflicts of interest and that the identity of any person or activity submitting a challenge proposal is not disclosed outside the Federal Government, prior to contract award, without the consent of the person or activity. For purposes of the proceeding sentence, the term “Federal Government” includes both employees of the Federal Government and employees of Federal Government contractors providing advisory and assistance services as described in part 37 of the Federal Acquisition Regulation.
• (i) Funds made available for the Challenge Program may be used only for activities authorized by this section, and not for implementation of challenge proposals.
• (j) The use of general solicitation competitive procedures established under subsection (c) shall be considered to be the use of competitive procedures for purposes of chapter 137 of this title.
• (k) In this section, the term “system”—
  • (1) means—
    • (A) the organization of hardware, software, material, facilities, personnel, data, and services needed to perform a designated function with specified results (such as the gathering of specified data, its processing, and its delivery to users); or
    • (B) a combination of two or more interrelated pieces (or sets) of equipment arranged in a functional package to perform an operational function or to satisfy a requirement; and
  • (2) includes a major system (as defined in section 2302(5) of this title ).
• (l)
  • (1) The Under Secretary of Defense for Research and Engineering shall carry out a pilot program to expand the use of the authority provided in this section to provide opportunities for the introduction of innovative and cost-saving approaches to programs other than major defense acquisition programs through the submission, review, and implementation, where appropriate, of qualifying proposals.
  • (2) For purposes of this subsection, a qualifying proposal is an offer to supply a nondevelopmental item that—
    • (A) is evaluated as achieving a level of performance that is at least equal to the level of performance of an item being procured under a covered acquisition program and as providing savings in excess of 15 percent after considering all costs to the Government of implementing such proposal; or
    • (B) is evaluated as achieving a level of performance that is significantly better than the level of performance of an item being procured under a covered acquisition program without any increase in cost to the Government.
  • (3) The Under Secretary shall adopt modifications as may be needed to the procedures applicable to the Challenge Program to provide for Department of Defense review of, and action on, qualifying proposals. Such procedures shall include, at a minimum, the issuance of a broad agency announcement inviting interested parties to submit qualifying proposals in areas of interest to the Department.
  • (4) In this subsection:
    • (A) The term “nondevelopmental item” has the meaning given that term in section 110 of title 41 .
    • (B) The term “covered acquisition program” means any acquisition program of the Department of Defense other than a major defense acquisition program, but does not include any contract awarded under an exception to competitive acquisition authorized by the Small Business Act ( 15 U.S.C. 631 et seq.).
    • (C) The term “level of performance”, with respect to a nondevelopmental item, means the extent to which the item demonstrates required item functional characteristics.
  • (5) The authority to carry out the pilot program under this subsection shall terminate on January 7, 2021 .

§ 2360. Research and development laboratories: contracts for services of university students

• (a) Subject to the availability of appropriations for such purpose, the Secretary of Defense may procure by contract under the authority of this section the temporary or intermittent services of students at institutions of higher learning for the purpose of providing technical support at defense research and development laboratories. Such contracts may be made directly with such students or with nonprofit organizations employing such students.
• (b) Students providing services pursuant to a contract made under subsection (a) shall be considered to be employees for the purposes of chapter 81 of title 5, relating to compensation for work injuries, and to be employees of the government for the purposes of chapter 171 of title 28, relating to tort claims. Such students who are not otherwise employed by the Federal Government shall not be considered to be Federal employees for any other purpose.
• (c) The Secretary of Defense shall prescribe regulations to carry out this section. Such regulations shall include definitions for the purposes of this section of the terms “student”, “institution of higher learning”, and “nonprofit organization”.

§ 2361. Award of grants and contracts to colleges and universities: requirement of competition

• (a) The Secretary of Defense may not make a grant or award a contract to a college or university for the performance of research and development, or for the construction of any research or other facility, unless—
  • (1) in the case of a grant, the grant is made using competitive procedures; and
  • (2) in the case of a contract, the contract is awarded in accordance with section 2304 of this title (other than pursuant to subsection (c)(5) of that section).
• (b)
  • (1) A provision of law may not be construed as modifying or superseding the provisions of subsection (a), or as requiring funds to be made available by the Secretary of Defense to a particular college or university by grant or contract, unless that provision of law—
    • (A) specifically refers to this section;
    • (B) specifically states that such provision of law modifies or supersedes the provisions of this section; and
    • (C) specifically identifies the particular college or university involved and states that the grant to be made or the contract to be awarded, as the case may be, pursuant to such provision of law is being made or awarded in contravention of subsection (a).
  • (2) A grant may not be made, or a contract awarded, pursuant to a provision of law that authorizes or requires the making of the grant, or the awarding of the contract, in a manner that is inconsistent with subsection (a) until—
    • (A) the Secretary of Defense submits to Congress a notice in writing of the intent to make the grant or award the contract; and
    • (B) a period of 180 days has elapsed after the date on which the notice is received by Congress.

§ 2361a. Extramural acquisition innovation and research activities

• (a) The Secretary of Defense, acting through the Under Secretary of Defense for Acquisition and Sustainment and in coordination with the Under Secretary of Defense for Research and Engineering, shall establish and maintain extramural acquisition innovation and research activities as described in subsection (d), which shall include an acquisition research organization within a civilian college or university that is not owned or operated by the Federal Government that is established to provide and maintain essential research and development capabilities through a long-term strategic relationship with the Department of Defense.
• (b) The goal of any activity conducted pursuant to this section shall be to provide academic analyses and policy alternatives for innovation in defense acquisition policies and practices to policymakers in the Federal Government by using a variety of means intended to widely disseminate research findings from such an activity, in addition to executing demonstration and pilot programs of innovative acquisition policies and practices.
• (c)
  • (1) Not later than June 1, 2020 , the Secretary of Defense shall appoint an individual from civilian life to serve as the director for the extramural acquisition innovation and research activities required by this section (referred to in this section as the “Director”).
  • (2) The Director shall serve a term of five years.
• (d) The activities described in this subsection are as follows:
  • (1) Research on past and current defense acquisition policies and practices, commercial and international best practices, and the application of new technologies and analytical capabilities to improve acquisition policies and practices.
  • (2) Pilot programs to prototype and demonstrate new acquisition practices for potential transition to wider use in the Department of Defense.
  • (3) Establishment of data repositories and development of analytical capabilities, in coordination with the Chief Data Officer of the Department of Defense, to enable researchers and acquisition professionals to access and analyze historical data sets to support research and new policy and practice development.
  • (4) Executive education to—
    • (A) support acquisition workforce development, including for early career, mid-career, and senior leaders; and
    • (B) provide appropriate education on acquisition issues to non-acquisition professionals.
  • (5) On an ongoing basis, a review of the implementation of recommendations contained in relevant Department of Defense and private sector studies on acquisition policies and practices, including—
    • (A) for recommendations for the enactment of legislation, identify the extent to which the recommendations have been enacted into law by Congress;
    • (B) for recommendations for the issuance of regulations, identify the extent to which the recommendations have been adopted through the issuance or revision of regulations;
    • (C) for recommendations for revisions to policies and procedures in the executive branch, identify the extent to which the recommendations have been adopted through issuance of an appropriate implementing directive or other form of guidance; and
    • (D) for recommendations for the resources required to implement recommendations contained in relevant Department of Defense and private sector studies on acquisition policies and practices.
  • (6) Engagement with researchers and acquisition professionals in the Department of Defense, as appropriate.
• (e) Subject to the availability of appropriations, the Secretary may use amounts available in the Defense Acquisition Workforce and Development Account to carry out the requirements of this section.
• (f) Not later than September 30, 2021 , and annually thereafter, the Director shall submit to the Secretary of Defense and the congressional defense committees a report describing the activities conducted under this section during the previous year.

