Assumption of uninsurable risk on certain contracts

(a) In general Chapter 281 of title 10, United States Code, is amended by adding at the end the following new section: 3864. Assumption of uninsurable risk on certain contracts (a) In general The Secretary of Defense shall ensure that a contractor is not required to assume the risk of loss for work in process under a covered contract if, due to classified nature of the performance of such contractor under such covered contract— (1) such contractor is unable to obtain insurance for such risk of loss from a commercial provider; or (2) a commercial provider is unable to process a claim of such contractor for loss of work in process under such covered contract. (b) Limitations Subsection (a) shall not apply with respect to a loss of work in process under a covered contract to the extent that such loss— (1) occurs outside the period of performance for such work in process under such covered contract; or (2) results from gross misconduct by the contractor. (c) Regulations Not later than 120 days after the date of the enactment of this Act, the Secretary of Defense shall revise the Defense Federal Acquisition Regulation Supplement to carry out this section. (d) Definitions In this section: (1) The term classified contract means a contract the performance of which requires a contractor performing under such contract, or an employee of such contractor, to have access to classified information. (2) The term covered contract means a classified, fixed-price type contract for the acquisition of a product entered into by the Department of Defense after the enactment of this Act. (3) The term work in process, with respect to a contract, means a product to be delivered under such contract— (A) that is at any stage of production or manufacture; and (B) the delivery of which has not been accepted by the Government.. (b) Regulations Not later than 120 days after the date of the enactment of this Act, the Secretary of Defense shall revise the Defense Federal Acquisition Regulation Supplement to carry out section 3864 of title 10, United States Code, as added by subsection (a).

(a) In general Chapter 281 of title 10, United States Code, is amended by adding at the end the following new section: 3864. Assumption of uninsurable risk on certain contracts (a) In general The Secretary of Defense shall ensure that a contractor is not required to assume the risk of loss for work in process under a covered contract if, due to classified nature of the performance of such contractor under such covered contract— (1) such contractor is unable to obtain insurance for such risk of loss from a commercial provider; or (2) a commercial provider is unable to process a claim of such contractor for loss of work in process under such covered contract. (b) Limitations Subsection (a) shall not apply with respect to a loss of work in process under a covered contract to the extent that such loss— (1) occurs outside the period of performance for such work in process under such covered contract; or (2) results from gross misconduct by the contractor. (c) Regulations Not later than 120 days after the date of the enactment of this Act, the Secretary of Defense shall revise the Defense Federal Acquisition Regulation Supplement to carry out this section. (d) Definitions In this section: (1) The term classified contract means a contract the performance of which requires a contractor performing under such contract, or an employee of such contractor, to have access to classified information. (2) The term covered contract means a classified, fixed-price type contract for the acquisition of a product entered into by the Department of Defense after the enactment of this Act. (3) The term work in process, with respect to a contract, means a product to be delivered under such contract— (A) that is at any stage of production or manufacture; and (B) the delivery of which has not been accepted by the Government.. (b) Regulations Not later than 120 days after the date of the enactment of this Act, the Secretary of Defense shall revise the Defense Federal Acquisition Regulation Supplement to carry out section 3864 of title 10, United States Code, as added by subsection (a).