§3745 Required regulations

Summary

Requires the Federal Acquisition Regulation (FAR) to set clear rules about which contractor costs are allowed and which are not. The FAR must, at minimum, explain the cost rules for 17 kinds of expenses, including air shows; memberships in civic, community, and professional groups; recruitment; employee morale and welfare; actions to influence executive-branch regulatory or contract decisions (except costs tied to contract proposals); community relations; dining facilities; professional and legal services; compensation; selling and marketing; travel; public relations; hotel and meal costs; corporate aircraft; company cars; advertising; and conventions. The FAR must also require a contracting officer to hold off on resolving questioned costs until they have adequate documentation and the contract auditor’s opinion. The contract auditor should, when practical, attend any negotiation or meeting about indirect-cost allowability. If the auditor’s report labels cost categories as questioned in a settlement proposal, the settlement must show how much of each questioned cost is paid.