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10 U.S. Code § 3678 - Contracts with terms of 18 months or more: limitation

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The Secretary of Defense or the Secretary of a military department may not enter into any contract with a term of 18 months or more, or extend or renew any contract for a term of 18 months or more, for any vessel, aircraft, or vehicle, through a lease, charter, or similar agreement, unless the Secretary has considered all costs of such contract (including estimated termination liability) and has determined in writing that the contract is in the best interest of the Government.

(Added and amended Pub. L. 116–283, div. A, title XVIII, § 1825(a), (j), Jan. 1, 2021, 134 Stat. 4206, 4208.)
Editorial Notes

The text of subsec. (b) of section 2401a of this title, which was transferred to this section and amended by Pub. L. 116–283, § 1825(j), was based on Pub. L. 103–355, title III, § 3065(a)(1), Oct. 13, 1994, 108 Stat. 3337; Pub. L. 104–106, div. A, title VIII, § 807(a)(1)(A), Feb. 10, 1996, 110 Stat. 391.

Prior Provisions

Provisions similar to those in this section were contained in Pub. L. 101–165, title IX, § 9081, Nov. 21, 1989, 103 Stat. 1147, which was set out as a note under section 2401 of this title, prior to repeal by Pub. L. 103–355, § 3065(b).


2021—Pub. L. 116–283, § 1825(j), transferred subsec. (b) of section 2401a of this title to this section and struck out subsec. (b) designation and heading “Limitation on Contracts With Terms of 18 Months or More” at beginning.

Statutory Notes and Related Subsidiaries
Effective Date

Section and amendment by Pub. L. 116–283 effective Jan. 1, 2022, with additional provisions for delayed implementation and applicability of existing law, see section 1801(d) of Pub. L. 116–283, set out as an Effective Date of 2021 Amendment note preceding section 3001 of this title.

Leases for Tanker Aircraft Under Multiyear Aircraft-Lease Pilot Program

Pub. L. 107–314, div. A, title I, § 133, Dec. 2, 2002, 116 Stat. 2477, provided that:

“The Secretary of the Air Force may not enter into a lease for the acquisition of tanker aircraft for the Air Force under section 8159 of the Department of Defense Appropriations Act, 2002 (division A of Public Law 107–117; 115 Stat. 2284; 10 U.S.C. 2401a note [now 10 U.S.C. 3678 note, set out below]) until—
the Secretary submits the report specified in subsection (c)(6) of such section; and
“(2) either—
authorization and appropriation of funds necessary to enter into such lease are provided by law; or
a new start reprogramming notification for the funds necessary to enter into such lease has been submitted in accordance with established procedures.”
Multi-Year Aircraft Lease Pilot Program

Pub. L. 107–206, title I, § 308, Aug. 2, 2002, 116 Stat. 841, provided that:

“During the current fiscal year and hereafter, section 2533a of title 10, United States Code [now 10 U.S.C. 4862], shall not apply to any transaction entered into to acquire or sustain aircraft under the authority of section 8159 of the Department of Defense Appropriations Act, 2002 (division A of Public Law 107–117; 115 Stat. 2284) [set out below].”

Pub. L. 107–117, div. A, title VIII, § 8159, Jan. 10, 2002, 115 Stat. 2284, as amended by Pub. L. 107–248, title VIII, § 8117, Oct. 23, 2002, 116 Stat. 1564; Pub. L. 113–76, div. C, title VIII, § 8122, Jan. 17, 2014, 128 Stat. 133, provided that:

