[USC02] 41 USC Subtitle IV: Miscellaneous
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41 USC Subtitle IV: Miscellaneous
From Title 41—PUBLIC CONTRACTS

Subtitle IV—Miscellaneous

Chapter
Sec.
81.
Drug-Free Workplace
8101
83.
Buy American
8301
85.
Committee for Purchase From People Who Are Blind or Severely Disabled
8501
87.
Kickbacks
8701

        

CHAPTER 81—DRUG-FREE WORKPLACE

Sec.
8101.
Definitions and construction.
8102.
Drug-free workplace requirements for Federal contractors.
8103.
Drug-free workplace requirements for Federal grant recipients.
8104.
Employee sanctions and remedies.
8105.
Waiver.
8106.
Regulations.

        

§8101. Definitions and construction

(a) Definitions.—In this chapter:

(1) Contractor.—The term "contractor" means the department, division, or other unit of a person responsible for the performance under the contract.

(2) Controlled substance.—The term "controlled substance" means a controlled substance in schedules I through V of section 202 of the Comprehensive Drug Abuse Prevention and Control Act of 1970 (21 U.S.C. 812).

(3) Conviction.—The term "conviction" means a finding of guilt (including a plea of nolo contendere), an imposition of sentence, or both, by a judicial body charged with the responsibility to determine violations of Federal or State criminal drug statutes.

(4) Criminal drug statute.—The term "criminal drug statute" means a criminal statute involving manufacture, distribution, dispensation, use, or possession of a controlled substance.

(5) Drug-free workplace.—The term "drug-free workplace" means a site of an entity—

(A) for the performance of work done in connection with a specific contract or grant described in section 8102 or 8103 of this title; and

(B) at which employees of the entity are prohibited from engaging in the unlawful manufacture, distribution, dispensation, possession, or use of a controlled substance in accordance with the requirements of the Anti-Drug Abuse Act of 1988 (Public Law 100–690, 102 Stat. 4181).


(6) Employee.—The term "employee" means the employee of a contractor or grantee directly engaged in the performance of work pursuant to the contract or grant described in section 8102 or 8103 of this title.

(7) Federal agency.—The term "Federal agency" means an agency as defined in section 552(f) of title 5.

(8) Grantee.—The term "grantee" means the department, division, or other unit of a person responsible for the performance under the grant.


(b) Construction.—This chapter does not require law enforcement agencies to comply with this chapter if the head of the agency determines it would be inappropriate in connection with the agency's undercover operations.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3826.)

Historical and Revision Notes
Revised

Section

Source (U.S. Code)Source (Statutes at Large)
8101(a)(1) 41:706(7). Pub. L. 100–690, title V, §§5157, 5158, Nov. 18, 1988, 102 Stat. 4308.
8101(a)(2) 41:706(3).
8101(a)(3) 41:706(4).
8101(a)(4) 41:706(5).
8101(a)(5) 41:706(1).
8101(a)(6) 41:706(2).
8101(a)(7) 41:706(8).
8101(a)(8) 41:706(6).
8101(b) 41:707.

§8102. Drug-free workplace requirements for Federal contractors

(a) In General.—

(1) Persons other than individuals.—A person other than an individual shall not be considered a responsible source (as defined in section 113 of this title) for the purposes of being awarded a contract for the procurement of any property or services of a value greater than the simplified acquisition threshold (as defined in section 134 of this title) by a Federal agency, other than a contract for the procurement of commercial products or commercial services (as defined in sections 103 and 103a, respectively, of this title), unless the person agrees to provide a drug-free workplace by—

(A) publishing a statement notifying employees that the unlawful manufacture, distribution, dispensation, possession, or use of a controlled substance is prohibited in the person's workplace and specifying the actions that will be taken against employees for violations of the prohibition;

(B) establishing a drug-free awareness program to inform employees about—

(i) the dangers of drug abuse in the workplace;

(ii) the person's policy of maintaining a drug-free workplace;

(iii) available drug counseling, rehabilitation, and employee assistance programs; and

(iv) the penalties that may be imposed on employees for drug abuse violations;


(C) making it a requirement that each employee to be engaged in the performance of the contract be given a copy of the statement required by subparagraph (A);

(D) notifying the employee in the statement required by subparagraph (A) that as a condition of employment on the contract the employee will—

(i) abide by the terms of the statement; and

(ii) notify the employer of any criminal drug statute conviction for a violation occurring in the workplace no later than 5 days after the conviction;


(E) notifying the contracting agency within 10 days after receiving notice under subparagraph (D)(ii) from an employee or otherwise receiving actual notice of a conviction;

(F) imposing a sanction on, or requiring the satisfactory participation in a drug abuse assistance or rehabilitation program by, any employee who is convicted, as required by section 8104 of this title; and

(G) making a good faith effort to continue to maintain a drug-free workplace through implementation of subparagraphs (A) to (F).


(2) Individuals.—A Federal agency shall not make a contract with an individual unless the individual agrees not to engage in the unlawful manufacture, distribution, dispensation, possession, or use of a controlled substance in the performance of the contract.


(b) Suspension, Termination, or Debarment of Contractor.—

(1) Grounds for suspension, termination, or debarment.—Payment under a contract awarded by a Federal agency may be suspended and the contract may be terminated, and the contractor or individual who made the contract with the agency may be suspended or debarred in accordance with the requirements of this section, if the head of the agency determines that—

(A) the contractor is violating, or has violated, the requirements of subparagraph (A), (B), (C), (D), (E), or (F) of subsection (a)(1); or

(B) the number of employees of the contractor who have been convicted of violations of criminal drug statutes for violations occurring in the workplace indicates that the contractor has failed to make a good faith effort to provide a drug-free workplace as required by subsection (a).


(2) Conduct of suspension, termination, and debarment proceedings.—A contracting officer who determines in writing that cause for suspension of payments, termination, or suspension or debarment exists shall initiate an appropriate action, to be conducted by the agency concerned in accordance with the Federal Acquisition Regulation and applicable agency procedures. The Federal Acquisition Regulation shall be revised to include rules for conducting suspension and debarment proceedings under this subsection, including rules providing notice, opportunity to respond in writing or in person, and other procedures as may be necessary to provide a full and fair proceeding to a contractor or individual.

(3) Effect of debarment.—A contractor or individual debarred by a final decision under this subsection is ineligible for award of a contract by a Federal agency, and for participation in a future procurement by a Federal agency, for a period specified in the decision, not to exceed 5 years.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3827; Pub. L. 115–232, div. A, title VIII, §836(b)(20), Aug. 13, 2018, 132 Stat. 1864.)

Historical and Revision Notes
Revised

Section

Source (U.S. Code)Source (Statutes at Large)
8102 41:701. Pub. L. 100–690, title V, §5152, Nov. 18, 1988, 102 Stat. 4304; Pub. L. 103–355, title IV, §4104(d), title VIII, §8301(f), Oct. 13, 1994, 108 Stat. 3342, 3397; Pub. L. 104–106, div. D, title XLIII, §§4301(a)(3), 4321(i)(13), Feb. 10, 1996, 110 Stat. 656, 677.

Amendments

2018—Subsec. (a)(1). Pub. L. 115–232 substituted "commercial products or commercial services (as defined in sections 103 and 103a, respectively, of this title)" for "commercial items (as defined in section 103 of this title)" in introductory provisions.

Effective Date of 2018 Amendment

Amendment by Pub. L. 115–232 effective Jan. 1, 2020, subject to a savings provision, see section 836(h) of Pub. L. 115–232, set out as an Effective Date of 2018 Amendment; Savings Provision note under section 453b of Title 6, Domestic Security.

§8103. Drug-free workplace requirements for Federal grant recipients

(a) In General.—

(1) Persons other than individuals.—A person other than an individual shall not receive a grant from a Federal agency unless the person agrees to provide a drug-free workplace by—

(A) publishing a statement notifying employees that the unlawful manufacture, distribution, dispensation, possession, or use of a controlled substance is prohibited in the grantee's workplace and specifying the actions that will be taken against employees for violations of the prohibition;

(B) establishing a drug-free awareness program to inform employees about—

(i) the dangers of drug abuse in the workplace;

(ii) the grantee's policy of maintaining a drug-free workplace;

(iii) available drug counseling, rehabilitation, and employee assistance programs; and

(iv) the penalties that may be imposed on employees for drug abuse violations;


(C) making it a requirement that each employee to be engaged in the performance of the grant be given a copy of the statement required by subparagraph (A);

(D) notifying the employee in the statement required by subparagraph (A) that as a condition of employment in the grant the employee will—

(i) abide by the terms of the statement; and

(ii) notify the employer of any criminal drug statute conviction for a violation occurring in the workplace no later than 5 days after the conviction;


(E) notifying the granting agency within 10 days after receiving notice under subparagraph (D)(ii) from an employee or otherwise receiving actual notice of a conviction;

(F) imposing a sanction on, or requiring the satisfactory participation in a drug abuse assistance or rehabilitation program by, any employee who is convicted, as required by section 8104 of this title; and

(G) making a good faith effort to continue to maintain a drug-free workplace through implementation of subparagraphs (A) to (F).


(2) Individuals.—A Federal agency shall not make a grant to an individual unless the individual agrees not to engage in the unlawful manufacture, distribution, dispensation, possession, or use of a controlled substance in conducting an activity with the grant.


(b) Suspension, Termination, or Debarment of Grantee.—

(1) Grounds for suspension, termination, or debarment.—Payment under a grant awarded by a Federal agency may be suspended and the grant may be terminated, and the grantee may be suspended or debarred, in accordance with the requirements of this section, if the head of the agency or the official designee of the head of the agency determines in writing that—

(A) the grantee is violating, or has violated, the requirements of subparagraph (A), (B), (C), (D), (E), (F), or (G) of subsection (a)(1); or

(B) the number of employees of the grantee who have been convicted of violations of criminal drug statutes for violations occurring in the workplace indicates that the grantee has failed to make a good faith effort to provide a drug-free workplace as required by subsection (a)(1).


(2) Conduct of suspension, termination, and debarment proceedings.—A suspension of payments, termination, or suspension or debarment proceeding subject to this subsection shall be conducted in accordance with applicable law, including Executive Order 12549 or any superseding executive order and any regulations prescribed to implement the law or executive order.

