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-CITE-
10 USC CHAPTER 433 - PROCUREMENT 01/03/2007

-EXPCITE-
TITLE 10 - ARMED FORCES
Subtitle B - Army
PART IV - SERVICE, SUPPLY, AND PROCUREMENT
CHAPTER 433 - PROCUREMENT

-HEAD-
CHAPTER 433 - PROCUREMENT

-MISC1-
Sec.
[4531. Repealed.]
4532. Factories and arsenals: manufacture at; abolition of.
[4533 to 4535. Repealed.]
4536. Equipment: post bakeries, schools, kitchens, and mess
halls.
[4537 to 4539. Repealed.]
4540. Architectural and engineering services.
4541. Army arsenals: treatment of unutilized or
underutilized plant-capacity costs.
4542. Technical data packages for large-caliber cannon:
prohibition on transfers to foreign countries;
exception.
4543. Army industrial facilities: sales of manufactured
articles or services outside Department of Defense.
4544. Army industrial facilities: cooperative activities
with non-Army entities.

AMENDMENTS
2004 - Pub. L. 108-375, div. A, title III, Sec. 353(b), Oct. 28,
2004, 118 Stat. 1861, added item 4544.
2000 - Pub. L. 106-398, Sec. 1 [[div. A], title III, Sec.
342(b)], Oct. 30, 2000, 114 Stat. 1654, 1654A-65, added item 4541.
1993 - Pub. L. 103-160, div. A, title I, Sec. 158(a)(2), title
VIII, Sec. 828(a)(5), Nov. 30, 1993, 107 Stat. 1582, 1713, struck
out items 4531 "Authorization", 4533 "Army ration", 4534
"Subsistence supplies: contract stipulations; place of delivery on
inspection", 4535 "Exceptional subsistence supplies: purchase
without advertising", 4537 "Military surveys and maps: assistance
of United States mapping agencies", 4538 "Unserviceable ammunition:
exchange and reclamation", and 4541 "Gratuitous services of
officers of the Army Reserve" and added item 4543.
1986 - Pub. L. 99-500, Sec. 101(c) [title IX, Sec. 9036(b)(2)],
Oct. 18, 1986, 100 Stat. 1783-82, 1783-108, and Pub. L. 99-591,
Sec. 101(c) [title IX, Sec. 9036(b)(2)], Oct. 30, 1986, 100 Stat.
3341-82, 3341-108; Pub. L. 99-661, div. A, title XII, Sec.
1203(a)(2), Nov. 14, 1986, 100 Stat. 3969, amended analysis
identically adding item 4542.
1982 - Pub. L. 97-258, Sec. 2(b)(9)(A), Sept. 13, 1982, 96 Stat.
1056, added item 4541.
1970 - Pub. L. 91-482, Sec. 2A, Oct. 21, 1970, 84 Stat. 1082,
struck out item 4539 "Horses and mules".

-End-



-CITE-
10 USC Sec. 4531 01/03/2007

-EXPCITE-
TITLE 10 - ARMED FORCES
Subtitle B - Army
PART IV - SERVICE, SUPPLY, AND PROCUREMENT
CHAPTER 433 - PROCUREMENT

-HEAD-
Sec. 4531. Repealed.

-MISC1-
[Sec. 4531. Repealed. Pub. L. 103-160, div. A, title VIII, Sec.
823(2), Nov. 30, 1993, 107 Stat. 1707].
Section, act Aug. 10, 1956, ch. 1041, 70A Stat. 253, authorized
Secretary of the Army to procure materials and facilities necessary
to maintain and support the Army.

-End-



-CITE-
10 USC Sec. 4532 01/03/2007

-EXPCITE-
TITLE 10 - ARMED FORCES
Subtitle B - Army
PART IV - SERVICE, SUPPLY, AND PROCUREMENT
CHAPTER 433 - PROCUREMENT

-HEAD-
Sec. 4532. Factories and arsenals: manufacture at; abolition of

-STATUTE-
(a) The Secretary of the Army shall have supplies needed for the
Department of the Army made in factories or arsenals owned by the
United States, so far as those factories or arsenals can make those
supplies on an economical basis.
(b) The Secretary may abolish any United States arsenal that he
considers unnecessary.

-SOURCE-
(Aug. 10, 1956, ch. 1041, 70A Stat. 254.)

-MISC1-



HISTORICAL AND REVISION NOTES
--------------------------------------------------------------------
Revised Source (U.S. Code) Source (Statutes at
section Large)
--------------------------------------------------------------------
4532(a) 5:181-4(e). June 28, 1950, ch. 383,
Sec. 101(e), 64 Stat.
264.
4532(b)
50:55.
R.S. 1666.
--------------------------------------------------------------------

The words "Except as otherwise provided by law", in 5:181-4(e),
are omitted, since there is no law within the scope of the
exception. The word "made" is substituted for the words
"manufactured or produced". The words "United States" are
substituted for the word "Government", in 5:181-4(e). The words
"which he considers" are substituted for the words "as, in his
judgment", in 50:55. The words "useless or", in 50:55, are omitted
as surplusage.

SALE OF ARSENAL
Act Mar. 3, 1875, ch. 174, 18 Stat. 510, authorized the sale of
the arsenal at Detroit, Michigan.

