41 U.S.C. § 3101 — Applicability

Page 81 TITLE 41—PUBLIC CONTRACTS § 3101 ‘‘(a) UNIFORM STANDARDS AND CONTROLS REQUIRED.— Not later than 180 days after the date of the enactment of this Act [Jan. 2, 2013], the officials specified in sub- section (b) shall— ‘‘(1) establish uniform data standards, internal con- trol requirements, independent verification and vali- dation requirements, and business process rules for processing procurement requests, contracts, receipts, and invoices by the Department of Defense or other executive agencies, as applicable; ‘‘(2) establish and maintain one or more approved electronic contract writing systems that conform with the standards, requirements, and rules estab- lished pursuant to paragraph (1); and ‘‘(3) require the use of electronic contract writing systems approved in accordance with paragraph (2) for all contracts entered into by the Department of Defense or other executive agencies, as applicable. ‘‘(b) COVERED OFFICIALS.—The officials specified in this subsection are the following: ‘‘(1) The Secretary of Defense, with respect to the Department of Defense and the military departments. ‘‘(2) The Administrator for Federal Procurement Policy, with respect to the executive agencies other than the Department of Defense and the military de- partments. ‘‘(c) ELECTRONIC WRITING SYSTEMS FOR DEPARTMENT OF STATE AND USAID.—Notwithstanding subsection (b)(2), the Secretary of State and the Administrator of the United States Agency for International Develop- ment may meet the requirements of subsection (a)(2) with respect to approved electronic contract writing systems for the Department of State and the United States Agency for International Development, respec- tively, if the Secretary and the Administrator, as the case may be, demonstrate to the Administrator for Federal Procurement Policy that prior investment of resources in existing contract writing systems will re- sult in the most cost effective and efficient means to satisfy such requirements. ‘‘(d) PHASE-IN OF IMPLEMENTATION OF REQUIREMENT FOR APPROVED SYSTEMS.—The officials specified in sub- section (b) may phase in the implementation of the re- quirement to use approved electronic contract writing systems in accordance with subsection (a)(3) over a pe- riod of up to five years beginning with the date of the enactment of this Act [Jan. 2, 2013]. ‘‘(e) REPORTS.—Not later than 180 days after the date of the enactment of this Act [Jan. 2, 2013], the officials specified in subsection (b) shall each submit to the ap- propriate committees of Congress a report on the im- plementation of the requirements of this section. Each report shall, at a minimum— ‘‘(1) describe the standards, requirements, and rules established pursuant to subsection (a)(1); ‘‘(2) identify the electronic contract writing sys- tems approved pursuant to subsection (a)(2) and, if multiple systems are approved, explain why the use of such multiple systems is the most efficient and ef- fective approach to meet the contract writing needs of the Federal Government; and ‘‘(3) provide the schedule for phasing in the use of approved electronic contract writing systems in ac- cordance with subsections (a)(3) and (d). ‘‘(f) DEFINITIONS.—In this section: ‘‘(1) The term ‘appropriate committees of Congress’ means— ‘‘(A) the Committee on Armed Services, the Com- mittee on Foreign Relations, the Committee on Homeland Security and Governmental Affairs, and the Committee on Appropriations of the Senate; and ‘‘(B) the Committee on Armed Services, the Com- mittee on Foreign Affairs, the Committee on Over- sight and Government Reform [now Committee on Oversight and Accountability], and the Committee on Appropriations of the House of Representatives. ‘‘(2) The term ‘executive agency’ has the meaning given that term in section 133 of title 41, United States Code.’’ § 3101. Applicability (a) IN GENERAL.—An executive agency shall make purchases and contracts for property and services in accordance with this division and im- plementing regulations of the Administrator of General Services. (b) SIMPLIFIED ACQUISITION THRESHOLD AND PROCEDURES.— (1) SIMPLIFIED ACQUISITION THRESHOLD.— (A) DEFINITION.—For purposes of an acqui- sition by an executive agency, the simplified acquisition threshold is as specified in sec- tion 134 of this title. (B) INAPPLICABLE LAWS.—A law properly listed in the Federal Acquisition Regulation pursuant to section 1905 of this title does not apply to or with respect to a contract or sub- contract that is not greater than the sim- plified acquisition threshold. (2) SIMPLIFIED ACQUISITION PROCEDURES.