10 U.S.C. § 7543 — Army industrial facilities: sales of manufactured articles or services outside Department of Defense
submitted 33 years ago by Pub. L. 103-160 to r/title-10-ARMED-FORCES · 787 words · no verdicts yet
Regulations may allow certain working-capital-funded Army facilities to sell specified articles and services outside the Department of Defense when nine conditions are met. The section also sets contracting, funding, export-control, and cost rules and defines four terms.
(a) Regulations under section 2208(h) may authorize a working-capital-funded Army* industrial facility, including an Army arsenal, that makes large-caliber cannon, gun mounts, recoil mechanisms, ammunition, munitions, or components to sell articles or services outside the Department of Defense if: (1) an article is sold to a United States manufacturer, assembler, developer, or other concern for (A) developing new products, (B) incorporating it into items sold to or used under a United States agency contract, (C) incorporating it into items sold to, used under a contract with, or used to solicit a contract with a friendly foreign government, or (D) commercial products; (2) the Defense Department finds the purchaser qualified for the proposed work; (3) the sale does not interfere with facility work for Defense or a Defense contractor; (4) services relate to an authorized article and are performed in the United States for the purchaser; (5) the Army Secretary finds the article or service unavailable from a United States commercial source; (6) the purchaser agrees to protect and reimburse the United States against claims for injury or damage arising from the article or service, except for willful misconduct or gross negligence; (7) the facility can make the article or substantially perform the service with only incidental subcontracting; (8) making the article or performing the service is in the public interest; and (9) the sale does not interfere with the facility's military mission. (b) Regulations must also (1) require authority to be exercised by the commander of the Army major subordinate command responsible for the facility; (2) allow advance incremental funding; and (3), for a facility making large-caliber cannon, gun mounts, recoil mechanisms, or components, allow it to (A) charge at least the variable costs of commercial articles or services; (B) use a firm fixed-price contract or, if the buyer agrees, a cost-reimbursement contract; and (C) build and maintain, without appropriated funds, working capital for design, planning, procurement, and other related costs. (c) This section does not affect Arms Export Control Act section 38 export controls for items incorporating or produced using a sold article. (d)(1) A "commercial article" is usable for a nondefense purpose. (2) A "commercial service" is usable for a nondefense purpose. (3) "Advance incremental funding" means partial payments including (A) one or more before work or related costs begin and (B) later progress payments that complete payment as the work is completed. (4) "Variable costs" are costs expected to change directly with sales volume, meaning for articles the production volume needed for the orders and for services the extent of services sold.
Regulations under section 2208(h) of this title shall authorize 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 to sell manufactured articles or services to a person outside the Department of Defense if—
in the case of an article, the article is sold to a United States manufacturer, assembler, developer, or other concern—
for use in developing new products;
for incorporation into items to be sold to, or to be used in a contract with, an agency of the United States;
for incorporation into items to be sold to, or to be used in a contract with, or to be used for purposes of soliciting a contract with, a friendly foreign government; or
for use in commercial products;
in the case of an article, the purchaser is determined by the Department of Defense to be qualified to carry out the proposed work involving the article to be purchased;
the sale is to be made on a basis that does not interfere with performance of work by the facility for the Department of Defense or for a contractor of the Department of Defense;
in the case of services, the services are related to an article authorized to be sold under this section and are to be performed in the United States for the purchaser;
the Secretary of the Army determines that the articles or services are not available from a commercial source located in the United States;
the purchaser of an article or service agrees to hold harmless and indemnify the United States, except in a case of willful misconduct or gross negligence, from any claim for damages or injury to any person or property arising out of the article or service;
the article to be sold can be manufactured, or the service to be sold can be substantially performed, by the industrial facility with only incidental subcontracting;
it is in the public interest to manufacture such article or perform such service; and
the sale will not interfere with performance of the military mission of the industrial facility.
The regulations shall also—
require that the authority to sell articles or services under the regulations be exercised at the level of the commander of the major subordinate command of the Army with responsibility over the facility concerned;
authorize a purchaser of articles or services to use advance incremental funding to pay* for the articles or services; and
in the case of a sale of commercial articles or commercial services in accordance with subsection (a) by a facility that manufactures large caliber cannons, gun mounts, or recoil mechanisms, or components thereof, authorize such facility—
to charge the buyer, at a minimum, the variable costs that are associated with the commercial articles or commercial services sold;
to enter into a firm, fixed-price contract or, if agreed by the buyer, a cost reimbursement contract for the sale; and
to 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 commercial articles or commercial services sold.
Nothing in this section shall be construed to affect the application of the export controls provided for in section 38 of the Arms Export Control Act (22 U.S.C. 2778) to items which incorporate or are produced through the use of an article sold under this section.
In this section:
The term “commercial article” means an article that is usable for a nondefense purpose.
The term “commercial service” means a service that is usable for a nondefense purpose.
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—
one or more partial payments before the commencement of work or the incurring of costs in connection with the production of the articles or the performance of the services, as the case may be; and
subsequent progress payments that result in full payment being completed as the required work is being completed.
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—
in the case of articles, the volume of production necessary to satisfy the sales orders; or
in the case of services, the extent of the services sold.
Source credit: (Added Pub. L. 103–160, div. A, title I, § 158(a)(1), Nov. 30, 1993, 107 Stat. 1581, § 4543; amended Pub. L. 103–337, div. A, title I, § 141, Oct. 5, 1994, 108 Stat. 2688; renumbered § 7543, Pub. L. 115–232, div. A, title VIII, § 808(d), Aug. 13, 2018, 132 Stat. 1839.)
- 1993Enacted · Pub. L. 103-160 · 107 Stat. 1581
- 1994Amended · Pub. L. 103-337 · 108 Stat. 2688
- 2018Amended · Pub. L. 115-232 · 132 Stat. 1839
A history note hasn’t been published yet. The record shows enactment by Pub. L. 103-160 on 1993-11-30.
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