--- kind: "range" citation: "10 U.S.C. §§ 3321–3323" title: "10" from: "3321" to: "3323" count: 3 release: "119-102" url: "https://uscodex.org/usc/10/3321..3323" --- # §3321. Contracts awarded using procedures other than sealed-bid procedures - (a) **Authorized Types.—** Subject to the limitation in [section 3322(a) of this title](/usc/10/3322.md?p=a), the other provisions of this chapter, and other applicable provisions of law, the [head of an agency](/usc/10/3004.md), in awarding contracts under [chapter 137](/usc/10/chstA-ptIV-ch137.md) legacy provisions after using procedures other than sealed-bid procedures, may enter into any kind of contract that he considers will promote the best interests of the [United States](/usc/10/101.md?p=a-1). - (b) **Required Warranty.—** - (1) **Content.—** Each contract awarded under [chapter 137](/usc/10/chstA-ptIV-ch137.md) legacy provisions after using procedures other than sealed-bid procedures shall contain a warranty, determined to be suitable by the head of the [agency](/usc/10/4701.md?p=g-1), that the [contractor](/usc/10/9511.md?p=7) has employed or retained no person or selling [agency](/usc/10/4701.md?p=g-1) to solicit or obtain the contract under an understanding or agreement for a commission, percentage, brokerage, or contingent fee, except a bona fide employee or established commercial or selling [agency](/usc/10/4701.md?p=g-1) maintained by the [contractor](/usc/10/9511.md?p=7) to obtain business. - (2) **Remedy for Breaking Warranty.—** If a [contractor](/usc/10/9511.md?p=7) breaks such a warranty the [United States](/usc/10/101.md?p=a-1)— - (A) may annul the contract without liability; or - (B) may deduct the commission, percentage, brokerage, or contingent fee from the contract price or consideration. - (3) **Inapplicability to Certain Contracts.—** This subsection does not apply— - (A) to a contract that is for an amount not greater than the [simplified acquisition threshold](/usc/10/3015.md?p=1); or - (B) to a contract for the [acquisition](/usc/10/3001.md?p=c) of commercial products or commercial services. # §3322. Cost contracts - (a) **Cost-plus-a-percentage-of-cost System of Contracting Prohibited.—** The cost-plus-a-percentage-of-cost system of contracting may not be used. - (b) **Cost-plus-a-fixed-fee Contracts.—** The fee for performing a cost-plus-a-fixed-fee contract for experimental, developmental, or research work may not be more than 15 percent of the estimated cost of the contract, not including the fee. The fee for performing a cost-plus-a-fixed-fee contract for architectural or engineering services for a public work or utility plus the cost of those services to the [contractor](/usc/10/9511.md?p=7) may not be more than 6 percent of the estimated cost of that work or project, not including fees. The fee for performing any other cost-plus-a-fixed-fee contract may not be more than 10 percent of the estimated cost of the contract, not including the fee. Determinations under this subsection of the estimated costs of a contract or project shall be made by the head of the [agency](/usc/10/4701.md?p=g-1) at the time the contract is made. - (c) **Advance Notice of Certain Subcontracts.—** - (1) **In general.—** Except as provided in [paragraph (2)](#c-2), each cost contract and each cost-plus-a-fixed-fee contract shall provide for notice to the [agency](/usc/10/4701.md?p=g-1) by the [contractor](/usc/10/9511.md?p=7) before the making, under the prime contract, of— - (A) a cost-plus-a-fixed-fee subcontract; or - (B) a fixed-price subcontract or purchase order involving more than the greater of (i) the [simplified acquisition threshold](/usc/10/3015.md?p=1), or (ii) 5 percent of the estimated cost of the prime contract. - (2) **Exception.—** [Paragraph (1)](#c-1) shall not apply to a prime contract with a [contractor](/usc/10/9511.md?p=7) that maintains a purchasing system approved by the contracting [officer](/usc/10/101.md?p=b-1) for the contract. - (d) **Limitation on Certain Options.—** - (1) **In general.—** Except as provided by [paragraph (2)](#d-2), a [covered contract](#d-3-A) shall limit the number of low-[rate](/usc/10/101.md?p=b-9) production lots for any production quantities procured using fixed-priced options under such [covered contract](#d-3-A) to not more than one. - (2) **Waiver.—** - (A) **In general.—** The [service acquisition executive](/usc/10/101.md?p=a-10) of the military [department](/usc/10/101.md?p=a-6) concerned or, in the case of program that is a joint program, the Secretary of Defense may waive the limit required under [paragraph (1)](#d-1) with respect to the number of low-[rate](/usc/10/101.md?p=b-9) production lots for a production quantity under a [covered contract](#d-3-A) if such [service acquisition executive](/usc/10/101.md?p=a-10) or the Secretary of Defense, as applicable, determines that such waiver is in the best interest of the [Department](/usc/10/101.md?p=a-6) of Defense. - (B) **Delegation limit.—** Neither a [service acquisition executive](/usc/10/101.md?p=a-10) nor the Secretary of Defense may delegate the authority under [subparagraph (A)](#d-2-A) to waive the limit required under [paragraph (1)](#d-1) below the level of a [service acquisition executive](/usc/10/101.md?p=a-10). - (3) **Definitions.—** In this subsection: - (A) The term “covered contract” means a cost reimbursement contract for the development of a [major system](/usc/10/3041.md?p=a). - (B) The term “low-rate initial production” has the same meaning as in [section 4231 of this title](/usc/10/4231.md). - (C) The term “[major system](/usc/10/3041.md?p=a)” has the meaning given such term in [section 3041 of this title](/usc/10/3041.md). # §3323. Cost-plus contracting prohibited for military construction and military family housing projects - (a) **Prohibition.—** A contract entered into by the [United States](/usc/10/101.md?p=a-1) in connection with a military construction project or a military family housing project may not use any form of cost-plus contracting. - (b) **Applicability.—** The prohibition specified in [subsection (a)](#a)— - (1) is in addition to the prohibition specified in [section 3322(a) of this title](/usc/10/3322.md?p=a) on the use of the cost-plus-a-percentage-of-cost system of contracting; and - (2) applies notwithstanding a declaration of war or the declaration by the President of a national emergency under section 201 of the National Emergencies Act ([50 U.S.C. 1621](/usc/50/1621.md)) that [includes](/usc/10/101.md?p=g-4) the use of the [armed forces](/usc/10/101.md?p=a-4).