-End-



-CITE-
10 USC Secs. 4533 to 4535 01/03/2007

-EXPCITE-
TITLE 10 - ARMED FORCES
Subtitle B - Army
PART IV - SERVICE, SUPPLY, AND PROCUREMENT
CHAPTER 433 - PROCUREMENT

-HEAD-
Secs. 4533 to 4535. Repealed.

-MISC1-
[Secs. 4533 to 4535. Repealed. Pub. L. 103-160, div. A, title VIII,
Sec. 823(3)-(5), Nov. 30, 1993, 107 Stat. 1707].
Section 4533, act Aug. 10, 1956, ch. 1041, 70A Stat. 254, related
to purchases of army rations.
Section 4534, act Aug. 10, 1956, ch. 1041, 70A Stat. 254, related
to subsistence supplies, contract stipulations, and place of
delivery on inspection.
Section 4535, act Aug. 10, 1956, ch. 1041, 70A Stat. 254,
provided that exceptional subsistence supplies could be purchased
without advertising.

-End-



-CITE-
10 USC Sec. 4536 01/03/2007

-EXPCITE-
TITLE 10 - ARMED FORCES
Subtitle B - Army
PART IV - SERVICE, SUPPLY, AND PROCUREMENT
CHAPTER 433 - PROCUREMENT

-HEAD-
Sec. 4536. Equipment: post bakeries, schools, kitchens, and mess
halls

-STATUTE-
Money necessary for the following items for the use of enlisted
members of the Army may be spent from appropriations for regular
supplies:
(1) Equipment for post bakeries.
(2) Furniture, textbooks, paper, and equipment for post
schools.
(3) Tableware and mess furniture for kitchens and mess halls.

-SOURCE-
(Aug. 10, 1956, ch. 1041, 70A Stat. 254.)

-MISC1-



HISTORICAL AND REVISION NOTES
--------------------------------------------------------------------
Revised Source (U.S. Code) Source (Statutes at
section Large)
--------------------------------------------------------------------
4536 10:1334. June 13, 1890, ch. 423
(1st proviso under
"Quartermaster's
Department"), 26 Stat.
152.
--------------------------------------------------------------------

The words "Money necessary * * * may be spent" are substituted
for the words "There may be expended * * * the amounts required".
The word "bakeries" is substituted for the words "bake house to
carry on post bakeries". The words "each and all" are omitted as
surplusage.

-End-



-CITE-
10 USC Secs. 4537, 4538 01/03/2007

-EXPCITE-
TITLE 10 - ARMED FORCES
Subtitle B - Army
PART IV - SERVICE, SUPPLY, AND PROCUREMENT
CHAPTER 433 - PROCUREMENT

-HEAD-
Secs. 4537, 4538. Repealed.

-MISC1-
[Secs. 4537, 4538. Repealed. Pub. L. 103-160, div. A, title VIII,
Sec. 823(6), (7), Nov. 30, 1993, 107 Stat. 1707].
Section 4537, acts Aug. 10, 1956, ch. 1041, 70A Stat. 254; Nov.
2, 1966, Pub. L. 89-718, Sec. 8(a), 80 Stat. 1117; Dec. 12, 1980,
Pub. L. 96-513, title V, Sec. 512(14), 94 Stat. 2930, authorized
Secretary of the Army to obtain assistance of United States mapping
agencies in making and developing military surveys and maps.
Section 4538, acts Aug. 10, 1956, ch. 1041, 70A Stat. 255; Dec.
12, 1980, Pub. L. 96-513, title V, Sec. 512(15), 94 Stat. 2930,
related to exchange and reclamation of unserviceable ammunition.

-End-



-CITE-
10 USC Sec. 4539 01/03/2007

-EXPCITE-
TITLE 10 - ARMED FORCES
Subtitle B - Army
PART IV - SERVICE, SUPPLY, AND PROCUREMENT
CHAPTER 433 - PROCUREMENT

-HEAD-
Sec. 4539. Repealed.

-MISC1-
[Sec. 4539. Repealed. Pub. L. 91-482, Sec. 1(a), Oct. 21, 1970, 84
Stat. 1082].
Section, act Aug. 10, 1956, ch. 1041, 70A Stat. 255, provided for
purchase of horses and mules in open market at Army posts, within
maximum prices prescribed by Secretary of the Army.

-End-



-CITE-
10 USC Sec. 4540 01/03/2007

-EXPCITE-
TITLE 10 - ARMED FORCES
Subtitle B - Army
PART IV - SERVICE, SUPPLY, AND PROCUREMENT
CHAPTER 433 - PROCUREMENT

-HEAD-
Sec. 4540. Architectural and engineering services

-STATUTE-
(a) Whenever he considers that it is advantageous to the national
defense and that existing facilities of the Department of the Army
are inadequate, the Secretary of the Army may, by contract or
otherwise, employ the architectural or engineering services of any
person outside that Department for producing and delivering
designs, plans, drawings, and specifications needed for any public
works or utilities project of the Department.
(b) The fee for any service under this section may not be more
than 6 percent of the estimated cost, as determined by the
Secretary, of the project to which it applies.
(c) Sections 305, 3324, and 7204, chapter 51, and subchapters
III, IV, and VI of chapter 53 of title 5 do not apply to employment
under this section.

