§4704 — Title 41 Public Contracts | U.S. Code

Summary

Federal agency contracts must say that a contractor cannot make deals with a subcontractor that unreasonably stop the subcontractor from selling any item or process (including computer software) it made or provided under the contract directly to the U.S. government. The contractor also cannot otherwise unreasonably block those direct sales. This rule does not stop a contractor from using legal rights it already has. It does not apply to purchases at or below the simplified acquisition threshold. For commercial products or services, a sale restriction is allowed if the government is treated the same as any other buyer.

Title 41, §4704

Public Contracts — Source: USLM XML via OLRC

(a)Each contract for the purchase of property or services made by an executive agency shall provide that the contractor will not—

(1)enter into an agreement with a subcontractor under the contract that has the effect of unreasonably restricting sales by the subcontractor directly to the Federal Government of any item or process (including computer software) made or furnished by the subcontractor under the contract (or any follow-on production contract); or

(2)otherwise act to restrict unreasonably the ability of a subcontractor to make sales described in paragraph (1) to the Federal Government.

(b)This section does not prohibit a contractor from asserting rights it otherwise has under law.

(c)This section does not apply to a contract for an amount that is not greater than the simplified acquisition threshold.

(d)An agreement between the contractor in a contract for the acquisition of commercial products or commercial services and a subcontractor under the contract that restricts sales by the subcontractor directly to persons other than the contractor may not be considered to unreasonably restrict sales by that subcontractor to the Federal Government in violation of the provision included in the contract pursuant to subsection (a) if the agreement does not result in the Federal Government being treated differently with regard to the restriction than any other prospective purchaser of the commercial products or commercial services from that subcontractor.

Notes & Related Subsidiaries

Historical and Revision Notes

Revised SectionSource (U.S. Code)Source (Statutes at Large) 4704(a)41:253g(a).June 30, 1949, ch. 288, title III, § 303G(a), (b), formerly § 303H, as added Pub. L. 98–577, title II, § 206(a), Oct. 30, 1984, 98 Stat. 3073; renumbered § 303G, Pub. L. 99–145, title XIII, § 1304(c)(4)(A), Nov. 8, 1985, 99 Stat. 742. 4704(b)41:253g(b). 4704(c)41:253g(c).June 30, 1949, ch. 288, title III, § 303G(c), as added Pub. L. 103–355, title IV, § 4103(b), Oct. 13, 1994, 108 Stat. 3341. 4704(d)41:253g(d).June 30, 1949, ch. 288, title III, § 303G(d), as added Pub. L. 103–355, title VIII, § 8204(a), Oct. 13, 1994, 108 Stat. 3396.

Editorial Notes

Amendments

2018—Subsec. (d). Pub. L. 115–232 substituted “commercial products or commercial services” for “commercial items” in two places.

Statutory Notes and Related Subsidiaries

Effective Date

of 2018 AmendmentAmendment by Pub. L. 115–232 effective Jan. 1, 2020, subject to a

Savings Provision

, see section 836(h) of Pub. L. 115–232, set out as an

Effective Date

of 2018 Amendment;

Savings Provision

note under section 453b of Title 6, Domestic Security.

§4704 Prohibition of contractors limiting subcontractor sales directly to Federal Government

Summary

Title 41, §4704

Notes & Related Subsidiaries

Historical and Revision Notes

Editorial Notes

Amendments

Statutory Notes and Related Subsidiaries

Effective Date

Savings Provision

Effective Date

Savings Provision

Citations & Metadata