10 U.S. Code § 2327 - Contracts: consideration of national security objectives

(a) Disclosure of Ownership or Control by a Foreign Government.— The head of an agency shall require a firm or a subsidiary of a firm that submits a bid or proposal in response to a solicitation issued by the Department of Defense to disclose in that bid or proposal any significant interest in such firm or subsidiary (or, in the case of a subsidiary, in the firm that owns the subsidiary) that is owned or controlled (whether directly or indirectly) by a foreign government or an agent or instrumentality of a foreign government, if such foreign government is the government of a country that the Secretary of State determines under section 6(j)(1)(A) of the Export Administration Act of 1979 (50 App. U.S.C. 2405 (j)(1)(A)) has repeatedly provided support for acts of international terrorism.
(b) Prohibition on Entering Into Contracts Against the Interests of the United States.— Except as provided in subsection (c), the head of an agency may not enter into a contract with a firm or a subsidiary of a firm if—
(1) a foreign government owns or controls (whether directly or indirectly) a significant interest in such firm or subsidiary (or, in the case of a subsidiary, in the firm that owns the subsidiary); and
(2) such foreign government is the government of a country that the Secretary of State determines under section 6(j)(1)(A) of the Export Administration Act of 1979 (50 App. U.S.C. 2405 (j)(1)(A)) has repeatedly provided support for acts of international terrorism.
(c) Waiver.—
(1)
(A) If the Secretary of Defense determines under paragraph (2) that entering into a contract with a firm or a subsidiary of a firm described in subsection (b) is not inconsistent with the national security objectives of the United States, the head of an agency may enter into a contract with such firm or subsidiary if in the best interests of the Government.
(B) The Secretary shall maintain records of each contract entered into by reason of subparagraph (A). Such records shall include the following:
(i) The identity of the foreign government concerned.
(ii) The nature of the contract.
(iii) The extent of ownership or control of the firm or subsidiary concerned (or, if appropriate in the case of a subsidiary, of the firm that owns the subsidiary) by the foreign government concerned or the agency or instrumentality of such foreign government.
(iv) The reasons for entering into the contract.
(2) Upon the request of the head of an agency, the Secretary of Defense shall determine whether entering into a contract with a firm or subsidiary described in subsection (b) is inconsistent with the national security objectives of the United States. In making such a determination, the Secretary of Defense shall consider the following:
(A) The relationship of the United States with the foreign government concerned.
(B) The obligations of the United States under international agreements.
(C) The extent of the ownership or control of the firm or subsidiary (or, if appropriate in the case of a subsidiary, of the firm that owns the subsidiary) by the foreign government or an agent or instrumentality of the foreign government.
(D) Whether payments made, or information made available, to the firm or subsidiary under the contract could be used for purposes hostile to the interests of the United States.
(d) List of Firms Subject to Prohibition.—
(1) The Secretary of Defense shall develop and maintain a list of all firms and subsidiaries of firms that the Secretary has identified as being subject to the prohibition in subsection (b).
(2)
(A) A person may request the Secretary to include on the list maintained under paragraph (1) any firm or subsidiary of a firm that the person believes to be owned or controlled by a foreign government described in subsection (b)(2). Upon receipt of such a request, the Secretary shall determine whether the conditions in paragraphs (1) and (2) of subsection (b) exist in the case of that firm or subsidiary. If the Secretary determines that such conditions do exist, the Secretary shall include the firm or subsidiary on the list.
(B) A firm or subsidiary of a firm included on the list may request the Secretary to remove such firm or subsidiary from the list on the basis that it has been erroneously included on the list or its ownership circumstances have significantly changed. Upon receipt of such a request, the Secretary shall determine whether the conditions in paragraphs (1) and (2) of subsection (b) exist in the case of that firm or subsidiary. If the Secretary determines that such conditions do not exist, the Secretary shall remove the firm or subsidiary from the list.
(C) The Secretary shall establish procedures to carry out this paragraph.
(3) The head of an agency shall prohibit each firm or subsidiary of a firm awarded a contract by the agency from entering into a subcontract under that contract in an amount in excess of $25,000 with a firm or subsidiary included on the list maintained under paragraph (1) unless there is a compelling reason to do so. In the case of any subcontract requiring consent by the head of an agency, the head of the agency shall not consent to the award of the subcontract to a firm or subsidiary included on such list unless there is a compelling reason for such approval.
(e) Distribution of List.— The Administrator of General Services shall ensure that the list developed and maintained under subsection (d) is made available to Federal agencies and the public in the same manner and to the same extent as the list of suspended and debarred contractors compiled pursuant to subpart 9.4 of the Federal Acquisition Regulation.
(f) Applicability.—
(1) This section does not apply to a contract for an amount less than $100,000.
(2) This section does not apply to the Coast Guard or the National Aeronautics and Space Administration.
(g) Regulations.— The Secretary of Defense, after consultation with the Secretary of State, shall prescribe regulations to carry out this section. Such regulations shall include a definition of the term “significant interest”.

