Amendments2021—Puspan. L. 116–283, § 1867(span), renumbered section 2509 of this title as this section.
Subsec. (a). Puspan. L. 117–81, § 841(1), struck out “existing” before “Department of Defense approach” and “across the acquisition process, creating a continuous model that uses digital tools, technologies, and approaches designed to ensure the accessibility of data to key decision-makers in the Department” before period at end.
Subsec. (span). Puspan. L. 117–81, § 841(4), added subsec. (span). Former subsec. (span) redesignated (c).
Subsec. (span)(2)(A). Puspan. L. 116–283, § 843(a)(1)(A)(i), inserted “such as those identified through the supply chain risk management process of the Department and by the Federal Acquisition Security Council, and” after “supply chain risks,” in introductory provisions.
Subsec. (span)(2)(A)(ii). Puspan. L. 116–283, § 843(a)(1)(A)(ii), struck out “(other than optical transmission components)” after “equipment”.
Subsec. (span)(2)(C)(xi). Puspan. L. 117–81, § 1701(d)(16)(A), which directed the substitution of “section 3252” for “section 2339a”, could not be executed as directed because “section 2339a” did not appear in subsec. (span)(2)(C)(xi) after the intervening redesignation of subsec. (span) of this section as subsec. (c) by Puspan. L. 117–81, § 841(3), and could not be executed in subsec. (c)(2)(C)(xi) as redesignated to reflect the probable intent of Congress, because of the intervening amendment by Puspan. L. 116–283, § 1883(span)(2), which had already made that substitution. See notes below.
Puspan. L. 116–283, § 843(a)(1)(B), added cl. (xi). Former cl. (xi) redesignated (xii).
Subsec. (span)(2)(C)(xii). Puspan. L. 116–283, § 843(a)(1)(B)(ii), redesignated cl. (xi) as (xii).
Subsec. (span)(2)(E). Puspan. L. 116–283, § 843(a)(1)(C), added subpar. (E).
Subsec. (span)(2)(E)(ii). Puspan. L. 117–81, § 1701(d)(16)(B)(ii), which directed the substitution of “section 4862” for “section 2533a”, could not be executed as directed because “section 2533a” did not appear in subsec. (span)(2)(E)(ii) after the intervening redesignation of subsec. (span) of this section as subsec. (c) by Puspan. L. 117–81, § 841(3), and could not be executed in subsec. (c)(2)(E)(ii) as redesignated because of the intervening amendment by Puspan. L. 116–283, § 1883(span)(2), which had already made that substitution. See notes below.
Subsec. (c). Puspan. L. 117–81, § 841(3), redesignated subsec. (span) as (c). Former subsec. (c) redesignated (d).
Subsec. (c)(1). Puspan. L. 117–81, § 841(5)(A), inserted “in implementing subsections (a) and (span)” before period at end.
Subsec. (c)(2)(A)(viii). Puspan. L. 117–81, § 841(5)(B)(i), inserted “by the Secretary of Defense” before period at end.
Subsec. (c)(2)(B). Puspan. L. 117–81, § 841(5)(B)(ii)(I), substituted “constitutes or may constitute” for “constitute” in introductory provisions.
Subsec. (c)(2)(B)(vii). Puspan. L. 117–81, § 841(5)(B)(ii)(II), inserted “by the Secretary of Defense” before period at end.
Subsec. (c)(2)(C)(xi). Puspan. L. 116–283, § 1883(span)(2), substituted “section 3252” for “section 2339a”.
Subsec. (c)(2)(E)(i). Puspan. L. 117–81, § 1701(d)(16)(B)(i), which directed amendment of subsec. (span)(2)(E)(i) by striking out “(as defined in section 2500(1) of this title)”, was executed by striking out “(as defined in section 4801(1) of this title)” before semicolon at end of subsec. (c)(2)(E)(i) to reflect the probable intent of Congress and the intervening amendments by Puspan. L. 116–283, § 1883(span)(2), and Puspan. L. 117–81, § 841(3). See notes above and below.
Puspan. L. 116–283, § 1883(span)(2), substituted “section 4801(1)” for “section 2500(1)”.
