Title 10 — Armed ForcesRelease 119-73not60
§3761 Restructuring Costs
Title 10 › Subtitle Subtitle A— General Military Law › Part V— ACQUISITION › Subpart D— General Contracting Provisions › Chapter 273— ALLOWABLE COSTS › Subchapter II— OTHER ALLOWABLE COST PROVISIONS › § 3761
Summary
The Secretary cannot pay restructuring costs for a business combination after November 18, 1997 unless the Secretary writes that expected savings are at least twice the costs, or savings exceed costs and a critical capability is preserved. If costs exceed $25,000,000 over 5 years, an Assistant Secretary or higher must decide; otherwise the DCMA Director or higher must decide. Business combination means a merger or acquisition.
Full Legal Text
Title 10, §3761
Armed Forces — Source: USLM XML via OLRC
(a)The Secretary of Defense may not pay, under subchapter I, a defense contractor for restructuring costs associated with a business combination of the contractor that occurs after November 18, 1997, unless the Secretary determines in writing either—
(1)that the amount of projected savings for the Department of Defense associated with the restructuring will be at least twice the amount of the costs allowed; or
(2)that the amount of projected savings for the Department of Defense associated with the restructuring will exceed the amount of the costs allowed and that the business combination will result in the preservation of a critical capability that otherwise might be lost to the Department.
(b)The Secretary may not delegate the authority to make a determination under subsection (a), with respect to a business combination, to an official of the Department of Defense—
(1)below the level of an Assistant Secretary of Defense for cases in which the amount of restructuring costs is expected to exceed $25,000,000 over a 5-year period; or
(2)below the level of the Director of the Defense Contract Management Agency for all other cases.
(c)In this section, the term “business combination” includes a merger or acquisition.
Legislative History
Notes & Related Subsidiaries
Editorial Notes
Amendments
2021—Pub. L. 116–283, § 1832(j)(2), renumbered section 2325 of this title as this section. Subsec. (a). Pub. L. 116–283, § 1832(j)(3)(B), (E), in introductory provisions, struck out par. (1) designation before “The Secretary” and substituted “subchapter I” for “section 2324 of this title” and redesignated subpars. (A) and (B) as pars. (1) and (2), respectively. Former par. (2) of subsec. (a) redesignated subsec. (b). Subsec. (b). Pub. L. 116–283, § 1832(j)(3)(C)–(E), redesignated par. (2) of subsec. (a) as subsec. (b), inserted heading, substituted “subsection (a)” for “paragraph (1)” in introductory provisions, and redesignated subpars. (A) and (B) as pars. (1) and (2), respectively. Former subsec. (b) redesignated (c). Subsec. (c). Pub. L. 116–283, § 1832(j)(3)(A), redesignated subsec. (b) as (c). 2013—Subsec. (b). Pub. L. 112–239 redesignated subsec. (c) as (b) and struck out former subsec. (b) which required reports relating to business combinations occurring on or after
August 15, 1994. 2004—Subsec. (a)(2). Pub. L. 108–375 substituted “paragraph (1), with respect to a business combination, to an official of the Department of Defense—” for “paragraph (1) to an official of the Department of Defense below the level of an Assistant Secretary of Defense.” and added subpars. (A) and (B). 1999—Subsec. (a)(1). Pub. L. 106–65 inserted “that occurs after
November 18, 1997,” after “of the contractor” in introductory provisions.
Statutory Notes and Related Subsidiaries
Effective Date
of 2021 AmendmentAmendment by Pub. L. 116–283 effective Jan. 1, 2022, with additional provisions for delayed implementation and applicability of existing law, see section 1801(d) of Pub. L. 116–283, set out as a note preceding section 3001 of this title.
Effective Date
Pub. L. 105–85, div. A, title VIII, § 804(c), Nov. 18, 1997, 111 Stat. 1834, provided that: “section 2325(a) of title 10, United States Code [now 10 U.S.C. 3761(a)], as added by subsection (a), shall apply with respect to business combinations that occur after the date of the enactment of this Act [Nov. 18, 1997].”
Reference
Citations & Metadata
Citation
10 U.S.C. § 3761
Title 10 — Armed Forces
Last Updated
Apr 3, 2026
Release point: 119-73not60