The Secretary of the Air Force may, from funds provided in this Act [see Tables for classification] or any future appropriations Act, establish and make payments on a multi-year pilot program for leasing general purpose Boeing 767 aircraft and Boeing 737 aircraft in commercial configuration.
Sections 2401 [see 10 U.S.C. 3671 et seq.] and 2401a [see 10 U.S.C. 3678, 3681] of title 10, United States Code, shall not apply to any aircraft lease authorized by this section.
“(c) Under the aircraft lease Pilot Program authorized by this section:
The Secretary may include terms and conditions in lease agreements that are customary in aircraft leases by a non-Government lessor to a non-Government lessee, but only those that are not inconsistent with any of the terms and conditions mandated herein. Notwithstanding the provisions of Section [sic] 3324 of Title 31, United States Code, payment for the acquisition of leasehold interests under this section may be made for each annual term up to one year in advance.
The term of any individual lease agreement into which the Secretary enters under this section shall not exceed 10 years, inclusive of any options to renew or extend the initial lease term.
The Secretary may provide for special payments in a lessor if the Secretary terminates or cancels the lease prior to the expiration of its term. Such special payments shall not exceed an amount equal to the value of 1 year’s lease payment under the lease.
Subchapter IV of chapter 15 of title 31, United States Code shall apply to the lease transactions under this section, except that the limitation in section 1553(b)(2) shall not apply.
The Secretary shall lease aircraft under terms and conditions consistent with this section and consistent with the criteria for an operating lease as defined in OMB Circular A–11, as in effect at the time of the lease.
“(6) Lease arrangements authorized by this section may not commence until:
The Secretary submits a report to the congressional defense committees [Committees on Armed Services of the Senate and the House of Representatives and Subcommittees on Defense of the Committees on Appropriations of the Senate and the House of Representatives] outlining the plans for implementing the Pilot Program. The report shall describe the terms and conditions of proposed contracts and describe the expected savings, if any, comparing total costs, including operation, support, acquisition, and financing, of the lease, including modification, with the outright purchase of the aircraft as modified.
A period of not less than 30 calendar days has elapsed after submitting the report.
The Air Force shall accept delivery of the aircraft in a general purpose configuration.
At the conclusion of the lease term, each aircraft obtained under that lease may be returned to the contractor in the same configuration in which the aircraft was delivered.
The present value of the total payments over the duration of each lease entered into under this authority shall not exceed 90 percent of the fair market value of the aircraft obtained under that lease.
“(d) No lease entered into under this authority shall provide for—
the modification of the general purpose aircraft from the commercial configuration, unless and until separate authority for such conversion is enacted and only to the extent budget authority is provided in advance in appropriations Acts for that purpose; or
the purchase of the aircraft by, or the transfer of ownership to, the Air Force.
The authority granted to the Secretary of the Air Force by this section is separate from and in addition to, and shall not be construed to impair or otherwise affect, the authority of the Secretary to procure transportation or enter into leases under a provision of law other than this section.
The authority provided under this section may be used to lease not more than a total of 100 Boeing 767 aircraft and 4 Boeing 737 aircraft for the purposes specified herein.
Notwithstanding any other provision of law, any payments required for a lease entered into under this Section, or any payments made pursuant to subsection (c)(3) above, may be made from appropriations available for operation and maintenance or for lease or procurement of aircraft at the time that the lease takes effect; appropriations available for operation and maintenance or for lease or procurement of aircraft at the time that the payment is due; or funds appropriated for those payments.”
Lease of Firefighting, Crash Rescue, and Snow Removal Equipment

Pub. L. 105–262, title VIII, § 8126, Oct. 17, 1998, 112 Stat. 2333, provided that:

The Secretary of the Army and the Secretary of the Air Force may each enter into one or more multiyear leases of nontactical firefighting equipment, nontactical crash rescue equipment, or nontactical snow removal equipment. The period of a lease entered into under this section shall be for any period not in excess of 10 years. Any such lease shall provide that performance under the lease during the second and subsequent years of the contract is contingent upon the appropriation of funds and shall provide for a cancellation payment to be made to the lessor if such appropriations are not made.
Lease payments made under subsection (a) shall be made from amounts provided in this or future appropriations Acts.
This section is effective for all fiscal years beginning after September 30, 1998.”