— Simplified acquisition procedures contained in the Federal Acquisition Regulation pursuant to section 1901 of this title apply in executive agencies as provided in section 1901. (c) EXCEPTIONS.— (1) IN GENERAL.—This division does not apply— (A) to the Department of Defense, the Coast Guard, and the National Aeronautics and Space Administration; or (B) except as provided in paragraph (2), when this division is made inapplicable pur- suant to law. (2) APPLICABILITY OF CERTAIN LAWS RELATED TO ADVERTISING, OPENING OF BIDS, AND LENGTH OF CONTRACT.—Sections 6101, 6103, and 6304 of this title do not apply to the procurement of property or services made by an executive agency pursuant to this division. However, when this division is made inapplicable by any law, sections 6101 and 6103 of this title apply in the absence of authority conferred by statute to procure without advertising or without re- gard to section 6101 of this title. A law that authorizes an executive agency (other than an executive agency exempted from this division by this subsection) to procure property or services without advertising or without regard to section 6101 of this title is deemed to au- thorize the procurement pursuant to the pro- visions of this division relating to procedures other than sealed-bid procedures. (Pub. L. 111–350, § 3, Jan. 4, 2011, 124 Stat. 3742.) HISTORICAL AND REVISION NOTES Revised Section Source (U.S. Code) Source (Statutes at Large) 3101(a) ........ 41:252(a) (words be- fore 1st semi- colon). June 30, 1949, ch. 288, title III, § 302(a), 63 Stat. 393; July 12, 1952, ch. 703, § 1(m), 66 Stat. 594; Pub. L. 85–800, § 1, Aug. 28, 1958, 72 Stat. 966; Pub. L. 89–343, § 1, Nov. 8, 1965, 79 Stat. 1303. 3101(b)(1) .... 41:252a. June 30, 1949, ch. 288, title III, § 302A, as added Pub. L. 103–355, title IV, §§ 4003, 4103(a), Oct. 13, 1994, 108 Stat. 3338, 3341. 3101(b)(2) .... 41:252b. June 30, 1949, ch. 288, title III, § 302B, as added Pub. L. 103–355, title IV, § 4203(b), Oct. 13, 1994, 108 Stat. 3346. Page 82 TITLE 41—PUBLIC CONTRACTS § 3101 HISTORICAL AND REVISION NOTES—CONTINUED Revised Section Source (U.S. Code) Source (Statutes at Large) 3101(c)(1) .... 41:252(a) (words after 1st semi- colon and before ‘‘but when’’). 3101(c)(2) .... 41:252(a) (words after ‘‘other law’’). 41:260. June 30, 1949, ch. 288, title III, § 310, 63 Stat. 397; July 12, 1952, ch. 703, § 1(m), (n), 66 Stat. 594; Pub. L. 85–800, § 6, Aug. 28, 1958, 72 Stat. 967; Pub. L. 89–343, § 5, Nov. 8, 1965, 79 Stat. 1303; Pub. L. 98–369, div. B, title VII, § 2714(a)(6), July 18, 1984, 98 Stat. 1185. In subsection (c)(1)(B), the words ‘‘except as provided in paragraph (2)’’ are added for clarity. The words ‘‘sec- tion 113(e) of title 40 or any other’’ are omitted as un- necessary. Executive Documents EX. ORD. NO. 13005. EMPOWERMENT CONTRACTING Ex. Ord. No. 13005, May 21, 1996, 61 F.R. 26069, pro- vided: In order to promote economy and efficiency in Fed- eral procurement, it is necessary to secure broad-based competition for Federal contracts. This broad competi- tion is best achieved where there is an expansive pool of potential contractors capable of producing quality goods and services at competitive prices. A great and largely untapped opportunity for expanding the pool of such contractors can be found in this Nation’s economi- cally distressed communities. Fostering growth of Federal contractors in economi- cally distressed communities and ensuring that those contractors become viable businesses for the long term will promote economy and efficiency in Federal pro- curement and help to empower those communities. Fostering growth of long-term viable contractors will be promoted by offering appropriate incentives to qualified businesses. Accordingly, by the authority vested in me as Presi- dent by the Constitution and the laws of the United States, including section 486(a) [now 121(a)] of title 40, United States Code, and section 301 of title 3, United States Code, it is hereby ordered as follows: SECTION 1. Policy. The purpose of this order is to strengthen the economy and to improve the efficiency of the Federal procurement system by encouraging business development that expands the industrial base and increases competition. SEC. 2. Empowerment Contracting Program. In consulta- tion with the Secretaries of the Departments of Hous- ing and Urban Development, Labor, and Defense; the Administrator of General Services; the Administrator of the National Aeronautics and Space Administration; the Administrator of the Small Business Administra- tion; and the Administrator for Federal