
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 23, 2000]
[Document not affected by Public Laws enacted between
  January 23, 2000 and December 4, 2001]
[CITE: 50USC1431]

 
                   TITLE 50--WAR AND NATIONAL DEFENSE
 
                 CHAPTER 29--NATIONAL DEFENSE CONTRACTS
 
Sec. 1431. Authorization; official approval; Congressional 
        action: notification of committees of certain proposed 
        obligations, resolution of disapproval, continuity of session, 
        computation of period
        
    The President may authorize any department or agency of the 
Government which exercises functions in connection with the national 
defense, acting in accordance with regulations prescribed by the 
President for the protection of the Government, to enter into contracts 
or into amendments or modifications of contracts heretofore or hereafter 
made and to make advance payments thereon, without regard to other 
provisions of law relating to the making, performance, amendment, or 
modification of contracts, whenever he deems that such action would 
facilitate the national defense. The authority conferred by this section 
shall not be utilized to obligate the United States in an amount in 
excess of $50,000 without approval by an official at or above the level 
of an Assistant Secretary or his Deputy, or an assistant head or his 
deputy, of such department or agency, or by a Contract Adjustment Board 
established therein. The authority conferred by this section may not be 
utilized to obligate the United States in any amount in excess of 
$25,000,000 unless the Committees on Armed Services of the Senate and 
the House of Representatives have been notified in writing of such 
proposed obligation and 60 days of continuous session of Congress have 
expired following the date on which such notice was transmitted to such 
Committees. For purposes of this section, the continuity of a session of 
Congress is broken only by an adjournment of the Congress sine die at 
the end of a Congress, and the days on which either House is not in 
session because of an adjournment of more than 3 days to a day certain, 
or because of an adjournment sine die other than at the end of a 
Congress, are excluded in the computation of such 60-day period.

(Pub. L. 85-804, Sec. 1, Aug. 28, 1958, 72 Stat. 972; Pub. L. 93-155, 
title VIII, Sec. 807(a), Nov. 16, 1973, 87 Stat. 615; Pub. L. 101-510, 
div. A, title XIII, Sec. 1313, Nov. 5, 1990, 104 Stat. 1670; Pub. L. 
102-25, title VII, Sec. 705(f), Apr. 6, 1991, 105 Stat. 120.)


                               Amendments

    1991--Pub. L. 102-25, Sec. 705(f)(1), inserted before period at end 
of third sentence ``and 60 days of continuous session of Congress have 
expired following the date on which such notice was transmitted to such 
Committees''.
    Pub. L. 102-25, Sec. 705(f)(2), in fourth sentence, inserted ``at 
the end of a Congress'' after ``sine die'' and ``, or because of an 
adjournment sine die other than at the end of a Congress,'' after ``to a 
day certain''.
    1990--Pub. L. 101-510 struck out before period at end of third 
sentence ``and 60 days of continuous session of Congress have expired 
following the date on which such notice was transmitted to such 
Committees and neither House of Congress has adopted, within such 60-day 
period, a resolution disapproving such obligation''.
    1973--Pub. L. 93-155 provided for notification of Congressional 
Committees with respect to certain proposed obligations, Congressional 
resolution of disapproval, continuity of Congressional session, and 
computation of period.


                    Effective Date of 1991 Amendment

    Section 705(f)(1) of Pub. L. 102-25 provided that the amendment made 
by that section is effective as of Nov. 6, 1990.


              Nonapplicability of National Emergencies Act

    The provisions of the National Emergencies Act [see Short Title note 
set out under section 1601 of this title] shall not apply to the powers 
and authorities conferred by this section and actions taken hereunder, 
see section 1651(a)(6) of this title.


            Obligations Entered Into Before November 16, 1973

    Amendment by Pub. L. 93-155 not affecting the carrying out of any 
contract, loan, guarantee, commitment, or other obligation entered into 
prior to Nov. 16, 1973, see section 807(e) of Pub. L. 93-155, set out as 
a note under section 2307 of Title 10, Armed Forces.