(3) Effect of debarment.—A grantee debarred by a final decision under this subsection is ineligible for award of a grant by a Federal agency, and for participation in a future grant by a Federal agency, for a period specified in the decision, not to exceed 5 years.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3828.)

Historical and Revision Notes
Revised

Section

Source (U.S. Code)Source (Statutes at Large)
8103 41:702. Pub. L. 100–690, title V, §5153, Nov. 18, 1988, 102 Stat. 4306; Pub. L. 105–85, div. A, title VIII, §809, Nov. 18, 1997, 111 Stat. 1838.

§8104. Employee sanctions and remedies

Within 30 days after receiving notice from an employee of a conviction pursuant to section 8102(a)(1)(D)(ii) or 8103(a)(1)(D)(ii) of this title, a contractor or grantee shall—

(1) take appropriate personnel action against the employee, up to and including termination; or

(2) require the employee to satisfactorily participate in a drug abuse assistance or rehabilitation program approved for those purposes by a Federal, State, or local health, law enforcement, or other appropriate agency.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3830.)

Historical and Revision Notes
Revised

Section

Source (U.S. Code)Source (Statutes at Large)
8104 41:703. Pub. L. 100–690, title V, §5154, Nov. 18, 1988, 102 Stat. 4307.

§8105. Waiver

(a) In General.—The head of an agency may waive a suspension of payments, termination of the contract or grant, or suspension or debarment of a contractor or grantee under this chapter with respect to a particular contract or grant if—

(1) in the case of a contract, the head of the agency determines under section 8102(b)(1) of this title, after a final determination is issued under section 8102(b)(1), that suspension of payments, termination of the contract, suspension or debarment of the contractor, or refusal to permit a person to be treated as a responsible source for a contract would severely disrupt the operation of the agency to the detriment of the Federal Government or the general public; or

(2) in the case of a grant, the head of the agency determines that suspension of payments, termination of the grant, or suspension or debarment of the grantee would not be in the public interest.


(b) Waiver Authority May Not Be Delegated.—The authority of the head of an agency under this section to waive a suspension, termination, or debarment shall not be delegated.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3830.)

Historical and Revision Notes
Revised

Section

Source (U.S. Code)Source (Statutes at Large)
8105 41:704. Pub. L. 100–690, title V, §5155, Nov. 18, 1988, 102 Stat. 4307.

§8106. Regulations

Government-wide regulations governing actions under this chapter shall be issued pursuant to division B of subtitle I of this title.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3830.)

Historical and Revision Notes
Revised

Section

Source (U.S. Code)Source (Statutes at Large)
8106 41:705. Pub. L. 100–690, title V, §5156, Nov. 18, 1988, 102 Stat. 4308.

The words "Not later than 90 days after November 18, 1988, the" are omitted as obsolete.

CHAPTER 83—BUY AMERICAN

Sec.
8301.
Definitions.
8302.
American materials required for public use.
8303.
Contracts for public works.
8304.
Waiver rescission.
8305.
Annual report.

        

§8301. Definitions

In this chapter:

(1) Public building, public use, and public work.—The terms "public building", "public use", and "public work" mean a public building of, use by, and a public work of, the Federal Government, the District of Columbia, Puerto Rico, American Samoa, and the Virgin Islands.

(2) United states.—The term "United States" includes any place subject to the jurisdiction of the United States.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3830.)

Historical and Revision Notes
Revised

Section

Source (U.S. Code)Source (Statutes at Large)
8301 41:10c. Mar. 3, 1933, ch. 212, title III, §1, 47 Stat. 1520; Pub. L. 86–70, §43, June 25, 1959, 73 Stat. 151; Pub. L. 86–624, §28, July 12, 1960, 74 Stat. 419; Pub. L. 100–418, title VII, §7005(a), Aug. 23, 1988, 102 Stat. 1552.

In paragraph (1), the words "the Philippine Islands" are omitted because of Proclamation No. 2695 (22 U.S.C. 1394 note). The words "the Canal Zone" are omitted because of the Panama Canal Treaty of 1977.

In paragraph (2), the words "when used in a geographical sense" are omitted as unnecessary.

Implementation of Buy American Act With Respect to Certain Water Resource Projects

Pub. L. 100–371, title V, §508, July 19, 1988, 102 Stat. 875, provided that:

"(a) General Rule.—For purposes of title III of the Act of March 3, 1933 (47 Stat. 1520; [former] 41 U.S.C. 10a–10c) [see 41 U.S.C. 8301 et seq.], commonly known as the Buy American Act, a cofferdam or any other temporary structure to be constructed by the Secretary of the Army, acting through the Chief of Engineers, shall be treated in the same manner as a permanent dam constructed by the Secretary of the Army.

"(b) Applicability.—Subsection (a) shall only apply to contracts entered into after the date of the enactment of this Act [July 19, 1988]."

Ex. Ord. No. 13788. Buy American and Hire American

Ex. Ord. No. 13788, Apr. 18, 2017, 82 F.R. 18837, as amended by Ex. Ord. No. 13858, §5, Jan. 31, 2019, 84 F.R. 2040, provided:

By the authority vested in me as President by the Constitution and the laws of the United States of America, and to ensure the faithful execution of the laws, it is hereby ordered as follows:

Section 1. Definitions. As used in this order:

(a) "Buy American Laws" means all statutes, regulations, rules, and Executive Orders relating to Federal procurement or Federal financial assistance—including those that refer to "Buy America" or "Buy American"—that require, or provide a preference for, the purchase or acquisition of goods, products, or materials produced in the United States, including iron, steel, and manufactured goods.

(b) "Produced in the United States" means, for iron and steel products, that all manufacturing processes, from the initial melting stage through the application of coatings, occurred in the United States.

(c) "Petition beneficiaries" means aliens petitioned for by employers to become nonimmigrant visa holders with temporary work authorization under the H–1B visa program.

(d) "Waivers" means exemptions from or waivers of Buy American Laws, or the procedures and conditions used by an executive department or agency (agency) in granting exemptions from or waivers of Buy American Laws.

(e) "Workers in the United States" and "United States workers" shall both be defined as provided at section 212(n)(4)(E) of the Immigration and Nationality Act (8 U.S.C. 1182(n)(4)(E)).

Sec. 2. Policy. It shall be the policy of the executive branch to buy American and hire American.

(a) Buy American Laws. In order to promote economic and national security and to help stimulate economic growth, create good jobs at decent wages, strengthen our middle class, and support the American manufacturing and defense industrial bases, it shall be the policy of the executive branch to maximize, consistent with law, through terms and conditions of Federal financial assistance awards and Federal procurements, the use of goods, products, and materials produced in the United States.

(b) Hire American. In order to create higher wages and employment rates for workers in the United States, and to protect their economic interests, it shall be the policy of the executive branch to rigorously enforce and administer the laws governing entry into the United States of workers from abroad, including section 212(a)(5) of the Immigration and Nationality Act (8 U.S.C. 1182(a)(5)).

Sec. 3. Immediate Enforcement and Assessment of Domestic Preferences According to Buy American Laws. (a) Every agency shall scrupulously monitor, enforce, and comply with Buy American Laws, to the extent they apply, and minimize the use of waivers, consistent with applicable law.

(b) Within 150 days of the date of this order, the heads of all agencies shall:

(i) assess the monitoring of, enforcement of, implementation of, and compliance with Buy American Laws within their agencies;

(ii) assess the use of waivers within their agencies by type and impact on domestic jobs and manufacturing; and

(iii) develop and propose policies for their agencies to ensure that, to the extent permitted by law, Federal financial assistance awards and Federal procurements maximize the use of materials produced in the United States, including manufactured products; components of manufactured products; and materials such as steel, iron, aluminum, and cement.

(c) Within 60 days of the date of this order, the Secretary of Commerce and the Director of the Office of Management and Budget, in consultation with the Secretary of State, the Secretary of Labor, the United States Trade Representative, and the Federal Acquisition Regulatory Council, shall issue guidance to agencies about how to make the assessments and to develop the policies required by subsection (b) of this section.

(d) Within 150 days of the date of this order, the heads of all agencies shall submit findings made pursuant to the assessments required by subsection (b) of this section to the Secretary of Commerce and the Director of the Office of Management and Budget.

(e) Within 150 days of the date of this order, the Secretary of Commerce and the United States Trade Representative shall assess the impacts of all United States free trade agreements and the World Trade Organization Agreement on Government Procurement on the operation of Buy American Laws, including their impacts on the implementation of domestic procurement preferences.

(f) The Secretary of Commerce, in consultation with the Secretary of State, the Director of the Office of Management and Budget, and the United States Trade Representative, shall submit to the President a report on Buy American that includes findings from subsections (b), (d), and (e) of this section. This report shall be submitted within 220 days of the date of this order and shall include specific recommendations to strengthen implementation of Buy American Laws, including domestic procurement preference policies and programs. Subsequent reports on implementation of Buy American Laws shall be submitted by each agency head annually to the Secretary of Commerce and the Director of the Office of Management and Budget, on November 15, 2018, 2019, and 2020, and in subsequent years as directed by the Secretary of Commerce and the Director of the Office of Management and Budget. The Secretary of Commerce shall submit to the President an annual report based on these submissions beginning January 15, 2019.

Sec. 4. Judicious Use of Waivers. (a) To the extent permitted by law, public interest waivers from Buy American Laws should be construed to ensure the maximum utilization of goods, products, and materials produced in the United States.

(b) To the extent permitted by law, determination of public interest waivers shall be made by the head of the agency with the authority over the Federal financial assistance award or Federal procurement under consideration.

(c) To the extent permitted by law, before granting a public interest waiver, the relevant agency shall take appropriate account of whether a significant portion of the cost advantage of a foreign-sourced product is the result of the use of dumped steel, iron, or manufactured goods or the use of injuriously subsidized steel, iron, or manufactured goods, and it shall integrate any findings into its waiver determination as appropriate.

