Difference between revisions of "FAR 52.242-3 - Penalties for Unallowable Costs"
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*(2) The final statement of costs incurred and estimated to be incurred under the Incentive Price Revision clause (if applicable), which is used to establish the final contract price. | *(2) The final statement of costs incurred and estimated to be incurred under the Incentive Price Revision clause (if applicable), which is used to establish the final contract price. | ||
− | + | ==Penalty Statement== | |
'''(b)''' Contractors which include unallowable indirect costs in a proposal may be subject to penalties. The penalties are prescribed in 10 U.S.C. 2324 or 41 U.S.C. chapter 43, as applicable, which is implemented in Section 42.709 of the Federal Acquisition Regulation (FAR). | '''(b)''' Contractors which include unallowable indirect costs in a proposal may be subject to penalties. The penalties are prescribed in 10 U.S.C. 2324 or 41 U.S.C. chapter 43, as applicable, which is implemented in Section 42.709 of the Federal Acquisition Regulation (FAR). | ||
− | + | ==Contractor Requirements== | |
'''(c)''' The Contractor shall not include in any proposal any cost that is unallowable, as defined in Subpart 2.1 of the FAR, or an executive agency supplement to the FAR. | '''(c)''' The Contractor shall not include in any proposal any cost that is unallowable, as defined in Subpart 2.1 of the FAR, or an executive agency supplement to the FAR. | ||
− | + | ==Penalty Assessment== | |
'''(d)''' If the Contracting Officer determines that a cost submitted by the Contractor in its proposal is expressly unallowable under a cost principle in the FAR, or an executive agency supplement to the FAR, that defines the allowability of specific selected costs, the Contractor shall be assessed a penalty equal to— | '''(d)''' If the Contracting Officer determines that a cost submitted by the Contractor in its proposal is expressly unallowable under a cost principle in the FAR, or an executive agency supplement to the FAR, that defines the allowability of specific selected costs, the Contractor shall be assessed a penalty equal to— | ||
*(1) The amount of the disallowed cost allocated to this contract; plus | *(1) The amount of the disallowed cost allocated to this contract; plus | ||
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'''(h)''' Payment by the Contractor of any penalty assessed under this clause does not constitute repayment to the Government of any unallowable cost which has been paid by the Government to the Contractor. | '''(h)''' Payment by the Contractor of any penalty assessed under this clause does not constitute repayment to the Government of any unallowable cost which has been paid by the Government to the Contractor. | ||
− | |ImportantNotesRequirements=In all solicitations and contracts over $700,000 except fixed-price contracts without cost incentives or any firm fixed-price contract for the purchase of commercial items.Generally, covered contracts are those which contain one ofthe clauses at 52.216-7, 52.216-16, or 52.216-17, or a similarclause from an executive agency's supplement to the FAR. | + | |ImportantNotesRequirements=Only applies to Cost Type contracts or Time and Material Contracts. For Time and Materials contracts, it is only applicable to the Material portion, and then only the indirects that are applied to Materials. |
+ | |||
+ | In all solicitations and contracts over $700,000 except fixed-price contracts without cost incentives or any firm fixed-price contract for the purchase of commercial items.Generally, covered contracts are those which contain one ofthe clauses at 52.216-7, 52.216-16, or 52.216-17, or a similarclause from an executive agency's supplement to the FAR. | ||
[[Category:FAR 52 - Solicitation Provisions and Contract Clauses]] | [[Category:FAR 52 - Solicitation Provisions and Contract Clauses]] |
Revision as of 09:23, 3 July 2014
Prescribed in 42.709-6 | ||
Effective Date: | 1 May 2014 | |
Clause or Provision: | Clause | |
Provision or Clause Number: | 52.242-3 - Penalties for Unallowable Costs | |
Principle Type And/Or Purpose of Contract: | ||
Required: | ||
Applicable: | Cost Reimbursement Research and Development; Cost Reimbursement Supply; Cost Reimbursement Service; Cost Reimbursement Construction; Time and Materials/Labor Hour; Leasing of Motor Vehicles; Communication Services; Dismantling, Demolition, or Removal of Improvements; Architect-Engineering; Indefinite Delivery; Transportation; | |
Optional: | Fixed Price Service; Fixed Price Construction; Facilities; Simplified Acquisition Procedures; Utility Services; | |
Subject: | ||
ProcurementType: | ||
Contract Threshold: | ||
Prescription Overview: | ||
Clause Overview: |
(a) Definition“Proposal,” as used in this clause, means either—
Penalty Statement(b) Contractors which include unallowable indirect costs in a proposal may be subject to penalties. The penalties are prescribed in 10 U.S.C. 2324 or 41 U.S.C. chapter 43, as applicable, which is implemented in Section 42.709 of the Federal Acquisition Regulation (FAR). Contractor Requirements(c) The Contractor shall not include in any proposal any cost that is unallowable, as defined in Subpart 2.1 of the FAR, or an executive agency supplement to the FAR. Penalty Assessment(d) If the Contracting Officer determines that a cost submitted by the Contractor in its proposal is expressly unallowable under a cost principle in the FAR, or an executive agency supplement to the FAR, that defines the allowability of specific selected costs, the Contractor shall be assessed a penalty equal to—
| |
Important Notes/Requirements: |
Only applies to Cost Type contracts or Time and Material Contracts. For Time and Materials contracts, it is only applicable to the Material portion, and then only the indirects that are applied to Materials. In all solicitations and contracts over $700,000 except fixed-price contracts without cost incentives or any firm fixed-price contract for the purchase of commercial items.Generally, covered contracts are those which contain one ofthe clauses at 52.216-7, 52.216-16, or 52.216-17, or a similarclause from an executive agency's supplement to the FAR. | |
Subcontract Threshold: | ||
Incorporated by Reference: | Yes | |
Uniform Contract Format: | I | |
Editor: | Marshall |
Personal notes.