Us Code § 2563 - Articles and services of industrial facilities: sale to persons outside the Department of Defense
Full text of Us Code United States Code § 2563 — Articles and services of industrial facilities: sale to persons outside the Department of Defense, with citation guidance and answers to common questions.
§ 2563. Articles and services of industrial facilities: sale to persons outside the Department of Defense
(a)
(2)(A) Except as provided in subparagraph (B), articles and services referred to in paragraph (1) are articles and services that are manufactured or performed by any working-capital funded industrial facility of the armed forces.
(B) The authority in this section does not apply to sales of articles and services by a working-capital funded Army industrial facility (including a Department of the Army arsenal) that manufactures large caliber cannons, gun mounts, recoil mechanisms, ammunition, munitions, or components thereof, which are governed by regulations required by section 7543 of this title.
(b)
(c)
(A) the Secretary of Defense determines that the articles or services are not available from a commercial source in the United States;
(B) the purchaser agrees to hold harmless and indemnify the United States, except as provided in paragraph (3), from any claim for damages or injury to any person or property arising out of the articles or services;
(C) the articles or services can be substantially manufactured or performed by the industrial facility concerned with only incidental subcontracting;
(D) it is in the public interest to manufacture the articles or perform the services;
(E) the Secretary determines that the sale of the articles or services will not interfere with the military mission of the industrial facility concerned; and
(F) the sale of the goods and services is made on the basis that it will not interfere with performance of work by the industrial facility concerned for the Department of Defense.
(2) The Secretary of Defense may waive the condition in paragraph (1)(A) and subsection (a)(1) that an article or service must be not available from a United States commercial source in the case of a particular sale if the Secretary determines that the waiver is necessary for reasons of national security and notifies Congress regarding the reasons for the waiver.
(3) Paragraph (1)(B) does not apply in any case of willful misconduct or gross negligence or in the case of a claim by a purchaser of articles or services under this section that damages or injury arose from the failure of the Government to comply with quality, schedule, or cost performance requirements in the contract to provide the articles or services.
(d)
(2) In the sale of articles and services under this section, the Secretary shall—
(A) charge the purchaser, at a minimum, the variable costs, capital improvement costs, and equipment depreciation costs that are associated with the articles or services sold;
(B) enter into a firm, fixed-price contract or, if agreed by the purchaser, a cost reimbursement contract for the sale; and
(C) develop and maintain (from sources other than appropriated funds) working capital to be available for paying design costs, planning costs, procurement costs, and other costs associated with the articles or services sold.
(e)
(f)
(g)
(1) The term "advance incremental funding", with respect to a sale of articles or services, means a series of partial payments for the articles or services that includes—
(A) one or more partial payments before the commencement of work or the incurring of costs in connection with the manufacture of the articles or the performance of the services, as the case may be; and
(B) subsequent progress payments that result in full payment being completed as the required work is being completed.
(2) The term "not available", with respect to an article or service proposed to be sold under this section, means that the article or service is unavailable from a commercial source in the required quantity and quality or within the time required.
(3) The term "variable costs", with respect to sales of articles or services, means the costs that are expected to fluctuate directly with the volume of sales and—
(A) in the case of articles, the volume of production necessary to satisfy the sales orders; or
(B) in the case of services, the extent of the services sold.
(Added Pub. L. 103–337, div. A, title III, §339(a)(1), Oct. 5, 1994, 108 Stat. 2718, §2553; amended Pub. L. 106–65, div. A, title III, §331(a)(2), (b), Oct. 5, 1999, 113 Stat. 566, 567; renumbered §2563, Pub. L. 106–398, §1 [[div. A], title X, §1033(b)(1)], Oct. 30, 2000, 114 Stat. 1654, 1654A–260; Pub. L. 107–107, div. A, title III, §343(a), Dec. 28, 2001, 115 Stat. 1061; Pub. L. 115–232, div. A, title VIII, §809(a), Aug. 13, 2018, 132 Stat. 1840.)
Editorial Notes
Amendments
2018—Subsec. (a)(2)(B). Pub. L. 115–232 substituted "section 7543" for "section 4543".
2001—Subsec. (c)(1)(B). Pub. L. 107–107, §343(a)(1), substituted "as provided in paragraph (3)" for "in any case of willful misconduct or gross negligence".
Subsec. (c)(3). Pub. L. 107–107, §343(a)(2), added par. (3).
2000—Pub. L. 106–398 renumbered section 2553 of this title as this section.
1999—Subsec. (c). Pub. L. 106–65, §331(a)(2), designated existing provisions as par. (1), redesignated former pars. (1) to (6) as subpars. (A) to (F), respectively, of par. (1), and added par. (2).
Subsec. (g)(2), (3). Pub. L. 106–65, §331(b), added par. (2) and redesignated former par. (2) as (3).
Statutory Notes and Related Subsidiaries
Effective Date of 2018 Amendment
Amendment by Pub. L. 115–232 effective Feb. 1, 2019, with provision for the coordination of amendments and special rule for certain redesignations, see section 800 of Pub. L. 115–232, set out as a note preceding section 3001 of this title.
Effective Date
Pub. L. 103–337, div. A, title III, §339(b), Oct. 5, 1994, 108 Stat. 2720, provided that: "Section 2553 [now 2563] of title 10, United States Code, as added by subsection (a), shall take effect on April 1, 1995."
About This Section
10 U.S.C. § 2563 is part of Title 10 of the United States Code. The United States Code is the official codification of federal statutes maintained by the Office of the Law Revision Counsel of the U.S. House of Representatives. Congress amends the Code through new public laws, which are eventually incorporated into the relevant title.
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