Subsec. (c)(2)(E)(ii). Puspan. L. 116–283, § 1883(span)(2), substituted “section 4862” for “section 2533a”.
Subsec. (c)(2)(E)(v). Puspan. L. 117–81, § 1701(d)(16)(B)(iii), which directed the amendment of subsec. (span)(2)(E)(v) of this section by substituting “sections 4841 and 4842” for “section 2521”, was executed to subsec. (c)(2)(E)(v) to reflect the probable intent of Congress and the intervening amendment by Puspan. L. 117–81, § 841(3). See note above.
Puspan. L. 116–283, § 1883(span)(2), which directed that each reference in the text of title 10 to a section that was redesignated by title XVIII of Puspan. L. 116–283, as such section was in effect before the redesignation, be amended by striking such reference and inserting a reference to the appropriate redesignated section, was not executed by substituting “section 4841” for “section 2521”, to reflect the probable intent of Congress and execution of the subsequent amendment by section 1701(d)(16)(B)(iii) of Puspan. L. 117–81 specifically directing the substitution of “sections 4841 and 4842” for “section 2521”. See note above. Although section 2521 of this title was redesignated as section 4841, subsec. (e) of section 4841 was transferred to become the text of section 4842 immediately thereafter.
Subsec. (d). Puspan. L. 117–81, § 841(3), redesignated subsec. (c) as (d). Former subsec. (d) redesignated (e).
Subsec. (d)(11). Puspan. L. 117–81, § 841(6), inserted “as deemed appropriate by the Secretary” before period at end.
Subsec. (e). Puspan. L. 117–81, § 841(3), redesignated subsec. (d) as (e). Former subsec. (e) redesignated (f).
Subsec. (e)(1)(A). Puspan. L. 117–81, § 841(7)(A)(i), struck out “timely” before “maintaining valid and reliable data”.
Subsec. (e)(1)(B)(ii). Puspan. L. 117–81, § 841(7)(A)(ii)(I), added cl. (ii) and struck out former cl. (ii) which read as follows: “A description of the modern data infrastructure, tools, and applications and what changes would improve the effectiveness and efficiency of mitigating the risks described in subsection (span)(2).”
Subsec. (e)(1)(B)(iii). Puspan. L. 117–81, § 841(7)(A)(ii)(II), inserted “, including the following” before colon at end of introductory provisions.
Subsec. (e)(2). Puspan. L. 117–81, § 841(7)(B), added par. (2) and struck out former par. (2) which related to Secretary of Defense’s development of unified set of activities to modernize systems of record, data sources and collection methods, and data exposure mechanisms.
Subsec. (f). Puspan. L. 117–81, § 841(2), (3), redesignated subsec. (e) as (f) and struck out former subsec. (f) which related to implementation and reporting requirements.
Subsec. (f)(1)(A). Puspan. L. 116–283, § 1867(d)(6), which directed the substitution of “section 3252(c)” for “section 2339a(e)”, could not be executed because of the prior repeal of subsec. (f) by Puspan. L. 117–81, § 841(2). See note above.
Subsec. (f)(2). Puspan. L. 116–283, § 843(a)(2), inserted “, and supporting policies, procedures, and guidance relating to such actions” after “subsection (span)”.
Subsec. (g). Puspan. L. 117–81, § 841(2), struck out subsec. (g) which related to briefing and periodic assessments of reviews by Comptroller General.
Mitigating Risks Related to Foreign Ownership, Control, or Influence of Department of Defense Contractors or SubcontractorsPuspan. L. 116–283, div. A, title VIII, § 819(c), Jan. 1, 2021, 134 Stat. 3752, provided that:“(1)Implementation plan.—Not later than March 1, 2021, the Secretary of Defense shall provide to the congressional defense committees [Committees on Armed Services and Appropriations of the Senate and the House of Representatives] a plan and schedule for implementation of the requirements of section 847 of the National Defense Authorization Act for Fiscal Year 2020 (Public Law 116–92; 133 Stat. 1505; 10 U.S.C. 2509 note [now 10 U.S.C. 4819 note]) [set out below], as amended by this section, including—“(A) a timeline for issuance of regulations, development of training for appropriate officials, and development of systems for reporting of beneficial ownership and FOCI by covered contractors or subcontractors;
“(B) the designation of officials and organizations responsible for such implementation; and
“(C) interim milestones to be met in implementing the plan and schedule.
