§396 — Title 6 Domestic Security | U.S. Code

Summary

For contracts signed after July 1, 2007, companies hired as lead system integrators for big Department of Homeland Security projects must not have a direct financial stake in building any single system or part of a system of systems. They can be allowed a financial stake only if the Secretary of Homeland Security certifies to certain Congressional committees that the company was chosen through a competitive process and steps were taken to avoid conflicts, or if the company was chosen as a lower-tier subcontractor by another contractor through a process it did not control. Work that only connects two or more systems or parts is allowed. By July 1, 2007, the Department must update its acquisition rules to give a clear definition of "lead system integrator" (modeled on the Department of Defense) and to list the types of contracts and fee arrangements appropriate for producing, deploying, and maintaining complex systems.

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.

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.

§396 Lead System Integrator; Financial Interests

Summary

Title 6, §396

Notes & Related Subsidiaries

Editorial Notes

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