Source

(Added Pub. L. 99–500, § 101(c) [title X, § 951(a)(1)], Oct. 18, 1986, 100 Stat. 1783–82, 1783–164, and Pub. L. 99–591, § 101(c) [title X, § 951(a)(1)], Oct. 30, 1986, 100 Stat. 3341–82, 3341–164; Pub. L. 99–661, div. A, title IX, formerly title IV, § 951(a)(1),Nov. 14, 1986, 100 Stat. 3944, renumbered title IX, Pub. L. 100–26, § 3(5),Apr. 21, 1987, 101 Stat. 273; amended Pub. L. 100–180, div. A, title XII, § 1231(8),Dec. 4, 1987, 101 Stat. 1160; Pub. L. 100–224, § 5(b)(2),Dec. 30, 1987, 101 Stat. 1538; Pub. L. 105–85, div. A, title VIII, § 843,Nov. 18, 1997, 111 Stat. 1844; Pub. L. 108–136, div. A, title X, § 1031(a)(16),Nov. 24, 2003, 117 Stat. 1597.)
Codification

Pub. L. 99–591is a corrected version of Pub. L. 99–500.
Pub. L. 99–500, Pub. L. 99–591, and Pub. L. 99–661added identical sections.
Prior Provisions

A prior section 2327 was renumbered section 2347 of this title.
Amendments

2003—Subsec. (c)(1)(A). Pub. L. 108–136, § 1031(a)(16)(A), substituted “if in the best interests of the Government” for “after the date on which such head of an agency submits to Congress a report on the contract”.
Subsec. (c)(1)(B). Pub. L. 108–136, § 1031(a)(16)(B), substituted “The Secretary shall maintain records of each contract entered into by reason of subparagraph (A). Such records” for “A report under subparagraph (A)”.
Subsec. (c)(1)(C). Pub. L. 108–136, § 1031(a)(16)(C), struck out subpar. (C) which read as follows: “After the head of an agency submits a report to Congress under subparagraph (A) with respect to a firm or a subsidiary, such head of an agency is not required to submit a report before entering into any subsequent contract with such firm or subsidiary unless the information required to be included in such report under subparagraph (B) has materially changed since the submission of the previous report.”
1997—Subsecs. (d) to (g). Pub. L. 105–85added subsecs. (d) and (e) and redesignated former subsecs. (d) and (e) as (f) and (g), respectively.
1987—Subsecs. (a), (b)(2). Pub. L. 100–224substituted “50 U.S.C. App.” for “50 U.S.C.” in parenthetical after “Export Administration Act of 1979”.
Subsec. (d)(1). Pub. L. 100–180inserted par. (1) designation.
Effective Date

Pub. L. 99–500, § 101(c) [title X, § 951(c)], Oct. 18, 1986, 100 Stat. 1783–82, 1783–165, Pub. L. 99–591, § 101(c) [title X, § 951(c)], Oct. 30, 1986, 100 Stat. 3341–82, 3341–165, and Pub. L. 99–661, div. A, title IX, formerly title IV, § 951(c),Nov. 14, 1986, 100 Stat. 3945, renumbered title IX, Pub. L. 100–26, § 3(5),Apr. 21, 1987, 101 Stat. 273, provided that: “Section 2327 of title 10, United States Code (as added by subsection (a)(1)), shall apply to contracts entered into by the Secretary of Defense after the end of the 90-day period beginning on the date of the enactment of this Act [Oct. 18, 1986].”
Transfer of Functions

For transfer of authorities, functions, personnel, and assets of the Coast Guard, including the authorities and functions of the Secretary of Transportation relating thereto, to the Department of Homeland Security, and for treatment of related references, see sections 468 (b), 551 (d), 552 (d), and 557 of Title 6, Domestic Security, and the Department of Homeland Security Reorganization Plan of November 25, 2002, as modified, set out as a note under section 542 of Title 6.
Reports by Defense Contractors of Dealings With Terrorist Countries

Pub. L. 103–160, div. A, title VIII, § 843,Nov. 30, 1993, 107 Stat. 1720, as amended by Pub. L. 103–355, title VIII, § 8105(j),Oct. 13, 1994, 108 Stat. 3393, directed the Secretary of Defense to require any person with whom the Secretary proposed to enter into a contract for the provision of goods or services in an amount in excess of $5,000,000, to report to the Secretary each commercial transaction which that person had conducted with the government of any terrorist country during the preceding three years and during the course of the contract, required the Secretary to prescribe regulations and to submit an annual report to Congress setting forth those commercial transactions with terrorist countries that had been included in the reports made during the preceding fiscal year, and provided that section 843 ofPub. L. 103–160would expire on Sept. 30, 1996.