Procurement Policy, the Secretary of the Department of Commerce shall develop policies and procedures to ensure that agencies, to the extent permitted by law, grant quali- fied large businesses and qualified small businesses ap- propriate incentives to encourage business activity in areas of general economic distress, including a price or an evaluation credit, when assessing offers for govern- ment contracts in unrestricted competitions, where the incentives would promote the policy set forth in this order. In developing such policies and procedures, the Secretary shall consider the size of the qualified busi- nesses. SEC. 3. Monitoring and Evaluation. The Secretary shall: (a) monitor the implementation and operation of the policies and procedures developed in accordance with this order; (b) develop a process to ensure the proper administra- tion of the program and to reduce the potential for fraud by the intended beneficiaries of the program; (c) develop principles and a process to evaluate the effectiveness of the policies and procedures developed in accordance with this order; and (d) by December 1 of each year, issue a report to the President on the status and effectiveness of the pro- gram. SEC. 4. Implementation Guidelines. In implementing this order, the Secretary shall: (a) issue rules, regulations, and guidelines necessary to implement this order, including a requirement for the periodic review of the eligibility of qualified busi- nesses and distressed areas; (b) draft all rules, regulations, and guidelines nec- essary to implement this order within 90 days of the date of this order; and (c) ensure that all policies and procedures and all rules, regulations, and guidelines adopted and imple- mented in accordance with this order minimize the ad- ministrative burden on affected agencies and the pro- curement process. SEC. 5. Definitions. For purposes of this Executive order: (a) ‘‘Agency’’ means any authority of the United States that is an ‘‘agency’’ under 44 U.S.C. 3502(1), other than those considered to be independent regu- latory agencies, as defined in 44 U.S.C. 3502(10). (b) ‘‘Area of general economic distress’’ shall be de- fined, for all urban and rural communities, as any cen- sus tract that has a poverty rate of at least 20 percent or any designated Federal Empowerment Zone, Supple- mental Empowerment Zone, Enhanced Enterprise Com- munity, or Enterprise Community. In addition, the Secretary may designate as an area of general eco- nomic distress any additional rural or Indian reserva- tion area after considering the following factors: (1) Unemployment rate; (2) Degree of poverty; (3) Extent of outmigration; and (4) Rate of business formation and rate of business growth. (c) ‘‘Qualified large business’’ means a large for-profit or not-for-profit trade or business that (1) employs a significant number of residents from the area of gen- eral economic distress; and (2) either has a significant physical presence in the area of general economic dis- tress or has a direct impact on generating significant economic activity in the area of general economic dis- tress. (d) ‘‘Qualified small business’’ means a small for-prof- it or not-for-profit trade or business that (1) employs a significant number of residents from the area of gen- eral economic distress; (2) has a significant physical presence in the area of general economic distress; or (3) has a direct impact on generating significant economic activity in the area of general economic distress. (e) ‘‘Secretary’’ means the Secretary of Commerce. SEC. 6. Agency Authority. Nothing in this Executive order shall be construed as displacing the agencies’ au- thority or responsibilities, as authorized by law, in- cluding specifically other programs designed to pro- mote the development of small or disadvantaged busi- nesses. SEC. 7. Judicial Review. This Executive order does not create any right or benefit, substantive or procedural, enforceable at law or equity by a party against the United States, its agencies or instrumentalities, its of- ficers or employees, or any other person. WILLIAM J. CLINTON. EX. ORD. NO. 13627. STRENGTHENING PROTECTIONS AGAINST TRAFFICKING IN PERSONS IN FEDERAL CON- TRACTS Ex. Ord. No. 13627, Sept. 25, 2012, 77 F.R. 60029, pro- vided: By the authority vested in me as President by the Constitution and the laws of the United States of Page 83 TITLE 41—PUBLIC CONTRACTS § 3101 America, including the Federal Property and Adminis- trative Services Act (40 U.S.C. 101 et seq.) and the Traf- ficking Victims Protection Act of 2000, as amended (TVPA) (Public Law 