(a)
(b)
(1) If the head of the agency determines that a cost submitted by a contractor in its proposal for settlement is expressly unallowable under a cost principle referred to in subsection (a) that defines the allowability of specific selected costs, the head of the agency shall assess a penalty against the contractor in an amount equal to—
(A) the amount of the disallowed cost allocated to covered contracts for which a proposal for settlement of indirect costs has been submitted; plus
(B) interest (to be computed based on provisions in the Federal Acquisition Regulation) to compensate the United States for the use of any funds which a contractor has been paid in excess of the amount to which the contractor was entitled.
(2)
(c)
(1) the contractor withdraws the proposal before the formal initiation of an audit of the proposal by the Federal Government and resubmits a revised proposal;
(2) the amount of unallowable costs subject to the penalty is insignificant; or
(3) the contractor demonstrates, to the contracting officer's satisfaction, that—
(A) it has established appropriate policies and personnel training and an internal control and review system that provide assurances that unallowable costs subject to penalties are precluded from being included in the contractor's proposal for settlement of indirect costs; and
(B) the unallowable costs subject to the penalty were inadvertently incorporated into the proposal.
(d)
(1) shall be considered a final decision for the purposes of section 7103 of title 41; and
(2) is appealable in the manner provided in section 7104(a) of title 41.
(Added and amended Pub. L. 116–283, div. A, title XVIII, §1832(a), (c), Jan. 1, 2021, 134 Stat. 4218, 4219.)
The text of subsec. (a) of section 2324 of this title, which was transferred to this section by Pub. L. 116–283, §1832(c)(1), was based on Pub. L. 99–145, title IX, §911(a)(1), Nov. 8, 1985, 99 Stat. 682; Pub. L. 102–484, div. A, title VIII, §818(a)(1)(A), Oct. 23, 1992, 106 Stat. 2457; Pub. L. 103–355, title II, §2101(a), Oct. 13, 1994, 108 Stat. 3306.
The text of subsec. (b) of section 2324 of this title, which was transferred to this section and amended by Pub. L. 116–283, §1832(c), was based on Pub. L. 99–145, title IX, §911(a)(1), Nov. 8, 1985, 99 Stat. 682; Pub. L. 102–484, div. A, title VIII, §818(a)(1)(B), (2), Oct. 23, 1992, 106 Stat. 2457, 2458; Pub. L. 103–355, title II, §2101(a)(2), Oct. 13, 1994, 108 Stat. 3306.
The text of subsec. (c) of section 2324 of this title, which was transferred to this section by Pub. L. 116–283, §1832(c)(1), was based on Pub. L. 102–484, div. A, title VIII, §818(a)(5), Oct. 23, 1992, 106 Stat. 2458; Pub. L. 103–355, title II, §2101(a)(3), Oct. 13, 1994, 108 Stat. 3307.
The text of subsec. (d) of section 2324 of this title, which was transferred to this section by Pub. L. 116–283, §1832(c)(1), was based on Pub. L. 99–145, title IX, §911(a)(1), Nov. 8, 1985, 99 Stat. 683; Pub. L. 102–484, div. A, title VIII, §818(a)(4), Oct. 23, 1992, 106 Stat. 2458; Pub. L. 103–355, title II, §2101(a)(4), Oct. 13, 1994, 108 Stat. 3307; Pub. L. 111–350, §5(b)(19)(A), (B), Jan. 4, 2011, 124 Stat. 3844.
A prior section 3743 was renumbered section 7273 of this title.
2021—Pub. L. 116–283, §1832(c)(1), transferred subsecs. (a) to (d) of section 2324 of this title to this section.
Subsec. (b). Pub. L. 116–283, §1832(c)(2), realigned margins of pars. (1) and (2) and inserted par. (2) heading.
Section and amendment 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 an Effective Date of 2021 Amendment note preceding section 3001 of this title.