§ 2362. Research and educational programs and activities: historically black colleges and universities and minority-serving institutions of higher education

• (a)
  • (1) The Secretary of Defense, acting through the Assistant Secretary of Defense for Research and Engineering and the Secretary of each military department, shall carry out a program to provide assistance to covered educational institutions to assist the Department in defense-related research, development, testing, and evaluation activities.
  • (2) The Secretary of Defense may not delegate or transfer to an individual outside the Office of the Secretary of Defense the authority regarding the programming or budgeting of the program established by this section that is carried out by the Assistant Secretary of Defense for Research and Engineering.
• (b) The objective of the program established by subsection (a)(1) is to enhance defense-related research and education at covered educational institutions. Such objective shall be accomplished through initiatives designed to—
  • (1) enhance the research and educational capabilities of such institutions in areas of importance to national defense, as determined by the Secretary;
  • (2) encourage the participation of such institutions in the research, development, testing, and evaluation programs and activities of the Department of Defense;
  • (3) increase the number of graduates from such institutions engaged in disciplines important to the national security functions of the Department of Defense, as determined by the Secretary; and
  • (4) encourage research and educational collaborations between such institutions and other institutions of higher education, Government defense organizations, and the defense industry.
• (c) Under the program established by subsection (a)(1), the Secretary of Defense may provide covered educational institutions with funding or technical assistance, including any of the following:
  • (1) Support for research, development, testing, evaluation, or educational enhancements in areas important to national defense through the competitive awarding of grants, cooperative agreements, contracts, scholarships, fellowships, or the acquisition of research equipment or instrumentation.
  • (2) Support to assist in the attraction and retention of faculty in scientific disciplines important to the national security functions of the Department of Defense.
  • (3) Establishing partnerships between such institutions and defense laboratories, Government defense organizations, the defense industry, and other institutions of higher education in research, development, testing, and evaluation in areas important to the national security functions of the Department of Defense.
  • (4) Other such non-monetary assistance as the Secretary finds appropriate to enhance defense-related research, development, testing, and evaluation activities at such institutions.
• (d) The Secretary of Defense may develop incentives to encourage research and educational collaborations between covered educational institutions and other institutions of higher education.
• (e) The Secretary of Defense may establish procedures under which the Secretary may limit funding under this section to institutions that have not otherwise received a significant amount of funding from the Department of Defense for research, development, testing, and evaluation programs supporting the national security functions of the Department.
• (f) In this section the term “covered educational institution” means—
  • (1) an institution of higher education eligible for assistance under title III or V of the Higher Education Act of 1965 ( 20 U.S.C. 1051 et seq.); or
  • (2) an accredited postsecondary minority institution.

§ 2363. Mechanisms to provide funds for defense laboratories for research and development of technologies for military missions

• (a)
  • (1) The Secretary of Defense, in consultation with the Secretaries of the military departments, shall establish mechanisms under which the director of a defense laboratory may use an amount of funds equal to not less than two percent and not more than four percent of all funds available to the defense laboratory for the following purposes:
    • (A) To fund innovative basic and applied research that is conducted at the defense laboratory and supports military missions.
    • (B) To fund development programs that support the transition of technologies developed by the defense laboratory into operational use.
    • (C) To fund workforce development activities that improve the capacity of the defense laboratory to recruit and retain personnel with necessary scientific and engineering expertise that support military missions.
    • (D) To fund the repair or minor military construction of the laboratory infrastructure and equipment, in accordance with subsection (b).
  • (2) The mechanisms established under paragraph (1) shall provide that funding shall be used under paragraph (1) at the discretion of the director of a defense laboratory in consultation with the science and technology executive of the military department concerned.
  • (3) The science and technology executive of a military department may develop policies and guidance to leverage funding and promote cross-laboratory collaboration, including with laboratories of other military departments.
  • (4) After consultation with the science and technology executive of the military department concerned, the director of a defense laboratory may charge customer activities a fixed percentage fee, in addition to normal costs of performance, in order to obtain funds to carry out activities authorized by this subsection. The fixed fee may not exceed four percent of costs.
• (b) Funds shall be available in accordance with subsection (a)(1)(D) only if—
  • (1) the Secretary notifies the congressional defense committees of the total cost of the project before the date on which the Secretary uses the mechanism under such subsection for such project; and
  • (2) the Secretary ensures that the project complies with the applicable cost limitations in—
    • (A) section 2805(d) of this title , with respect to revitalization and recapitalization projects; and
    • (B) section 2811 of this title , with respect to repair projects.
• (c)
  • (1) The Secretary shall establish and maintain mechanisms for the continuous collection of information on achievements, best practices identified, lessons learned, and challenges arising in the exercise of the authority in this section.
  • (2) The Secretary shall establish and maintain mechanisms as follows:
    • (A) Mechanisms for the release to the public of information on achievements and best practices described in paragraph (1) in unclassified form.
    • (B) Mechanisms for dissemination to appropriate civilian and military officials of information on achievements and best practices described in paragraph (1) in classified form.

§ 2364. Coordination and communication of defense research activities and technology domain awareness

• (a) The Secretary of Defense shall promote, monitor, and evaluate programs for the communication and exchange of research, development, and technological data—
  • (1) among the Defense research facilities, combatant commands, and other organizations that are involved in developing for the Department of Defense the technological requirements for new items for use by combat forces;
  • (2) among Defense research facilities and other offices, agencies, and bureaus in the Department that are engaged in related technological matters;
  • (3) among other research facilities and other departments or agencies of the Federal Government that are engaged in research, development, and technological matters;
  • (4) among private commercial, research institution, and university entities engaged in research, development, and technological matters potentially relevant to defense on a voluntary basis;
  • (5) to the extent practicable, to achieve full awareness of scientific and technological advancement and innovation wherever it may occur, whether funded by the Department of Defense, another element of the Federal Government, or other entities; and
  • (6) through development and distribution of clear technical communications to the public, military operators, acquisition organizations, and civilian and military decision-makers that convey successes of research and engineering activities supported by the Department and the contributions of such activities to support national needs.
• (b) The Secretary of Defense shall ensure, to the maximum extent practicable—
  • (1) that Defense research facilities are assigned broad mission requirements rather than specific hardware needs;
  • (2) that appropriate personnel of such facilities are assigned to serve as consultants on component and support system standardization;
  • (3) that the managers of such facilities have broad latitude to choose research and development projects based on awareness of activities throughout the technology domain, including within the Federal Government, the Department of Defense, public and private research institutions and universities, and the global commercial marketplace;
  • (4) that technology position and issue papers prepared by Defense research facilities are readily available to all components of the Department of Defense and to contractors who submit bids or proposals for Department of Defense contracts;
  • (5) that, in order to promote increased consideration of technological issues early in the development process, any technological assessment made by a Defense research facility shall be provided to the Defense Technical Information Center repository to support acquisition decisions; and
  • (6) that, in light of Defense research facilities being funded by the public, Defense research facilities are broadly authorized and encouraged to support national technological development goals and support technological missions of other departments and agencies of the Federal Government, when such support is determined by the Secretary of Defense to be in the best interests of the Federal Government.
• (c) In this section, the term “Defense research facility” means a Department of Defense facility which performs or contracts for the performance of—
  • (1) basic research; or
  • (2) applied research known as exploratory development.