106–386, Division A), and in order to strengthen protections against trafficking in persons in Federal contracting, it is hereby ordered as follows: SECTION 1. Policy. More than 20 million men, women, and children throughout the world are victims of severe forms of trafficking in persons (‘‘trafficking’’ or ‘‘traf- ficking in persons’’)—defined in section 103 of the TVPA, 22 U.S.C. 7102(8) [now 7102(11)], to include sex trafficking in which a commercial sex act is induced by force, fraud, or coercion, or in which the person induced to perform such act has not attained 18 years of age, or the recruitment, harboring, transportation, provision, or obtaining of a person for labor or services, through the use of force, fraud, or coercion, for the purpose of subjection to involuntary servitude, peonage, debt bondage, or slavery. The United States has long had a zero-tolerance pol- icy regarding Government employees and contractor personnel engaging in any form of this criminal behav- ior. As the largest single purchaser of goods and serv- ices in the world, the United States Government bears a responsibility to ensure that taxpayer dollars do not contribute to trafficking in persons. By providing our Government workforce with additional tools and train- ing to apply and enforce existing policy, and by pro- viding additional clarity to Government contractors and subcontractors on the steps necessary to fully com- ply with that policy, this order will help to protect vul- nerable individuals as contractors and subcontractors perform vital services and manufacture the goods pro- cured by the United States. In addition, the improved safeguards provided by this order to strengthen compliance with anti-trafficking laws will promote economy and efficiency in Govern- ment procurement. These safeguards, which have been largely modeled on successful practices in the private sector, will increase stability, productivity, and cer- tainty in Federal contracting by avoiding the disrup- tion and disarray caused by the use of trafficked labor and resulting investigative and enforcement actions. SEC. 2. Anti-Trafficking Provisions. (a) Within 180 days of the date of this order, the Federal Acquisition Regu- latory (FAR) Council, in consultation with the Sec- retary of State, the Attorney General, the Secretary of Labor, the Secretary of Homeland Security, the Admin- istrator for the United States Agency for International Development, and the heads of such other executive de- partments and agencies (agencies) as the FAR Council determines to be appropriate, shall take steps nec- essary to amend the Federal Acquisition Regulation to: (1) strengthen the efficacy of the Government’s zero- tolerance policy on trafficking in persons by Federal contractors and subcontractors in solicitations, con- tracts, and subcontracts for supplies or services (in- cluding construction and commercial items), by: (A) expressly prohibiting Federal contractors, con- tractor employees, subcontractors, and subcontractor employees from engaging in any of the following types of trafficking-related activities: (i) using misleading or fraudulent recruitment practices during the recruitment of employees, such as failing to disclose basic information or making material misrepresentations regarding the key terms and conditions of employment, including wages and fringe benefits, the location of work, living condi- tions and housing (if employer provided or arranged), any significant costs to be charged to the employee, and, if applicable, the hazardous nature of the work; (ii) charging employees recruitment fees; (iii) destroying, concealing, confiscating, or other- wise denying access by an employee to the employ- ee’s identity documents, such as passports or drivers’ licenses; and (iv) for portions of contracts and subcontracts: (I) performed outside the United States, failing to pay return transportation costs upon the end of em- ployment, for an employee who is not a national of the country in which the work is taking place and who was brought into that country for the purpose of working on a U.S. Government contract or sub- contract; (II) not covered by subsection (a)(1)(A)(iv)(I) of this section, failing to pay return transportation costs upon the end of employment, for an employee who is not a national of the country in which the work is taking place and who was brought into that country for the purpose of working on a U.S. Government con- tract or subcontract, if the payment of such costs is required under existing temporary worker programs or pursuant to a written agreement with the