10 U.S.C. § 3703 — Exceptions

Page 2530 TITLE 10—ARMED FORCES § 3703 § 3703. Exceptions (a) IN GENERAL.—Submission of certified cost or pricing data shall not be required under sec- tion 3702 of this title in the case of a contract, a subcontract, or modification of a contract or subcontract— (1) for which the price agreed upon is based on— (A) adequate competition that results in at least two or more responsive and viable competing bids; or (B) prices set by law or regulation; (2) for the acquisition of a commercial prod- uct or a commercial service; (3) in an exceptional case when the head of the procuring activity, without delegation, de- termines that the requirements of this chapter may be waived and justifies in writing the rea- sons for such determination; or (4) to the extent such data— (A) relates to an offset agreement in con- nection with a contract for the sale of a weapon system or defense-related item to a foreign country or foreign firm; and (B) does not relate to a contract or sub- contract under the offset agreement for work performed in such foreign country or by such foreign firm that is directly related to the weapon system or defense-related item being purchased under the contract. (b) MODIFICATIONS OF CONTRACTS AND SUB- CONTRACTS FOR COMMERCIAL PRODUCTS OR COM- MERCIAL SERVICES.—In the case of a modification of a contract or subcontract for a commercial product or commercial services that is not cov- ered by the exception to the submission of cer- tified cost or pricing data in paragraph (1) or (2) of subsection (a), submission of certified cost or pricing data shall not be required under section 3702 of this title if— (1) the contract or subcontract being modi- fied is a contract or subcontract for which sub- mission of certified cost or pricing data may not be required by reason of paragraph (1) or (2) of subsection (a); and (2) the modification would not change the contract or subcontract, as the case may be, from a contract or subcontract for the acquisi- tion of a commercial product or commercial services to a contract or subcontract for the acquisition of an item other than a commer- cial product or commercial services. (c) NONCOMMERCIAL MODIFICATIONS OF COMMER- CIAL PRODUCTS.—(1) The exception in subsection (a)(2) does not apply to cost or pricing data on noncommercial modifications of a commercial product that are expected to cost, in the aggre- gate, more than the amount specified in section 3702(a)(1)(A) of this title, as adjusted from time to time under section 3702(g) of this title, or 5 percent of the total price of the contract (at the time of contract award), whichever is greater. (2) In this subsection, the term ‘‘noncommer- cial modification’’, with respect to a commer- cial product, means a modification of such prod- uct that is not a modification described in sec- tion 103(3)(A) of title 41. (3) Nothing in paragraph (1) shall be con- strued— (A) to limit the applicability of the excep- tion in paragraph (1) or (3) of subsection (a) to cost or pricing data on a noncommercial modi- fication of a commercial product; or (B) to require the submission of cost or pric- ing data on any aspect of an acquisition of a commercial product other than the cost and pricing of noncommercial modifications of such product. (d) COMMERCIAL PRODUCT OR COMMERCIAL SERV- ICE DETERMINATION.—(1) For purposes of apply- ing the exception under subsection (a)(2) to the required submission of certified cost or pricing data, the contracting officer may presume that a prior commercial product or commercial serv- ice determination made by a military depart- ment, a Defense Agency, or another component of the Department of Defense shall serve as a de- termination for subsequent procurements of such product or service. (2) If the contracting officer does not make the presumption described in paragraph (1) and in- stead chooses to proceed with a procurement of a product or service previously determined to be a commercial product or a commercial service using procedures other than the procedures au- thorized for the procurement of a commercial product or a commercial service, as the case may be, the contracting officer shall request a review of the commercial product or commercial service determination by the head of the con- tracting