-SOURCE-
(Aug. 10, 1956, ch. 1041, 70A Stat. 255; Pub. L. 89-718, Sec. 28,
Nov. 2, 1966, 80 Stat. 1119; Pub. L. 95-454, title VII, Sec.
703(c)(3), title VIII, Sec. 801(a)(3)(I), Oct. 13, 1978, 92 Stat.
1217, 1222; Pub. L. 96-513, title V, Sec. 512(16), Dec. 12, 1980,
94 Stat. 2930.)

-MISC1-



HISTORICAL AND REVISION NOTES
--------------------------------------------------------------------
Revised Source (U.S. Code) Source (Statutes at
section Large)
--------------------------------------------------------------------
4540(a) 5:221 (1st sentence, less Aug. 7, 1939, ch. 511,
last 15 words). Sec. 2, 53 Stat. 1240.
4540(b) 5:221 (less 1st sentence).
4540(c) 5:221 (last 15 words of
1st sentence).
--------------------------------------------------------------------

In subsection (a), the words "and providing that in the opinion"
are omitted as covered by the words "whenever he considers". The
words "needed for" are substituted for the words "required for the
accomplishment of".
In subsection (c), reference is made in substance to the
Classification Act of 1949, instead of the Classification Act of
1923 referred to in the source statute, since section 1106(a) of
the Classification Act of 1949, 63 Stat. 972, provides that all
references in other acts to the Classification Act of 1923 should
be considered to refer to the Classification Act of 1949.

AMENDMENTS
1980 - Subsec. (c). Pub. L. 96-513 substituted "and 7204, chapter
51, and subchapters III, IV, and VI of chapter 53 of title 5" for
"5101-5115, 5331-5338, 5341, 5342, and 7204 of title 5 and
subchapter VI of chapter 53 of title 5".
1978 - Subsec. (c). Pub. L. 95-454, Sec. 801(a)(3)(I), inserted
reference to subchapter VI of chapter 53 of title 5.
Pub. L. 95-454, Sec. 703(c)(3), substituted "7204" for "7154".
1966 - Subsec. (c). Pub. L. 89-718 substituted "Sections 305,
3324, 5101-5115, 5331-5338, 5341, 5342, and 7154 of title 5" for
"Sections 1071-1153 of title 5".

EFFECTIVE DATE OF 1980 AMENDMENT
Amendment by Pub. L. 96-513 effective Dec. 12, 1980, see section
701(b)(3) of Pub. L. 96-513, set out as a note under section 101 of
this title.

EFFECTIVE DATE OF 1978 AMENDMENT
Amendment by section 703(c)(3) of Pub. L. 95-454 effective 90
days after Oct. 13, 1978, see section 907 of Pub. L. 95-454, set
out as a note under section 1101 of Title 5, Government
Organization and Employees.
Amendment by section 801(a)(3)(I) of Pub. L. 95-454 effective on
first day of first applicable pay period beginning on or after 90th
day after Oct. 13, 1978, see section 801(a)(4) of Pub. L. 95-454,
set out as an Effective Date note under section 5361 of Title 5.

-End-



-CITE-
10 USC Sec. 4541 01/03/2007

-EXPCITE-
TITLE 10 - ARMED FORCES
Subtitle B - Army
PART IV - SERVICE, SUPPLY, AND PROCUREMENT
CHAPTER 433 - PROCUREMENT

-HEAD-
Sec. 4541. Army arsenals: treatment of unutilized or underutilized
plant-capacity costs

-STATUTE-
(a) Estimate of Costs. - The Secretary of the Army shall include
in the budget justification documents submitted to Congress in
support of the President's budget for a fiscal year submitted under
section 1105 of title 31 an estimate of the funds to be required in
that fiscal year to cover unutilized and underutilized plant-
capacity costs at Army arsenals.
(b) Use of Funds. - Funds appropriated to the Secretary of the
Army for a fiscal year to cover unutilized and underutilized plant-
capacity costs at Army arsenals shall be used in such fiscal year
only for such costs.
(c) Treatment of Costs. - (1) The Secretary of the Army shall not
include unutilized and underutilized plant-capacity costs when
evaluating the bid of an Army arsenal for purposes of the arsenal's
contracting to provide a good or service to a Government agency.
(2) When an Army arsenal is serving as a subcontractor to a
private-sector entity with respect to a good or service to be
provided to a Government agency, the cost charged by the arsenal
shall not include unutilized and underutilized plant-capacity costs
that are funded by a direct appropriation.
(d) Definitions. - In this section:
(1) The term "Army arsenal" means a Government-owned,
Government-operated defense plant of the Department of the Army
that manufactures weapons, weapon components, or both.
(2) The term "unutilized and underutilized plant-capacity
costs" means the costs associated with operating and maintaining
the facilities and equipment of an Army arsenal that the
Secretary of the Army determines are required to be kept for
mobilization needs, in those months in which the facilities and
equipment are not used or are used only 20 percent or less of
available work days.

-SOURCE-
(Added Pub. L. 106-398, Sec. 1 [[div. A], title III, Sec. 342(a)],
Oct. 30, 2000, 114 Stat. 1654, 1654A-64.)