Sec. 5. Ensuring the Integrity of the Immigration System in Order to "Hire American." (a) In order to advance the policy outlined in section 2(b) of this order, the Secretary of State, the Attorney General, the Secretary of Labor, and the Secretary of Homeland Security shall, as soon as practicable, and consistent with applicable law, propose new rules and issue new guidance, to supersede or revise previous rules and guidance if appropriate, to protect the interests of United States workers in the administration of our immigration system, including through the prevention of fraud or abuse.

(b) In order to promote the proper functioning of the H–1B visa program, the Secretary of State, the Attorney General, the Secretary of Labor, and the Secretary of Homeland Security shall, as soon as practicable, suggest reforms to help ensure that H–1B visas are awarded to the most-skilled or highest-paid petition beneficiaries.

Sec. 6. General Provisions. (a) Nothing in this order shall be construed to impair or otherwise affect:

(i) the authority granted by law to an executive department or agency, or the head thereof;

(ii) the functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals; or

(iii) existing rights or obligations under international agreements.

(b) This order shall be implemented consistent with applicable law and subject to the availability of appropriations.

(c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.

Donald J. Trump.      

Ex. Ord. No. 13858. Strengthening Buy-American Preferences for Infrastructure Projects

Ex. Ord. No. 13858, Jan. 31, 2019, 84 F.R. 2039, provided:

By the authority vested in me as President by the Constitution and the laws of the United States of America, and to strengthen Buy-American principles in Federal financial assistance programs, it is hereby ordered as follows:

Section 1. Policy. As expressed in Executive Order 13788 of April 18, 2017 (Buy American and Hire American) [set out above], it is the policy of the executive branch to maximize, consistent with law, the use of goods, products, and materials produced in the United States, in Federal procurements and through the terms and conditions of Federal financial assistance awards.

Sec. 2. Definitions. As used in this order:

(a) "Produced in the United States" means, for iron and steel products, that all manufacturing processes, from the initial melting stage through the application of coatings, occurred in the United States.

(b) "Federal financial assistance" shall have the meaning and shall be interpreted consistent with the definition provided by the Office of Management and Budget's Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, found at section 200.40 of title 2, Code of Federal Regulations.

(c) "Manufactured products" means items and construction materials composed in whole or in part of non-ferrous metals such as aluminum; plastics and polymer-based products such as polyvinyl chloride pipe; aggregates such as concrete; glass, including optical fiber; and lumber.

(d) "Infrastructure project" means a project to develop public or private physical assets that are designed to provide or support services to the general public in the following sectors: surface transportation, including roadways, bridges, railroads, and transit; aviation; ports, including navigational channels; water resources projects; energy production, generation, and storage, including from fossil-fuels, renewable, nuclear, and hydroelectric sources; electricity transmission; gas, oil, and propane storage and transmission; electric, oil, natural gas, and propane distribution systems; broadband internet; pipelines; stormwater and sewer infrastructure; drinking water infrastructure; cybersecurity; and any other sector designated through a notice published in the Federal Register by the Federal Permitting Improvement Steering Council.

(e) "Covered program" means any program for which a focus of the statutory authorities under which it is administered is the award of Federal financial assistance for the alteration, construction, conversion, demolition, extension, improvement, maintenance, reconstruction, rehabilitation, or repair of an infrastructure project in the United States, except that this term shall not include:

(i) programs for which providing a domestic preference is inconsistent with law; or

(ii) programs providing Federal financial assistance that are subject to comparable domestic preferences.

(f) "Domestic Preference" means a preference for the purchase, acquisition, or use of goods, products, or materials produced in the United States, including iron and aluminum as well as steel, cement, and other manufactured products.

Sec. 3. Application of Buy-American Principles to Covered Programs. (a) Within 90 days of the date of this order [Jan. 31, 2019], the head of each executive department and agency (agency) administering a covered program shall, as appropriate and to the extent consistent with law, encourage recipients of new Federal financial assistance awards pursuant to a covered program to use, to the greatest extent practicable, iron and aluminum as well as steel, cement, and other manufactured products produced in the United States in every contract, subcontract, purchase order, or sub-award that is chargeable against such Federal financial assistance award.

(b) The head of each agency administering a covered program shall include in the report required by section 4 of this order a detailed explanation of the strategy, plan, or program developed to satisfy the requirement of subsection (a) of this section.

Sec. 4. Identification of Opportunities to Maximize the Use of Buy-American Principles. Within 120 days of the date of this order, the head of each agency administering a covered program shall identify in a report to the President, through the Assistant to the President for Trade and Manufacturing Policy, any tools, techniques, terms, or conditions that have been used or could be used, consistent with law and in furtherance of the policy set forth in section 1 of this order, to maximize the use of iron and aluminum as well as steel, cement, and other manufactured products produced in the United States in contracts, sub-contracts, purchase orders, or sub-awards that are chargeable against Federal financial assistance awards for infrastructure projects. In preparing this report, the agency head shall take care to analyze whether covered programs within the agency head's jurisdiction would support, through terms and conditions on new Federal financial assistance awards under such covered programs, the imposition of a requirement to use iron and aluminum as well as steel, cement, and other manufactured products produced in the United States in contracts, sub-contracts, purchase orders, or sub-awards that are chargeable against such Federal financial assistance awards.

Sec. 5. [Amended Ex. Ord. No. 13788, set out above.]

Sec. 6. General Provisions. (a) Nothing in this order shall be construed to impair or otherwise affect:

(i) the authority granted by law to an executive department or agency, or the head thereof;

(ii) the functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals; or

(iii) existing rights or obligations under international agreements.

(b) This order shall be implemented consistent with applicable law and subject to the availability of appropriations.

(c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.

Donald J. Trump.      

Ex. Ord. No. 13881. Maximizing Use of American-Made Goods, Products, and Materials

Ex. Ord. No. 13881, July 15, 2019, 84 F.R. 34257, provided:

By the authority vested in me as President by the Constitution and the laws of the United States of America, and to promote the principles underlying the Buy American Act of 1933 (41 U.S.C. 8301–8305), it is hereby ordered as follows:

Section 1. Policy. (a) As expressed in Executive Order 13788 of April 18, 2017 (Buy American and Hire American) [set out above], and in Executive Order 13858 of January 31, 2019 (Strengthening Buy-American Preferences for Infrastructure Projects) [set out above], it is the policy of the United States to buy American and to maximize, consistent with law, the use of goods, products, and materials produced in the United States. To those ends, my Administration shall enforce the Buy American Act to the greatest extent permitted by law.

(b) In Executive Order 10582 of December 17, 1954 (Prescribing Uniform Procedures for Certain Determinations Under the Buy-American Act) [41 U.S.C. 8303 note], President Eisenhower established that materials shall be, for purposes of the Buy American Act, considered of foreign origin if the cost of the foreign products used in such materials constitutes 50 percent or more of the cost of all the products used in such materials. He also established that, in determining whether the bid or offered price of materials of domestic origin is unreasonable or inconsistent with the public interest, the executive agencies shall either (1) add 6 percent to the total bid or offered price of materials of foreign origin, or (2) add 10 percent to the total bid or offered price of materials of foreign origin less certain specified costs as follows. Where the foreign bid or offer is less than $25,000, applicable duty is excluded from the calculation. Where the foreign bid or offer is more than $25,000, both applicable duty, and all costs incurred after arrival in the United States, are excluded from the calculation.

(c) The policies described in section 1(b) of this order were adopted by the Federal Acquisition Regulatory Council (FAR Council) in the Federal Acquisition Regulation (FAR), title 48, Code of Federal Regulations. The FAR should be reviewed and revised, as appropriate, to most effectively carry out the goals of the Buy American Act and my Administration's policy of enforcing the Buy American Act to its maximum lawful extent. I therefore direct the members of the FAR Council to consider measures that may better effectuate this policy.

Sec. 2. Proposed Rules. (a) Within 180 days of the date of this order [July 15, 2019], the FAR Council shall consider proposing for notice and public comment:

(i) an amendment to the applicable provisions in the FAR that would provide that materials shall be considered to be of foreign origin if:

(A) for iron and steel end products, the cost of foreign iron and steel used in such iron and steel end products constitutes 5 percent or more of the cost of all the products used in such iron and steel end products; or

(B) for all other end products, the cost of the foreign products used in such end products constitutes 45 percent or more of the cost of all the products used in such end products; and

(ii) an amendment to the applicable provisions in the FAR that would provide that the executive agency concerned shall in each instance conduct the reasonableness and public interest determination referred to in sections 8302 and 8303 of title 41, United States Code, on the basis of the following-described differential formula, subject to the terms thereof: the sum determined by computing 20 percent (for other than small businesses), or 30 percent (for small businesses), of the offer or offered price of materials of foreign origin.

(b) The FAR Council shall consider and evaluate public comments on any regulations proposed pursuant to section 2(a) of this order and shall promptly issue a final rule, if appropriate and consistent with applicable law and the national security interests of the United States. The head of each executive agency shall issue such regulations as may be necessary to ensure that agency procurement practices conform to the provisions of any final rule issued pursuant to this order.

Sec. 3. Effect on Executive Order 10582. Executive Order 10582 is superseded to the extent that it is inconsistent with this order. Upon the issuance of a final rule pursuant to section 2 of this order, subsections 2(a) and 2(c) of Executive Order 10582 are revoked.

Sec. 4. Additional Actions. Within 180 days of the date of this order, the Secretary of Commerce and the Director of the Office of Management and Budget shall, in consultation with the FAR Council, the Chairman of the Council of Economic Advisers, the Assistant to the President for Economic Policy, and the Assistant to the President for Trade and Manufacturing Policy, submit to the President a report on any other changes to the FAR that the FAR Council should consider in order to better enforce the Buy American Act and to otherwise act consistent with the policy described in section 1 of this order, including whether and when to further decrease, including incrementally, the threshold percentage in subsection 2(a)(i)(B) of this order from the proposed 45 percent to 25 percent. The report shall include recommendations based on the feasibility and desirability of any decreases, including the timing of such decreases.

Sec. 5. General Provisions. (a) Nothing in this order shall be construed to impair or otherwise affect:

(i) the authority granted by law to an executive department or agency, or the head thereof, including, for example, the authority to utilize non-availability and public interest exceptions as delineated in section 8303 of title 41, United States Code, and 48 CFR 25.103; or

(ii) the functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals.

