Agency or any other element of the Department of Defense that the Secretary may designate.

(c) ADVANCE PAYMENTS.-The authority provided under subsection (a) may be exercised without regard to section 3324 of title 31.

(d) RECOVERY OF FUNDS. (1) A cooperative agreement for performance of basic, applied, or advanced research authorized by section 2358 of this title and a transaction authorized by subsection (a) may include a clause that requires a person or other entity to make payments to the Department of Defense or any other department or agency of the Federal Government as a condition for receiving support under the agreement or other transaction.

(2) The amount of any payment received by the Federal Government pursuant to a requirement imposed under paragraph (1) may be credited, to the extent authorized by the Secretary of Defense, to the appropriate account established under subsection (f). Amounts so credited shall be merged with other funds in the account and shall be available for the same purposes and the same period for which other funds in such account are available.

(e) CONDITIONS.-(1) The Secretary of Defense shall ensure that

(A) to the maximum extent practicable, no cooperative agreement containing a clause under subsection (d) and no transaction entered into under subsection (a) provides for research that duplicates research being conducted under existing programs carried out by the Department of Defense; and

(B) to the extent that the Secretary determines practicable, the funds provided by the Government under a cooperative agreement containing a clause under subsection (d) or a transaction authorized by subsection (a) do not exceed the total amount provided by other parties to the cooperative agreement or other transaction.

(2) A cooperative agreement containing a clause under subsection (d) or a transaction authorized by subsection (a) may be used for a research project when the use of a standard contract, grant, or cooperative agreement for such project is not feasible or appropriate.

(f) SUPPORT ACCOUNTS.-There is hereby established on the books of the Treasury separate accounts for each of the military departments and the Defense Advanced Research Projects Agency for support of research projects and development projects provided for in cooperative agreements containing a clause under subsection (d) and research projects provided for in transactions entered into under subsection (a). Funds in those accounts shall be available for the payment of such support.

(g) REGULATIONS.-The Secretary of Defense shall prescribe regulations to carry out this section.

(h) ANNUAL REPORT.-(1) Not later than 90 days after the end of each fiscal year, the Secretary of Defense shall submit to the Committee on Armed Services of the Senate and the Committee on Armed Services of the House of Representatives a report on the use by the Department of Defense during such fiscal year of

(d) ADJUSTED MAXIMUM REIMBURSEMENT AMOUNT.-For purposes of subsection (c)(2), the adjusted maximum reimbursement amount for a major contractor for a fiscal year is the sum of—

(1) the total amount of the allowable independent research and development and bid and proposal costs incurred by the contractor during the preceding fiscal year;

and

(2) 5 percent of the amount referred to in paragraph (1);

(3) if the projected total amount of the independent research and development and bid and proposal costs incurred by the contractor for such fiscal year is greater than the total amount of the independent research and development and bid and proposal costs incurred by the contractor for the preceding fiscal year, the amount that is determined by multiplying the amount referred to in paragraph (1) by the lesser of

(A) the percentage by which the projected total amount of such incurred costs for such fiscal year exceeds the total amount of the incurred costs of the contractor for the preceding fiscal year; or

(B) the estimated percentage rate of inflation from the end of the preceding fiscal year to the end of the fiscal year for which the amount of the limitation is being computed.

(e) WAIVER OF ADJUSTED MAXIMUM REIMBURSEMENT AMOUNT.-The Secretary of Defense may waive the applicability of any limitation prescribed under subsection (c)(2) to any contractor for a fiscal year to the extent that the Secretary determines that allowing the contractor to exceed the contractor's adjusted maximum reimbursement amount for such year

(1) is necessary to reimburse such contractor at least to the extent that would have been allowed under regulations as in effect on December 4, 1991; or

(2) is otherwise in the best interest of the Government.

(f) LIMITATIONS ON REGULATIONS.-Regulations prescribed pursuant to subsection (c) may not include provisions that would infringe on the independence of a contractor to choose which technologies to pursue in its independent research and development program.

(g) ENCOURAGEMENT OF CERTAIN CONTRACTOR ACTIVITIES.— The regulations under subsection (a) shall encourage contractors to engage in research and development activities of potential interest to the Department of Defense, including activities intended to accomplish any of the following:

(1) Enabling superior performance of future United States weapon systems and components.

(2) Reducing acquisition costs and life-cycle costs of military systems.

(3) Strengthening the defense industrial base and the technology base of the United States.

(4) Enhancing the industrial competitiveness of the United States.

(5) Promoting the development of technologies identified as critical under section 2506 of this title.

(6) Increasing the development and promotion of efficient and effective applications of dual-use technologies.

(7) Providing efficient and effective technologies for achieving such environmental benefits as improved environmental data gathering, environmental cleanup and restoration, pollution reduction in manufacturing, environmental conservation, and environmentally safe management of facilities.

(h) MAJOR CONTRACTORS.-A contractor shall be considered to be a major contractor for the purposes of subsection (c) for any fiscal year if for the preceding fiscal year the contractor's covered segments allocated to Department of Defense contracts a total of more than $10,000,000 in independent research and development and bid and proposal costs.

(i) DEFINITIONS.-In this section:

(1) COVERED CONTRACT.-The term "covered contract" has the meaning given that term in section 2324(1) of this title.

(2) COVERED SEGMENT.-The term "covered segment", with respect to a contractor, means a product division of the contractor that allocated more than $1,000,000 in independent research and development and bid and proposal costs to Department of Defense contracts during the preceding fiscal year. In the case of a contractor that has no product divisions, such term means the contractor as a whole.