activity. (3) Not later than 30 days after receiving a re- quest for review of a determination under para- graph (2), the head of a contracting activity shall— (A) confirm that the prior determination was appropriate and still applicable; or (B) issue a revised determination with a written explanation of the basis for the revi- sion. (e) A contracting officer shall consider evi- dence provided by an offeror of recent purchase prices paid by the Government for the same or similar commercial products or commercial services in establishing price reasonableness on a subsequent purchase if the contracting officer is satisfied that the prices previously paid re- main a valid reference for comparison after con- sidering the totality of other relevant factors such as the time elapsed since the prior pur- chase and any differences in the quantities pur- chased or applicable terms and conditions. (f) DETERMINATION BY PRIME CONTRACTOR.—A prime contractor required to submit certified cost or pricing data under section 3702 of this title with respect to a prime contract shall be responsible for determining whether a sub- contract under such contract qualifies for an ex- ception under subsection (a)(1) from such re- quirement. (Added and amended Pub. L. 116–283, div. A, title XVIII, § 1831(a), (d), Jan. 1, 2021, 134 Stat. 4209, 4211.) Editorial Notes CODIFICATION The text of subsec. (b) of section 2306a of this title, which was transferred to this section and amended by Page 2531 TITLE 10—ARMED FORCES § 3704 Pub. L. 116–283, § 1831(d), was based on Pub. L. 99–500, § 101(c) [title X, § 952(a)], Oct. 18, 1986, 100 Stat. 1783–82, 1783–166, and Pub. L. 99–591, § 101(c) [title X, § 952(a)], Oct. 30, 1986, 100 Stat. 3341–82, 3341–166; Pub. L. 99–661, div. A, title IX, formerly title IV, § 952(a), Nov. 14, 1986, 100 Stat. 3945, renumbered title IX, Pub. L. 100–26, § 3(5), Apr. 21, 1987, 101 Stat. 273; Pub. L. 103–355, title I, § 1202(a), Oct. 13, 1994, 108 Stat. 3274, as amended by Pub. L. 104–106, div. D, title XLIII, § 4321(a)(2), Feb. 10, 1996, 110 Stat. 671; Pub. L. 104–106, div. D, title XLII, § 4201(a)(1), Feb. 10, 1996, 110 Stat. 649; Pub. L. 108–375, div. A, title VIII, § 818(a), Oct. 28, 2004, 118 Stat. 2015; Pub. L. 110–181, div. A, title VIII, § 814, Jan. 28, 2008, 122 Stat. 222; Pub. L. 113–291, div. A, title X, § 1071(a)(3), Dec. 19, 2014, 128 Stat. 3504; Pub. L. 114–92, div. A, title VIII, §§ 812, 851(b), 853, Nov. 25, 2015, 129 Stat. 891, 916, 919; Pub. L. 114–328, div. A, title VIII, § 822(2), Dec. 23, 2016, 130 Stat. 2276; Pub. L. 115–232, div. A, title VIII, § 836(c)(5)(A), Aug. 13, 2018, 132 Stat. 1865. Pub. L. 99–500, Pub. L. 99–591, and Pub. L. 99–661 added identical sec- tions. Pub. L. 99–591 is a corrected version of Pub. L. 99–500. AMENDMENTS 2021—Pub. L. 116–283, § 1831(d)(1), transferred subsec. (b) of section 2306a of this title to this section, struck out subsec. (b) designation and heading ‘‘Exceptions’’ at beginning, and redesignated pars. (1) to (6) as sub- secs. (a) to (f), respectively, and realigned margins. Subsec. (a). Pub. L. 116–283, § 1831(d)(2)(A), (B), (C), (E), after redesignation of section 2306a(b)(1) of this title as subsec. (a) of this section, substituted ‘‘under section 3702 of this title’’ for ‘‘under subsection (a)’’ in introductory provisions, redesignated subpar. (A) and its cls. (i) and (ii) as par. (1) and subpars. (A) and (B), respectively, redesignated subpars. (B) and (C) as pars. (2) and (3), respectively, and redesignated subpar. (D) and its cls. (i) and (ii) as par. (4) and subpars. (A) and (B), respectively. Subsec. (a)(3). Pub. L. 116–283, § 1831(d)(2)(D), sub- stituted ‘‘this chapter’’ for ‘‘this section’’. Subsec. (b). Pub. L. 116–283, § 1831(d)(3)(A), (B), after redesignation of section 2306a(b)(2) of this title as sub- sec. (b) of this section, in introductory provisions, sub- stituted ‘‘paragraph (1) or (2) of subsection (a)’’ for ‘‘paragraph (1)(A) or (1)(B)’’ and ‘‘under section 3702 of this title’’ for ‘‘under subsection (a)’’ and redesignated subpars. (A) and (B) as pars. (1) and (2), respectively. Subsec. (b)(1). Pub. L. 116–283, § 1831(d)(3)(C), sub- stituted ‘‘paragraph (1) or (2) of subsection (a)’’ for ‘‘paragraph (1)(A) or (1)(B)’’. Subsec. (c). Pub. L. 116–283, § 