“(a) Limitation.—An article of military equipment that is an end item of a major weapon system may not be furnished or transferred to a private entity for the conduct of research, development, test and evaluation under contractual agreement with the Department of Defense, if such research, development, test, and evaluation necessitates significantly modifying the military equipment, until the senior acquisition official of a military department, or his designee, submits to the congressional defense committees certification in writing—
that the modification of such article of military equipment is necessary to execute the contractual scope of work and there is no suitable alternative to modifying such article;
that the research, development, test, and evaluation effort is of sufficient interest to the military department to warrant the modification of such article of military equipment;
prior to the end of the period of performance of such a contractual agreement, the article of military equipment will be restored to its original condition; or
it is not necessary to restore the article of military equipment to its original condition because the military department intends to dispose of the equipment or operate the equipment in its modified form.
that the private entity has sufficient resources and capability to fully perform the contractual research, development, test, and evaluation; and
“(5) that the military department has—
identified the scope of future test and evaluation likely to be required prior to transition of the associated technology to a program of record; and
a plan for the conduct of such future test and evaluation, including the anticipated roles and responsibilities of government and the private entity, as applicable.
No military equipment that is an end item of a major weapons system may be transferred or furnished to a private entity for purposes of research and development as authorized under subsection (a) unless the senior officer of the military service concerned certifies to the congressional defense committees [Committees on Armed Services and Appropriations of the Senate and the House of Representatives] that such equipment is not essential to the defense of the United States.
“(c) One-time Authority to Transfer.—
The Secretary of the Navy may transfer, to Piasecki Aircraft Corporation of Essington, Pennsylvania (in this section referred to as ‘transferee’), all right, title, and interest of the United States, except as otherwise provided in this subsection, in and to Navy aircraft N40VT (Bureau Number 163283), also known as the X–49A aircraft, and associated components and test equipment, previously specified as Government-furnished equipment in contract N00019–00–C–0284. The transferee shall provide consideration for the transfer of such military equipment to the transferor of an amount not to exceed fair value, as determined, on a non-delegable basis, by the Secretary.
“(d) Applicable Law.—
The transfer or use of military equipment is subject to all applicable Federal and State laws and regulations, including, but not limited to, the Arms Export Control Act
[22 U.S.C. 2751
et seq.], the Export Administration Act of 1979
[50 U.S.C. 4601
et seq.], continued under Executive Order 12924
[listed in a table under 50 U.S.C. 1701
], International Traffic in Arms Regulations (22
C.F.R. 120 et seq.), Export Administration Regulations (15
C.F.R. 730 et seq.), Foreign Assets Control Regulations (31
C.F.R. 500 et seq.), and the Espionage Act
[act June 15, 1917, ch. 30, 40 Stat. 217
, see Tables for classification].
“(e) Condition of Equipment to Be Transferred.—
“(1) As-is condition.—
The military equipment transferred under subsection (c) shall be transferred in its current ‘as-is’ condition. The Secretary is not required to repair or alter the condition of any military equipment before transferring any interest in such equipment under subsection (c).
“(2) Spare parts or equipment.—
The Secretary of the Navy is not required to provide spare parts or equipment as a result of the transfer authorized under subsection (c).
“(f) Transfer at No Cost to the United States.—
The transfer of military equipment under subsection (c) shall be made at no cost to the United States. Any costs associated with the transfer shall be borne by the transferee.
“(g) Additional Terms and Conditions.—The Secretary shall require that the transfer authorized by section (c) be carried out by means of a written agreement and shall require, at a minimum, the following conditions to the transfer:
A condition stipulating that the transfer of the X-49A aircraft is for the sole purpose of further development, test, and evaluation of vectored thrust ducted propeller (hereinafter in this section referred to as ‘VTDP’) technology.
A condition providing the Government the right to procure the VTDP technology demonstrated under this program at a discounted cost based on the value of the X-49A aircraft and associated equipment at the time of transfer, with such valuation and terms determined by the Secretary.
A condition that the transferee not transfer any interest in, or transfer possession of, the military equipment transferred under subsection (b) to any other party without the prior written approval of the Secretary.
A condition that if the Secretary determines at any time that the transferee has failed to comply with a condition set forth in paragraphs (1) through (3), all items referred to in subsection (b) shall be transferred back to the Navy, at no cost to the United States.
A condition that the transferee acknowledges sole responsibility of the X-49A aircraft and associated equipment and assumes all liability for operation of the X-49A aircraft and associated equipment.
“(h) No Liability for the United States.—
Upon the transfer of military equipment under subsection (b), the United States shall not be liable for any death, injury, loss, or damage that results from the use of such military equipment by any person other than the United States.
“(i) Additional Terms and Conditions.—
The Secretary may require such additional terms and conditions in connection with a transfer under subsection (b) as the Secretary considers appropriate to protect the interests of the United States.
“(j) Definitions.—In this subsection:
The term ‘contractual agreement’ includes contracts, grants, cooperative agreements, and other transactions.”