§ 2365. Global Research Watch Program

• (a) The Under Secretary of Defense for Research and Engineering shall carry out a Global Research Watch program in accordance with this section.
• (b) The goals of the program are as follows:
  • (1) To monitor and analyze the basic and applied research activities and capabilities of foreign nations and private sector persons in areas of military interest, including allies and competitors.
  • (2) To provide standards for comparison and comparative analysis of research capabilities of foreign nations and private sector persons in relation to the research capabilities of the United States.
  • (3) To assist Congress and Department of Defense officials in making investment decisions for research in technical areas where the United States may not be the global leader.
  • (4) To identify areas where significant opportunities for cooperative research may exist.
  • (5) To coordinate and promote the international cooperative research and analysis activities of each of the armed forces and Defense Agencies.
  • (6) To establish and maintain an electronic database on international research capabilities, comparative assessments of capabilities, cooperative research opportunities, and ongoing cooperative programs.
• (c) The program shall be focused on research and technologies at a technical maturity level equivalent to Department of Defense basic and applied research programs.
• (d)
  • (1) The Under Secretary shall coordinate the program with the international cooperation and analysis activities of the military departments and Defense Agencies.
  • (2) The Secretaries of the military departments and the directors of the Defense Agencies shall provide the Under Secretary of Defense for Research and Engineering such assistance as the Under Secretary may require for purposes of the program.
  • (3)
    • (A) Funds available to a military department for a fiscal year for monitoring or analyzing the research activities and capabilities of foreign nations may not be obligated or expended until the Under Secretary of Defense for Research and Engineering certifies to the Under Secretary of Defense for Acquisition, Technology, and Logistics that the Secretary of such military department has provided the assistance required under paragraph (2).
    • (B) The limitation in subparagraph (A) shall not be construed to alter or effect the availability to a military department of funds for intelligence activities.
• (e) Information in electronic databases of the Global Research Watch program shall be maintained in unclassified form and, as determined necessary by the Under Secretary of Defense for Research and Engineering, in classified form in such databases.
• (f) The requirement to carry out the program under this section shall terminate on September 30, 2025 .

§ 2366. Major systems and munitions programs: survivability testing and lethality testing required before full-scale production

• (a)
  • (1) The Secretary of Defense shall provide that—
    • (A) a covered system may not proceed beyond low-rate initial production until realistic survivability testing of the system is completed in accordance with this section and the report required by subsection (d) with respect to that testing is submitted in accordance with that subsection; and
    • (B) a major munition program or a missile program may not proceed beyond low-rate initial production until realistic lethality testing of the program is completed in accordance with this section and the report required by subsection (d) with respect to that testing is submitted in accordance with that subsection.
  • (2) The Secretary of Defense shall provide that a covered product improvement program may not proceed beyond low-rate initial production until—
    • (A) in the case of a product improvement to a covered system, realistic survivability testing is completed in accordance with this section; and
    • (B) in the case of a product improvement to a major munitions program or a missile program, realistic lethality testing is completed in accordance with this section.
• (b)
  • (1) Survivability and lethality tests required under subsection (a) shall be carried out sufficiently early in the development phase of the system or program (including a covered product improvement program) to allow any design deficiency demonstrated by the testing to be corrected in the design of the system, munition, or missile (or in the product modification or upgrade to the system, munition, or missile) before proceeding beyond low-rate initial production.
  • (2) The costs of all tests required under that subsection shall be paid from funds available for the system being tested.
• (c)
  • (1) The Secretary of Defense may waive the application of the survivability and lethality tests of this section to a covered system, munitions program, missile program, or covered product improvement program if the Secretary determines that live-fire testing of such system or program would be unreasonably expensive and impractical and submits a certification of that determination to Congress—
    • (A) before Milestone B approval for the system or program; or
    • (B) in the case of a system or program initiated at—
      • (i) Milestone B, as soon as is practicable after the Milestone B approval; or
      • (ii) Milestone C, as soon as is practicable after the Milestone C approval.
  • (2) In the case of a covered system (or covered product improvement program for a covered system), the Secretary may waive the application of the survivability and lethality tests of this section to such system or program and instead allow testing of the system or program in combat by firing munitions likely to be encountered in combat at components, subsystems, and subassemblies, together with performing design analyses, modeling and simulation, and analysis of combat data. Such alternative testing may not be carried out in the case of any covered system (or covered product improvement program for a covered system) unless the Secretary certifies to Congress, before the system or program enters system development and demonstration, that the survivability and lethality testing of such system or program otherwise required by this section would be unreasonably expensive and impracticable.
  • (3) The Secretary shall include with any certification under paragraph (1) or (2) a report explaining how the Secretary plans to evaluate the survivability or the lethality of the system or program and assessing possible alternatives to realistic survivability testing of the system or program.
  • (4) In time of war or mobilization, the President may suspend the operation of any provision of this section.
• (d)
  • (1) At the conclusion of survivability or lethality testing under subsection (a), the Secretary of Defense shall submit a report on the testing to the congressional defense committees. Each such report shall describe the results of the survivability or lethality testing and shall give the Secretary’s overall assessment of the testing.
  • (2) If a decision is made within the Department of Defense to proceed to operational use of a system, or to make procurement funds available for a system, before Milestone C approval of that system, the Secretary of Defense shall submit to the congressional defense committees, as soon as practicable after such decision, the following:
    • (A) A report describing the status of survivability and live fire testing of that system.
    • (B) The report required under paragraph (1).
• (e) In this section:
  • (1) The term “covered system” means—
    • (A) a vehicle, weapon platform, or conventional weapon system that—
      • (i) includes features designed to provide some degree of protection to users in combat; and
      • (ii) is a major system as defined in section 2302(5) of this title ; or
    • (B) any other system or program designated by the Secretary of Defense for purposes of this section.
  • (2) The term “major munitions program” means—
    • (A) a munition program for which more than 1,000,000 rounds are planned to be acquired; or
    • (B) a conventional munitions program that is a major system within the meaning of that term in section 2302(5) of this title .
  • (3) The term “realistic survivability testing” means, in the case of a covered system (or a covered product improvement program for a covered system), testing for vulnerability of the system in combat by firing munitions likely to be encountered in combat (or munitions with a capability similar to such munitions) at the system configured for combat, with the primary emphasis on testing vulnerability with respect to potential user casualties and taking into equal consideration the susceptibility to attack and combat performance of the system.
  • (4) The term “realistic lethality testing” means, in the case of a major munitions program or a missile program (or a covered product improvement program for such a program), testing for lethality by firing the munition or missile concerned at appropriate targets configured for combat.
  • (5) The term “configured for combat”, with respect to a weapon system, platform, or vehicle, means loaded or equipped with all dangerous materials (including all flammables and explosives) that would normally be on board in combat.
  • (6) The term “covered product improvement program” means a program under which—
    • (A) a modification or upgrade will be made to a covered system which (as determined by the Secretary of Defense) is likely to affect significantly the survivability of such system; or
    • (B) a modification or upgrade will be made to a major munitions program or a missile program which (as determined by the Secretary of Defense) is likely to affect significantly the lethality of the munition or missile produced under the program.
  • (7) The term “Milestone B approval” means a decision to enter into system development and demonstration pursuant to guidance prescribed by the Secretary of Defense for the management of Department of Defense acquisition programs.
  • (8) The term “Milestone C approval” means a decision to enter into production and deployment pursuant to guidance prescribed by the Secretary of Defense for the management of Department of Defense acquisition programs.