-MISC1-
PRIOR PROVISIONS
A prior section 4541, added Pub. L. 97-258, Sec. 2(b)(9)(B),
Sept. 13, 1982, 96 Stat. 1056, authorized Secretary of the Army to
accept gratuitous services of officers of the Army Reserve, prior
to repeal by Pub. L. 103-160, div. A, title VIII, Sec. 822(d)(2),
Nov. 30, 1993, 107 Stat. 1707. See section 10212 of this title.

-End-



-CITE-
10 USC Sec. 4542 01/03/2007

-EXPCITE-
TITLE 10 - ARMED FORCES
Subtitle B - Army
PART IV - SERVICE, SUPPLY, AND PROCUREMENT
CHAPTER 433 - PROCUREMENT

-HEAD-
Sec. 4542. Technical data packages for large-caliber cannon:
prohibition on transfers to foreign countries; exception

-STATUTE-
(a) General Rule. - Funds appropriated to the Department of
Defense may not be used -
(1) to transfer to a foreign country a technical data package
for a defense item being manufactured or developed in an arsenal;
or
(2) to assist a foreign country in producing such a defense
item.

(b) Exception. - The Secretary of the Army may use funds
appropriated to the Department of Defense to transfer a technical
data package, or to provide assistance, described in subsection (a)
if -
(1) the transfer or provision of assistance is to a friendly
foreign country (as determined by the Secretary of Defense in
consultation with the Secretary of State);
(2) the Secretary of the Army determines that such action -
(A) would have a clear benefit to the preservation of the
production base for the production of cannon at the arsenal
concerned; and
(B) would not transfer technology (including production
techniques) considered unique to the arsenal concerned, except
as provided in subsection (e); and

(3) the Secretary of Defense enters into an agreement with the
country concerned described in subsection (c) or (d).

(c) Coproduction Agreements. - An agreement under this subsection
shall be in the form of a Government-to-Government Memorandum of
Understanding and shall include provisions that -
(1) prescribe the content of the technical data package or
assistance to be transferred to the foreign country participating
in the agreement;
(2) require that production by the participating foreign
country of the defense item to which the technical data package
or assistance relates be shared with the arsenal concerned;
(3) subject to such exceptions as may be approved under
subsection (f), prohibit transfer by the participating foreign
country to a third party or country of -
(A) any defense article, technical data package, technology,
or assistance provided by the United States under the
agreement; and
(B) any defense article produced by the participating foreign
country under the agreement; and

(4) require the Secretary of Defense to monitor compliance with
the agreement and the participating foreign country to report
periodically to the Secretary of Defense concerning the
agreement.

(d) Cooperative Project Agreements. - An agreement under this
subsection is a cooperative project agreement under section 27 of
the Arms Export Control Act (22 U.S.C. 2767) which includes
provisions that -
(1) for development phases describe the technical data to be
transferred and for the production phase prescribe the content of
the technical data package or assistance to be transferred to the
foreign country participating in the agreement;
(2) require that at least the United States production of the
defense item to which the technical data package or assistance
relates be carried out by the arsenal concerned; and
(3) require the Secretary of Defense to monitor compliance with
the agreement.

(e) Licensing Fees and Royalties. - The limitation in subsection
(b)(2)(B) shall not apply if the technology (or production
technique) transferred is subject to nonexclusive license and
payment of any negotiated licensing fee or royalty that reflects
the cost of development, implementation, and prove-out of the
technology or production technique. Any negotiated license fee or
royalty shall be placed in the operating fund of the arsenal
concerned for the purpose of capital investment and technology
development at that arsenal.
(f) Transfers to Third Parties. - A transfer described in
subsection (c)(3) may be made if -
(1) the defense article, technical data package, or technology
to be transferred is a product of a cooperative research and
development program or a cooperative project in which the United
States and the participating foreign country were partners; or
(2) the President -
(A) complies with all requirements of section 3(d) of the
Arms Export Control Act (22 U.S.C. 2753(d)) with respect to
such transfer; and
(B) certifies to Congress, before the transfer, that the
transfer would provide a clear benefit to the production base
of the United States for large-caliber cannon.

(g) Notice and Reports to Congress. - (1) The Secretary of the
Army shall submit to Congress a notice of each agreement entered
into under this section.
(2) The Secretary shall submit to Congress a semi-annual report
on the operation of this section and of agreements entered into
under this section.
(h) Arsenal Defined. - In this section, the term "arsenal" means
a Government-owned, Government-operated defense plant that
manufactures large-caliber cannon.

-SOURCE-
(Added Pub. L. 99-500, Sec. 101(c) [title IX, Sec. 9036(b)(1)],
Oct. 18, 1986, 100 Stat. 1783-82, 1783-107, and Pub. L. 99-591,
Sec. 101(c) [title IX, Sec. 9036(b)(1)], Oct. 30, 1986, 100 Stat.
3341-82, 3341-107; Pub. L. 99-661, div. A, title XII, Sec.
1203(a)(1), Nov. 14, 1986, 100 Stat. 3968; amended Pub. L. 101-189,
div. A, title VIII, Sec. 806, Nov. 29, 1989, 103 Stat. 1489; Pub.
L. 102-190, div. A, title X, Secs. 1061(a)(24), 1086, Dec. 5, 1991,
105 Stat. 1473, 1483.)