  Ex. Ord. No. 10789. Contracting Authority of Government Agencies in 
               Connection With National Defense Functions

    Ex. Ord. No. 10789, Nov. 14, 1958, 23 F.R. 8897, as amended by Ex. 
Ord. No. 11051, Sept. 27, 1962, 27 F.R. 9683; Ex. Ord. No. 11382, Nov. 
28, 1967, 32 F.R. 16247; Ex. Ord. No. 11610, July 22, 1971, 36 F.R. 
13755; Ex. Ord. No. 12148, July 20, 1979, 44 F.R. 43239; Ex. Ord. No. 
12919, Sec. 904(b), June 3, 1994, 59 F.R. 29534, provided:
    By virtue of the authority vested in me by the act of August 28, 
1958, 72 Stat. 972, hereinafter called the act [this chapter], and as 
President of the United States, and deeming that such action will 
facilitate the national defense, it is hereby ordered as follows:

                      Part I--Department of Defense

    Under such regulations, which shall be uniform to the extent 
practicable, as may be prescribed or approved by the Secretary of 
Defense:
    1. The Department of Defense is authorized, within the limits of the 
amounts appropriated and the contract authorization provided therefor, 
to enter into contracts and into amendments or modifications of 
contracts heretofore or hereafter made, and to make advance payments 
thereon, without regard to the provisions of law relating to the making, 
performance, amendment, or modification of contracts, whenever, in the 
judgment of the Secretary of Defense, the Secretary of the Army, the 
Secretary of the Navy, or the Secretary of the Air Force, or the duly 
authorized representative of any such Secretary, the national defense 
will be facilitated thereby.
    1A. (a) The limitation in paragraph 1 to amounts appropriated and 
the contract authorization provided therefor shall not apply to 
contractual provisions which provide that the United States will hold 
harmless and indemnify the contractor against any of the claims or 
losses set forth in subparagraph (b), whether resulting from the 
negligence or wrongful act or omission of the contractor or otherwise 
(except as provided in subparagraph (b)(2)). This exception from the 
limitations of paragraph 1 shall apply only to claims or losses arising 
out of or resulting from risks that the contract defines as unusually 
hazardous or nuclear in nature. Such a contractual provision shall be 
approved in advance by an official at a level not below that of the 
Secretary of a military department and may require each contractor so 
indemnified to provide and maintain financial protection of such type 
and in such amounts as is determined by the approving official to be 
appropriate under the circumstances. In deciding whether to approve the 
use of an indemnification provision and in determining the amount of 
financial protection to be provided and maintained by the indemnified 
contractor, the appropriate official shall take into account such 
factors as the availability, cost and terms of private insurance, self-
insurance, other proof of financial responsibility and workmen's 
compensation insurance. Such approval and determination, as required by 
the preceding two sentences, shall be final.
    (b)(1) Subparagraph (a) shall apply to claims (including reasonable 
expenses of litigation and settlement) or losses, not compensated by 
insurance or otherwise, of the following types:
    (A) Claims by third persons, including employees of the contractor, 
for death, personal injury, or loss of, damage to, or loss of use of 
property;
    (B) Loss of, damage to, or loss of use of property of the 
contractor;
    (C) Loss of, damage to, or loss of use of property of the 
Government;
    (D) Claims arising (i) from indemnification agreements between the 
contractor and a subcontractor or subcontractors, or (ii) from such 
arrangements and further indemnification arrangements between 
subcontractors at any tier; provided that all such arrangements were 
entered into pursuant to regulations prescribed or approved by the 
Secretaries of Defense, the Army, the Navy, or the Air Force.
    (2) Indemnification and hold harmless agreements entered into 
pursuant to this subsection, whether between the United States and a 
contractor, or between a contractor and a subcontractor, or between two 
subcontractors, shall not cover claims or losses caused by the willful 
misconduct or lack of good faith on the part of any of the contractor's 
or subcontractor's directors or officers or principal officials which 
are (i) claims by the United States (other than those arising through 
subrogation) against the contractor or subcontractor, or (ii) losses 
affecting the property of such contractor or subcontractor. Regulations 
to be prescribed or approved by the Secretaries of Defense, the Army, 
the Navy or the Air Force shall define the scope of the term principal 
officials.
    (3) The United States may discharge its obligation under a provision 
authorized by subparagraph (a) by making payments directly to 
subcontractors or to third persons to whom a contractor or subcontractor 
may be liable.
    (c) A contractual provision made under subparagraph (a) that 
provides for indemnification must also provide for--
    (1) notice to the United States of any claim or action against, or 
of any loss by, the contractor or subcontractor which is covered by such 
contractual provision; and
    (2) control or assistance by the United States, at its election, in 
the settlement or defense of any such claim or action.
    2. The Secretaries of Defense, the Army, the Navy, and the Air 
Force, respectively, may exercise the authority herein conferred and, in 
their discretion and by their direction, may delegate such authority to 
any other military or civilian officers or officials of their respective 
departments, and may confer upon any such military or civilian officers 
or officials the power to make further delegations of such authority 
within their respective commands or organizations: Provided, That the 
authority herein conferred shall not be utilized to obligate the United 
States in an amount in excess of $50,000 without approval by an official 
at or above the level of an Assistant Secretary or his Deputy, or by a 
departmental Contract Adjustment Board.
    3. The contracts hereby authorized to be made shall include 
agreements of all kinds (whether in the form of letters of intent, 
purchase orders, or otherwise) for all types and kinds of property or 
services necessary, appropriate, or convenient for the national defense, 
or for the invention, development, or production of, or research 
concerning, any such property or services, including, but not limited 
to, aircraft, missiles, buildings, vessels, arms, armament, equipment or 
supplies of any kind, or any portion thereof, including plans, spare 
parts and equipment therefor, materials, supplies, facilities, 
