65FR37335 Acquisition Regulation: Changes to Department of Energy Cost Principles and Various Clauses, Part 2/2
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Posting-number: Volume 65, Issue 115, Page 37335, Part 1
[[Page 37343]]
970.5204-17 [Removed and Reserved]
10. Section 970.5204-17, Political activity cost prohibition is
removed and reserved.
11. Section 970.5204-31 is amended by revising the introductory
paragraph of clause paragraph (h) and adding clause paragraph (m) to
read as follows:
970.5204-31 Insurance-litigation and claims.
* * * * *
(h) In addition to the cost reimbursement limitations contained
in FAR part 31, as supplemented by DEAR 970.31, and notwithstanding
any other provision of this contract, the contractor's liabilities
to third persons, including employees but excluding costs incidental
to worker's compensation actions, (and any expenses incidental to
such liabilities, including litigation costs, counsel fees,
judgments and settlements) shall not be reimbursed if such
liabilities were caused by contractor managerial personnel:
* * * * *
(m) Reasonable litigation and other legal expenses are allowable
when incurred in accordance with the DOE approved contractor legal
management procedures (including cost guidelines) as such procedures
may be revised from time to time, and if not otherwise made
unallowable by law or the provisions of this contract.
970.5204-61 [Removed and Reserved]
12. Section 970.5204-61, Cost prohibitions related to legal and
other proceedings is removed and reserved.
970.5204-84 [Removed and Reserved]
13. Section 970.5204-84, Waiver of limitations on severance
payments to foreign nationals, is removed and reserved.
14. Section 970.5204-XX is added to read as follows:
970.5204-XX Penalties for unallowable costs.
As prescribed in 970.4207-3 use the following clause:
Penalties for unallowable costs (APR 2000)
(a) Contractors which include unallowable cost in a submission
for settlement for cost incurred, may be subject to penalties.
(b) If, during the review of a submission for settlement of cost
incurred, the contracting officer determines that the submission
contains an expressly unallowable cost or a cost determined to be
unallowable prior to the submission, the contracting officer shall
assess a penalty.
(c) Unallowable costs are either expressly unallowable or
determined unallowable.
(1) An expressly unallowable cost is a particular item or type
of cost which, under the express provisions of an applicable law,
regulation, or this contract, is specifically named and stated to be
unallowable.
(2) A cost determined unallowable is one which, for that
contractor,
(i) Was subject to a contracting officer's final decision and
not appealed;
(ii) The Department's Board of Contract Appeals or a court has
previously ruled as unallowable; or
(iii) Was mutually agreed to be unallowable.
(d) If the contracting officer determines that a cost submitted
by the contractor in its submission for settlement of cost incurred
is:
(1) Expressly unallowable, then the contracting officer shall
assess a penalty in an amount equal to the disallowed cost allocated
to this contract plus interest on the paid portion of the disallowed
cost. Interest shall be computed from the date of overpayment to the
date of repayment using the interest rate specified by the Secretary
of the Treasury pursuant to Public Law 92-41 (85 Stat. 97); or
(2) Determined unallowable, then the contracting officer shall
assess a penalty in an amount equal to two times the amount of the
disallowed cost allocated to this contract.
(e) The contracting officer may waive the penalty provisions
when:
(1) The contractor withdraws the submission before the formal
initiation of an audit of the submission and submits a revised
submission;
(2) The amount of the unallowable costs allocated to covered
contracts is $10,000 or less; or
(3) The contractor demonstrates to the contracting officer's
satisfaction that:
(i) It has established appropriate policies, personnel training,
and an internal control and review system that provides assurances
that unallowable costs subject to penalties are precluded from the
contractor's submission for settlement of costs; and
(ii) The unallowable costs subject to the penalty were
inadvertently incorporated into the submission.
(End of clause)
[FR Doc. 00-14866 Filed 6-13-00; 8:45 am]
BILLING CODE 6450-01-P