(b) This order shall be implemented consistent with applicable law and subject to the availability of appropriations.

(c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.

Donald J. Trump.      

§8302. American materials required for public use

(a) In General.—

(1) Allowable materials.—Only unmanufactured articles, materials, and supplies that have been mined or produced in the United States, and only manufactured articles, materials, and supplies that have been manufactured in the United States substantially all from articles, materials, or supplies mined, produced, or manufactured in the United States, shall be acquired for public use unless the head of the department or independent establishment concerned determines their acquisition to be inconsistent with the public interest or their cost to be unreasonable.

(2) Exceptions.—This section does not apply—

(A) to articles, materials, or supplies for use outside the United States;

(B) if articles, materials, or supplies of the class or kind to be used, or the articles, materials, or supplies from which they are manufactured, are not mined, produced, or manufactured in the United States in sufficient and reasonably available commercial quantities and are not of a satisfactory quality; and

(C) to manufactured articles, materials, or supplies procured under any contract with an award value that is not more than the micro-purchase threshold under section 1902 of this title.


(b) Reports.—

(1) In general.—Not later than 180 days after the end of each of fiscal years 2009 through 2011, the head of each Federal agency shall submit to the Committee on Homeland Security and Governmental Affairs of the Senate and the Committee on Oversight and Government Reform of the House of Representatives a report on the amount of the acquisitions made by the agency in that fiscal year of articles, materials, or supplies purchased from entities that manufacture the articles, materials, or supplies outside of the United States.

(2) Contents of report.—The report required by paragraph (1) shall separately include, for the fiscal year covered by the report—

(A) the dollar value of any articles, materials, or supplies that were manufactured outside the United States;

(B) an itemized list of all waivers granted with respect to the articles, materials, or supplies under this chapter, and a citation to the treaty, international agreement, or other law under which each waiver was granted;

(C) if any articles, materials, or supplies were acquired from entities that manufacture articles, materials, or supplies outside the United States, the specific exception under this section that was used to purchase the articles, materials, or supplies; and

(D) a summary of—

(i) the total procurement funds expended on articles, materials, and supplies manufactured inside the United States; and

(ii) the total procurement funds expended on articles, materials, and supplies manufactured outside the United States.


(3) Public availability.—The head of each Federal agency submitting a report under paragraph (1) shall make the report publicly available to the maximum extent practicable.

(4) Exception for intelligence community.—This subsection shall not apply to acquisitions made by an agency, or component of an agency, that is an element of the intelligence community as specified in, or designated under, section 3 of the National Security Act of 1947 (50 U.S.C. 401a).1

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3831.)

Historical and Revision Notes
Revised

Section

Source (U.S. Code)Source (Statutes at Large)
8302 41:10a. Mar. 3, 1933, ch. 212, title III, §2, 47 Stat. 1520; Pub. L. 100–418, title VII, §7005(b), Aug. 23, 1988, 102 Stat. 1553; Pub. L. 103–355, title IV, §4301(b), Oct. 13, 1994, 108 Stat. 3347; Pub. L. 110–28 title VIII, §8306, May 25, 2007, 121 Stat. 211.

In subsection (a), the words "Notwithstanding any other provision of law" are omitted as unnecessary.

In subsection (b)(1), reference to fiscal years 2007 and 2008 is omitted as obsolete.

References in Text

The National Security Act of 1947, referred to in subsec. (b)(4), is act July 26, 1947, ch. 343, 61 Stat. 495, which was formerly classified principally to chapter 15 (§401 et seq.) of Title 50, War and National Defense, prior to editorial reclassification in chapter 44 (§3001 et seq.) of Title 50. Section 3 of the Act is now classified to section 3003 of Title 50. For complete classification of this Act to the Code, see Tables.

1 See References in Text note below.

§8303. Contracts for public works

(a) In General.—Every contract for the construction, alteration, or repair of any public building or public work in the United States shall contain a provision that in the performance of the work the contractor, subcontractors, material men, or suppliers shall use only—

(1) unmanufactured articles, materials, and supplies that have been mined or produced in the United States; and

(2) manufactured articles, materials, and supplies that have been manufactured in the United States substantially all from articles, materials, or supplies mined, produced, or manufactured in the United States.


(b) Exceptions.—

(1) In general.—This section does not apply—

(A) to articles, materials, or supplies for use outside the United States;

(B) if articles, materials, or supplies of the class or kind to be used, or the articles, materials, or supplies from which they are manufactured, are not mined, produced, or manufactured in the United States in sufficient and reasonably available commercial quantities and are not of a satisfactory quality; and

(C) to manufactured articles, materials, or supplies procured under any contract with an award value that is not more than the micro-purchase threshold under section 1902 of this title.


(2) Particular article, material, or supply.—If the head of the department or independent establishment making the contract finds that it is impracticable to comply with subsection (a) for a particular article, material, or supply or that it would unreasonably increase the cost, an exception shall be noted in the specifications for that article, material, or supply and a public record of the findings that justified the exception shall be made.

(3) Inconsistent with public interest.—Subsection (a) shall be regarded as requiring the purchase, for public use within the United States, of articles, materials, or supplies manufactured in the United States in sufficient and reasonably available commercial quantities and of a satisfactory quality, unless the head of the department or independent establishment concerned determines their purchase to be inconsistent with the public interest or their cost to be unreasonable.


(c) Results of Failure To Comply.—If the head of a department, bureau, agency, or independent establishment that has made a contract containing the provision required by subsection (a) finds that there has been a failure to comply with the provision in the performance of the contract, the head of the department, bureau, agency, or independent establishment shall make the findings public. The findings shall include the name of the contractor obligated under the contract. The contractor, and any subcontractor, material man, or supplier associated or affiliated with the contractor, shall not be awarded another contract for the construction, alteration, or repair of any public building or public work for 3 years after the findings are made public.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3832.)

Historical and Revision Notes
Revised

Section

Source (U.S. Code)Source (Statutes at Large)
8303(a) 41:10b(a) (words before "except as provided"). Mar. 3, 1933, ch. 212, title III, §3, 47 Stat. 1520; Pub. L. 100–418, title VII, §7005(c), Aug. 23, 1988, 102 Stat. 1553.
8303(b)(1) 41:10b(a) ("except as provided in section 10a of this title").
8303(b)(2) 41:10b(a) (proviso).
8303(b)(3) 41:10d. Oct. 29, 1949, ch. 787, title VI, §633, 63 Stat. 1024; Pub. L. 100–418, title VII, §7005(d), Aug. 23, 1988, 102 Stat. 1553.
8303(c) 41:10b(b).

In subsection (a), before paragraph (1), the words "growing out of an appropriation heretofore made or hereafter to be made" are omitted as unnecessary.

Subsection (b)(1) is substituted for "except as provided in section 10a of this title" for clarity.

In subsection (b)(3), the words "In order to clarify the original intent of Congress, hereafter, section 10a of this title" are omitted as unnecessary.

In subsection (c), the words "in the United States or elsewhere" are omitted as unnecessary.

Ex. Ord. No. 10582. Uniform Procedures for Determinations

Ex. Ord. No. 10582, Dec. 17, 1954, 19 F.R. 8723, as amended by Ex. Ord. No. 11051, Sept. 27, 1962, 27 F.R. 9683; Ex. Ord. No. 12148, July 20, 1979, 44 F.R. 43239; Ex. Ord. No. 12608, Sept. 9, 1987, 52 F.R. 34617; Ex. Ord. No. 13881, §3, July 15, 2019, 84 F.R. 34258, provided:

Section 1. As used in this order, (a) the term "materials" includes articles and supplies, (b) the term "executive agency" includes executive department, independent establishment, and other instrumentality of the executive branch of the Government, and (c) the term "bid or offered price of materials of foreign origin" means the bid or offered price of such materials delivered at the place specified in the invitation to bid including applicable duty and all costs incurred after arrival in the United States.

Sec. 2. (a) For the purposes of this order materials shall be considered to be of foreign origin if the cost of the foreign products used in such materials constitutes fifty per centum or more of the cost of all the products used in such materials.

(b) For the purposes of the said act of March 3, 1933 [probably means act Mar. 3, 1933, ch. 212, title III, 47 Stat. 1520, see 41 U.S.C. 8301 et seq.], and the other laws referred to in the first paragraph of the preamble of this order, the bid or offered price of materials of domestic origin shall be deemed to be unreasonable, or the purchase of such materials shall be deemed to be inconsistent with the public interest, if the bid or offered price thereof exceeds the sum of the bid or offered price of like materials of foreign origin and a differential computed as provided in subsection (c) of this section.

(c) The executive agency concerned shall in each instance determine the amount of the differential referred to in subsection (b) of this section on the basis of one of the following-described formulas, subject to the terms thereof:

(1) The sum determined by computing six per centum of the bid or offered price of materials of foreign origin.

(2) The sum determined by computing ten per centum of the bid or offered price of materials of foreign origin exclusive of applicable duty and all costs incurred after arrival in the United States: provided that when the bid or offered price of materials of foreign origin amounts to less than $25,000, the sum shall be determined by computing ten per centum of such price exclusive only of applicable duty.

Sec. 3. Nothing in this order shall affect the authority or responsibility of an executive agency:

(a) To reject any bid or offer for reasons of the national interest not described or referred to in this order; or

(b) To place a fair proportion of the total purchases with small business concerns in accordance with section 302(b) of the Federal Property and Administrative Services Act of 1949, as amended [former 41 U.S.C. 252(b)] [now 41 U.S.C. 3104], [former] section 2(b) of the Armed Services Procurement Act of 1947, as amended, and [former] section 202 of the Small Business Act of 1953; or

(c) To reject a bid or offer to furnish material of foreign origin in any situation in which the domestic supplier offering the lowest price for furnishing the desired materials undertakes to produce substantially all of such materials in areas of substantial unemployment, as determined by the Secretary of Labor in accordance with such appropriate regulations as he may establish and during such period as the President may determine that it is in the national interest to provide to such areas preference in the award of Government contracts: Provided, that nothing in this section shall prevent the rejection of a bid or offered price which is excessive; or

(d) To reject any bid or offer for materials of foreign origin if such rejection is necessary to protect essential national-security interests after receiving advice with respect thereto from the President or from the Director [now Administrator] of the Federal Emergency Management Agency. In providing this advice the Director [Administrator] shall be governed by the principle that exceptions under this section shall be made only upon a clear showing that the payment of a greater differential than the procedures of this section generally prescribe is justified by consideration of national security.