“(2)Revision of regulations, directives, guidance, training, and policies.—Not later than July 1, 2021, the Secretary of Defense shall revise relevant directives, guidance, training, and policies, including revising the Department of Defense Supplement to the Federal Acquisition Regulation, to fully implement the requirements of such section 847.
“(3)Definitions.—In this subsection, the term ‘beneficial ownership’, ‘FOCI’, and ‘covered contractors or subcontractors’ have the meanings given, respectively, in section 847 of the National Defense Authorization Act for Fiscal Year 2020 (Public Law 116–92; 133 Stat. 1505; 10 U.S.C. 2509 note [now 10 U.S.C. 4819 note]).”
Puspan. L. 116–92, div. A, title VIII, § 847, Dec. 20, 2019, 133 Stat. 1505, as amended by Puspan. L. 116–283, div. A, title VIII, § 819(a), (span), (d), Jan. 1, 2021, 134 Stat. 3751, 3752, provided that:“(a)Definitions.—In this section:“(1)Beneficial owner; beneficial ownership.—The terms ‘beneficial owner’ and ‘beneficial ownership’ shall be determined in a manner that is not less stringent than the manner set forth in section 240.13d–3 of title 17, Code of Federal Regulations (as in effect on the date of the enactment of this Act [Dec. 20, 2019]).
“(2)Company.—The term ‘company’ means any corporation, company, limited liability company, limited partnership, business trust, business association, or other similar entity.
“(3)Covered contractor or subcontractor.—The term ‘covered contractor or subcontractor’ means a company that is an existing or prospective contractor or subcontractor of the Department of Defense on a contract or subcontract with a value in excess of $5,000,000, except as provided in subsection (c).
“(4)Foreign ownership, control, or influence; foci.—The terms ‘foreign ownership, control, or influence’ and ‘FOCI’ have the meanings given those terms in the National Industrial Security Program Operating Manual (DOD 5220.22–M), or a successor document.
“(span)Improved Assessment and Mitigation of Risks Related to Foreign Ownership, Control, or Influence.—“(1)In general.—In developing and implementing the analytical framework for mitigating risk relating to ownership structures, as required by section 2509 of title 10, United States Code [now 10 U.S.C. 4819], as added by section 845 of this Act, the Secretary of Defense shall improve the process and procedures for the assessment and mitigation of risks related to foreign ownership, control, or influence (FOCI) of covered contractors or subcontractors doing business with the Department of Defense. “(2)Elements.—The process and procedures for the assessment and mitigation of risk relating to ownership structures referred to in paragraph (1) shall include the following elements:“(A)Assessment of foci.—(i) A requirement for covered contractors or subcontractors to disclose to the Defense Counterintelligence and Security Agency, or its successor organization, their beneficial ownership and whether they are under FOCI.
“(ii) A requirement to update such disclosures when changes occur to information previously provided, consistent with or similar to the procedures for updating FOCI information under the National Industrial Security Program Operating Manual (DOD 5220.22–M), or a successor document.
“(iii) A requirement for covered contractors or subcontractors determined to be under FOCI to disclose contact information for each of its foreign owners that is a beneficial owner.
“(iv) A requirement that, at a minimum, the disclosures required by this paragraph be provided at the time the contract or subcontract is awarded, amended, or renewed, but in no case later than one year after the Secretary prescribes regulations to carry out this subsection.
“(v) A requirement for the Secretary to require reports and conduct examinations on a periodic basis of covered contractors or subcontractors in order to assess compliance with the requirements of this section.