§ 2366a. Major defense acquisition programs: determination required before Milestone A approval

• (a) Before granting Milestone A approval for a major defense acquisition program or a major subprogram, the milestone decision authority for the program or subprogram shall ensure that—
  • (1) information about the program or subprogram is sufficient to warrant entry of the program or subprogram into the risk reduction phase;
  • (2) the Secretary of the military department concerned and the Chief of the armed force concerned concur in the cost, schedule, technical feasibility, and performance trade-offs that have been made with regard to the program; and
  • (3) there are sound plans for progression of the program or subprogram to the development phase.
• (b) A major defense acquisition program or subprogram may not receive Milestone A approval or otherwise be initiated prior to Milestone B approval until the milestone decision authority determines in writing, after consultation with the Joint Requirements Oversight Council on matters related to program requirements and military needs—
  • (1) that the program fulfills an approved initial capabilities document;
  • (2) that the program has been developed in light of appropriate market research;
  • (3) if the program duplicates a capability already provided by an existing system, the duplication provided by such program is necessary and appropriate;
  • (4) that, with respect to any identified areas of risk, including risks determined by the identification of critical technologies required under section 2448b(a)(1) of this title or any other risk assessment, there is a plan to reduce the risk;
  • (5) that planning for sustainment has been addressed and that a determination of applicability of core logistics capabilities requirements has been made;
  • (6) that an analysis of alternatives has been performed consistent with study guidance developed by the Director of Cost Assessment and Program Evaluation;
  • (7) that a cost estimate for the program has been submitted, with the concurrence of the Director of Cost Assessment and Program Evaluation, and that the level of resources required to develop, procure, and sustain the program is sufficient for successful program execution;
  • (8) that, with respect to a program initiated after January 1, 2019 , technology shall be developed in the program (after Milestone A approval) only if the milestone decision authority determines with a high degree of confidence that such development will not delay the fielding target of the program, or, if the milestone decision authority does not make such determination for a major system component being developed under the program, the milestone decision authority ensures that the technology related to the major system component shall be sufficiently matured and demonstrated in a relevant environment (after Milestone A approval) separate from the program using the prototyping authorities in subchapter II of chapter 144B of this title or other authorities, as appropriate, and have an effective plan for adoption or insertion by the relevant program; and
  • (9) that the program or subprogram meets any other considerations the milestone decision authority considers relevant.
• (c)
  • (1) Not later than 15 days after granting Milestone A approval for a major defense acquisition program, the milestone decision authority for the program shall provide to the congressional defense committees and, in the case of intelligence or intelligence-related activities, the congressional intelligence committees a brief summary report that contains the following elements:
    • (A) The program cost and fielding targets established under section 2448a(a) of this title .
    • (B) The estimated cost and schedule for the program established by the military department concerned, including—
      • (i) the dollar values estimated for the program acquisition unit cost and total life-cycle cost; and
      • (ii) the planned dates for each program milestone and initial operational capability.
    • (C) The independent estimated cost for the program established pursuant to section 2334(a)(6) of this title , and any independent estimated schedule for the program, including—
      • (i) as assessment of the major contributors to the program acquisition unit cost and total life-cycle cost; and
      • (ii) the planned dates for each program milestone and initial operational capability.
    • (D) A summary of the technical or manufacturing risks associated with the program, as determined by the military department concerned, including identification of any critical technologies or manufacturing processes that need to be matured.
    • (E) A summary of the independent technical risk assessment conducted or approved under section 2448b of this title , including identification of any critical technologies or manufacturing processes that need to be matured.
    • (F) A summary of any sufficiency review conducted by the Director of Cost Assessment and Program Evaluation of the analysis of alternatives performed for the program (as referred to in subsection (b)(6)).
    • (G) Any other information the milestone decision authority considers relevant.
  • (2)
    • (A) At the request of any of the congressional defense committees or, in the case of intelligence or intelligence-related activities, the congressional intelligence committees, the milestone decision authority shall submit to the committee an explanation of the basis for a determination made under subsection (b) with respect to a major defense acquisition program, together with a copy of the written determination, or further information or underlying documentation for the information in a brief summary report submitted under paragraph (1), including the independent cost and schedule estimates and the independent technical risk assessments referred to in that paragraph.
    • (B) The explanation or information shall be submitted in unclassified form, but may include a classified annex.
• (d) In this section:
  • (1) The term “major defense acquisition program” has the meaning provided in section 2430 of this title .
  • (2) The term “initial capabilities document” means any capabilities requirement document approved by the Joint Requirements Oversight Council that establishes the need for a materiel approach to resolve a capability gap.
  • (3) The term “Milestone A approval” means a decision to enter into technology maturation and risk reduction pursuant to guidance prescribed by the Secretary of Defense for the management of Department of Defense acquisition programs.
  • (4) The term “Milestone B approval” has the meaning provided that term in section 2366(e)(7) of this title .
  • (5) The term “core logistics capabilities” means the core logistics capabilities identified under section 2464(a) of this title .
  • (6) the term “major subprogram” means a major subprogram of a major defense acquisition program designated under section 2430a(a)(1) of this title .
  • (7) The term “milestone decision authority”, with respect to a major defense acquisition program or a major subprogram, means the official within the Department of Defense designated with the overall responsibility and authority for acquisition decisions for the program or subprogram, including authority to approve entry of the program or subprogram into the next phase of the acquisition process.
  • (8) The term “fielding target” has the meaning given that term in section 2448a(a) of this title .
  • (9) The term “major system component” has the meaning given that term in section 2446a(b)(3) of this title .
  • (10) The term “congressional intelligence committees” has the meaning given that term in section 437(c) of this title .

§ 2366b. Major defense acquisition programs: certification required before Milestone B approval

