10 U.S.C. § 3805 — Payments for commercial products and

Page 2566 TITLE 10—ARMED FORCES § 3805 States Code [now 10 U.S.C. 3804(b)], with respect to progress payments for any undefinitized contractual action (as defined in section 2326 of title 10, United States Code [see 10 U.S.C. 3377(b)(1)]; in this section re- ferred to as ‘UCA’) if the Secretary determines that the waiver is necessary due to the national emergency for the Coronavirus Disease 2019 (COVID–19) and— ‘‘(1) a contractor performing the contract for which a UCA is entered into has not already received in- creased progress payments from the Secretary of De- fense on contractual actions other than UCAs; or ‘‘(2) a contractor performing the contract for which a UCA is entered into, and that has received in- creased progress payments from the Secretary of De- fense on contractual actions other than UCAs, can demonstrate that the contractor has promptly pro- vided the amount of the increase to any subcontrac- tors (at any tier), small business concerns (as defined under section 3 of the Small Business Act (15 U.S.C. 632)), or suppliers of the contractor. ‘‘(b) DEFINITIZATION.—With respect to a UCA that not been definitized for a period of 180 days beginning on the date on which such UCA was entered into, the Sec- retary of Defense may only use the waiver authority described in subsection (a) if the Secretary (or a des- ignee at a level not below the head of a contracting ac- tivity) provides a certification to the congressional de- fense committees [Committees on Armed Services and Appropriations of the Senate and the House of Rep- resentatives] that such UCA will be definitized within 60 days after the date on which the waiver is issued. ‘‘(c) SUBMISSION.—For each use of the waiver author- ity under subsection (a), the Secretary of Defense shall submit to the congressional defense committees an es- timate of the amounts to be provided to subcontractors (at any tier), small business concerns, and suppliers, in- cluding an identification of the specific entities receiv- ing an amount from an increased progress payment de- scribed under such subsection (a).’’ § 3805. Payments for commercial products and commercial services (a) TERMS AND CONDITIONS FOR PAYMENTS.— Payments under section 3801 of this title for commercial products and commercial services may be made under such terms and conditions as the head of the agency determines are appro- priate or customary in the commercial market- place and are in the best interests of the United States. (b) SECURITY FOR PAYMENTS.—The head of the agency shall obtain adequate security for such payments. If the security is in the form of a lien in favor of the United States, such lien is para- mount to all other liens and is effective imme- diately upon the first payment, without filing, notice, or other action by the United States. (c) LIMITATION ON ADVANCE PAYMENTS.—Ad- vance payments made under section 3801 of this title for commercial products and commercial services may include payments, in a total amount of not more than 15 percent of the con- tract price, in advance of any performance of work under the contract. (d) NONAPPLICATION OF CERTAIN CONDITIONS.— The conditions of sections 3803 and 3804 of this title need not be applied if they would be incon- sistent, as determined by the head of the agen- cy, with commercial terms and conditions pur- suant to this section. (Added and amended Pub. L. 116–283, div. A, title XVIII, § 1834(a), (f), Jan. 1, 2021, 134 Stat. 4234, 4236.) Editorial Notes CODIFICATION The text of subsec. (f) of section 2307 of this title, which was transferred to this section and amended by Pub. L. 116–283, § 1834(f), was based on Pub. L. 103–355, title II, § 2001(f), Oct. 13, 1994, 108 Stat. 3302; Pub. L. 115–232, div. A, title VIII, § 836(c)(6), Aug. 13, 2018, 132 Stat. 1866. AMENDMENTS 2021—Pub. L. 116–283, § 1834(f)(1)(A), transferred sub- sec. (f) of section 2307 of this title to this section and struck out subsec. (f) designation and heading ‘‘Condi- tions for Payments for Commercial Products and Com- mercial Services’’ at beginning. Subsec. (a). Pub. L. 116–283, § 1834(f)(1)(B), (4), after transfer of section 2307(f) of this title to this section, redesignated par. (1) as subsec. (a), inserted heading, and substituted ‘‘section 3801 of this title’’ for ‘‘sub- section (a)’’. Subsec. (b). Pub. L. 116–283, § 1834(f)(4), inserted head- ing. Pub. L. 116–283, § 1834(f)(2), which directed the des- ignation of ‘‘the second sentence of subsection (a) as subsection (b)’’, was executed by designating the second and third sentences of subsec. (a) as (b), to reflect the probable intent of Congress. Subsec. (c). Pub. L. 116–283, § 1834(f)(1)(B), (5), after transfer of section 2307(f) of this title to this section, redesignated par. (2) as subsec. (c), inserted heading, and substituted ‘‘section 3801 of this title’’ for ‘‘sub- section (a)’’. Subsec. (d). Pub. L. 116–283, § 1834(f)(1)(B), (6), after transfer of section 2307(f) of this title to this section, redesignated par. (3) as subsec. (d), inserted heading, and substituted ‘‘sections 3803 and 3804 of this title’’ for ‘‘subsections (d) and (e)’’ and ‘‘this section’’ for ‘‘para- graphs (1) and (2)’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE Section and amendment by Pub. L. 116–283 effective Jan. 1, 2022, with additional provisions for delayed im- plementation and applicability of existing law, see sec- tion 1801(d) of Pub. L. 116–283, set out as an Effective Date of 2021 Amendment note preceding section 3001 of this title. § 3806. Action in case of fraud (a) REMEDY COORDINATION OFFICIAL DEFINED.— In this section, the term ‘‘remedy coordination official’’, with respect to an agency, means the person or entity in that agency who coordinates within that agency the administration of crimi- nal, civil, administrative, and contractual rem- edies resulting from investigations of fraud or corruption related to procurement activities. (b) RECOMMENDATION TO REDUCE OR SUSPEND PAYMENTS.—In any case in which the remedy co- ordination official of an agency finds that there is substantial evidence that the request of a con- tractor for advance, partial, or progress pay- ment under a contract awarded by that agency is based on fraud, the remedy coordination offi- cial shall recommend that the head of the agen- cy reduce or suspend further payments to such contractor. (c) REDUCTION OR SUSPENSION OF PAYMENTS.— The head of an agency receiving a recommenda- tion under subsection (b) in the case of a con- tractor’s request for payment under a contract shall determine whether there is substantial evi- dence that the request is based on fraud. Upon