(Added P.L. 101-510, § 824(a), Nov. 5, 1990, 104 Stat. 1603; amended P.L. 102-25, § 701(c), April 6, 1991, 105 Stat. 113; P.L. 102-190, § 802(a)(1), Dec. 5, 1991, 105 Stat. 1412; P.L. 102-484, § 1052(27), Oct. 23, 1992, 106 Stat. 2500; P.L. 103–35, §201(c)(5), May 31, 1993, 107 Stat. 98; P.L. 104-106, § 4321(b)(11), Feb. 10, 1996, 110 Stat. 672.)

§ 2373. Procurement for experimental purposes

(a) AUTHORITY.-The Secretary of Defense and the Secretaries of the military departments may each buy ordnance, signal, chemical activity, and aeronautical supplies, including parts and accessories, and designs thereof, that the Secretary of Defense or the Secretary concerned considers necessary for experimental or test purposes in the development of the best supplies that are needed for the national defense.

(b) PROCEDURES.-Purchases under this section may be made inside or outside the United States and by contract or otherwise. Chapter 137 of this title applies only when such purchases are made in quantity.

(Added P.L. 103-160, §822(c)(1), Nov. 30, 1993, 107 Stat. 1706; amended P.L. 103-337, § 1070(g), Oct. 5, 1994, 108 Stat. 2859; P.L. 104-106, §812, Feb. 10, 1996, 110 Stat. 395.)

§ 2374. Merit-based award of grants for research and development

(a) It is the policy of Congress that an agency named in section 2303(a) of this title should not be required by legislation to award a new grant for research, development, test, or evaluation to a nonFederal Government entity. It is further the policy of Congress that any program, project, or technology identified in legislation be awarded through merit-based selection procedures.

(b) A provision of law may not be construed as requiring a new grant to be awarded to a specified non-Federal Government entity unless that provision of law

(1) specifically refers to this subsection;

(2) specifically identifies the particular non-Federal Government entity involved; and

(3) specifically states that the award to that entity is required by such provision of law in contravention of the policy set forth in subsection (a).

(c) For purposes of this section, a grant is a new grant unless the work provided for in the grant is a continuation of the work performed by the specified entity under a preceding grant.

(d) This section shall not apply with respect to any grant that calls upon the National Academy of Sciences to investigate, examine, or experiment upon any subject of science or art of significance to an agency named in section 2303(a) of this title and to report on such matters to the Congress or any agency of the Federal Gov

ernment.

(Added P.L. 103–355, § 7203(a)(2), Oct. 13, 1994, 108 Stat. 3380.)

§ 2374a. Prizes for advanced technology achievements

(a) AUTHORITY.-The Secretary of Defense, acting through the Director of the Defense Advanced Research Projects Agency, may carry out a program to award cash prizes in recognition of outstanding achievements in basic, advanced, and applied research, technology development, and prototype development that have the potential for application to the performance of the military missions of the Department of Defense.

(b) COMPETITION REQUIREMENTS.-The program under subsection (a) shall use a competitive process for the selection of recipients of cash prizes. The process shall include the widely-advertised solicitation of submissions of research results, technology developments, and prototypes.

(c) LIMITATIONS.-(1) The total amount made available for award of cash prizes in a fiscal year may not exceed $10,000,000.

(2) No prize competition may result in the award of more than $1,000,000 in cash prizes without the approval of the Under Secretary of Defense for Acquisition, Technology, and Logistics.

(d) RELATIONSHIP TO OTHER AUTHORITY.-The program under subsection (a) may be carried out in conjunction with or in addition to the exercise of any other authority of the Director to acquire, support, or stimulate basic, advanced and applied research, technology development, or prototype projects.

(e) ANNUAL REPORT.-Promptly after the end of each fiscal year, the Secretary shall submit to the Committees on Armed Services of the Senate and the House of Representatives a report on the administration of the program for that fiscal year. The report shall include the following:

(1) The military applications of the research, technology, or prototypes for which prizes were awarded.

(2) The total amount of the prizes awarded.

(3) The methods used for solicitation and evaluation of submissions, together with an assessment of the effectiveness of those methods.

(f) PERIOD OF AUTHORITY.-The authority to award prizes under subsection (a) shall terminate at the end of September 30,

(Added P.L. 106–65, §244(a), Oct. 5, 1999, 113 Stat. 552; P.L. 107-314, § 248(a), Dec. 2, 2002, 116 Stat. 2502.)

§ 2374b. Prizes for achievements in promoting science, mathematics, engineering, or technology education

(a) AUTHORITY.-The Secretaries of the military departments and the heads of defense agencies may each carry out a program to award cash prizes in recognition of outstanding achievements that are designed to promote science, mathematics, engineering, or technology education in support of the missions of the Department of Defense.

(b) COMPETITION REQUIREMENTS.-Each program under subsection (a) shall use a competitive process for the selection of recipients of cash prizes.

(c) LIMITATION.-For any single program under subsection (a), the total amount made available for award of cash prizes in a fiscal year may not exceed $1,000,000.

(d) RELATIONSHIP TO OTHER AUTHORITY.—The program under subsection (a) may be carried out in conjunction with or in addition to the exercise of any other authority to acquire, support, or stimulate basic and applied research, advanced technology development, or prototype development projects.

(e) ANNUAL REPORT.-Promptly after the end of each fiscal year, each Secretary of a military department and each head of a defense agency carrying out a program under subsection (a) shall submit to the Committees on Armed Services of the Senate and the House of Representatives a report on the administration of that program for that fiscal year.

(f) PERIOD OF AUTHORITY.-The authority to award prizes under subsection (a) shall terminate at the end of September 30, 2006.

(Added P.L. 107-314, § 248(c)(1), Dec. 2, 2002, 116 Stat. 2502.)