• (a) A major defense acquisition program may not receive Milestone B approval until the milestone decision authority—
  • (1) has received a preliminary design review and conducted a formal post-preliminary design review assessment, and certifies on the basis of such assessment that the program demonstrates a high likelihood of accomplishing its intended mission;
  • (2) further certifies that the technology in the program has been demonstrated in a relevant environment, as determined by the milestone decision authority on the basis of an independent review and technical risk assessment conducted under section 2448b of this title ;
  • (3) determines in writing that—
    • (A) the program is affordable when considering the ability of the Department of Defense to accomplish the program’s mission using alternative systems;
    • (B) appropriate trade-offs among cost, schedule, technical feasibility, and performance objectives have been made to ensure that the program is affordable when considering the per unit cost and the total life-cycle cost;
    • (C) reasonable cost and schedule estimates have been developed to execute, with the concurrence of the Director of Cost Assessment and Program Evaluation, the product development and production plan under the program;
    • (D) the estimated procurement unit cost for the program and the estimated date for initial operational capability for the baseline description for the program (established under section 2435) do not exceed the program cost and fielding targets established under section 2448a(a) of this title , or, if such estimated cost is higher than the program cost targets or if such estimated date is later than the fielding target, the program cost targets have been increased or the fielding target has been delayed by the milestone decision authority;
    • (E) funding is expected to be available to execute the product development and production plan for the program, consistent with the estimates described in subparagraph (C) for the program;
    • (F) appropriate market research has been conducted prior to technology development to reduce duplication of existing technology and products;
    • (G) the Department of Defense has completed an analysis of alternatives with respect to the program;
    • (H) the Joint Requirements Oversight Council has accomplished its duties with respect to the program pursuant to section 181(b) of this title , including an analysis of the operational requirements for the program;
    • (I) life-cycle sustainment planning, including corrosion prevention and mitigation planning, has identified and evaluated relevant sustainment costs throughout development, production, operation, sustainment, and disposal of the program, and any alternatives, and that such costs are reasonable and have been accurately estimated;
    • (J) an estimate has been made of the requirements for core logistics capabilities and the associated sustaining workloads required to support such requirements;
    • (K) there is a plan to mitigate and account for any costs in connection with any anticipated de-certification of cryptographic systems and components during the production and procurement of the major defense acquisition program to be acquired;
    • (L) the program complies with all relevant policies, regulations, and directives of the Department of Defense;
    • (M) the Secretary of the military department concerned and the Chief of the armed force concerned concur in the trade-offs made in accordance with subparagraph (B);
    • (N) the requirements of section 2446b(e) of this title are met; and
    • (O) appropriate actions have been taken to negotiate and enter into a contract or contract options for the technical data required to support the program;
  • (4) in the case of a space system, performs a cost benefit analysis for any new or follow-on satellite system using a dedicated ground control system instead of a shared ground control system, except that no cost benefit analysis is required to be performed under this paragraph for any Milestone B approval of a space system after December 31, 2019 ; and
  • (5) in the case of a naval vessel program, certifies compliance with the requirements of section 8669b of this title .
• (b)
  • (1) The program manager for a major defense acquisition program that has received certifications or a determination under subsection (a) shall immediately notify the milestone decision authority of any changes to the program or a designated major subprogram of such program that—
    • (A) alter the substantive basis for the certifications or determination of the milestone decision authority relating to any component of such certifications or determination specified in paragraph (1), (2), or (3) of subsection (a); or
    • (B) otherwise cause the program or subprogram to deviate significantly from the material provided to the milestone decision authority in support of such certifications or determination.
  • (2) Upon receipt of information under paragraph (1), the milestone decision authority may withdraw the certifications or determination concerned or rescind Milestone B approval if the milestone decision authority determines that such certifications, determination, or approval are no longer valid.
• (c)
  • (1) Not later than 15 days after granting Milestone B approval for a major defense acquisition program, the milestone decision authority for the program shall provide to the congressional defense committees and, in the case of intelligence or intelligence-related activities, the congressional intelligence committees a brief summary report that contains the following elements:
    • (A) The program cost and fielding targets established under section 2448a(a) of this title .
    • (B) The estimated cost and schedule for the program established by the military department concerned, including—
      • (i) the dollar values estimated for the program acquisition unit cost, average procurement unit cost, and total life-cycle cost; and
      • (ii) the planned dates for each program milestone, initial operational test and evaluation, and initial operational capability.
    • (C) The independent estimated cost for the program established pursuant to section 2334(a)(6) of this title , and any independent estimated schedule for the program, including—
      • (i) the dollar values and ranges estimated for the program acquisition unit cost, average procurement unit cost, and total life-cycle cost; and
      • (ii) the planned dates for each program milestone, initial operational test and evaluation, and initial operational capability.
    • (D) A summary of the technical and manufacturing risks associated with the program, as determined by the military department concerned, including identification of any critical technologies or manufacturing processes that have not been successfully demonstrated in a relevant environment.
    • (E) A summary of the independent technical risk assessment conducted or approved under section 2448b of this title , including identification of any critical technologies or manufacturing processes that have not been successfully demonstrated in a relevant environment.
    • (F) A statement of whether a modular open system approach is being used for the program.
    • (G) An assessment of the sufficiency of developmental test and evaluation plans, including the use of automated data analytics or modeling and simulation tools and methodologies.
    • (H) Any other information the milestone decision authority considers relevant.
  • (2)
    • (A) The certifications and determination under subsection (a) with respect to a major defense acquisition program shall be submitted to the congressional defense committees with the first Selected Acquisition Report submitted under section 2432 of this title after completion of the certification.
    • (B) The milestone decision authority shall retain records of the basis for the certifications and determination under paragraphs (1), (2), and (3) of subsection (a).
  • (3)
    • (A) At the request of any of the congressional defense committees or, in the case of intelligence or intelligence-related activities, the congressional intelligence committees, the milestone decision authority shall submit to the committee an explanation of the basis for the certifications and determination under paragraphs (1), (2), and (3) of subsection (a) with respect to a major defense acquisition program or further information or underlying documentation for the information in a brief summary report submitted under paragraph (1), including the independent cost and schedule estimates and the independent technical risk assessments referred to in that paragraph.
    • (B) The explanation or information shall be submitted in unclassified form, but may include a classified annex.
• (d)
  • (1) The milestone decision authority may, at the time of Milestone B approval or at the time that such milestone decision authority withdraws a certification or rescinds Milestone B approval pursuant to subsection (b)(2), waive the applicability to a major defense acquisition program of one or more components (as specified in paragraph (1), (2), or (3) of subsection (a)) of the certification and determination requirements if the milestone decision authority determines that, but for such a waiver, the Department would be unable to meet critical national security objectives.
  • (2) Whenever the milestone decision authority makes such a determination and authorizes such a waiver—
    • (A) the waiver, the waiver determination, and the reasons for the waiver determination shall be submitted in writing to the congressional defense committees within 30 days after the waiver is authorized; and
    • (B) the milestone decision authority shall review the program not less often than annually to determine the extent to which such program currently satisfies the certification and determination components specified in paragraphs (1), (2), and (3) of subsection (a) until such time as the milestone decision authority determines that the program satisfies all such certification and determination components.
  • (3) The requirement in paragraph (2)(B) shall not apply to a program for which a certification was required pursuant to section 2433a(c) of this title if the milestone decision authority—
    • (A) determines in writing that—
      • (i) the program has reached a stage in the acquisition process at which it would not be practicable to meet the certification component that was waived; and
      • (ii) the milestone decision authority has taken appropriate alternative actions to address the underlying purposes of such certification component; and
    • (B) submits the written determination, and an explanation of the basis for the determination, to the congressional defense committees.
• (e) Any budget request, budget justification material, budget display, reprogramming request, Selected Acquisition Report, or other budget documentation or performance report submitted by the Secretary of Defense to the President regarding a major defense acquisition program receiving a waiver pursuant to subsection (d) shall prominently and clearly indicate that such program has not fully satisfied the certification requirements of this section until such time as the milestone decision authority makes the determination that such program has satisfied all such certification requirements.
• (f) The milestone decision authority may not delegate the certification requirement under subsection (a) or the authority to waive any component of such requirement under subsection (d).
• (g) In this section:
  • (1) The term “major defense acquisition program” means a Department of Defense acquisition program that is a major defense acquisition program for purposes of section 2430 of this title .
  • (2) The term “designated major subprogram” means a major subprogram of a major defense acquisition program designated under section 2430a(a)(1) of this title .
  • (3) The term “milestone decision authority”, with respect to a major defense acquisition program, means the official within the Department of Defense designated with the overall responsibility and authority for acquisition decisions for the program, including authority to approve entry of the program into the next phase of the acquisition process.
  • (4) The term “Milestone B approval” has the meaning provided that term in section 2366(e)(7) of this title .
  • (5) The term “core logistics capabilities” means the core logistics capabilities identified under section 2464(a) of this title .
  • (6) The term “fielding target” has the meaning given that term in section 2448a(a) of this title .
  • (7) The term “major system component” has the meaning given that term in section 2446a(b)(3) of this title .
  • (8) The term “congressional intelligence committees” has the meaning given that term in section 437(c) of this title .

