Page:United States Statutes at Large Volume 124.djvu/3815

 124 STAT. 3789 PUBLIC LAW 111–350—JAN. 4, 2011 the burden of proof is on the contractor to establish that those costs are reasonable. § 4310. Proceeding costs not allowable (a) DEFINITIONS.—In this section: (1) COSTS.—The term ‘‘costs’’, with respect to a proceeding, means all costs incurred by a contractor, whether before or after the commencement of the proceeding, including— (A) administrative and clerical expenses; (B) the cost of legal services, including legal services performed by an employee of the contractor; (C) the cost of the services of accountants and consultants retained by the contractor; and (D) the pay of directors, officers, and employees of the contractor for time devoted by those directors, officers, and employees to the proceeding. (2) PENALTY.—The term ‘‘penalty’’ does not include restitu- tion, reimbursement, or compensatory damages. (3) PROCEEDING.—The term ‘‘proceeding’’ includes an inves- tigation. (b) IN GENERAL.—Except as otherwise provided in this section, costs incurred by a contractor in connection with a criminal, civil, or administrative proceeding commenced by the Federal Govern- ment or a State are not allowable as reimbursable costs under a covered contract if the proceeding— (1) relates to a violation of, or failure to comply with, a Federal or State statute or regulation; and (2) results in a disposition described in subsection (c). (c) COVERED DISPOSITIONS.—A disposition referred to in sub- section (b)(2) is any of the following: (1) In a criminal proceeding, a conviction (including a convic- tion pursuant to a plea of nolo contendere) by reason of the violation or failure referred to in subsection (b). (2) In a civil or administrative proceeding involving an allega- tion of fraud or similar misconduct, a determination of con- tractor liability on the basis of the violation or failure referred to in subsection (b). (3) In any civil or administrative proceeding, the imposition of a monetary penalty by reason of the violation or failure referred to in subsection (b). (4) A final decision to do any of the following, by reason of the violation or failure referred to in subsection (b): (A) Debar or suspend the contractor. (B) Rescind or void the contract. (C) Terminate the contract for default. (5) A disposition of the proceeding by consent or compromise if the disposition could have resulted in a disposition described in paragraph (1), (2), (3), or (4). (d) COSTS ALLOWED BY SETTLEMENT AGREEMENT IN PROCEEDING COMMENCED BY FEDERAL GOVERNMENT.—In the case of a proceeding referred to in subsection (b) that is commenced by the Federal Government and is resolved by consent or compromise pursuant to an agreement entered into by a contractor and the Federal Government, the costs incurred by the contractor in connection with the proceeding that are otherwise not allowable as reimburs- able costs under subsection (b) may be allowed to the extent specifi- cally provided in that agreement.