em- ployee; provided, however (III) that the requirements of subsections (a)(1)(A)(iv)(I) and (II) shall not apply to: (aa) an employee who is legally permitted to re- main in the country of employment and who choos- es to do so; or (bb) an employee who is a victim of trafficking and is seeking victim services or legal redress in the country of employment, or an employee who is a witness in a trafficking-related enforcement ac- tion; (v) other specific activities that the FAR Council identifies as directly supporting or promoting traf- ficking in persons, the procurement of commercial sex acts, or the use of forced labor in the performance of the contract or subcontract; (B) requiring contractors and their subcontractors, by contract clause, to agree to cooperate fully in pro- viding reasonable access to allow contracting agencies and other responsible enforcement agencies to conduct audits, investigations, or other actions to ascertain compliance with the TVPA, this order, or any other ap- plicable law or regulation establishing restrictions on trafficking in persons, the procurement of commercial sex acts, or the use of forced labor; and (C) requiring contracting officers to notify, in accord- ance with agency procedures, the agency’s Inspector General, the agency official responsible for initiating suspension or debarment actions, and law enforcement, if appropriate, if they become aware of any activities that would justify termination under section 106(g) of the TVPA, 22 U.S.C. 7104(g), or are inconsistent with the requirements of this order or any other applicable law or regulation establishing restrictions on traf- ficking in persons, the procurement of commercial sex acts, or the use of forced labor, and further requiring that the agency official responsible for initiating sus- pension and debarment actions consider whether sus- pension or debarment is necessary in order to protect the Government’s interest; (2) except as provided in subsection (a)(3) of this sec- tion, ensure that provisions in solicitations and clauses in contracts and subcontracts, where the estimated value of the supplies acquired or services required to be performed outside the United States exceeds $500,000, include the following requirements pertaining to the portion of the contract or subcontract performed out- side the United States: (A) that each such contractor and subcontractor maintain a compliance plan during the performance of the contract or subcontract that is appropriate for the size and complexity of the contract or subcontract and the nature and scope of the activities performed, in- cluding the risk that the contract or subcontract will involve services or supplies susceptible to trafficking. The compliance plan shall be provided to the con- tracting officer upon request, and relevant contents of the plan shall be posted no later than the initiation of contract performance at the workplace and on the con- tractor or subcontractor’s Web site (if one is main- tained), and shall, at a minimum, include: (i) an awareness program to inform employees about: (I) the policy of ensuring that employees do not en- gage in trafficking in persons or related activities, including those specified in subsection (a)(1)(A) of this section, the procurement of commercial sex acts, or the use of forced labor; and Page 84 TITLE 41—PUBLIC CONTRACTS § 3101 (II) the actions that will be taken against employ- ees for violation of such policy; (ii) a process for employees to report, without fear of retaliation, any activity that would justify termi- nation under section 106(g) of the TVPA, or is incon- sistent with the requirements of this order, or any other applicable law or regulation establishing re- strictions on trafficking in persons, the procurement of commercial sex acts, or the use of forced labor; (iii) a recruitment and wage plan that only permits the use of recruitment companies with trained em- ployees, prohibits charging recruitment fees to the employee, and ensures that wages meet applicable host country legal requirements or explains any vari- ance; (iv) a housing plan, if the contractor or subcon- tractor intends to provide or arrange housing, that ensures that the housing meets host country housing and safety standards or explains any variance; and (v) procedures to prevent subcontractors at any tier from engaging in trafficking in persons, including those trafficking-related activities described in sub- section (a)(1)(A) of this section, and to monitor, de- tect, and terminate any subcontractors or subcon- tractor employees that have engaged in such