§6321 — Title 10 Armed Forces | U.S. Code

§6321 Costs not allowed under covered contracts

Title 10 › Subtitle Subtitle A— - General Military Law › Part PART VI— - ELEMENTS OF DEPARTMENT OF DEFENSE AND OTHER MATTERS › Subpart Subpart B— - Atomic Energy Defense › Chapter CHAPTER 608— - ADMINISTRATIVE MATTERS › Subchapter SUBCHAPTER I— - CONTRACTS › § 6321

Last updated Apr 6, 2026|Official source

Summary

Stops contractors from charging certain costs to covered contracts. Not allowed costs include things like entertainment and related expenses; spending to try to influence Congress or a State legislature; legal defense costs in fraud cases when the contractor is found liable or pleads nolo contendere; fines and penalties (except when they come from following contract terms or are preapproved in writing by the contracting officer under Energy Department rules); club membership fees; alcoholic drinks; donations; advertising that promotes the contractor; promotional gifts and souvenirs; and unnecessary or more-than-standard-cost air travel or other non-common-carrier travel. The Secretary of Energy must write rules to carry out this list no later than 150 days after November 8, 1985, and must publish those rules in accordance with section 1707 of title 41. The rules may set definitions and limits. The rules must allow costs for giving Congress or a State legislature, when asked, factual, technical, or scientific information or expert advice, and the travel, lodging, or meals needed to give that information. The cost limits apply to expenses charged on or after 30 days after those rules are issued. Covered contract means a contract over $100,000 made by the Secretary of Energy using money for the Department of Energy’s national security programs.

Title 10, §6321

Armed Forces — Source: USLM XML via OLRC

(a)The following costs are not allowable under a covered contract:

(1)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).

(2)Costs incurred to influence (directly or indirectly) legislative action on any matter pending before Congress or a State legislature.

(3)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 false certification).

(4)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 Energy.

(5)Costs of membership in any social, dining, or country club or organization.

(6)Costs of alcoholic beverages.

(7)Contributions or donations, regardless of the recipient.

(8)Costs of advertising designed to promote the contractor or its products.

(9)Costs of promotional items and memorabilia, including models, gifts, and souvenirs.

(10)Costs for travel by commercial aircraft or by travel by other than common carrier that is not necessary for the performance of the contract and the cost of which exceeds the amount of the standard commercial fare.

(b)(1)Not later than 150 days after November 8, 1985, the Secretary of Energy shall prescribe regulations to implement this section. Such regulations may establish appropriate definitions, exclusions, limitations, and qualifications. Such regulations shall be published in accordance with section 1707 of title 41.

(2)In any regulations implementing subsection (a)(2), the Secretary may not treat as not allowable (by reason of such subsection) the following costs of a contractor:

(A)Costs of providing to Congress or a State legislature, in response to a request from Congress or a State legislature, information of a factual, technical, or scientific nature, or advice of experts, with respect to topics directly related to the performance of the contract.

(B)Costs for transportation, lodging, or meals incurred for the purpose of providing such information or advice.

(c)In this section, the term “covered contract” means a contract for an amount more than $100,000 entered into by the Secretary of Energy obligating funds appropriated for national security programs of the Department of Energy.

(d)Subsection (a) shall apply with respect to costs incurred under a covered contract on or after 30 days after the regulations required by subsection (b) are issued.

Notes & Related Subsidiaries

Editorial Notes

Prior Provisions

A prior section 6321 was renumbered section 8321 of this title. Provisions similar to those in this section were contained in section 2781 of Title 50, War and National Defense, prior to repeal by Pub. L. 119–60, § 3111(b)(1).

Amendments

2025—Pub. L. 119–60, § 3111(d)(2)(B), realigned margins.