§ 2366c. Major defense acquisition programs: submissions to Congress on Milestone C

• (a) Not later than 15 days after granting Milestone C approval for a major defense acquisition program, the milestone decision authority for the program shall provide to the congressional defense committees and, in the case of intelligence or intelligence-related activities, the congressional intelligence committees a brief summary report that contains the following:
  • (1) The estimated cost and schedule for the program established by the military department concerned, including—
    • (A) the dollar values estimated for the program acquisition unit cost, average procurement unit cost, and total life-cycle cost; and
    • (B) the planned dates for initial operational test and evaluation and initial operational capability.
  • (2) The independent estimated cost for the program established pursuant to section 2334(a)(6) of this title , and any independent estimated schedule for the program, including—
    • (A) the dollar values estimated for the program acquisition unit cost, average procurement unit cost, and total life-cycle cost; and
    • (B) the planned dates for initial operational test and evaluation and initial operational capability.
  • (3) A summary of any production, manufacturing, and fielding risks associated with the program.
  • (4) An assessment of the sufficiency of the developmental test and evaluation completed, including the use of automated data analytics or modeling and simulation tools and methodologies.
• (b) At the request of any of the congressional defense committees or, in the case of intelligence or intelligence-related activities, the congressional intelligence committees, the milestone decision authority shall submit to the committee further information or underlying documentation for the information in a brief summary report submitted under subsection (a), including the independent cost and schedule estimates and the independent technical risk assessments referred to in that subsection.
• (c) In this section, the term “congressional intelligence committees” has the meaning given that term in section 437(c) of this title .

§ 2367. Use of federally funded research and development centers

• (a) Except as provided in subsection (b), the Secretary of Defense may not place work with a federally funded research and development center unless such work is within the purpose, mission, and general scope of effort of such center as established in the sponsoring agreement of the Department of Defense with such center.
• (b) This section does not apply to a federally funded research and development center that performs applied scientific research under laboratory conditions.
• (c)
  • (1) The head of an agency may not obligate or expend amounts appropriated to the Department of Defense for purposes of operating a federally funded research center that was not in existence before June 2, 1986 , until—
    • (A) the head of the agency submits to Congress a report with respect to such center that describes the purpose, mission, and general scope of effort of the center; and
    • (B) a period of 60 days beginning on the date such report is received by Congress has elapsed.
  • (2) In this subsection, the term “head of an agency” has the meaning given such term in section 2302(1) of this title .
• (d) After the close of a fiscal year, and not later than January 1 of the next year, the Secretary shall submit to the Committee on Armed Services and the Committee on Appropriations of the Senate and the Committee on Armed Services and the Committee on Appropriations of the House of Representatives a report setting forth the actual obligations and the actual man-years of effort expended at each federally funded research and development center during that fiscal year.

§ 2368. Centers for Science, Technology, and Engineering Partnership

• (a)
  • (1) The Secretary of Defense, in coordination with the Secretaries of the military departments, shall designate each science and technology reinvention laboratory as a Center for Science, Technology, and Engineering Partnership (in this section referred to as “Centers”) in the recognized core competencies of the designee.
  • (2) The Secretary of Defense shall establish a policy to encourage the Secretary of each military department to reengineer management and business processes and adopt best-business and personnel practices at the Centers of the Secretary concerned in connection with the capability requirements of the Centers, so as to serve as recognized leaders in such capabilities throughout the Department of Defense and in the national technology and industrial base.
  • (3) The Secretary of Defense, acting through the directors of the Centers, may conduct one or more pilot programs, consistent with applicable requirements of law, to test any practices referred to in paragraph (2) that the Directors determine could—
    • (A) improve the efficiency and effectiveness of operations at Centers;
    • (B) improve the support provided by the Centers for the elements of the Department of Defense who use the services of the Centers; and
    • (C) enhance capabilities by reducing the cost and improving the performance and efficiency of executing laboratory missions.
• (b)
  • (1) To achieve one or more objectives set forth in paragraph (2), the Secretary may authorize and establish incentives for the Director of a Center to enter into public-private cooperative arrangements (in this section referred to as a “public-private partnership”) to provide for any of the following:
    • (A) For employees of the Center, academia, private industry, State and local governments, or other entities outside the Department of Defense to perform (under contract, subcontract, or otherwise) work related to the capabilities of the Center, including any work that—
      • (i) involves one or more capabilities of the Center; and
      • (ii) may be applicable to both the Department and commercial entities.
    • (B) For private industry or other entities outside the Department of Defense to use for either Government or commercial purposes any capabilities of the Center that are not fully used for Department of Defense activities for any period determined to be consistent with the needs of the Department of Defense.
  • (2) The objectives for exercising the authority provided in paragraph (1) are as follows:
    • (A) To maximize the use of the capacity of a Center.
    • (B) To reduce or eliminate the cost of ownership of a Center by the Department of Defense.
    • (C) To reduce the cost of science, technology, and engineering activities of the Department of Defense.
    • (D) To leverage private sector investment in—
      • (i) such efforts as research and equipment recapitalization for a Center; and
      • (ii) the promotion of the undertaking of commercial business ventures based on the capabilities of a Center, as determined by the director of the Center.
    • (E) To foster cooperation and technology transfer between the armed forces, academia, private industry, and State and local governments.
    • (F) To increase access by a Center to a skilled technical workforce that can contribute to the effective and efficient execution of the missions of the Department of Defense.
    • (G) To increase the ability of a Center to access and use non-Department of Defense methods to develop and innovate and access capabilities that contribute to the effective and efficient execution of the missions of the Department of Defense.
  • (3)
    • (A) Public-private partnerships entered into under paragraph (1) may be used for purposes relating to technology transfer and other authorities described in subparagraph (B).
    • (B) The authorities described in this subparagraph are provisions of law that provide for cooperation and partnership by the Department of Defense with academia, private industry, and State and local governments, including the following:
      • (i) Sections 3371 through 3375 of title 5.
      • (ii) Sections 2194, 2358, 2371, 2511, 2539b, and 2563 of this title.
      • (iii) Section 209 of title 35 .
      • (iv) Sections 8, 12, and 23 of the Stevenson-Wydler Technology Innovation Act of 1980 ( 15 U.S.C. 3706 , 3710a, and 3715).
• (c) Any capability of a Center made available to the private sector may be used to perform research and testing activities in order to make more efficient and economical use of Government-owned capabilities and encourage the creation and preservation of jobs to ensure the availability of a workforce with the necessary research and technical skills to meet the needs of the armed forces.
• (d) Amounts received by a Center for work performed under a public-private partnership may—
  • (1) be credited to the appropriation or fund, including a working-capital or revolving fund, that incurs the cost of performing the work; or
  • (2) be used by the Director of the Center as the Director considers appropriate and consistent with section 219 of the Duncan Hunter National Defense Authorization Act for Fiscal Year 2009 ( Public Law 110–417 ; 10 U.S.C. 2358 note).
• (e) Capacities of a Center may be made available for use by a private-sector entity under this section only if—
  • (1) the use of the capacities will not have a significant adverse effect on the performance of the Center or the ability of the Center to achieve the mission of the Center, as determined by the Director of the Center; and
  • (2) the private-sector entity agrees—
    • (A) to reimburse the Department of Defense when required in accordance with the guidance of the Department for the direct and indirect costs (including any rental costs) that are attributable to the use of the capabilities by the private-sector entity, as determined by the Secretary of the military departments; and
    • (B) to hold harmless and indemnify the United States from—
      • (i) any claim for damages or injury to any person or property arising out of the use of the capabilities, except under the circumstances described in section 2563(c)(3) of this title ; and
      • (ii) any liability or claim for damages or injury to any person or property arising out of a decision by the Secretary to suspend or terminate that use of capabilities during a war or national emergency.
• (f)
  • (1) Subject to the approval of the Secretary or the head of the another department or agency of the Federal Government concerned, the Director of a Center may enter into a contract, memorandum of understanding or other transaction with a partnership intermediary that provides for the partnership intermediary to perform services for the Department of Defense that increase the likelihood of success in the conduct of cooperative or joint activities of the Center with industry or academic institutions.
  • (2) In this subsection, the term “partnership intermediary” means an agency of a State or local government, or a nonprofit entity owned in whole or in part by, chartered by, funded in whole or in part by, or operated in whole or in part by or on behalf of a State or local government, that assists, counsels, advises, evaluates, or otherwise cooperates with industry or academic institutions that need or can make demonstrably productive use of technology-related assistance from a Center.
• (g) Nothing in this section may be construed to authorize a change, otherwise prohibited by law, from the performance of work at a Center by personnel of the Department of Defense to performance by a contractor.
• (h) In this section:
  • (1) The term “capabilities”, with respect to a Center for Science, Technology, and Engineering Partnership, means the facilities, equipment, personnel, intellectual property, and other assets that support the core competencies of the Center.
  • (2) The term “national technology and industrial base” has the meaning given that term in section 2500 of this title .
  • (3) The term “science and technology reinvention laboratory” means a science and technology reinvention laboratory designated under section 1105 of the National Defense Authorization Act for Fiscal Year 2010 ( Public Law 111–84 ; 10 U.S.C. 2358 note).