activi- ties; and (B) that each such contractor and subcontractor shall certify, prior to receiving an award and annually there- after during the term of the contract or subcontract, that: (i) it has the compliance plan referred to in sub- section (a)(2)(A) of this section in place to prevent trafficking-related activities described in section 106(g) of the TVPA and this order; and (ii) either, to the best of its knowledge and belief, neither it nor any of its subcontractors has engaged in any such activities; or, if abuses have been found, the contractor or subcontractor has taken the appro- priate remedial and referral actions; (3) specify that the requirements in subsections (a)(2)(A) and (B) of this section shall not apply with re- spect to contracts or subcontracts for commercially available off-the-shelf items. (b) Not later than 1 year after the date of this order, the member agencies of the President’s Interagency Task Force to Monitor and Combat Trafficking in Per- sons (PITF), established pursuant to section 105 of the TVPA, 22 U.S.C. 7103, shall jointly establish a process for evaluating and identifying, for Federal contracts and subcontracts performed substantially within the United States, whether there are industries or sectors with a history (or where there is current evidence) of trafficking-related or forced labor activities described in section 106(g) of the TVPA, in subsection (a)(1)(A) of this section, or any other applicable law or regulation establishing restrictions on trafficking in persons, the procurement of commercial sex acts, or the use of forced labor. Where the PITF has identified such indus- tries or sectors, it shall notify agencies of these des- ignations, and individual agencies shall, in consulta- tion with the Office of Federal Procurement Policy of the Office of Management and Budget, adopt and pub- lish appropriate safeguards, guidance, and compliance assistance to prevent trafficking and forced labor in Federal contracting in these identified areas. SEC. 3. Guidance and Training. (a) The Administrator for Federal Procurement Policy shall: (1) in consultation with appropriate management councils, such as the Chief Acquisition Officers Coun- cil, provide guidance to agencies on developing appro- priate internal procedures and controls for awarding and administering Federal contracts to improve moni- toring of and compliance with actions to prevent traf- ficking in persons, consistent with section 106 of the TVPA, including the development of methods to track the number of trafficking violations reported and rem- edies applied; and (2) in consultation with the Federal Acquisition Insti- tute and appropriate management councils, such as the Chief Acquisition Officers Council: (A) develop methods to track the number of Federal employees trained; and (B) implement training requirements to ensure that the Federal acquisition workforce is trained on the policies and responsibilities for combating trafficking, including on: (i) applicable laws, regulations, and policies; and (ii) internal controls and oversight procedures im- plemented by the agency, including enforcement pro- cedures available to the agency to investigate, man- age, and mitigate contractor and subcontractor traf- ficking violations. (b) The member agencies of PITF shall jointly facili- tate the sharing of information that may be used by ac- quisition, program, and other offices within agencies to evaluate where the risk of trafficking in persons may be heightened based on the nature of the work to be performed, the place of performance, and any other rel- evant considerations. SEC. 4. Effective Date. This order shall become effec- tive immediately and shall apply to solicitations issued on or after the effective date for the action taken by the FAR Council under subsection 2(a) of this order. SEC. 5. General Provisions. (a) Nothing in this order shall be construed to impair or otherwise affect: (1) the authority granted by law to an executive de- partment, agency, or the head thereof; or (2) the functions of the Director of the Office of Man- agement and Budget relating to budgetary, administra- tive, or legislative proposals. (b) This order shall be implemented consistent with applicable law and subject to the availability of appro- priations. (c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforce- able 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. BARACK OBAMA. EXECUTIVE ORDER NO. 13673 Ex. Ord. No. 13673, July 31, 2014, 79 F.R. 45309, as amended by Ex. Ord. No. 13683, § 3, Dec. 11, 2014, 79 F.R. 75042; Ex. Ord. No. 13738, Aug. 