-COD-
CODIFICATION
Pub. L. 99-591 is a corrected version of Pub. L. 99-500.
Pub. L. 99-500, Pub. L. 99-591, and Pub. L. 99-661 added
identical sections.


-MISC1-
AMENDMENTS
1991 - Subsec. (b)(1). Pub. L. 102-190, Sec. 1086(a), substituted
"friendly foreign country" for "member nation of the North Atlantic
Treaty Organization or a country designated as a major non-NATO
ally".
Subsec. (c)(3). Pub. L. 102-190, Secs. 1061(a)(24)(A),
1086(b)(1), amended par. (3) identically, substituting "subsection
(f)" for "subsection (d)" in introductory provisions.
Subsec. (f). Pub. L. 102-190, Secs. 1061(a)(24)(B), 1086(b)(2),
amended subsec. identically, substituting "subsection (c)(3)" for
"subsection (b)(3)" in introductory provisions.
1989 - Subsec. (b)(1). Pub. L. 101-189, Sec. 806(a)(1),
substituted "a member nation of the North Atlantic Treaty
Organization or a country designated as a major non-NATO ally" for
"a friendly foreign country".
Subsec. (b)(2)(B). Pub. L. 101-189, Sec. 806(a)(2), inserted ",
except as provided in subsection (e)" after "arsenal concerned".
Subsec. (b)(3). Pub. L. 101-189, Sec. 806(a)(3), inserted "or
(d)" after "subsection (c)".
Subsecs. (d), (e). Pub. L. 101-189, Sec. 806(b)(2), added
subsecs. (d) and (e). Former subsecs. (d) and (e) redesignated (f)
and (g), respectively.
Subsec. (f). Pub. L. 101-189, Sec. 806(b)(1), redesignated
subsec. (d) as (f). Former subsec. (f) redesignated (h).
Subsec. (f)(1). Pub. L. 101-189, Sec. 806(c), inserted "or a
cooperative project" after "cooperative research and development
program".
Subsecs. (g), (h). Pub. L. 101-189, Sec. 806(b)(1), redesignated
subsecs. (e) and (f) as (g) and (h), respectively.

EFFECTIVE DATE
Section 101(c) [title IX, Sec. 9036(c)] of Pub. L. 99-500 and
Pub. L. 99-591, and section 1203(b) of Pub. L. 99-661 provided
that: "Section 4542 of title 10, United States Code, as added by
subsection (a), shall apply with respect to funds appropriated for
fiscal years after fiscal year 1986."

RULE OF CONSTRUCTION FOR DUPLICATE AUTHORIZATION AND APPROPRIATION
PROVISIONS OF PUBLIC LAWS 99-500, 99-591, AND 99-661
For rule of construction for certain duplicate provisions of
Public Laws 99-500, 99-591, and 99-661, see Pub. L. 100-26, Sec. 6,
Apr. 21, 1987, 101 Stat. 274, set out as a note under section 2302
of this title.

-End-



-CITE-
10 USC Sec. 4543 01/03/2007

-EXPCITE-
TITLE 10 - ARMED FORCES
Subtitle B - Army
PART IV - SERVICE, SUPPLY, AND PROCUREMENT
CHAPTER 433 - PROCUREMENT

-HEAD-
Sec. 4543. Army industrial facilities: sales of manufactured
articles or services outside Department of Defense

-STATUTE-
(a) Authority To Sell Outside DOD. - Regulations under section
2208(h) of this title shall authorize a working-capital funded Army
industrial facility (including a Department of the Army arsenal)
that manufactures large caliber cannons, gun mounts, recoil
mechanisms, ammunition, munitions, or components thereof to sell
manufactured articles or services to a person outside the
Department of Defense if -
(1) in the case of an article, the article is sold to a United
States manufacturer, assembler, developer, or other concern -
(A) for use in developing new products;
(B) for incorporation into items to be sold to, or to be used
in a contract with, an agency of the United States;
(C) for incorporation into items to be sold to, or to be used
in a contract with, or to be used for purposes of soliciting a
contract with, a friendly foreign government; or
(D) for use in commercial products;

(2) in the case of an article, the purchaser is determined by
the Department of Defense to be qualified to carry out the
proposed work involving the article to be purchased;
(3) the sale is to be made on a basis that does not interfere
with performance of work by the facility for the Department of
Defense or for a contractor of the Department of Defense;
(4) in the case of services, the services are related to an
article authorized to be sold under this section and are to be
performed in the United States for the purchaser;
(5) the Secretary of the Army determines that the articles or
services are not available from a commercial source located in
the United States;
(6) the purchaser of an article or service agrees to hold
harmless and indemnify the United States, except in a case of
willful misconduct or gross negligence, from any claim for
damages or injury to any person or property arising out of the
article or service;
(7) the article to be sold can be manufactured, or the service
to be sold can be substantially performed, by the industrial
facility with only incidental subcontracting;
(8) it is in the public interest to manufacture such article or
perform such service; and
(9) the sale will not interfere with performance of the
military mission of the industrial facility.