“(B)Responsibility determination.—Consistent with section 2509 of title 10, United States Code [now 10 U.S.C. 4819], as added by section 845 of this Act, consideration of FOCI risks as part of responsibility determinations, including—“(i) whether to establish a special standard of responsibility relating to FOCI risks for covered contractors or subcontractors, and the extent to which the policies and procedures consistent with or similar to those relating to FOCI under the National Industrial Security Program shall be applied to covered contractors or subcontractors;
“(ii) procedures for contracting officers making responsibility determinations regarding whether covered contractors or subcontractors may be under foreign ownership, control, or influence and for determining whether there is reason to believe that such foreign ownership, control, or influence would pose a risk or potential risk to national security or potential compromise because of sensitive data, systems, or processes, such as personally identifiable information, cybersecurity, or national security systems involved with the contract or subcontract; and
“(iii) modification of policies, directives, and practices to provide that an assessment that a covered contractor or subcontractor is under FOCI may be a sufficient basis for a contracting officer to determine that such a covered contractor or subcontractor is not responsible.
“(C)Contract requirements, administration, and oversight relating to foci.—“(i) Requirements for contract clauses providing for and enforcing disclosures related to changes in FOCI or beneficial ownership during performance of the contract or subcontract, consistent with subparagraph (A), and necessitating the effective mitigation of risks related to FOCI throughout the duration of the contract or subcontract.
“(ii) Pursuant to section 2509(c) of title 10, United States Code [now 10 U.S.C. 4819(c)], designation of the appropriate Department of Defense official responsible to approve and to take actions relating to award, modification, termination of a contract, or direction to modify or terminate a subcontract due to an assessment by the Defense Counterintelligence and Security Agency, or its successor organization, that a covered contractor or subcontractor under FOCI poses a risk to national security or potential risk of compromise. “(iii) A requirement for the provision of additional information regarding beneficial ownership and control of any covered contractor or subcontractor on the contract or subcontract.
“(iv) Procedures for appropriately responding to changes in covered contractor or subcontractor beneficial ownership status based on changes in disclosures of their beneficial ownership and whether they are under FOCI and the reports and examinations required by subparagraph (A)(v).
“(v) Other measures as necessary to be consistent with other relevant practices, policies, regulations, and actions, including those under the National Industrial Security Program.
“(c)Applicability to Contracts and Subcontracts for Commercial Products and Services and Other Forms of Acquisition Agreements.—“(1)Commercial products and services.—The requirements under subsections (span)(2)(A) and (span)(2)(C) shall not apply to a contract or subcontract for commercial products or services, unless a designated senior Department of Defense official specifically requires the applicability of subsections (span)(2)(A) and (span)(2)(C) based on a determination by the designated senior official that the contract or subcontract involves a risk or potential risk to national security or potential compromise because of sensitive data, systems, or processes, such as personally identifiable information, cybersecurity, or national security systems.
“(2)Research and development and procurement activities.—The Secretary of Defense shall ensure that the requirements of this section are applied to research and development and procurement activities, including for the delivery of services, established through any means including those under section 2358(span) of title 10, United States Code [now 10 U.S.C. 4001(span)]. “(d)Availability of Resources.—The Secretary shall ensure that sufficient resources, including subject matter expertise, are allocated to execute the functions necessary to carry out this section, including the assessment, mitigation, contract administration, and oversight functions.
“(e)Rule of Construction.—Nothing in this section shall be construed to limit or modify any other procurement policy, procedure, requirement, or restriction provided by law, including section 721 of the Defense Production Act of 1950 (50 U.S.C. 4565), as amended by the Foreign Interference Risk Review Modernization Act of 2018 (subtitle A of title XVII of Public Law 115–232). “(f)Availability of Beneficial Ownership Data.—“(1)In general.—Not later than 180 days after the date of the enactment of this Act, the Secretary of Defense shall establish a process to update systems of record to improve the assessment and mitigation of risks associated with FOCI through the inclusion and updating of all appropriate associated uniquely identifying information about the contracts and contractors and subcontracts and subcontractors in the Federal Awardee Performance and Integrity Information System (FAPIIS), administered by the General Services Administration, and the Commercial and Government Entity (CAGE) database, administered by the Defense Logistics Agency.
“(2)Limited availability of information.—The Secretary of Defense shall ensure that the information required to be disclosed pursuant to this section is—“(A) not made public;
“(B) made available via the FAPIIS and CAGE databases; and
“(C) made available to appropriate government departments or agencies.”