23, 2016, 81 F.R. 58807, which related to compliance with labor laws by Federal contractors, was revoked by Ex. Ord. No. 13782, § 1, Mar. 27, 2017, 82 F.R. 15607, set out below. EX. ORD. NO. 13782. REVOCATION OF FEDERAL CONTRACTING EXECUTIVE ORDERS Ex. Ord. No. 13782, Mar. 27, 2017, 82 F.R. 15607, pro- vided: By the authority vested in me as President by the Constitution and the laws of the United States of America, it is hereby ordered as follows: SECTION 1. Revocation. Executive Order 13673 of July 31, 2014, section 3 of Executive Order 13683 of December 11, 2014, and Executive Order 13738 of August 23, 2016, are revoked. SEC. 2. Reconsideration of Existing Rules. All executive departments and agencies shall, as appropriate and to the extent consistent with law, consider promptly re- scinding any orders, rules, regulations, guidance, guide- lines, or policies implementing or enforcing the re- voked Executive Orders and revoked provision listed in section 1 of this order. SEC. 3. General Provisions. (a) Nothing in this order shall be construed to impair or otherwise affect: (i) the authority granted by law to an executive de- partment or agency, or the head thereof; or (ii) the functions of the Director of the Office of Man- agement and Budget relating to budgetary, administra- tive, or legislative proposals. (b) This order shall be implemented consistent with applicable law and subject to the availability of appro- priations. (c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforce- able at law or in equity by any party against the Page 85 TITLE 41—PUBLIC CONTRACTS § 3102 United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person. DONALD J. TRUMP. GOVERNMENT CONTRACTING Memorandum of President of the United States, Mar. 4, 2009, 74 F.R. 9755, provided: Memorandum for the Heads of Executive Depart- ments and Agencies The Federal Government has an overriding obligation to American taxpayers. It should perform its functions efficiently and effectively while ensuring that its ac- tions result in the best value for the taxpayers. Since 2001, spending on Government contracts has more than doubled, reaching over $500 billion in 2008. During this same period, there has been a significant increase in the dollars awarded without full and open competition and an increase in the dollars obligated through cost-reimbursement contracts. Between fiscal years 2000 and 2008, for example, dollars obligated under cost-reimbursement contracts nearly doubled, from $71 billion in 2000 to $135 billion in 2008. Reversing these trends away from full and open competition and toward cost-reimbursement contracts could result in savings of billions of dollars each year for the American tax- payer. Excessive reliance by executive agencies on sole- source contracts (or contracts with a limited number of sources) and cost-reimbursement contracts creates a risk that taxpayer funds will be spent on contracts that are wasteful, inefficient, subject to misuse, or other- wise not well designed to serve the needs of the Federal Government or the interests of the American taxpayer. Reports by agency Inspectors General, the Government Accountability Office (GAO), and other independent re- viewing bodies have shown that noncompetitive and cost-reimbursement contracts have been misused, re- sulting in wasted taxpayer resources, poor contractor performance, and inadequate accountability for results. When awarding Government contracts, the Federal Government must strive for an open and competitive process. However, executive agencies must have the flexibility to tailor contracts to carry out their mis- sions and achieve the policy goals of the Government. In certain exigent circumstances, agencies may need to consider whether a competitive process will not accom- plish the agency’s mission. In such cases, the agency must ensure that the risks associated with noncompeti- tive contracts are minimized. Moreover, it is essential that the Federal Govern- ment have the capacity to carry out robust and thor- ough management and oversight of its contracts in order to achieve programmatic goals, avoid significant overcharges, and curb wasteful spending. A GAO study last year of 95 major defense acquisitions projects found cost overruns of 26 percent, totaling $295 billion over the life of the projects. Improved contract over- sight could reduce such sums significantly. Government outsourcing for services also raises spe- cial concerns. For decades, the Federal Government has relied on the private sector for necessary commercial services used by the Government, such as