utilities, machinery, machine tools, and any other equipment without any 
restriction of any kind as to type, character, location, or form.
    4. The Department of Defense may by agreement modify or amend or 
settle claims under contracts heretofore or hereafter made, may make 
advance payments upon such contracts of any portion of the contract 
price, and may enter into agreements with contractors or obligors 
modifying or releasing accrued obligations of any sort, including 
accrued liquidated damages or liability under surety or other bonds. 
Amendments or modifications of contracts may be with or without 
consideration and may be utilized to accomplish the same things as any 
original contract could have accomplished hereunder, irrespective of the 
time or circumstances of the making, or the form, of the contract 
amended or modified, or of the amending or modifying contract, and 
irrespective of rights which may have accrued under the contract or the 
amendments or modifications thereof.
    5. Proper records of all actions taken under the authority of the 
act shall be maintained within the Department of Defense. The 
Secretaries of Defense, the Army, the Navy, and the Air Force shall make 
such records available for public inspection except to the extent that 
they, or their duly authorized representatives, may respectively deem 
the disclosure of information therein to be detrimental to the national 
security.
    6. The Department of Defense shall, by March 15 of each year, report 
to the Congress all actions taken within that department under the 
authority of the act during the preceding calendar year. With respect to 
actions which involve actual or potential cost to the United States in 
excess of $50,000, the report shall (except as the disclosure of such 
information may be deemed to be detrimental to the national security)--
    (a) name the contractor;
    (b) state the actual cost or estimated potential cost involved;
    (c) describe the property or services involved; and
    (d) state further the circumstances justifying the action taken.
    7. There shall be no discrimination in any act performed hereunder 
against any person on the ground of race, religion, color, or national 
origin, and all contracts entered into, amended, or modified hereunder 
shall contain such nondiscrimination provision as otherwise may be 
required by statute or Executive order.
    8. No claim against the United States arising under any purchase or 
contract made under the authority of the act and this order shall be 
assigned except in accordance with the Assignment of Claims Act of 1940 
(54 Stat. 1029), as amended [section 3727 of Title 31, Money and 
Finance, and section 15 of Title 41, Public Contracts].
    9. Advance payments shall be made hereunder only upon obtaining 
adequate security.
    10. Every contract entered into, amended, or modified pursuant to 
this order shall contain a warranty by the contractor in substantially 
the following terms:
    ``The Contractor warrants that no person or selling agency has been 
employed or retained to solicit or secure this contract upon an 
agreement or understanding for a commission, percentage, brokerage, or 
contingent fee, except bonafide employees or bonafide established 
commercial or selling agencies maintained by the Contractor for the 
purpose of securing business. For breach or violation of this warranty 
the Government shall have the right to annul this contract without 
liability or, in its discretion, to deduct from the contract price or 
consideration, or otherwise recover, the full amount of such commission, 
percentage, brokerage, or contingent fee.''
    11. Except as provided in the Act of September 27, 1966, 80 Stat. 
850 [which amended section 1433 of this title, sections 2310 and 2313 of 
Title 10, Armed Forces, and section 254 of Title 41, Public Contracts] 
contracts entered into, amended, or modified pursuant to authority of 
this order shall include a clause to the effect that the Comptroller 
General of the United States or any of his duly authorized 
representatives shall, until the expiration of three years after final 
payment, have access to and the right to examine any directly pertinent 
books, documents, papers, and records of the contractor or any of his 
subcontractors engaged in the performance of, and involving transactions 
related to, such contracts or subcontracts. Before exercising the 
authority provided in the Act of September 27, 1966, 80 Stat. 850 the 
Secretaries of Defense, the Army, the Navy, or the Air Force, or their 
designees, shall first determine that all reasonable efforts have been 
made to include the clause prescribed above and that alternate sources 
of supply are not reasonably available.
    12. Nothing herein contained shall be construed to constitute 
authorization hereunder for--
    (a) the use of the cost-plus-a-percentage-of-cost system of 
contracting;
    (b) any contract in violation of existing law relating to limitation 
of profits or fees;
    (c) the negotiation of purchases of or contracts for property or 
services required by law to be procured by formal advertising and 
competitive bidding;
    (d) the waiver of any bid, payment, performance, or other bond 
required by law;
    (e) the amendment of a contract negotiated under section 2304(a)(15) 
of Title 10 of the United States Code to increase the contract price to 
an amount higher than the lowest rejected bid of any responsible bidder; 
or
    (f) the formalization of an informal commitment, unless the 
Secretary of Defense, the Secretary of the Army, the Secretary of the 
Navy, or the Secretary of the Air Force, or the duly authorized 
representative of any such Secretary, finds that at the time the 
commitment was made it was impracticable to use normal procurement 
procedures.
    13. The provisions of the Walsh-Healey Act (49 Stat. 2036), as 
amended [sections 35 to 45 of Title 41, Public Contracts], the Davis-
Bacon Act (49 Stat. 1011), as amended [sections 276a to 276a-5 of Title 
40, Public Buildings, Property, and Works], the Copeland Act (48 Stat. 
948), as amended, and the Eight-Hour Law (37 Stat. 137), as amended 
[sections 321 to 323 of Title 40], if otherwise applicable, shall apply 
to contracts made and performed under the authority of this order.
    14. Nothing herein contained shall prejudice anything heretofore 
done under Executive Order No. 9001 of December 27, 1941, or Executive 
Order No. 10210 of February 2, 1951, or any amendments or extensions 
thereof, or the continuance in force of an action heretofore taken under 
those orders or any amendments or extensions thereof.
    15. Nothing herein contained shall prejudice any other authority 
which the Department of Defense may have to enter into, amend, or modify 
contracts, and to make advance payments.

