Page:United States Statutes at Large Volume 100 Part 5.djvu/461

 PUBLIC LAW 99-661—NOV. 14, 1986

100 STAT. 3935

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u^2) The term 'lowest commercial price' means the lowest price at which a sale was made to the general public of a particular part. Such term does not include the price at which a sale was made— "(A) to any agency of the United States; "(B) to any person for resale by such person after such person performs a service or function in connection with jy < such part that increases the cost of the part, unless the agency procuring the part can demonstrate that the agency is procuring the part before such service or function has I been performed by any such person; "(C) to a subsidiary, affiliate, or parent business organization of the contractor, or any other branch of the same business entity; "(D) to any person at a price that, for the purpose of making a donation, has been substantially discounted below the fair market value or regular price of such part; or "(E) to a customer located outside the United States. "(g) APPLICABILITY.—This section does not apply to a contract entered into using simplified small purchase procedures established under section 2304(g) of this title.". (2) The item relating to section 2323 at the beginning of chapter 137 is amended to read as follows:

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"2323. Commercial pricing for spare or repair parts.".

(b) EFFECTIVE DATE.—Regulations prescribed under section 2323(e) 10 USC 2323 of title 10, United States Code (as amended by subsection (a)(1)), J^o**shall take effect on the date of the enactment of this Act.

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SEC. 927. ALLOCATION OF OVERHEAD TO PARTS TO WHICH CONTRACTOR HAS ADDED LITTLE VALUE

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(a) IN GENERAL.—Section 2304 of title 10, United States Code, is amended by adding at the end the following new subsection: "(i)(l) The Secretary of Defense shall prescribe by regulation the Regulations. manner in which the Department of Defense negotiates prices for supplies to be obtained through the use of procedures other than competitive procedures, as defined in section 2302(2) of this title. "(2) The regulations required by paragraph (1) shall— "(A) specify the incurred overhead a contractor may appropriately allocate to supplies referred to in that paragraph; and "(B) require the contractor to identify those supplies which it did not manufacture or to which it did not contribute significant value. "(3) Such regulations shall not apply to an item of supply included in a contract or subcontract for which the price is based on established catalog or market prices of commercial items sold in substantial quantities to the general public". Oa) DEADLINE.—The Secretary of Defense shall prescribe the regu- 10 USC 2304 lations required by section 2304(i) of such title (as added by subsec- note, tion (a)) not later than 180 days after the date of the enactment of this Act. (c) REPEAL.—Section 1245 of the Department of Defense Authorization Act, 1985 (Public Law 98-525, 98 Stat. 2609), is repealed.

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