transpor- tation, food, and maintenance. Office of Management and Budget Circular A–76, first issued in 1966, was based on the reasonable premise that while inherently gov- ernmental activities should be performed by Govern- ment employees, taxpayers may receive more value for their dollars if non-inherently governmental activities that can be provided commercially are subject to the forces of competition. However, the line between inherently governmental activities that should not be outsourced and commer- cial activities that may be subject to private sector competition has been blurred and inadequately defined. As a result, contractors may be performing inherently governmental functions. Agencies and departments must operate under clear rules prescribing when outsourcing is and is not appropriate. It is the policy of the Federal Government that exec- utive agencies shall not engage in noncompetitive con- tracts except in those circumstances where their use can be fully justified and where appropriate safeguards have been put in place to protect the taxpayer. In addi- tion, there shall be a preference for fixed-price type contracts. Cost-reimbursement contracts shall be used only when circumstances do not allow the agency to define its requirements sufficiently to allow for a fixed- price type contract. Moreover, the Federal Government shall ensure that taxpayer dollars are not spent on con- tracts that are wasteful, inefficient, subject to misuse, or otherwise not well designed to serve the Federal Government’s needs and to manage the risk associated with the goods and services being procured. The Fed- eral Government must have sufficient capacity to man- age and oversee the contracting process from start to finish, so as to ensure that taxpayer funds are spent wisely and are not subject to excessive risk. Finally, the Federal Government must ensure that those func- tions that are inherently governmental in nature are performed by executive agencies and are not outsourced. I hereby direct the Director of the Office of Manage- ment and Budget (OMB), in collaboration with the Sec- retary of Defense, the Administrator of the National Aeronautics and Space Administration, the Adminis- trator of General Services, the Director of the Office of Personnel Management, and the heads of such other agencies as the Director of OMB determines to be ap- propriate, and with the participation of appropriate management councils and program management offi- cials, to develop and issue by July 1, 2009, Government- wide guidance to assist agencies in reviewing, and cre- ating processes for ongoing review of, existing con- tracts in order to identify contracts that are wasteful, inefficient, or not otherwise likely to meet the agen- cy’s needs, and to formulate appropriate corrective ac- tion in a timely manner. Such corrective action may include modifying or canceling such contracts in a manner and to the extent consistent with applicable laws, regulations, and policy. I further direct the Director of OMB, in collaboration with the aforementioned officials and councils, and with input from the public, to develop and issue by Sep- tember 30, 2009, Government-wide guidance to: (1) govern the appropriate use and oversight of sole- source and other types of noncompetitive contracts and to maximize the use of full and open competition and other competitive procurement processes; (2) govern the appropriate use and oversight of all contract types, in full consideration of the agency’s needs, and to minimize risk and maximize the value of Government contracts generally, consistent with the regulations to be promulgated pursuant to section 864 of Public Law 110–417; (3) assist agencies in assessing the capacity and abil- ity of the Federal acquisition workforce to develop, manage, and oversee acquisitions appropriately; and (4) clarify when governmental outsourcing for serv- ices is and is not appropriate, consistent with section 321 of Public Law 110–417 (31 U.S.C. 501 note). Executive departments and agencies shall carry out the provisions of this memorandum to the extent per- mitted by law. This memorandum 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, agen- cies, or entities, its officers, employees, or agents, or any other person. The Director of OMB is hereby authorized and di- rected to publish this memorandum in the Federal Reg- ister. BARACK OBAMA. § 3102. Delegation and assignment of powers, functions, and responsibilities (a) IN GENERAL.—Except to the extent ex- pressly prohibited by another law, the head of an executive agency may delegate to another of-