         Part II--Extension of Provisions of Paragraphs 1 to 14

    21. Subject to the limitations and regulations contained in 
paragraphs 1 to 14, inclusive, hereof, and under any regulations 
prescribed by him in pursuance of the provisions of paragraph 22 hereof, 
the head of each of the following-named agencies is authorized to 
perform or exercise as to his agency, independently of any Secretary 
referred to in the said paragraphs 1 to 14, all the functions and 
authority vested by those paragraphs in the Secretaries mentioned 
therein:
    Department of the Treasury.
    Department of the Interior.
    Department of Agriculture.
    Department of Commerce.
    Department of Transportation.
    Atomic Energy Commission.
    General Services Administration.
    National Aeronautics and Space Administration.
    Tennessee Valley Authority.
    Government Printing Office.
    The Federal Emergency Management Agency.
    22. The head of each agency named in paragraph 21 hereof is 
authorized to prescribe regulations governing the carrying out of the 
functions and authority vested with respect to his agency by the 
provisions of paragraph 21 hereof. Such regulations shall, to the extent 
practicable, be uniform with the regulations prescribed or approved by 
the Secretary of Defense under the provisions of Part I of this order.
    23. Nothing contained herein shall prejudice any other authority 
which any agency named in paragraph 21 hereof may have to enter into, 
amend, or modify contracts and to make advance payments.
    24. Nothing contained in this Part shall constitute authorization 
thereunder for the amendment of a contract negotiated under section 
322(c)(14) of the Federal Property and Administrative Services Act of 
1949 (63 Stat. 394), as amended by section 2(b) of the act of August 28, 
1958, 72 Stat. 966 [section 252(c)(14) of Title 41, Public Contracts], 
to increase the contract price to an amount higher than the lowest 
rejected bid of any responsible bidder.


                            Cross References

    Certification by company officials of requests for relief, see note 
under section 2304 of Title 10, Armed Forces.