(b) Additional Requirements. - The regulations shall also -
(1) require that the authority to sell articles or services
under the regulations be exercised at the level of the commander
of the major subordinate command of the Army with responsibility
over the facility concerned;
(2) authorize a purchaser of articles or services to use
advance incremental funding to pay for the articles or services;
and
(3) in the case of a sale of commercial articles or commercial
services in accordance with subsection (a) by a facility that
manufactures large caliber cannons, gun mounts, or recoil
mechanisms, or components thereof, authorize such facility -
(A) to charge the buyer, at a minimum, the variable costs
that are associated with the commercial articles or commercial
services sold;
(B) to enter into a firm, fixed-price contract or, if agreed
by the buyer, a cost reimbursement contract for the sale; and
(C) to develop and maintain (from sources other than
appropriated funds) working capital to be available for paying
design costs, planning costs, procurement costs, and other
costs associated with the commercial articles or commercial
services sold.

(c) Relationship to Arms Export Control Act. - Nothing in this
section shall be construed to affect the application of the export
controls provided for in section 38 of the Arms Export Control Act
(22 U.S.C. 2778) to items which incorporate or are produced through
the use of an article sold under this section.
(d) Definitions. - In this section:
(1) The term "commercial article" means an article that is
usable for a nondefense purpose.
(2) The term "commercial service" means a service that is
usable for a nondefense purpose.
(3) The term "advance incremental funding", with respect to a
sale of articles or services, means a series of partial payments
for the articles or services that includes -
(A) one or more partial payments before the commencement of
work or the incurring of costs in connection with the
production of the articles or the performance of the services,
as the case may be; and
(B) subsequent progress payments that result in full payment
being completed as the required work is being completed.

(4) The term "variable costs", with respect to sales of
articles or services, means the costs that are expected to
fluctuate directly with the volume of sales and -
(A) in the case of articles, the volume of production
necessary to satisfy the sales orders; or
(B) in the case of services, the extent of the services sold.

-SOURCE-
(Added Pub. L. 103-160, div. A, title I, Sec. 158(a)(1), Nov. 30,
1993, 107 Stat. 1581; amended Pub. L. 103-337, div. A, title I,
Sec. 141, Oct. 5, 1994, 108 Stat. 2688.)


-MISC1-
AMENDMENTS
1994 - Subsec. (a). Pub. L. 103-337 struck out "nondefense-
related commercial" after "sell manufactured" in introductory
provisions and added pars. (5) to (9).

REGULATIONS
Section 158(c) of Pub. L. 103-160 provided that: "Regulations
under subsection (b) of section 4543 of title 10, United States
Code, as added by subsection (a), shall be prescribed not later
than 30 days after the date of the enactment of this Act [Nov. 30,
1993]."

PILOT PROGRAM ON SALES OF MANUFACTURED ARTICLES AND SERVICES OF
CERTAIN ARMY INDUSTRIAL FACILITIES WITHOUT REGARD TO AVAILABILITY
FROM DOMESTIC SOURCES
Pub. L. 107-314, div. A, title I, Sec. 111(c), Dec. 2, 2002, 116
Stat. 2473, provided that: "The Inspector General of the Department
of Defense shall review the experience under the pilot program
carried out under such section 141 [section 141 of Pub. L. 105-85,
set out as a note below] and, not later than July 1, 2003, submit
to Congress a report on the results of the review. The report shall
contain the views, information, and recommendations called for
under subsection (d) of such section (as redesignated by subsection
(b)(2)). In carrying out the review and preparing the report, the
Inspector General shall take into consideration the report
submitted to Congress under such subsection (as so redesignated)."
Pub. L. 105-85, div. A, title I, Sec. 141, Nov. 18, 1997, 111
Stat. 1652, as amended by Pub. L. 106-65, div. A, title I, Sec.
115, Oct. 5, 1999, 113 Stat. 533; Pub. L. 107-107, div. A, title I,
Sec. 112, Dec. 28, 2001, 115 Stat. 1029; Pub. L. 107-314, div. A,
title I, Sec. 111(a), (b), Dec. 2, 2002, 116 Stat. 2473; Pub. L.
108-375, div. A, title VIII, Sec. 844, Oct. 28, 2004, 118 Stat.
2019, provided that:
"(a) Pilot Program Required. - During fiscal years 1998 through
2009, the Secretary of the Army shall carry out a pilot program to
test the efficacy and appropriateness of selling manufactured
articles and services of Army industrial facilities under section
4543 of title 10, United States Code, without regard to the
availability of the articles and services from United States
commercial sources. In carrying out the pilot program, the
Secretary may use articles manufactured at, and services provided
by, not more than three Army industrial facilities, except that
during fiscal year 2002 the Secretary may only use articles
manufactured at, and services provided by, not more than one Army
industrial facility.
"(b) Temporary Waiver of Requirement for Determination of
Unavailability From Domestic Source. - Under the pilot program, the
Secretary of the Army is not required under section 4543(a)(5) of
title 10, United States Code, to determine whether an article or
service is available from a commercial source located in the United
States in the case of any of the following sales for which a
solicitation of offers is issued during the period during which the
pilot program is being conducted:
"(1) A sale of articles to be incorporated into a weapon system
being procured by the Department of Defense.
"(2) A sale of services to be used in the manufacture of a
weapon system being procured by the Department of Defense.
"(c) Transfer of Certain Sums. - For each Army industrial
facility participating in the pilot program that sells manufactured
articles and services in a total amount in excess of $20,000,000 in
any fiscal year, the amount equal to one-half of one percent of
such total amount shall be transferred from the sums in the Army
Working Capital Fund for unutilized plant capacity to
appropriations available for the following fiscal year for the
demilitarization of conventional ammunition by the Army.
"(d) Review by Inspector General. - The Inspector General of the
Department of Defense shall review the experience under the pilot
program under this section and, not later than July 1, 1999, submit
to Congress a report on the results of the review. The report shall
contain the following:
"(1) The Inspector General's views regarding the extent to
which the waiver under subsection (b) enhances the opportunity
for United States manufacturers, assemblers, developers, and
other concerns to enter into or participate in contracts and
teaming arrangements with Army industrial facilities under weapon
system programs of the Department of Defense.
"(2) The Inspector General's views regarding the extent to
which the waiver under subsection (b) enhances the opportunity
for Army industrial facilities referred to in section 4543(a) of
title 10, United States Code, to enter into or participate in
contracts and teaming arrangements with United States
manufacturers, assemblers, developers, and other concerns under
weapon system programs of the Department of Defense.
"(3) The Inspector General's views regarding the effect of the
waiver under subsection (b) on the ability of small businesses to
compete for the sale of manufactured articles or services in the
United States in competitions to enter into or participate in
contracts and teaming arrangements under weapon system programs
of the Department of Defense.
"(4) Specific examples under the pilot program that support the
Inspector General's views.
"(5) Any other information that the Inspector General considers
pertinent regarding the effects of the waiver of section
4543(a)(5) of title 10, United States Code, under the pilot
program on opportunities for United States manufacturers,
assemblers, developers, or other concerns, and for Army
industrial facilities, to enter into or participate in contracts
and teaming arrangements under weapon system programs of the
Department of Defense.
"(6) Any recommendations that the Inspector General considers
appropriate regarding continuation or modification of the policy
set forth in section 4543(a)(5) of title 10, United States Code."

