Page:United States Statutes at Large Volume 99 Part 1.djvu/705

 PUBLIC LAW 99-145—NOV. 8, 1985 sion of such proposal, the Secretary shall assess a penalty against the contractor, in addition to the penalty assessed under subsection (a), in an amount equal to two times the amount of such cost. "(c) An action of the Secretary under subsection (a) or (b)— "(1) shall be considered a final decision for the purposes of section 6 of the Contract Disputes Act of 1978 (41 U.S.C. 605); and "(2) is appealable in the manner provided in section 7 of such Act (41 U.S.C. 606). "(d) If any penalty is assessed under subsection (a) or (b) with respect to a proposal for settlement of indirect costs, the Secretary may assess an additional penalty of not more than $10,000 per proposal. "(e)(1) The following costs are not allowable under a covered contract: "(A) Costs of entertainment, including amusement, diversion, and social activities and any costs directly associated with such costs (such as tickets to shows or sports events, meals, lodging, rentals, transportation, and gratuities). "(B) Costs incurred to influence (directly or indirectly) legislative action on any matter pending before Congress or a State legislature. "(C) Costs incurred in defense of any civil or criminal fraud proceeding or similar proceeding (including filing of any false certification) brought by the United States where the contractor is found liable or has pleaded nolo contendere to a charge of fraud or similar proceeding (including filing of a false certification). "(D) Payments of fines and penalties resulting from violations of, or failure to comply with, Federal, State, local, or foreign laws and regulations, except when incurred as a result of compliance with specific terms and conditions of the contract or specific written instructions from the contracting officer authorizing in advance such payments in accordance with applicable regulations of the Secretary of Defense. "(E) Costs of membership in any social, dining, or country club or organization. "(F) Costs of alcoholic bever£^es. "(G) Contributions or donations, regardless of the recipient. "(H) Closts of advertising designed to promote the contractor or its products. "(I) Costs of promotional items and memorabilia, including models, gifts, and souvenirs. "(J) Costs for travel by commercial aircraft which exceed the amount of the standard commercial fare. "(2) The Secretary shall prescribe regulations to implement this section. Such regulations may establish appropriate definitions, exclusions, limitations, and qualifications. "(f)(1) The Secretary shall prescribe proposed regulations to amend those provisions of the Department of Defense Supplement to the Federal Acquisition Regulation dealing with the allowability of contractor costs. The amendments shall define in detail and in specific terms those costs which are unallowable, in whole or in part, under covered contracts. These regulations shall, at a minimum, clarify the cost principles applicable to contractor costs of the following: "(A) Air shows.

99 STAT. 683

Penalties.

Regulations. Regulations.

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