§4174 Contracts: acquisition, construction, or furnishing of test facilities and equipment

Summary

Allows the military to buy, build, or provide test, research, or development facilities and equipment to a contractor when a military department secretary decides they are needed to do the work. The costs follow the normal rules for allowable contract expenses. The government can pay for the facilities and either lend, lease, or sell them to the contractor (selling at fair value). It may not be used to pay for general-purpose new construction or improvements. If the facilities can’t be removed without great cost or loss of value, they may not be put on non‑government land unless the contract requires reimbursing the United States for fair value at the end, gives the United States an option to buy the land, or has another arrangement that protects the government. Money from sales or reimbursements goes to the Treasury as miscellaneous receipts unless another law says otherwise. A jointly funded project can be set up when facilities support multiple military departments, other DoD parts, other federal agencies, or eligible non‑federal entities. The Secretary of Defense must make written agreements covering cost sharing, access and priorities, management and oversight (including a lead agency), ownership and intellectual property, and dispute resolution. Non‑federal groups may join only if the Secretary of Defense finds it is in the national security interest and follows law. The Secretary of Defense and the military department secretaries must create rules to carry out these rules. This applies to contracts paid with research, development, test, and evaluation funds—including budget activity 1 (basic research), budget activity 2 (applied research), and budget activity 3 (advanced technology development) as set out in volume 2B, chapter 5 of the Department of Defense Financial Management Regulation (DOD 7000.14–R)—and to operation and maintenance funds when used for these activities. Covered contract means either a military department contract or a contract for a jointly funded project.