-End-



-CITE-
10 USC Sec. 4544 01/03/2007

-EXPCITE-
TITLE 10 - ARMED FORCES
Subtitle B - Army
PART IV - SERVICE, SUPPLY, AND PROCUREMENT
CHAPTER 433 - PROCUREMENT

-HEAD-
Sec. 4544. Army industrial facilities: cooperative activities with
non-Army entities

-STATUTE-
(a) Cooperative Arrangements Authorized. - A working-capital
funded Army industrial facility may enter into a contract or other
cooperative arrangement with a non-Army entity to carry out with
the non-Army entity a military or commercial project described in
subsection (b), subject to the conditions prescribed in subsection
(c).
(b) Authorized Activities. - A cooperative arrangement entered
into by an Army industrial facility under subsection (a) may
provide for any of the following activities:
(1) The sale of articles manufactured by the facility or
services performed by the facility to persons outside the
Department of the Army.
(2) The performance of work by a non-Army entity at the
facility.
(3) The performance of work by the facility for a non-Army
entity.
(4) The sharing of work by the facility and a non-Army entity.
(5) The leasing, or use under a facilities use contract or
otherwise, of the facility (including excess capacity) or
equipment (including excess equipment) of the facility by a non-
Army entity.
(6) The preparation and submission of joint offers by the
facility and a non-Army entity for competitive procurements
entered into with Federal agency.

(c) Conditions. - An activity authorized by subsection (b) may be
carried out at an Army industrial facility under a cooperative
arrangement entered into under subsection (a) only under the
following conditions:
(1) In the case of an article to be manufactured or services to
be performed by the facility, the articles can be substantially
manufactured, or the services can be substantially performed, by
the facility without subcontracting for more than incidental
performance.
(2) The activity does not interfere with performance of -
(A) work by the facility for the Department of Defense; or
(B) a military mission of the facility.

(3) The activity meets one of the following objectives:
(A) Maximized utilization of the capacity of the facility.
(B) Reduction or elimination of the cost of ownership of the
facility.
(C) Reduction in the cost of manufacturing or maintaining
Department of Defense products at the facility.
(D) Preservation of skills or equipment related to a core
competency of the facility.

(4) The non-Army entity agrees to hold harmless and indemnify
the United States from any liability or claim for damages or
injury to any person or property arising out of the activity,
including any damages or injury arising out of a decision by the
Secretary of the Army or the Secretary of Defense to suspend or
terminate an activity, or any portion thereof, during a war or
national emergency or to require the facility to perform other
work or provide other services on a priority basis, except -
(A) in any case of willful misconduct or gross negligence;
and
(B) in the case of a claim by a purchaser of articles or
services under this section that damages or injury arose from
the failure of the United States to comply with quality,
schedule, or cost performance requirements in the contract to
carry out the activity.

