(a) In general
The Secretary is authorized to carry out basic, applied, and advanced research activities as required to aid in the planning, design, construction, operation, and maintenance of water resources development projects and to support the missions and authorities of the Corps of Engineers.

(b) Testing and application
In carrying out subsection (a), the Secretary is authorized to test and apply technology, tools, techniques, and materials developed pursuant to such subsection, including the testing and application of such technology, tools, techniques, and materials at authorized water resources development projects, in consultation with the non-Federal interests for such projects.

(c) Other transactional authority for prototype projects

(1) In general
In carrying out subsection (b), the Secretary is authorized to enter into transactions (other than contracts, cooperative agreements, or grants) to carry out prototype projects to support basic, applied, and advanced research activities that are directly relevant to the civil works missions and authorities of the Corps of Engineers.

(2) Follow-on production transactions
A transaction entered into under paragraph (1) for a prototype project may provide for the award of a follow-on production contract or transaction to the participants in the transaction in accordance with the requirements of section 4022 of title 10.

(3) Guidance
Prior to entering into the first transaction under this subsection, the Secretary shall issue guidance for entering into transactions under this subsection (including guidance for follow-on production contracts or transactions under paragraph (2)).

(4) Conditions
In carrying out this subsection, the Secretary shall ensure that—

(A) competitive procedures are used to the maximum extent practicable to award each transaction; and

(B) at least one of the following conditions is met with respect to each transaction:

(i) The prototype project includes significant participation by at least one nonprofit research institution or nontraditional defense contractor, as that term is defined in section 3014 of title 10.

(ii) All significant participants in the transaction other than the Federal Government are small business concerns, as that term is used in section 632 of title 15 (including such concerns participating in a program described in section 638 of title 15).

(iii) At least one-third of the total cost of the prototype project is to be paid out of funds provided by sources other than the Federal Government.

(iv) The Head of the Contracting Activity for the Corps of Engineers submits to the Committee on Transportation and Infrastructure of the House of Representatives and the Committee on Environment and Public Works of the Senate a notification that exceptional circumstances justify the use of a transaction that provides for innovative business arrangements or structures that would not be feasible or appropriate under a contract, cooperative agreement, or grant.

(5) Notification
Not later than 30 days before the Secretary enters into a transaction under paragraph (1), the Secretary shall notify the Committee on Transportation and Infrastructure of the House of Representatives and the Committee on Environment and Public Works of the Senate of—

(A) the dollar amount of the transaction;

(B) the entity carrying out the prototype project that is the subject of the transaction;

(C) the justification for the transaction; and

(D) as applicable, the water resources development project where the prototype project will be carried out.

(6) Report
Not later than 4 years after December 23, 2022, the Secretary shall submit to the Committee on Transportation and Infrastructure of the House of Representatives and the Committee on Environment and Public Works of the Senate a report describing the use of the authority under this subsection.

(7) Comptroller General access to information

(A) Examination of records
Each transaction entered into under this subsection shall provide for mandatory examination by the Comptroller General of the United States of the records of any party to the transaction or any entity that participates in the performance of the transaction.

(B) Limitations

(i) Parties and entities
Examination of records by the Comptroller General pursuant to subparagraph (A) shall be limited as provided under clause (ii) in the case of a party to the transaction, an entity that participates in the performance of the transaction, or a subordinate element of that party or entity if the only transactions that the party, entity, or subordinate element entered into with Government entities in the year prior to the date of that transaction were entered into under paragraph (1) or under section 4021 or 4022 of title 10.

(ii) Records
The only records of a party, other entity, or subordinate element referred to in clause (i) that the Comptroller General may examine pursuant to subparagraph (A) are records of the same type as the records that the Government has had the right to examine under the audit access clauses of the previous transactions referred to in such clause that were entered into by that particular party, entity, or subordinate element.

(C) Waiver
The Head of the Contracting Activity for the Corps of Engineers may waive the applicability of subparagraph (A) to a transaction if the Head of the Contracting Activity for the Corps of Engineers—

(i) determines that it would not be in the public interest to apply the requirement to the transaction; and

(ii) transmits to the Committee on Environment and Public Works of the Senate, the Committee on Transportation and Infrastructure of the House of Representatives, and the Comptroller General, before the transaction is entered into, a notification of the waiver, including the rationale for the determination under clause (i).

(D) Timing
The Comptroller General may not examine records pursuant to subparagraph (A) more than 3 years after the final payment is made by the United States under the transaction.

(E) Report
Not later than 1 year after December 23, 2022, and annually thereafter, the Comptroller General shall submit to the Committee on Environment and Public Works of the Senate and the Committee on Transportation and Infrastructure of the House of Representatives a report on the use of the authority under this paragraph.

(8) Termination of authority
The authority to enter into a transaction under this subsection shall terminate on December 31, 2028.

(d) Coordination and consultation
In carrying out this section, the Secretary may coordinate and consult with Federal agencies, State and local agencies, Indian Tribes, universities, consortiums, councils, and other relevant entities that will aid in the planning, design, construction, operation, and maintenance of water resources development projects.

(e) Annual report

(1) In general
For fiscal year 2025, and annually thereafter, in conjunction with the annual budget submission of the President to Congress under section 1105(a) of title 31, the Secretary shall submit to the Committee on Environment and Public Works of the Senate and the Committee on Transportation and Infrastructure of the House of Representatives a report on basic, applied, and advanced research activities and prototype projects carried out under this section.

(2) Contents
Each report under paragraph (1) shall include—

(A) a description of each ongoing and new activity or project, including—

(i) the estimated total cost of the activity or project;

(ii) the amount of Federal expenditures for the activity or project;

(iii) the amounts provided by a non-Federal party to a transaction described in subsection (c), if applicable;

(iv) the estimated timeline for completion of the activity or project;

(v) the requesting district of the Corps of Engineers, if applicable; and

(vi) how the activity or project is consistent with subsection (a); and

(B) any additional information that the Secretary determines to be appropriate.

(f) Savings clause
Nothing in this section affects the authority of the Secretary to carry out, through the Engineer Research and Development Center, any activity requested by a district of the Corps of Engineers in support of a water resources development project or feasibility study (as defined in section 2215(d) of this title).

(g) Establishment of account
The Secretary, in consultation with the Director of the Office of Management and Budget, shall establish a separate appropriations account for administering funds made available to carry out this section.