§ 2371. Research projects: transactions other than contracts and grants

• (a) The Secretary of Defense and the Secretary of each military department may enter into transactions (other than contracts, cooperative agreements, and grants) under the authority of this subsection in carrying out basic, applied, and advanced research projects. The authority under this subsection is in addition to the authority provided in section 2358 of this title to use contracts, cooperative agreements, and grants in carrying out such projects.
• (b) In any exercise of the authority in subsection (a), the Secretary of Defense shall act through the Defense Advanced Research Projects Agency or any other element of the Department of Defense that the Secretary may designate.
• (c) The authority provided under subsection (a) may be exercised without regard to section 3324 of title 31 .
• (d)
  • (1) A cooperative agreement for performance of basic, applied, or advanced research authorized by section 2358 of this title and a transaction authorized by subsection (a) may include a clause that requires a person or other entity to make payments to the Department of Defense or any other department or agency of the Federal Government as a condition for receiving support under the agreement or other transaction.
  • (2) The amount of any payment received by the Federal Government pursuant to a requirement imposed under paragraph (1) may be credited, to the extent authorized by the Secretary of Defense, to the appropriate account established under subsection (f). Amounts so credited shall be merged with other funds in the account and shall be available for the same purposes and the same period for which other funds in such account are available.
• (e)
  • (1) The Secretary of Defense shall ensure that—
    • (A) to the maximum extent practicable, no cooperative agreement containing a clause under subsection (d) and no transaction entered into under subsection (a) provides for research that duplicates research being conducted under existing programs carried out by the Department of Defense; and
    • (B) to the extent that the Secretary determines practicable, the funds provided by the Government under a cooperative agreement containing a clause under subsection (d) or a transaction authorized by subsection (a) do not exceed the total amount provided by other parties to the cooperative agreement or other transaction.
  • (2) A cooperative agreement containing a clause under subsection (d) or a transaction authorized by subsection (a) may be used for a research project when the use of a standard contract, grant, or cooperative agreement for such project is not feasible or appropriate.
• (f) There is hereby established on the books of the Treasury separate accounts for each of the military departments and the Defense Advanced Research Projects Agency for support of research projects and development projects provided for in cooperative agreements containing a clause under subsection (d) and research projects provided for in transactions entered into under subsection (a). Funds in those accounts shall be available for the payment of such support.
• (g) The Secretary of Defense shall—
  • (1) ensure that management, technical, and contracting personnel of the Department of Defense involved in the award or administration of transactions under this section or other innovative forms of contracting are afforded opportunities for adequate education and training; and
  • (2) establish minimum levels and requirements for continuous and experiential learning for such personnel, including levels and requirements for acquisition certification programs.
• (h) The Secretary of Defense shall prescribe regulations to carry out this section.
• (i)
  • (1) Disclosure of information described in paragraph (2) is not required, and may not be compelled, under section 552 of title 5 for five years after the date on which the information is received by the Department of Defense.
  • (2)
    • (A) Paragraph (1) applies to information described in subparagraph (B) that is in the records of the Department of Defense if the information was submitted to the Department in a competitive or noncompetitive process having the potential for resulting in an award, to the party submitting the information, of a cooperative agreement for performance of basic, applied, or advanced research authorized by section 2358 of this title or another transaction authorized by subsection (a).
    • (B) The information referred to in subparagraph (A) is the following:
      • (i) A proposal, proposal abstract, and supporting documents.
      • (ii) A business plan submitted on a confidential basis.
      • (iii) Technical information submitted on a confidential basis.

§ 2371a. Cooperative research and development agreements under Stevenson-Wydler Technology Innovation Act of 1980

The Secretary of Defense, in carrying out research projects through the Defense Advanced Research Projects Agency, and the Secretary of each military department, in carrying out research projects, may permit the director of any federally funded research and development center to enter into cooperative research and development agreements with any person, any agency or instrumentality of the United States, any unit of State or local government, and any other entity under the authority granted by section 12 of the Stevenson-Wydler Technology Innovation Act of 1980 ( 15 U.S.C. 3710a ). Technology may be transferred to a non-Federal party to such an agreement consistent with the provisions of sections 11 and 12 of such Act ( 15 U.S.C. 3710 , 3710a).

§ 2371b. Authority of the Department of Defense to carry out certain prototype projects

• (a)
  • (1) Subject to paragraph (2), the Director of the Defense Advanced Research Projects Agency, the Secretary of a military department, or any other official designated by the Secretary of Defense may, under the authority of section 2371 of this title , carry out prototype projects that are directly relevant to enhancing the mission effectiveness of military personnel and the supporting 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, and any follow-on production contract or transaction that is awarded pursuant to subsection (f), 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 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; and
    • (B) may be exercised for a transaction for a prototype project, and any follow-on production contract or transaction that is awarded pursuant to subsection (f), 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.
  • (3) The authority of a senior procurement executive or director of the Defense Advanced Research Projects Agency 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)
  • (1) Subsections (e)(1)(B) and (e)(2) of such section 2371 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)
  • (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 2371 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)
  • (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.
• (e) In this section:
  • (1) The term “nontraditional defense contractor” has the meaning given the term under section 2302(9) of this title .
  • (2) The term “small business” means a small business concern as defined under section 3 of the Small Business Act ( 15 U.S.C. 632 ).
• (f)
  • (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 section 2304 of this title , 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 of this title, or under such procedures, terms, and conditions as the Secretary of Defense may establish by regulation.
• (g) 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) 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.