Sec. 4. The head of each executive agency shall issue such regulations as may be necessary to insure that procurement practices under his jurisdiction conform to the provisions of this order.

Sec. 5. This order shall apply only to contracts entered into after the date hereof. In any case in which the head of an executive agency proposing to purchase domestic materials determines that a greater differential than that provided in this order between the cost of such materials of domestic origin and materials of foreign origin is not unreasonable or that the purchase of materials of domestic origin is not inconsistent with the public interest, this order shall not apply. A written report of the facts of each case in which such a determination is made shall be submitted to the President through the Director of the Office of Management and Budget by the official making the determination within 30 days thereafter.

[Ex. Ord. No. 10582, set out above, superseded to the extent that it is inconsistent with Ex. Ord. No. 13881, and section 2(a) and (c) of Ex. Ord. No. 10582 revoked upon issuance of final rule pursuant to section 2 of Ex. Ord. No. 13881, see section 3 of Ex. Ord. No. 13881, July 15, 2019, 84 F.R. 34258, set out in a note under section 8301 of this title.]

§8304. Waiver rescission

(a) Type of Agreement.—An agreement referred to in subsection (b) is a reciprocal defense procurement memorandum of understanding between the United States and a foreign country pursuant to which the Secretary of Defense has prospectively waived this chapter for certain products in that country.

(b) Determination by Secretary of Defense.—If the Secretary of Defense, after consultation with the United States Trade Representative, determines that a foreign country that is party to an agreement described in subsection (a) has violated the agreement by discriminating against certain types of products produced in the United States that are covered by the agreement, the Secretary of Defense shall rescind the Secretary's blanket waiver of this chapter with respect to those types of products produced in that country.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3833.)

Historical and Revision Notes
Revised

Section

Source (U.S. Code)Source (Statutes at Large)
8304(a) 41:10b–2(a)(2), (b). Pub. L. 103–160, div. A, title VIII, §849(c), (d), Nov. 30, 1993, 107 Stat. 1725.
8304(b) 41:10b–2(a)(1).

In subsection (a), the text of 41:10b–2(b) is omitted as unnecessary.

Similar Provisions

Provisions similar to those in this section and section 8305 of this title were contained in the following acts:

Pub. L. 116–93, div. A, title VIII, §8029, Dec. 20, 2019, 133 Stat. 2342.

Pub. L. 115–245, div. A, title VIII, §8028, Sept. 28, 2018, 132 Stat. 3006.

Pub. L. 115–141, div. C, title VIII, §8028, Mar. 23, 2018, 132 Stat. 469.

Pub. L. 115–31, div. C, title VIII, §8029, May 5, 2017, 131 Stat. 253.

Pub. L. 114–113, div. C, title VIII, §8028, Dec. 18, 2015, 129 Stat. 2357.

Pub. L. 113–235, div. C, title VIII, §8028, Dec. 16, 2014, 128 Stat. 2258.

Pub. L. 113–76, div. C, title VIII, §8027, Jan. 17, 2014, 128 Stat. 110.

Pub. L. 113–6, div. C, title VIII, §8027, Mar. 26, 2013, 127 Stat. 302.

Pub. L. 112–74, div. A, title VIII, §8027, Dec. 23, 2011, 125 Stat. 811.

Pub. L. 112–10, div. A, title VIII, §8028, Apr. 15, 2011, 125 Stat. 63.

Pub. L. 111–118, div. A, title VIII, §8030, Dec. 19, 2009, 123 Stat. 3435.

Pub. L. 110–329, div. C, title VIII, §8030, Sept. 30, 2008, 122 Stat. 3627.

Pub. L. 110–116, div. A, title VIII, §8029, Nov. 13, 2007, 121 Stat. 1321.

Pub. L. 109–289, div. A, title VIII, §8027, Sept. 29, 2006, 120 Stat. 1279.

Pub. L. 109–148, div. A, title VIII, §8030, Dec. 30, 2005, 119 Stat. 2705.

Pub. L. 108–287, title VIII, §8032, Aug. 5, 2004, 118 Stat. 977.

Pub. L. 108–87, title VIII, §8033, Sept. 30, 2003, 117 Stat. 1079.

Pub. L. 107–248, title VIII, §8033, Oct. 23, 2002, 116 Stat. 1544.

Pub. L. 107–117, div. A, title VIII, §8036, Jan. 10, 2002, 115 Stat. 2255.

Pub. L. 106–259, title VIII, §8036, Aug. 9, 2000, 114 Stat. 682.

Pub. L. 106–79, title VIII, §8038, Oct. 25, 1999, 113 Stat. 1239.

Pub. L. 105–262, title VIII, §8038, Oct. 17, 1998, 112 Stat. 2305.

Pub. L. 105–56, title VIII, §8040, Oct. 8, 1997, 111 Stat. 1229.

Pub. L. 104–208, div. A, title I, §101(b) [title VIII, §8042], Sept. 30, 1996, 110 Stat. 3009–71, 3009-97.

Pub. L. 104–61, title VIII, §8051, Dec. 1, 1995, 109 Stat. 662.

Pub. L. 103–335, title VIII, §8058, Sept. 30, 1994, 108 Stat. 2631.

Pub. L. 103–139, title VIII, §8069, Nov. 11, 1993, 107 Stat. 1455.

Pub. L. 102–396, title IX, §9096, Oct. 6, 1992, 106 Stat. 1924, as amended by Pub. L. 103–355, title VII, §7206(b), Oct. 13, 1994, 108 Stat. 3382.

Pub. L. 102–190, div. A, title VIII, §833, Dec. 5, 1991, 105 Stat. 1447.

Pub. L. 102–172, title VIII, §8123, Nov. 26, 1991, 105 Stat. 1205.

Pub. L. 101–189, div. A, title VIII, §823, Nov. 29, 1989, 103 Stat. 1504.

§8305. Annual report

Not later than 60 days after the end of each fiscal year, the Secretary of Defense shall submit to Congress a report on the amount of purchases by the Department of Defense from foreign entities in that fiscal year. The report shall separately indicate the dollar value of items for which this chapter was waived pursuant to—

(1) a reciprocal defense procurement memorandum of understanding described in section 8304(a) of this title;

(2) the Trade Agreements Act of 1979 (19 U.S.C. 2501 et seq.); or

(3) an international agreement to which the United States is a party.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3833.)

Historical and Revision Notes
Revised

Section

Source (U.S. Code)Source (Statutes at Large)
8305 41:10b–3. Pub. L. 104–201, div. A, title VIII, §827, Sept. 23, 1996, 110 Stat. 2611; Pub. L. 105–85, div. A, title VIII, §846, Nov. 18, 1997, 111 Stat. 1845; Pub. L. 105–261, div. A, title VIII, §812, Oct. 17, 1998, 112 Stat. 2086.

CHAPTER 85—COMMITTEE FOR PURCHASE FROM PEOPLE WHO ARE BLIND OR SEVERELY DISABLED

Sec.
8501.
Definitions.
8502.
Committee for Purchase From People Who Are Blind or Severely Disabled.
8503.
Duties and powers of the Committee.
8504.
Procurement requirements for the Federal Government.
8505.
Audit.
8506.
Authorization of appropriations.

        

§8501. Definitions

In this chapter:

(1) Blind.—The term "blind" refers to an individual or class of individuals whose central visual acuity does not exceed 20/200 in the better eye with correcting lenses or whose visual acuity, if better than 20/200, is accompanied by a limit to the field of vision in the better eye to such a degree that its widest diameter subtends an angle of no greater than 20 degrees.

(2) Committee.—The term "Committee" means the Committee for Purchase From People Who Are Blind or Severely Disabled established under section 8502 of this title.

(3) Direct labor.—The term "direct labor"—

(A) includes all work required for preparation, processing, and packing of a product, or work directly relating to the performance of a service; but

(B) does not include supervision, administration, inspection, or shipping.


(4) Entity of the federal government and federal government.—The terms "entity of the Federal Government" and "Federal Government" include an entity of the legislative or judicial branch, a military department or executive agency (as defined in sections 102 and 105 of title 5, respectively), the United States Postal Service, and a nonappropriated fund instrumentality under the jurisdiction of the Armed Forces.

(5) Other severely disabled.—The term "other severely disabled" means an individual or class of individuals under a physical or mental disability, other than blindness, which (according to criteria established by the Committee after consultation with appropriate entities of the Federal Government and taking into account the views of non-Federal Government entities representing the disabled) constitutes a substantial handicap to employment and is of a nature that prevents the individual from currently engaging in normal competitive employment.

(6) Qualified nonprofit agency for other severely disabled.—The term "qualified nonprofit agency for other severely disabled" means an agency—

(A)(i) organized under the laws of the United States or a State;

(ii) operated in the interest of severely disabled individuals who are not blind; and

(iii) of which no part of the net income of the agency inures to the benefit of a shareholder or other individual;

(B) that complies with any applicable occupational health and safety standard prescribed by the Secretary of Labor; and

(C) that in the production of products and in the provision of services (whether or not the products or services are procured under this chapter) during the fiscal year employs blind or other severely disabled individuals for at least 75 percent of the hours of direct labor required for the production or provision of the products or services.


(7) Qualified nonprofit agency for the blind.—The term "qualified nonprofit agency for the blind" means an agency—

(A)(i) organized under the laws of the United States or a State;

(ii) operated in the interest of blind individuals; and

(iii) of which no part of the net income of the agency inures to the benefit of a shareholder or other individual;

(B) that complies with any applicable occupational health and safety standard prescribed by the Secretary of Labor; and

(C) that in the production of products and in the provision of services (whether or not the products or services are procured under this chapter) during the fiscal year employs blind individuals for at least 75 percent of the hours of direct labor required for the production or provision of the products or services.


