
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 10USC2325]

 
                         TITLE 10--ARMED FORCES
 
                    Subtitle A--General Military Law
 
                PART IV--SERVICE, SUPPLY, AND PROCUREMENT
 
                   CHAPTER 137--PROCUREMENT GENERALLY
 
Sec. 2325. Restructuring costs

    (a) Limitation on Payment of Restructuring Costs.--(1) The Secretary 
of Defense may not pay, under section 2324 of this title, a defense 
contractor for restructuring costs associated with a business 
combination of the contractor that occurs after November 18, 1997, 
unless the Secretary determines in writing either--
        (A) that the amount of projected savings for the Department of 
    Defense associated with the restructuring will be at least twice the 
    amount of the costs allowed; or
        (B) that the amount of projected savings for the Department of 
    Defense associated with the restructuring will exceed the amount of 
    the costs allowed and that the business combination will result in 
    the preservation of a critical capability that otherwise might be 
    lost to the Department.

    (2) The Secretary may not delegate the authority to make a 
determination under paragraph (1) to an official of the Department of 
Defense below the level of an Assistant Secretary of Defense.
    (b) Report.--Not later than March 1 in each of 1998, 1999, 2000, 
2001, and 2002, the Secretary of Defense shall submit to Congress a 
report that contains, with respect to business combinations occurring on 
or after August 15, 1994, the following:
        (1) For each defense contractor to which the Secretary has paid, 
    under section 2324 of this title, restructuring costs associated 
    with a business combination, a summary of the following:
            (A) An estimate of the amount of savings for the Department 
        of Defense associated with the restructuring that has been 
        realized as of the end of the preceding calendar year.
            (B) An estimate of the amount of savings for the Department 
        of Defense associated with the restructuring that is expected to 
        be achieved on defense contracts.

        (2) An identification of any business combination for which the 
    Secretary has paid restructuring costs under section 2324 of this 
    title during the preceding calendar year and, for each such business 
    combination--
            (A) the supporting rationale for allowing such costs;
            (B) factual information associated with the determination 
        made under subsection (a) with respect to such costs; and
            (C) a discussion of whether the business combination would 
        have proceeded without the payment of restructuring costs by the 
        Secretary.

        (3) For business combinations of major defense contractors that 
    took place during the year preceding the year of the report--
            (A) an assessment of any potentially adverse effects that 
        the business combinations could have on competition for 
        Department of Defense contracts (including potential horizontal 
        effects, vertical effects, and organizational conflicts of 
        interest), the national technology and industrial base, or 
        innovation in the defense industry; and
            (B) the actions taken to mitigate the potentially adverse 
        effects.

    (c) Definition.--In this section, the term ``business combination'' 
includes a merger or acquisition.

(Added Pub. L. 105-85, div. A, title VIII, Sec. 804(a)(1), Nov. 18, 
1997, 111 Stat. 1832; amended Pub. L. 106-65, div. A, title X, 
Sec. 1066(a)(19), Oct. 5, 1999, 113 Stat. 771.)


                            Prior Provisions

    A prior section 2325, added Pub. L. 99-500, Sec. 101(c) [title X, 
Sec. 907(a)(1)], Oct. 18, 1986, 100 Stat. 1783-82, 1783-137, and Pub. L. 
99-591, Sec. 101(c) [title X, Sec. 907(a)(1)], Oct. 30, 1986, 100 Stat. 
3341-82, 3341-137; Pub. L. 99-661, div. A, title IX, formerly title IV, 
Sec. 907(a)(1), Nov. 14, 1986, 100 Stat. 3917, renumbered title IX, Pub. 
L. 100-26, Sec. 3(5), Apr. 21, 1987, 101 Stat. 273; amended Pub. L. 101-
189, div. A, title XVI, Sec. 1622(c)(5), Nov. 29, 1989, 103 Stat. 1604; 
Pub. L. 101-510, div. A, title VIII, Sec. 810, Nov. 5, 1990, 104 Stat. 
1595; Pub. L. 103-160, div. A, title IX, Sec. 904(d)(1), Nov. 30, 1993, 
107 Stat. 1728, directed Secretary of Defense to ensure that 
requirements of Department of Defense with respect to procurement of 
supplies be stated in terms of functions to be performed, performance 
required, or essential physical characteristics, and related to 
preference for nondevelopmental items in procurement of supplies, prior 
to repeal by Pub. L. 103-355, title VIII, Sec. 8104(b)(1), Oct. 13, 
1994, 108 Stat. 3391. See sections 2376 and 2377 of this title.
    Another prior section 2325 was renumbered section 2345 of this 
title.


                               Amendments

    1999--Subsec. (a)(1). Pub. L. 106-65 inserted ``that occurs after 
November 18, 1997,'' after ``of the contractor'' in introductory 
provisions.


                             Effective Date

    Section 804(c) of Pub. L. 105-85 provided that: ``Section 2325(a) of 
title 10, United States Code, as added by subsection (a), shall apply 
with respect to business combinations that occur after the date of the 
enactment of this Act [Nov. 18, 1997].''


                               GAO Reports

    Section 804(b) of Pub. L. 105-85 provided that:
    ``(1) Not later than April 1, 1998, the Comptroller General shall--
        ``(A) in consultation with appropriate officials in the 
    Department of Defense--
            ``(i) identify major market areas affected by business 
        combinations of defense contractors since January 1, 1990; and
            ``(ii) develop a methodology for determining the savings 
        from business combinations of defense contractors on the prices 
        paid on particular defense contracts; and
        ``(B) submit to the congressional defense committees [Committees 
    on Armed Services and Appropriations of Senate and House of 
    Representatives] a report describing, for each major market area 
    identified pursuant to subparagraph (A)(i), the changes in numbers 
    of businesses competing for major defense contracts since January 1, 
    1990.
    ``(2) Not later than December 1, 1998, the Comptroller General shall 
submit to the congressional defense committees a report containing the 
following:
        ``(A) Updated information on--
            ``(i) restructuring costs of business combinations paid by 
        the Department of Defense pursuant to certifications under 
        section 818 of the National Defense Authorization Act for Fiscal 
        Year 1995 [Pub. L. 103-337, set out as a note under section 2324 
        of this title], and
            ``(ii) savings realized by the Department of Defense as a 
        result of the business combinations for which the payment of 
        restructuring costs was so certified.
        ``(B) An assessment of the savings from business combinations of 
    defense contractors on the prices paid on a meaningful sample of 
    defense contracts, determined in accordance with the methodology 
    developed pursuant to paragraph (1)(A)(ii), as well as a description 
    of the methodology.
        ``(C) Any recommendations that the Comptroller General considers 
    appropriate.
    ``(3) In this subsection, the term `business combination' has the 
meaning given that term in section 2325(c) of title 10, United States 
Code, as added by subsection (a).''