§ 2372. Independent research and development costs: allowable costs

• (a) The Secretary of Defense shall prescribe regulations governing the payment by the Department of Defense of expenses incurred by contractors for independent research and development costs. Such regulations shall provide that expenses incurred for independent research and development shall be reported independently from other allowable indirect costs.
• (b) The regulations prescribed under subsection (a) shall provide that independent research and development costs shall be considered a fair and reasonable, and allowable, indirect expense on Department of Defense contracts.
• (c) Subject to subsection (d), the regulations prescribed under subsection (a) may include the following provisions:
  • (1) Controls on the reimbursement of costs to the contractor for expenses incurred for independent research and development to ensure that such costs were incurred for independent research and development.
  • (2) Implementation of regular methods for transmission—
    • (A) from the Department of Defense to contractors, in a reasonable manner, of timely and comprehensive information regarding planned or expected needs of the Department of Defense for future technology and advanced capability; and
    • (B) from contractors to the Department of Defense, in a reasonable manner, of information regarding progress by the contractor on the independent research and development programs of the contractor.
• (d) Regulations prescribed under subsection (a) may not include provisions that would infringe on the independence of a contractor to choose which technologies to pursue in its independent research and development program if the chief executive officer of the contractor determines that expenditures will advance the needs of the Department of Defense for future technology and advanced capability as transmitted pursuant to subsection (c)(2)(A).
• (e) The regulations prescribed under subsection (a) shall apply to indirect costs incurred on or after October 1, 2017 .

§ 2372a. Bid and proposal costs: allowable costs

• (a) The Secretary of Defense shall prescribe regulations governing the payment by the Department of Defense of expenses incurred by contractors for bid and proposal costs. Such regulations shall provide that expenses incurred for bid and proposal costs shall be reported independently from other allowable indirect costs.
• (b) The regulations prescribed under subsection (a) shall provide that bid and proposal costs shall be allowable as indirect expenses on covered contracts, as defined in section 2324(l) of this title , to the extent that those costs are allocable, reasonable, and not otherwise unallowable by law or under the Federal Acquisition Regulation.
• (c) The Secretary shall establish a goal each fiscal year limiting the amount of reimbursable bid and proposal costs paid by the Department of Defense to an amount equal to not more than one percent of the total aggregate industry sales to the Department of Defense. To achieve such goal, the Secretary may not limit the payment of allowable bid and proposal costs for the covered year.
• (d)
  • (1) If the Department of Defense exceeds the goal established under subsection (c) for a fiscal year, within 180 days after exceeding the goal, the Secretary shall establish an advisory panel. The panel shall be supported by the Defense Acquisition University and the National Defense University, including administrative support.
  • (2) The panel shall be composed of nine individuals who are recognized experts in acquisition and procurement policy appointed by the Secretary. In making such appointments, the Secretary shall ensure that the members of the panel reflect diverse experiences in the public and private sector.
  • (3) The panel shall review laws, regulations, and practices that contribute to the expenses incurred by contractors for bids and proposals in the fiscal year concerned and recommend changes to such laws, regulations, and practices that may reduce expenses incurred by contractors for bids and proposals.
  • (4)
    • (A) Not later than six months after the establishment of the panel, the panel shall submit to the Secretary and the congressional defense committees an interim report on the findings of the panel.
    • (B) Not later than one year after the establishment of the panel, the panel shall submit to the Secretary and the congressional defense committees a final report on the findings of the panel.
  • (5) The panel shall terminate on the day the panel submits the final report under paragraph (4)(B).
  • (6) The Secretary of Defense may use amounts available in the Department of Defense Acquisition Workforce Development Fund established under section 1705 of this title to support the activities of the panel established under this subsection.
• (e) The regulations prescribed under subsection (a) shall apply to indirect costs incurred on or after October 1, 2017 .

§ 2373. Procurement for experimental purposes

• (a) The Secretary of Defense and the Secretaries of the military departments may each buy ordnance, signal, chemical activity, transportation, energy, medical, space-flight, telecommunications, and aeronautical supplies, including parts and accessories, and designs thereof, that the Secretary of Defense or the Secretary concerned considers necessary for experimental or test purposes in the development of the best supplies that are needed for the national defense.
• (b) Purchases under this section may be made inside or outside the United States and by contract or otherwise. Chapter 137 of this title applies only when such purchases are made in quantities greater than necessary for experimentation, technical evaluation, assessment of operational utility, or safety or to provide a residual operational capability.

§ 2374. Merit-based award of grants for research and development

• (a) It is the policy of Congress that an agency named in section 2303(a) of this title should not be required by legislation to award a new grant for research, development, test, or evaluation to a non-Federal Government entity. It is further the policy of Congress that any program, project, or technology identified in legislation be awarded through merit-based selection procedures.
• (b) A provision of law may not be construed as requiring a new grant to be awarded to a specified non-Federal Government entity unless that provision of law—
  • (1) specifically refers to this subsection;
  • (2) specifically identifies the particular non-Federal Government entity involved; and
  • (3) specifically states that the award to that entity is required by such provision of law in contravention of the policy set forth in subsection (a).
• (c) For purposes of this section, a grant is a new grant unless the work provided for in the grant is a continuation of the work performed by the specified entity under a preceding grant.
• (d) This section shall not apply with respect to any grant that calls upon the National Academy of Sciences to investigate, examine, or experiment upon any subject of science or art of significance to an agency named in section 2303(a) of this title and to report on such matters to the Congress or any agency of the Federal Government.

§ 2374a. Prizes for advanced technology achievements

• (a) The Secretary of Defense, acting through the Under Secretary of Defense for Research and Engineering, the Under Secretary of Defense for Acquisition and Sustainment, and the service acquisition executive for each military department, may carry out programs to award cash prizes and other types of prizes that the Secretary determines are appropriate to recognize outstanding achievements in basic, advanced, and applied research, technology development, and prototype development that have the potential for application to the performance of the military missions of the Department of Defense.
• (b) Each program under subsection (a) shall use a competitive process for the selection of recipients of cash prizes. The process shall include the widely-advertised solicitation of submissions of research results, technology developments, and prototypes.
• (c)
  • (1) No prize competition may result in the award of a prize with a fair market value of more than $10,000,000.
  • (2) No prize competition may result in the award of more than $1,000,000 in cash prizes without the approval of the Under Secretary of Defense for Research and Engineering.
  • (3) No prize competition may result in the award of a solely nonmonetary prize with a fair market value of more than $10,000 without the approval of the Under Secretary of Defense for Research and Engineering.
• (d) A program under subsection (a) may be carried out in conjunction with or in addition to the exercise of any other authority of an official referred to in that subsection to acquire, support, or stimulate basic, advanced and applied research, technology development, or prototype projects.
• (e) In addition to such sums as may be appropriated or otherwise made available to the Secretary to award prizes under this section, the Secretary may accept funds or nonmonetary items from other departments and agencies of the Federal Government, from State and local governments, and from the private sector, to award prizes under this section. The Secretary may not give any special consideration to any private sector entity in return for a donation.
• (f) Use of prize authority under this section shall be considered the use of competitive procedures for the purposes of section 2304 of this title .