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Use of accrued interest by certain consortium managers

Division A · Title VIII: Acquisition Policy, Acquisition Management, and Related Matters · Subtitle B: Amendments to General Contracting Authorities, Procedures, and Limitations

Plain-language summaryAI

Consortium management organizations working with the Department of Defense can keep the interest earned on advance payments they hold to cover their fees and other direct costs. They must invest these funds in Treasury bills and return any interest exceeding their covered costs to the Department. Any returned interest is credited back to the original funding account and used under the same rules as the initial payment.

AI-generated from this section’s text — a quick orientation, not a substitute for the full text below. Not legal advice.

Section Text · Sec. 822.
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(1)

by striking The authority and inserting (1) The authority ; and

(2)

by adding at the end the following new paragraph:

(2)
(A)

A contracting officer or an authorized official with legal authority to enter into an agreement on behalf of the Department of Defense under this section may authorize a consortium management organization to retain the interest accruing on the held amounts of such consortium management organization as payment for any covered costs through an agreement that—

(i)

authorizes such consortium management organization to make payments to members of a consortium, other than such consortium management organization, on behalf of the Department of Defense; and

(ii)

requires such consortium management organization to—

(B)

Interest on held amounts of a covered advance payment that is returned to the Department of Defense by a consortium management organization pursuant to subparagraph (A) shall be credited to the account from which such covered advance payment was made. Amounts so credited shall be merged with amounts in that account, and shall be available for the same purposes, and subject to the same conditions and limitations, as other amounts in that account.

(C)

In this paragraph—

(i)

the term consortium management organization means an entity that is responsible for coordinating, administering, and supporting the activities of a consortium under an agreement described in subparagraph (A);

(ii)

the term covered advance payment means an advance payment made by the Department of Defense to a consortium management organization under an agreement described in subparagraph (A) for the purposes of such consortium management organization making payments to members of a consortium on behalf of the Department;

(iii)

the term covered costs means—

(iv)

the term held amounts means funds provided as a covered advance payment that have not yet been used by the consortium management organization to which such covered advance payment was made to make a payment to a member of a consortium or returned to the Government in accordance with an agreement described in subparagraph (A).