1831(d)(4)(A), (D)(i), after redesignation of section 2306a(b)(3) of this title as sub- sec. (c) of this section, redesignated subpars. (A), (B), and (C) and its cls. (i) and (ii) as pars. (1), (2), and (3) and subpars. (A) and (B), respectively. Subsec. (c)(1). Pub. L. 116–283, § 1831(d)(4)(B), sub- stituted ‘‘subsection (a)(2)’’ for ‘‘paragraph (1)(B)’’, ‘‘section 3702(a)(1)(A) of this title’’ for ‘‘subsection (a)(1)(A)(i)’’, and ‘‘section 3702(g) of this title’’ for ‘‘sub- section (a)(7)’’. Subsec. (c)(2). Pub. L. 116–283, § 1831(d)(4)(C), sub- stituted ‘‘this subsection’’ for ‘‘this paragraph’’. Subsec. (c)(3). Pub. L. 116–283, § 1831(d)(4)(D)(ii), (ii) [(iii)], substituted ‘‘paragraph (1)’’ for ‘‘subparagraph (A)’’ in introductory provisions and ‘‘paragraph (1) or (3) of subsection (a)’’ for ‘‘subparagraph (A) or (C) of paragraph (1)’’ in subpar. (A). Subsec. (d). Pub. L. 116–283, § 1831(d)(5)(A), (D)(i), after redesignation of section 2306a(b)(4) of this title as sub- sec. (d) of this section, redesignated subpars. (A), (B), and (C) and its cls. (i) and (ii) as pars. (1), (2), and (3) and subpars. (A) and (B), respectively. Subsec. (d)(1). Pub. L. 116–283, § 1831(d)(5)(B), sub- stituted ‘‘subsection (a)(2)’’ for ‘‘paragraph (1)(B)’’. Subsec. (d)(2). Pub. L. 116–283, § 1831(d)(5)(C), sub- stituted ‘‘paragraph (1)’’ for ‘‘subparagraph (A)’’. Subsec. (d)(3). Pub. L. 116–283, § 1831(d)(5)(D)(ii), sub- stituted ‘‘paragraph (2)’’ for ‘‘subparagraph (B)’’ in in- troductory provisions. Subsec. (f). Pub. L. 116–283, § 1831(d)(6), after redesig- nation of section 2306a(b)(6) of this title as subsec. (f) of this section, substituted ‘‘section 3702 of this title’’ for ‘‘subsection (a)’’ and ‘‘subsection (a)(1)’’ for ‘‘paragraph (1)(A)’’. 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. § 3704. Cost or pricing data on below-threshold contracts (a) AUTHORITY TO REQUIRE SUBMISSION.—Sub- ject to subsection (b), when certified cost or pricing data are not required to be submitted by section 3702 of this title for a contract, sub- contract, or modification of a contract or sub- contract, such data may nevertheless be re- quired to be submitted by the head of the pro- curing activity, but only if the head of the pro- curing activity determines that such data are necessary for the evaluation by the agency of the reasonableness of the price of the contract, subcontract, or modification of a contract or subcontract. In any case in which the head of the procuring activity requires such data to be submitted under this section, the head of the procuring activity shall justify in writing the reason for such requirement. (b) EXCEPTION.—The head of the procuring ac- tivity may not require certified cost or pricing data to be submitted under this subsection for any contract or subcontract, or modification of a contract or subcontract, covered by the excep- tions in paragraph (1) or (2) of section 3703(a) of this title. (c) DELEGATION OF AUTHORITY PROHIBITED.— The head of a procuring activity may not dele- gate functions under this subsection. (Added and amended Pub. L. 116–283, div. A, title XVIII, § 1831(a), (e), Jan. 1, 2021, 134 Stat. 4209, 4213.) Editorial Notes CODIFICATION The text of subsec. (c) of section 2306a of this title, which was transferred to this section and amended by Pub. L. 116–283, § 1831(e), was based on Pub. L. 99–500, § 101(c) [title X, § 952(a)], Oct. 18, 1986, 100 Stat. 1783–82, 1783–166, and Pub. L. 99–591, § 101(c) [title X, § 952(a)], Oct. 30, 1986, 100 Stat. 3341–82, 3341–166; Pub. L. 99–661, div. A, title IX, formerly title IV, § 952(a), Nov. 14, 1986, 100 Stat. 3945, renumbered title IX, Pub. L. 100–26, § 3(5), Apr. 21, 1987, 101 Stat. 273; Pub. L. 101–510, div. A, title VIII, § 803(d), Nov. 5, 1990, 104 Stat. 1590; Pub. L. 103–355, title I, § 1203, Oct. 13, 1994, 108 Stat. 3274; Pub. L. 104–106, div. D, title XLII, § 4201(a)(1), Feb. 10, 1996, 110 Stat. 650. Pub. L. 99–500, Pub. L. 99–591, and Pub. L. 99–661 added identical sections. Pub. L. 99–591 is a corrected version of Pub. L. 99–500. AMENDMENTS 2021—Pub. L. 116–283, § 1831(e)(1)(A), transferred sub- sec. (c) of section 2306a of this title to this section and struck out subsec. (c) designation and heading ‘‘Cost or Pricing Data on Below-Threshold Contracts’’ at begin- ning.