15 U.S.C. § 3719 — Prize competitions

(a) Definitions. (1) “Agency” means a Federal agency. (2) “Director” means the Director of the Office of Science and Technology Policy. (3) “Federal agency” has the meaning given in section 3703 of this title, except it does not include an agency of the Federal Government’s legislative branch. (4) “Head of an agency” means the head of a Federal agency.

(b) In general. The head of one agency, or heads of multiple agencies working together, may run a program that awards prizes competitively to stimulate innovation that could advance the mission of the agency or agencies involved.

(c) Prize competitions. A prize competition may involve one or more of these activities: (1) a point-solution prize that rewards and encourages solutions to one clearly defined problem; (2) an exposition prize competition that finds and promotes many ideas and practices that might otherwise receive little attention, helping third parties develop them further; (3) participation prize competitions that create value during and after the competition by encouraging contestants to change behavior or develop skills that may have beneficial effects during and after the competition; and (4) other types that the agency head considers suitable for stimulating innovation that could advance the agency’s mission.

(d) Topics. When choosing topics, the agency head must consult broadly inside and outside the Federal Government and may create advisory committees.

(e) Advertising. The agency head must advertise each competition broadly to encourage broad participation.

(f) Requirements and registration. For each competition, the agency head must publish a notice on a publicly accessible Government website, such as www.challenge.gov, announcing: (1) the subject; (2) the eligibility rules; (3) how participants register; (4) the cash prize amount or non-cash award; and (5) how the winner will be chosen.

(g) Eligibility. To be eligible for a cash prize, an individual or entity: (1) must have registered under the agency head’s rules under subsection (f); (2) must have met every requirement of this section; (3) must, if a private entity, be incorporated in and maintain its main business location in the United States, or, if an individual participating alone or in a group, be a United States citizen or permanent resident; and (4) may not be a Federal entity or a Federal employee acting within the scope of employment. This section does not define the quoted term “permanent resident.”

(h) Consulting with federal employees. An individual or entity is not ineligible under subsection (g) merely because it used federal facilities or consulted with federal employees during a competition, if those facilities and employees are made available fairly to all participants.

(i) Liability. (1)(A) In this paragraph, “related entity” means a contractor or subcontractor at any level, and a supplier, user, customer, cooperating party, grantee, investigator, or detailee. (B) Registered participants must agree to take on all risks and give up claims against the Federal Government and its related entities, except for willful misconduct, for injury, death, or damage to or loss of property, revenue, or profits, whether direct, indirect, or consequential, arising from participation in a competition. This applies whether the injury, death, damage, or loss resulted from negligence or otherwise. This section does not define the quoted terms “willful misconduct” or “consequential.”

(2) Participants must obtain liability insurance or show financial responsibility in amounts set by the agency head. The insurance or responsibility must cover claims by (A) a third party for death, bodily injury, or property damage or loss caused by an activity connected with participation. The Federal Government must be named as an additional insured, and participants must agree to indemnify the Government against third-party damage claims arising from or related to competition activities. It must also cover (B) Government claims for damage to or loss of Government property caused by such an activity.

(3)(A) An agency may waive the insurance or financial-responsibility requirement in paragraph (2). (B) The Director must list every waiver granted during the preceding fiscal year and give a detailed explanation for each one. (4) The agency head may not require a participant to give up claims against the entity administering the competition when the agency used or disclosed the participant’s intellectual property, trade secrets, or confidential business information without authorization. This section does not define the quoted terms “indemnify,” “intellectual property,” “trade secrets,” or “confidential business information.”

(j) Intellectual property. (1) The Federal Government may not obtain an interest in intellectual property a participant develops in a competition without the participant’s written consent. (2) When appropriate and to advance the competition’s goals, the Government may negotiate a license to use intellectual property developed by a registered participant.

(k) Judges. (1) For each competition, the agency head, directly or through an agreement under subsection (l), must appoint one or more qualified judges to choose the winner or winners using the basis announced under subsection (f). Judges may include people outside the agency, including private-sector people. (2) A judge may not (A) have a personal or financial interest in, or be an employee, officer, director, or agent of, an entity registered in the competition; or (B) have a family or financial relationship with a registered individual participant. (3) Agency heads running competitions must create guidelines to ensure that judges are fairly balanced and work transparently. (4) Chapter 10 of title 5 does not apply to a committee, board, commission, panel, task force, or similar entity created only to judge competitions under this section. This section does not define the quoted terms “qualified,” “fairly balanced,” or “transparently.”

(l) Administering the competition. The agency head may enter into a grant, contract, cooperative agreement, or other agreement with a private-sector for-profit or nonprofit entity or a State or local government agency to administer the competition, subject to this section.

(m) Funding. (1) Support may include federal appropriated money and money provided by private for-profit or nonprofit entities. It may support designing or administering the competition or the cash prize. The agency head may request and accept money from other federal agencies; State, United States territory, local, or tribal governments; private for-profit entities; and nonprofit entities, to the extent appropriations laws allow, to support competitions. The agency head may not give an agency or entity special consideration in exchange for a donation.

(2) Despite other law, money appropriated under this section for cash prizes or non-cash awards remains available until spent. Nothing here permits obligating or paying money in violation of section 1341 of title 31. (3)(A) A competition may not be announced until all money needed to pay the announced cash prize has been appropriated or committed in writing by a private or State, United States territory, local, or tribal government source. (B) The agency head may increase a cash prize or non-cash award after the initial announcement only if (i) notice of the increase is given in the same way as the initial notice and (ii) the money needed for the increase has been appropriated or committed in writing by one of those sources.

(4)(A) A competition may not offer a cash prize or non-cash award greater than $50,000,000 unless 30 days have passed since written notice was sent to the Senate Committee on Commerce, Science, and Transportation and the House Committee on Science, Space, and Technology. (B) A competition may not award more than $1,000,000 in cash prizes or non-cash awards without the agency head’s approval.

(n) General Services Administration^* help. No later than 180 days after January 6, 2017, the General Services Administration must provide government-wide services for sharing best practices and helping agencies develop prize-competition guidelines. It must develop a contract vehicle for for-profit and nonprofit entities and State, territory, local, and tribal governments to give agencies access to relevant products and services, including technical help in structuring and running competitions so agencies can get the greatest marketplace benefit while pursuing competitions that advance federal policy objectives. This section does not define the quoted term “contract vehicle.”

(o) Compliance with existing law. (1) Merely offering a competition or providing a prize under this section does not make the Federal Government responsible for registered participants’ compliance with federal law, including licensing, export-control, and nonproliferation laws and related regulations. (2) This section does not affect prize authority granted by another law.

(p) Biennial report. (1) By March 1 of every other year, the Director must report to the Senate Committee on Commerce, Science, and Transportation and the House Committee on Science, Space, and Technology about activities during the preceding two fiscal years under subsection (b). (2) For each competition, the report must include: (A) the proposed goals; (B) an analysis of why using subsection (b) was preferable to other available authorities, such as contracts, grants, and cooperative agreements; (C) the total cash prizes or non-cash awards, including private money contributed, its sources, and how awarded and claimed prizes were allocated among agency accounts for recording obligations and expenditures; (D) the methods used to solicit and evaluate submissions, an assessment of how effective they were, and lessons for future competitions; (E) the resources, including staff and money, used to run the competition, what those resources were used for, and how execution funding was allocated among agency accounts for recording obligations and expenditures; (F) how the competition advanced the agency’s mission; and (G) cross-cutting subject areas and agency-specific mission needs that may offer the best competition opportunities during the next two fiscal years.