(d) Arrangement Methods and Authorities. - To establish a
cooperative arrangement under subsection (a) with a non-Army
entity, the approval authority described in subsection (f) for an
Army industrial facility may -
(1) enter into a firm, fixed-price contract (or, if agreed to
by the non-Army entity, a cost reimbursement contract) for a sale
of articles or services or use of equipment or facilities;
(2) enter into a multiyear contract for a period not to exceed
five years, unless a longer period is specifically authorized by
law;
(3) charge the non-Army entity the amounts necessary to recover
the full costs of the articles or services provided, including
capital improvement costs, and equipment depreciation costs
associated with providing the articles, services, equipment, or
facilities;
(4) authorize the non-Army entity to use incremental funding to
pay for the articles, services, or use of equipment or
facilities; and
(5) accept payment-in-kind.

(e) Proceeds Credited to Working Capital Fund. - The proceeds
received from the sale of an article or service pursuant to a
contract or other cooperative arrangement under this section shall
be credited to the working capital fund that incurs the cost of
manufacturing the article or performing the service.
(f) Approval Authority. - The authority of an Army industrial
facility to enter into a cooperative arrangement under subsection
(a) shall be exercised at the level of the commander of the major
subordinate command of the Army that has responsibility for the
facility. The commander may approve such an arrangement on a case-
by-case basis or a class basis.
(g) Commercial Sales. - Except in the case of work performed for
the Department of Defense, for a contract of the Department of
Defense, for foreign military sales, or for authorized foreign
direct commercial sales (defense articles or defense services sold
to a foreign government or international organization under export
controls), a sale of articles or services may be made under this
section only if the approval authority described in subsection (f)
determines that the articles or services are not available from a
commercial source located in the United States in the required
quantity or quality, or within the time required.
(h) Exclusion From Depot-Level Maintenance and Repair Percentage
Limitation. - Amounts expended for the performance of a depot-level
maintenance and repair workload by non-Federal Government personnel
at an Army industrial facility shall not be counted for purposes of
applying the percentage limitation in section 2466(a) of this title
if the personnel are provided by a non-Army entity pursuant to a
cooperative arrangement entered into under subsection (a).
(i) Relationship to Other Laws. - Nothing in this section shall
be construed to affect the application of -
(1) foreign military sales and the export controls provided for
in sections 30 and 38 of the Arms Export Control Act (22 U.S.C.
2770 and 2778) to activities of a cooperative arrangement entered
into under subsection (a); and
(2) section 2667 of this title to leases of non-excess property
in the administration of such an arrangement.

(j) Definitions. - In this section:
(1) The term "Army industrial facility" includes an ammunition
plant, an arsenal, a depot, and a manufacturing plant.
(2) The term "non-Army entity" includes the following:
(A) A Federal agency (other than the Department of the Army).
(B) An entity in industry or commercial sales.
(C) A State or political subdivision of a State.
(D) An institution of higher education or vocational training
institution.

(3) The term "incremental funding" means a series of partial
payments that -
(A) are made as the work on manufacture or articles is being
performed or services are being performed or equipment or
facilities are used, as the case may be; and
(B) result in full payment being completed as the required
work is being completed.

(4) The term "full costs", with respect to articles or services
provided under a cooperative arrangement entered into under
subsection (a), means the variable costs and the fixed costs that
are directly related to the production of the articles or the
provision of the services.
(5) The term "variable costs" means the costs that are expected
to fluctuate directly with the volume of sales or services
provided or the use of equipment or facilities.

(k) Expiration of Authority. - The authority to enter into a
cooperative arrangement under subsection (a) expires September 30,
2009.

-SOURCE-
(Added Pub. L. 108-375, div. A, title III, Sec. 353(a), Oct. 28,
2004, 118 Stat. 1859; amended Pub. L. 109-163, div. A, title III,
Sec. 321, Jan. 6, 2006, 119 Stat. 3191; Pub. L. 109-364, div. A,
title X, Sec. 1071(a)(29), Oct. 17, 2006, 120 Stat. 2399.)


-MISC1-
AMENDMENTS
2006 - Subsec. (d). Pub. L. 109-364 substituted "Arrangement" for
"Arangement" in heading.
Pub. L. 109-163, Sec. 321(b)(1), substituted "subsection (f)" for
"subsection (e)" in introductory provisions.
Subsecs. (e), (f). Pub. L. 109-163, Sec. 321(b)(2), (3), added
subsec. (e) and redesignated former subsec. (e) as (f). Former
subsec. (f) redesignated (g).
Subsec. (g). Pub. L. 109-163, Sec. 321(b)(4), substituted
"subsection (f)" for "subsection (e)".
Pub. L. 109-163, Sec. 321(b)(2), redesignated subsec. (f) as (g).
Former subsec. (g) redesignated (h).
Subsecs. (h), (i). Pub. L. 109-163, Sec. 321(b)(2), redesignated
subsecs. (g) and (h) as (h) and (i), respectively. Former subsec.
(i) redesignated (j).
Subsec. (j). Pub. L. 109-163, Sec. 321(b)(2), redesignated
subsec. (i) as (j). Former subsec. (j) redesignated (k).
Pub. L. 109-163, Sec. 321(a), substituted "September 30, 2009."
for "September 30, 2009, and arrangements entered into under such
subsection shall terminate not later than that date."
Subsec. (k). Pub. L. 109-163, Sec. 321(b)(2), redesignated
subsec. (j) as (k).

-End-

   

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