(8) Severely disabled individual.—The term "severely disabled individual" means an individual or class of individuals under a physical or mental disability, other than blindness, which (according to criteria established by the Committee after consultation with appropriate entities of the Federal Government and taking into account the views of non-Federal Government entities representing the disabled) constitutes a substantial handicap to employment and is of a nature that prevents the individual from currently engaging in normal competitive employment.

(9) State.—The term "State" includes the District of Columbia, Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Northern Mariana Islands.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3833.)

Historical and Revision Notes
Revised

Section

Source (U.S. Code)Source (Statutes at Large)
8501(1) 41:48b(1). June 25, 1938, ch. 697, §5, 52 Stat. 1196; Pub. L. 92–28, §1, June 23, 1971, 85 Stat. 81; Pub. L. 93–358, §1(3), July 25, 1974, 88 Stat. 393; Pub. L. 94–273, §3(22), Apr. 21, 1976, 90 Stat. 377.
8501(2) 41:46(a) (words in parentheses before par. (1)). June 25, 1938, ch. 697, §1(a) (words in parentheses before par. (1)), 52 Stat. 1196; Pub. L. 92–28, §1, June 23, 1971, 85 Stat. 77.
8501(3) 41:48b(5).
8501(4) 41:48b(7).
8501(5) 41:48b(2).
8501(6) 41:48b(4).
8501(7) 41:48b(3).
8501(8) 41:48b(2).
8501(9) 41:48b(8).

In this chapter, the word "disabled" is substituted for "handicapped" for consistency with the name of the Committee. The word "product" is substituted for "commodity" to reflect the current usage of the items produced in the Committee's program.

In this section, the text of 41:48b(6) is omitted as unnecessary.

In paragraph (9), the words "the Northern Mariana Islands" are substituted for "the Trust Territory of the Pacific Islands" because the Trust Territory of the Pacific Islands terminated. See 48 U.S.C. note prec. 1681. However, section 502(a)(2) of the Covenant to Establish a Commonwealth of the Northern Mariana Islands in Political Union with the United States of America (48 U.S.C. 1801 note) provided that laws in existence on the effective date of section 502 that were applicable to Guam and that were of general application to the several States would apply to the Northern Mariana Islands. The Marshall Islands, Palau, and the Federated States of Micronesia are not included because although they were part of the Trust Territory of the Pacific Islands, they are independent entities and not part of the United States.

Contracting With Employers of Persons With Disabilities

Pub. L. 109–364, div. A, title VIII, §856(a), (d), Oct. 17, 2006, 120 Stat. 2347, 2349, provided that:

"(a) Inapplicability of Certain Laws.—

"(1) Inapplicability of the randolph-sheppard act to contracts and subcontracts for military dining facility support services covered by javits-wagner-o'day act.—The Randolph-Sheppard Act (20 U.S.C. 107 et seq.) does not apply to full food services, mess attendant services, or services supporting the operation of a military dining facility that, as of the date of the enactment of this Act [Oct. 17, 2006], were services on the procurement list established under section 2 of the Javits-Wagner-O'Day Act ([former] 41 U.S.C. 47) [now 41 U.S.C. 8503].

"(2) Inapplicability of the javits-wagner-o'day act to contracts for the operation of a military dining facility.—(A) The Javits-Wagner-O'Day Act ([former] 41 U.S.C. 46 et seq.) [now 41 U.S.C. 8501 et seq.] does not apply at the prime contract level to any contract entered into by the Department of Defense as of the date of the enactment of this Act with a State licensing agency under the Randolph-Sheppard Act (20 U.S.C. 107 et seq.) for the operation of a military dining facility.

"(B) The Javits-Wagner-O'Day Act [now 41 U.S.C. 8501 et seq.] shall apply to any subcontract entered into by a Department of Defense contractor for full food services, mess attendant services, and other services supporting the operation of a military dining facility.

"(3) Repeal of superseded law.—[Repealed section 853(a), (b) of Pub. L. 108–375, 118 Stat. 2021.]

"(d) Definitions.—In this section:

"(1) The term 'State licensing agency' means any agency designated by the Secretary of Education under section 2(a)(5) of the Randolph-Sheppard Act (20 U.S.C. 107a(a)(5)).

"(2) The term 'military dining facility' means a facility owned, operated, leased, or wholly controlled by the Department of Defense and used to provide dining services to members of the Armed Forces, including a cafeteria, military mess hall, military troop dining facility, or any similar dining facility operated for the purpose of providing meals to members of the Armed Forces."

Statement of Policy and Report Concerning the Operation and Management of Certain Military Facilities Regarding the Blind or Severely Disabled

Pub. L. 109–163, div. A, title VIII, §848(b), (c), Jan. 6, 2006, 119 Stat. 3395, provided that:

"(b) Statement of Policy.—The Secretary of Defense, the Secretary of Education, and the Chairman of the Committee for Purchase From People Who Are Blind or Severely Disabled shall jointly issue a statement of policy related to the implementation of the Randolph-Sheppard Act (20 U.S.C. 107 et seq.) and the Javits-Wagner-O'Day Act ([former] 41 U.S.C. 48 [46 et seq.]) [now 41 U.S.C. 8501 et seq.] within the Department of Defense and the Department of Education. The joint statement of policy shall specifically address the application of those Acts to both operation and management of all or any part of a military mess hall, military troop dining facility, or any similar dining facility operated for the purpose of providing meals to members of the Armed Forces, and shall take into account and address, to the extent practicable, the positions acceptable to persons representing programs implemented under each Act.

"(c) Report.—Not later than April 1, 2006, the Secretary of Defense, the Secretary of Education, and the Chairman of the Committee for Purchase From People Who Are Blind or Severely Disabled shall submit to the Committees on Armed Services of the Senate and the House of Representatives, the Committee on Health, Education, Labor and Pensions of the Senate, and the Committee on Education and the Workforce of the House of Representatives a report describing the joint statement of policy issued under subsection (b), with such findings and recommendations as the Secretaries consider appropriate."

§8502. Committee for Purchase From People Who Are Blind or Severely Disabled

(a) Establishment.—There is a Committee for Purchase From People Who Are Blind or Severely Disabled.

(b) Composition.—The Committee consists of 15 members appointed by the President as follows:

(1) One officer or employee from each of the following, nominated by the head of the department or agency:

(A) The Department of Agriculture.

(B) The Department of Defense.

(C) The Department of the Army.

(D) The Department of the Navy.

(E) The Department of the Air Force.

(F) The Department of Education.

(G) The Department of Commerce.

(H) The Department of Veterans Affairs.

(I) The Department of Justice.

(J) The Department of Labor.

(K) The General Services Administration.


(2) One member from individuals who are not officers or employees of the Federal Government and who are conversant with the problems incident to the employment of the blind.

(3) One member from individuals who are not officers or employees of the Federal Government and who are conversant with the problems incident to the employment of other severely disabled individuals.

(4) One member from individuals who are not officers or employees of the Federal Government and who represent blind individuals employed in qualified nonprofit agencies for the blind.

(5) One member from individuals who are not officers or employees of the Federal Government and who represent severely disabled individuals (other than blind individuals) employed in qualified nonprofit agencies for other severely disabled individuals.


(c) Terms of Office.—Members appointed under paragraph (2), (3), (4), or (5) of subsection (b) shall be appointed for terms of 5 years and may be reappointed if the member meets the qualifications prescribed by those paragraphs.

(d) Chairman.—The members of the Committee shall elect one of the members to be Chairman.

(e) Vacancy.—

(1) Manner in which filled.—A vacancy in the membership of the Committee shall be filled in the manner in which the original appointment was made.

(2) Unfulfilled term.—A member appointed under paragraph (2), (3), (4), or (5) of subsection (b) to fill a vacancy occurring prior to the expiration of the term for which the predecessor was appointed shall be appointed only for the remainder of the term. The member may serve after the expiration of a term until a successor takes office.


(f) Pay and Travel Expenses.—

(1) Amount to which members are entitled.—Except as provided in paragraph (2), members of the Committee are entitled to receive the daily equivalent of the maximum annual rate of basic pay payable for level IV of the Executive Schedule for each day (including travel-time) during which they perform services for the Committee. A member is entitled to travel expenses, including a per diem allowance instead of subsistence, as provided under section 5703 of title 5.

(2) Officers or employees of the federal government.—Members who are officers or employees of the Federal Government may not receive additional pay because of their service on the Committee.


(g) Staff.—

(1) Appointment and compensation.—Subject to rules the Committee may adopt and to chapters 33 and 51 and subchapter III of chapter 53 of title 5, the Chairman may appoint and fix the pay of personnel the Committee determines are necessary to assist it in carrying out this chapter.

(2) Personnel from other entities.—On request of the Committee, the head of an entity of the Federal Government may detail, on a reimbursable basis, any personnel of the entity to the Committee to assist it in carrying out this chapter.


(h) Obtaining Official Information.—The Committee may secure directly from an entity of the Federal Government information necessary to enable it to carry out this chapter. On request of the Chairman, the head of the entity shall furnish the information to the Committee.

(i) Administrative Support Services.—The Administrator of General Services shall provide to the Committee, on a reimbursable basis, administrative support services the Committee requests.

(j) Annual Report.—Not later than December 31 of each year, the Committee shall transmit to the President a report that includes the names of the Committee members serving in the prior fiscal year, the dates of Committee meetings in that year, a description of the activities of the Committee under this chapter in that year, and any recommendations for changes in this chapter which the Committee determines are necessary.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3835.)

Historical and Revision Notes
Revised

Section

Source (U.S. Code)Source (Statutes at Large)
8502(a), (b) 41:46(a) (less words in parentheses before par. (1)). June 25, 1938, ch. 697, §1 (less (a) (words in parentheses before par. (1))), 52 Stat. 1196; Pub. L. 92–28, §1, June 23, 1971, 85 Stat. 77; Pub. L. 93–358, §1(1), (2), July 25, 1974, 88 Stat. 392; Pub. L. 94–273, §8(2), Apr. 21, 1976, 90 Stat. 378; Pub. L. 102–54, §13(p), June 13, 1991, 105 Stat. 278; Pub. L. 102–569, title IX, §911(a), Oct. 29, 1992, 106 Stat. 4486; Pub. L. 103–73, title III, §301, Aug. 11, 1993, 107 Stat. 736.
8502(c) 41:46(d)(1), (2), (4).
8502(d) 41:46(c).
8502(e)(1) 41:46(b).
8502(e)(2) 41:46(d)(3).
8502(f) 41:46(e).
8502(g) 41:46(f).
8502(h) 41:46(g).
8502(i) 41:46(h).
8502(j) 41:46(i).