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10 USCDescription of ChangeSession YearPublic LawStatutes at Large

This is a list of parts within the Code of Federal Regulations for which this US Code section provides rulemaking authority.

This list is taken from the Parallel Table of Authorities and Rules provided by GPO [Government Printing Office].

It is not guaranteed to be accurate or up-to-date, though we do refresh the database weekly. More limitations on accuracy are described at the GPO site.


48 CFR - Federal Acquisition Regulations System

48 CFR Part 1 - FEDERAL ACQUISITION REGULATIONS SYSTEM

48 CFR Part 2 - DEFINITIONS OF WORDS AND TERMS

48 CFR Part 3 - IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF INTEREST

48 CFR Part 4 - ADMINISTRATIVE MATTERS

48 CFR Part 5 - PUBLICIZING CONTRACT ACTIONS

48 CFR Part 6 - COMPETITION REQUIREMENTS

48 CFR Part 7 - ACQUISITION PLANNING

48 CFR Part 8 - REQUIRED SOURCES OF SUPPLIES AND SERVICES

48 CFR Part 9 - CONTRACTOR QUALIFICATIONS

48 CFR Part 10 - MARKET RESEARCH

48 CFR Part 11 - DESCRIBING AGENCY NEEDS

48 CFR Part 12 - ACQUISITION OF COMMERCIAL ITEMS

48 CFR Part 13 - SIMPLIFIED ACQUISITION PROCEDURES

48 CFR Part 14 - SEALED BIDDING

48 CFR Part 15 - CONTRACTING BY NEGOTIATION

48 CFR Part 16 - TYPES OF CONTRACTS

48 CFR Part 17 - SPECIAL CONTRACTING METHODS

48 CFR Part 18 19

48 CFR Part 22 - APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS

48 CFR Part 23 - ENVIRONMENT, ENERGY AND WATER EFFICIENCY, RENEWABLE ENERGY TECHNOLOGIES, OCCUPATIONAL SAFETY, AND DRUG-FREE WORKPLACE

48 CFR Part 24 - PROTECTION OF PRIVACY AND FREEDOM OF INFORMATION

48 CFR Part 25 - FOREIGN ACQUISITION

48 CFR Part 26 - OTHER SOCIOECONOMIC PROGRAMS

48 CFR Part 27 - PATENTS, DATA, AND COPYRIGHTS

48 CFR Part 28 - BONDS AND INSURANCE

48 CFR Part 29 - TAXES

48 CFR Part 30 - COST ACCOUNTING STANDARDS ADMINISTRATION

48 CFR Part 31 - CONTRACT COST PRINCIPLES AND PROCEDURES

48 CFR Part 32 - CONTRACT FINANCING

48 CFR Part 33 - PROTESTS, DISPUTES, AND APPEALS

48 CFR Part 34 - MAJOR SYSTEM ACQUISITION

48 CFR Part 35 - RESEARCH AND DEVELOPMENT CONTRACTING

48 CFR Part 36 - CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS

48 CFR Part 37 - SERVICE CONTRACTING

48 CFR Part 38 - FEDERAL SUPPLY SCHEDULE CONTRACTING

48 CFR Part 39 - ACQUISITION OF INFORMATION TECHNOLOGY

48 CFR Part 41 - ACQUISITION OF UTILITY SERVICES

48 CFR Part 42 - CONTRACT ADMINISTRATION AND AUDIT SERVICES

48 CFR Part 43 - CONTRACT MODIFICATIONS

48 CFR Part 44 - SUBCONTRACTING POLICIES AND PROCEDURES

48 CFR Part 45 - GOVERNMENT PROPERTY

48 CFR Part 46 - QUALITY ASSURANCE

48 CFR Part 47 - TRANSPORTATION

48 CFR Part 48 - VALUE ENGINEERING

48 CFR Part 49 - TERMINATION OF CONTRACTS

48 CFR Part 50 - EXTRAORDINARY CONTRACTUAL ACTIONS AND THE SAFETY ACT

48 CFR Part 51 - USE OF GOVERNMENT SOURCES BY CONTRACTORS

48 CFR Part 52 - SOLICITATION PROVISIONS AND CONTRACT CLAUSES

48 CFR Part 53 - FORMS

48 CFR Part 5433 - PROTESTS, DISPUTES AND APPEALS

 

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