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Title 6 — Domestic SecurityRelease 119-73

§396 Lead system integrator; financial interests

Title 6 › Chapter CHAPTER 1— - HOMELAND SECURITY ORGANIZATION › Subchapter SUBCHAPTER VIII— - COORDINATION WITH NON-FEDERAL ENTITIES; INSPECTOR GENERAL; UNITED STATES SECRET SERVICE; COAST GUARD; GENERAL PROVISIONS › Part Part D— - Acquisitions › § 396

Last updated Apr 6, 2026|Official source

Summary

After July 1, 2007, a company acting as the lead system integrator for a major Department of Homeland Security program must not have any direct money stake in developing or building any single system or part of a larger system. A company can have such a financial interest only if the Secretary of Homeland Security certifies to several House and Senate oversight and appropriations committees that the company was picked through a fair, competitive process and steps were taken to avoid conflicts of interest, or if the company was chosen as a lower-tier subcontractor by another contractor and had no control over that selection. The rule still allows a lead system integrator to do work needed to connect two or more systems together. By July 1, 2007, the Secretary must update DHS acquisition rules to define "lead system integrator" (based on the Department of Defense definition) and to list the kinds of contracts and fee plans appropriate for these integrators.

Full Legal Text

Title 6, §396

Domestic Security — Source: USLM XML via OLRC

(a)With respect to contracts entered into after July 1, 2007, and except as provided in subsection (b), no entity performing lead system integrator functions in the acquisition of a major system by the Department of Homeland Security may have any direct financial interest in the development or construction of any individual system or element of any system of systems.
(b)An entity described in subsection (a) may have a direct financial interest in the development or construction of an individual system or element of a system of systems if—
(1)the Secretary of Homeland Security certifies to the Committees on Appropriations of the Senate and the House of Representatives, the Committee on Homeland Security of the House of Representatives, the Committee on Transportation and Infrastructure of the House of Representatives, the Committee on Homeland Security and Governmental Affairs of the Senate, and the Committee on Commerce, Science and Transportation of the Senate that—
(A)the entity was selected by the Department of Homeland Security as a contractor to develop or construct the system or element concerned through the use of competitive procedures; and
(B)the Department took appropriate steps to prevent any organizational conflict of interest in the selection process; or
(2)the entity was selected by a subcontractor to serve as a lower-tier subcontractor, through a process over which the entity exercised no control.
(c)Nothing in this section shall be construed to preclude an entity described in subsection (a) from performing work necessary to integrate two or more individual systems or elements of a system of systems with each other.
(d)Not later than July 1, 2007, the Secretary of Homeland Security shall update the acquisition regulations of the Department of Homeland Security in order to specify fully in such regulations the matters with respect to lead system integrators set forth in this section. Included in such regulations shall be: (1) a precise and comprehensive definition of the term “lead system integrator”, modeled after that used by the Department of Defense; and (2) a specification of various types of contracts and fee structures that are appropriate for use by lead system integrators in the production, fielding, and sustainment of complex systems.

Legislative History

Notes & Related Subsidiaries

Editorial Notes

Codification Section was enacted as part of the U.S. Troop Readiness, Veterans’ Care, Katrina Recovery, and Iraq Accountability Appropriations Act, 2007, and not as part of the Homeland Security Act of 2002 which comprises this chapter.

Reference

Citations & Metadata

Citation

6 U.S.C. § 396

Title 6 — Domestic Security

Last Updated

Apr 6, 2026

Release point: 119-73