In subsection (b)(1)(F), the words "Department of Education" are substituted for "Department of Health and Human Services" in 41:46(a)(1) to correct a mistake in the United States Code. In the amendment to the original provision by section 1 of Public Law 92–28 (85 Stat. 77), an officer or employee of the Department of Health, Education, and Welfare was one of the members appointed to the Committee for Purchase From People Who Are Blind or Severely Disabled, because the Department, through the Rehabilitation Services Administration, had the major governmental function in the field of vocational rehabilitation for the blind and other severely handicapped and administered related vocational rehabilitation programs for individuals with disabilities. See House Report 92–228. Under section 301(a)(4)(A) and (C) and (b)(3) of the Department of Education Organization Act (20:3441(a)(4)(A) and (C) and (b)(3)), the functions and offices of the Department and the functions of the Secretary of Health, Education, and Welfare and the Commissioner of Rehabilitation Services were transferred to the Department or Secretary of Education. Section 509 of the Act (20:3508) redesignated the Department and Secretary of Health, Education, and Welfare as the Department and Secretary of Health and Human Services, respectively, and provided that references to the Department and Secretary of Health, Education, and Welfare were deemed to be references to the Department or Secretary of Health and Human Services except to the extent a reference was to a function of the Department or Secretary of Education. The reference in 41:46(a)(1) was changed to "Department of Health and Human Services" but should have been changed to "Department of Education". Furthermore, the regulations of the Committee include the Department of Education in the list of members of the Committee. See 41 CFR 51–2.1.

In subsection (c), the text of 41:46(d)(2) and (4) is omitted as obsolete.

In subsection (f)(1), the reference to section 5376 of title 5 is substituted for the reference to grade GS–18 of the General Schedule because of section 529 [title I, §101(c)(1)] of the Treasury, Postal Service and General Government Appropriations Act, 1991 (Public Law 101–509, 104 Stat. 1442, 5 U.S.C. 5376 note). The word "actual" is omitted as unnecessary. The words "A member is entitled to travel expenses, including a per diem allowance instead of subsistence, as provided under section 5703 of title 5" are substituted for 41:46(e)(3) to eliminate unnecessary words. The reference to section 5703 of title 5 is substituted for the reference to section 5703(b) of title 5 because of the amendment to section 5703 by section 4 of the Travel Expense Amendments Act of 1975 (Public Law 94–22, 89 Stat. 85).

In subsection (g), the words "its duties and powers" are omitted as surplus.

In subsection (g)(1), the reference to chapter 33 of title 5 is substituted for "the provisions of title 5 governing appointments in the competitive service" for clarity and for consistency with other titles of the United States Code. The words "relating to classification and General Schedule pay rates" are omitted as unnecessary.

In subsection (j), the words "and to the Congress" are omitted pursuant to section 3003 of the Federal Reports Elimination and Sunset Act of 1995 (31 U.S.C. 1113 note). See, also, page 199 of House Document No. 103–7.

Senate Revision Amendment

In subsec. (f)(1), "for level IV of the Executive Schedule" substituted for "under section 5376 of title 5" by S. Amdt. 4726 (111th Cong.). See 156 Cong. Rec. 18683 (2010).

§8503. Duties and powers of the Committee

(a) Procurement List.—

(1) Maintenance of list.—The Committee shall maintain and publish in the Federal Register a procurement list. The list shall include the following products and services determined by the Committee to be suitable for the Federal Government to procure pursuant to this chapter:

(A) Products produced by a qualified nonprofit agency for the blind or by a qualified nonprofit agency for other severely disabled.

(B) The services those agencies provide.


(2) Changes to list.—The Committee may, by rule made in accordance with the requirements of section 553(b) to (e) of title 5, add to and remove from the procurement list products so produced and services so provided.


(b) Fair Market Price.—The Committee shall determine the fair market price of products and services contained on the procurement list that are offered for sale to the Federal Government by a qualified nonprofit agency for the blind or a qualified nonprofit agency for other severely disabled. The Committee from time to time shall revise its price determinations with respect to those products and services in accordance with changing market conditions.

(c) Central Nonprofit Agency or Agencies.—The Committee shall designate a central nonprofit agency or agencies to facilitate the distribution, by direct allocation, subcontract, or any other means, of orders of the Federal Government for products and services on the procurement list among qualified nonprofit agencies for the blind or qualified nonprofit agencies for other severely disabled.

(d) Regulations.—The Committee—

(1) may prescribe regulations regarding specifications for products and services on the procurement list, the time of their delivery, and other matters as necessary to carry out this chapter; and

(2) shall prescribe regulations providing that when the Federal Government purchases products produced and offered for sale by qualified nonprofit agencies for the blind or qualified nonprofit agencies for other severely disabled, priority shall be given to products produced and offered for sale by qualified nonprofit agencies for the blind.


(e) Study and Evaluation of Activities.—The Committee shall make a continuing study and evaluation of its activities under this chapter to ensure effective and efficient administration of this chapter. The Committee on its own or in cooperation with other public or nonprofit private agencies may study—

(1) problems related to the employment of the blind and other severely disabled individuals; and

(2) the development and adaptation of production methods that would enable a greater utilization of the blind and other severely disabled individuals.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3836.)

Historical and Revision Notes
Revised

Section

Source (U.S. Code)Source (Statutes at Large)
8503(a) 41:47(a). June 25, 1938, ch. 697, §2, 52 Stat. 1196; Pub. L. 92–28, §1, June 23, 1971, 85 Stat. 79.
8503(b) 41:47(b).
8503(c) 41:47(c).
8503(d) 41:47(d).
8503(e) 41:47(e).

In subsection (a), the text of 41:47(a)(1) (last sentence) is omitted as obsolete. The words "procurement list" are substituted for "(hereafter in sections 46 to 48c of this title referred to as the 'procurement list')" to eliminate unnecessary words.

In subsection (d)(2), the text of 41:47(d)(2)(B) is omitted as obsolete.

§8504. Procurement requirements for the Federal Government

(a) In General.—An entity of the Federal Government intending to procure a product or service on the procurement list referred to in section 8503 of this title shall procure the product or service from a qualified nonprofit agency for the blind or a qualified nonprofit agency for other severely disabled in accordance with regulations of the Committee and at the price the Committee establishes if the product or service is available within the period required by the entity.

(b) Exception.—This section does not apply to the procurement of a product that is available from an industry established under chapter 307 of title 18 and that is required under section 4124 of title 18 to be procured from that industry.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3837.)

Historical and Revision Notes
Revised

Section

Source (U.S. Code)Source (Statutes at Large)
8504 41:48. June 25, 1938, ch. 697, §3, 52 Stat. 1196; Pub. L. 92–28, §1, June 23, 1971, 85 Stat. 80.

In subsection (a), the words "referred to in section 8503 of this title" are added for clarity because of the restatement of 41:47(a) in section 8503(a) of the revised title.

In subsection (b), the words "for procurement" are omitted as unnecessary.

§8505. Audit

For the purpose of audit and examination, the Comptroller General shall have access to the books, documents, papers, and other records of—

(1) the Committee and of each central nonprofit agency the Committee designates under section 8503(c) of this title; and

(2) qualified nonprofit agencies for the blind and qualified nonprofit agencies for other severely disabled that have sold products or services under this chapter to the extent those books, documents, papers, and other records relate to the activities of the agency in a fiscal year in which a sale was made under this chapter.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3838.)

Historical and Revision Notes
Revised

Section

Source (U.S. Code)Source (Statutes at Large)
8505 41:48a. June 25, 1938, ch. 697, §4, 52 Stat. 1196; Pub. L. 92–28, §1, June 23, 1971, 85 Stat. 81.

In this section, before paragraph (1), the words "or any of his duly authorized representatives" are omitted because of 31:711(2). In paragraph (1), the words "central nonprofit" are added for clarity.

§8506. Authorization of appropriations

Necessary amounts may be appropriated to the Committee to carry out this chapter.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3838.)

Historical and Revision Notes
Revised

Section

Source (U.S. Code)Source (Statutes at Large)
8506 41:48c. June 25, 1938, ch. 697, §6, 52 Stat. 1196; Pub. L. 92–28, §1, June 23, 1971, 85 Stat. 82; Pub. L. 93–76, July 30, 1973, 87 Stat. 176; Pub. L. 93–358, §1(4), July 25, 1974, 88 Stat. 393.

The reference to the fiscal year ending June 30, 1974 is omitted as obsolete.

CHAPTER 87—KICKBACKS

Sec.
8701.
Definitions.
8702.
Prohibited conduct.
8703.
Contractor responsibilities.
8704.
Inspection authority.
8705.
Administrative offsets.
8706.
Civil actions.
8707.
Criminal penalties.

        

§8701. Definitions

In this chapter:

(1) Contracting agency.—The term "contracting agency", when used with respect to a prime contractor, means a department, agency, or establishment of the Federal Government that enters into a prime contract with a prime contractor.

(2) Kickback.—The term "kickback" means any money, fee, commission, credit, gift, gratuity, thing of value, or compensation of any kind that is provided to a prime contractor, prime contractor employee, subcontractor, or subcontractor employee to improperly obtain or reward favorable treatment in connection with a prime contract or a subcontract relating to a prime contract.

(3) Person.—The term "person" means a corporation, partnership, business association of any kind, trust, joint-stock company, or individual.

(4) Prime contract.—The term "prime contract" means a contract or contractual action entered into by the Federal Government to obtain supplies, materials, equipment, or services of any kind.

(5) Prime contractor.—The term "prime contractor" means a person that has entered into a prime contract with the Federal Government.

(6) Prime contractor employee.—The term "prime contractor employee" means an officer, partner, employee, or agent of a prime contractor.

(7) Subcontract.—The term "subcontract" means a contract or contractual action entered into by a prime contractor or subcontractor to obtain supplies, materials, equipment, or services of any kind under a prime contract.

(8) Subcontractor.—The term "subcontractor"—

(A) means a person, other than the prime contractor, that offers to furnish or furnishes supplies, materials, equipment, or services of any kind under a prime contract or a subcontract entered into in connection with the prime contract; and

(B) includes a person that offers to furnish or furnishes general supplies to the prime contractor or a higher tier subcontractor.


(9) Subcontractor employee.—The term "subcontractor employee" means an officer, partner, employee, or agent of a subcontractor.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3838.)

Historical and Revision Notes
Revised

Section

Source (U.S. Code)Source (Statutes at Large)
8701 41:52. Mar. 8, 1946, ch. 80, §2, 60 Stat. 37; Pub. L. 86–695, Sept. 2, 1960, 74 Stat. 740; Pub. L. 99–634, §2(a), Nov. 7, 1986, 100 Stat. 3523.

In this section, the text of 41:52(3) is omitted because of the definition of "person" in 1:1.

In paragraph (2), the words "directly or indirectly" are omitted as unnecessary.

Senate Revision Amendment

Senate amendment 4726 (111th Cong.) added par. (3) and redesignated former pars. (3) to (8) as (4) to (9), respectively. See 156 Cong. Rec. 18683 (2010).

§8702. Prohibited conduct

A person may not—

(1) provide, attempt to provide, or offer to provide a kickback;

(2) solicit, accept, or attempt to accept a kickback; or

(3) include the amount of a kickback prohibited by paragraph (1) or (2) in the contract price—

(A) a subcontractor charges a prime contractor or a higher tier subcontractor; or

(B) a prime contractor charges the Federal Government.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3839.)

Historical and Revision Notes
Revised

Section

Source (U.S. Code)Source (Statutes at Large)
8702 41:53. Mar. 8, 1946, ch. 80, §3, 60 Stat. 37; Pub. L. 86–695, Sept. 2, 1960, 74 Stat. 740; Pub. L. 99–634, §2(a), Nov. 7, 1986, 100 Stat. 3524.

In paragraph (3), before subparagraph (A), the words "directly or indirectly" are omitted as unnecessary.

§8703. Contractor responsibilities

(a) Requirements Included in Contracts.—Each contracting agency shall include in each prime contract awarded by the agency a requirement that the prime contractor shall—

(1) have in place and follow reasonable procedures designed to prevent and detect violations of section 8702 of this title in its own operations and direct business relationships; and

(2) cooperate fully with a Federal Government agency investigating a violation of section 8702 of this title.


(b) Full Cooperation Required.—Notwithstanding subsection (d), a prime contractor shall cooperate fully with a Federal Government agency investigating a violation of section 8702 of this title.

(c) Reporting Requirement.—

(1) In general.—A prime contractor or subcontractor that has reasonable grounds to believe that a violation of section 8702 of this title may have occurred shall promptly report the possible violation in writing to the inspector general of the contracting agency, the head of the contracting agency if the agency does not have an inspector general, or the Attorney General.

(2) Supplying information as favorable evidence.—In an administrative or contractual action to suspend or debar a person who is eligible to enter into contracts with the Federal Government, evidence that the person has supplied information to the Federal Government pursuant to paragraph (1) is favorable evidence of the person's responsibility for the purposes of Federal procurement laws and regulations.


(d) Inapplicability to Certain Prime Contracts.—Subsection (a) does not apply to a prime contract—

(1) that is not greater than $100,000; or

(2) for the acquisition of commercial products or commercial services (as defined in sections 103 and 103a, respectively, of this title).

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3839; Pub. L. 115–232, div. A, title VIII, §836(b)(20), Aug. 13, 2018, 132 Stat. 1864.)

Historical and Revision Notes
Revised

Section

Source (U.S. Code)Source (Statutes at Large)
8703(a) 41:57(a), (b). Mar. 8, 1946, ch. 80, §7, 60 Stat. 37; Pub. L. 86–695, Sept. 2, 1960, 74 Stat. 740; Pub. L. 99–634, §2(a), Nov. 7, 1986, 100 Stat. 3525; Pub. L. 103–355, title IV, §4104(a), title VIII, §8301(c)(1), Oct. 13, 1994, 108 Stat. 3341, 3397; Pub. L. 104–106, div. D, title XLIII, §4321(g), Feb. 10, 1996, 110 Stat. 675.
8703(b) 41:57(e).
8703(c) 41:57(c).
8703(d) 41:57(d).

In subsection (c)(1), the words "Attorney General" are substituted for "Department of Justice" because of 28:503.

Amendments

2018—Subsec. (d)(2). Pub. L. 115–232 substituted "commercial products or commercial services (as defined in sections 103 and 103a, respectively, of this title)" for "commercial items (as defined in section 103 of this title)".

Effective Date of 2018 Amendment

Amendment by Pub. L. 115–232 effective Jan. 1, 2020, subject to a savings provision, see section 836(h) of Pub. L. 115–232, set out as an Effective Date of 2018 Amendment; Savings Provision note under section 453b of Title 6, Domestic Security.

§8704. Inspection authority

(a) In General.—To ascertain whether there has been a violation of section 8702 of this title with respect to a prime contract, the Comptroller General and the inspector general of the contracting agency, or a representative of the contracting agency designated by the head of the agency if the agency does not have an inspector general, shall have access to and may inspect the facilities and audit the books and records, including electronic data or records, of a prime contractor or subcontractor under a prime contract awarded by the agency.

(b) Exception.—This section does not apply to a prime contract for the acquisition of commercial products or commercial services (as defined in sections 103 and 103a, respectively, of this title).

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3839; Pub. L. 115–232, div. A, title VIII, §836(b)(20), Aug. 13, 2018, 132 Stat. 1864.)

Historical and Revision Notes
Revised

Section

Source (U.S. Code)Source (Statutes at Large)
8704 41:58. Mar. 8, 1946, ch. 80, §8, 60 Stat. 37; Pub. L. 86–695, Sept. 2, 1960, 74 Stat. 740; Pub. L. 99–634, §2(a), Nov. 7, 1986, 100 Stat. 3525; Pub. L. 103–355, title VIII, §8301(c)(2), Oct. 13, 1994, 108 Stat. 3397.

In subsection (a), the words "Comptroller General" are substituted for "General Accounting Office" because of 31:702.

Amendments

2018—Subsec. (b). Pub. L. 115–232 substituted "commercial products or commercial services (as defined in sections 103 and 103a, respectively, of this title)" for "commercial items (as defined in section 103 of this title)".

Effective Date of 2018 Amendment

Amendment by Pub. L. 115–232 effective Jan. 1, 2020, subject to a savings provision, see section 836(h) of Pub. L. 115–232, set out as an Effective Date of 2018 Amendment; Savings Provision note under section 453b of Title 6, Domestic Security.

§8705. Administrative offsets

(a) Definition.—In this section, the term "contracting officer" has the meaning given that term in chapter 71 of this title.

(b) Offset Authority.—A contracting officer of a contracting agency may offset the amount of a kickback provided, accepted, or charged in violation of section 8702 of this title against amounts the Federal Government owes the prime contractor under the prime contract to which the kickback relates.

(c) Duties of Prime Contractor.—

(1) Withholding and paying over or retaining amounts.—On direction of a contracting officer of a contracting agency with respect to a prime contract, the prime contractor shall withhold from amounts owed to a subcontractor under a subcontract of the prime contract the amount of a kickback which was or may be offset against the prime contractor under subsection (b). The contracting officer may order that amounts withheld—

(A) be paid over to the contracting agency; or

(B) be retained by the prime contractor if the Federal Government has already offset the amount against the prime contractor.


(2) Notice.—The prime contractor shall notify the contracting officer when an amount is withheld and retained under paragraph (1)(B).


(d) Offset, Direction, or Order is Claim of Federal Government.—An offset under subsection (b) or a direction or order of a contracting officer under subsection (c) is a claim by the Federal Government for the purposes of chapter 71 of this title.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3840.)

Historical and Revision Notes
Revised

Section

Source (U.S. Code)Source (Statutes at Large)
8705(a) 41:56(d). Mar. 8, 1946, ch. 80, §6, 60 Stat. 37; Pub. L. 86–695, Sept. 2, 1960, 74 Stat. 740; Pub. L. 99–634, §2(a), Nov. 7, 1986, 100 Stat. 3524.
8705(b) 41:56(a).
8705(c) 41:56(b).
8705(d) 41:56(c).

§8706. Civil actions

(a) Amount.—The Federal Government in a civil action may recover from a person—

(1) that knowingly engages in conduct prohibited by section 8702 of this title a civil penalty equal to—

(A) twice the amount of each kickback involved in the violation; and

(B) not more than $10,000 for each occurrence of prohibited conduct; and


(2) whose employee, subcontractor, or subcontractor employee violates section 8702 of this title by providing, accepting, or charging a kickback a civil penalty equal to the amount of that kickback.


(b) Statute of Limitations.—A civil action under this section must be brought within 6 years after the later of the date on which—

(1) the prohibited conduct establishing the cause of action occurred; or

(2) the Federal Government first knew or should reasonably have known that the prohibited conduct had occurred.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3840.)

Historical and Revision Notes
Revised

Section

Source (U.S. Code)Source (Statutes at Large)
8706 41:55. Mar. 8, 1946, ch. 80, §5, 60 Stat. 37; Pub. L. 86–695, Sept. 2, 1960, 74 Stat. 740; Pub. L. 99–634, §2(a), Nov. 7, 1986, 100 Stat. 3524.

§8707. Criminal penalties

A person that knowingly and willfully engages in conduct prohibited by section 8702 of this title shall be fined under title 18, imprisoned for not more than 10 years, or both.

(Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3841.)

Historical and Revision Notes
Revised

Section

Source (U.S. Code)Source (Statutes at Large)
8707 41:54. Mar. 8, 1946, ch. 80, §4, 60 Stat. 37; Pub. L. 86–695, Sept. 2, 1960, 74 Stat. 740; Pub. L. 99–634, §2(a), Nov. 7, 1986, 100 Stat. 3524.