§3745 Required Regulations

Summary

Require the Federal Acquisition Regulation to set clear rules about which contractor costs can be charged to covered contracts and which cannot. The rules must list unallowable costs in detail and explain cost rules for 17 kinds of expenses, including air shows; memberships in civic, community, and professional groups; recruitment; employee morale and welfare; efforts to influence executive branch decisions on rules and contracts; community relations; dining facilities; professional and legal services; pay and benefits; selling and marketing; travel; public relations; hotel and meal costs; corporate aircraft and company cars; advertising; and conventions. A contracting officer must not settle or decide on questioned costs until they have enough records and the contract auditor’s judgment on whether the costs are allowable. The auditor should, when possible, attend any negotiation or meeting about indirect costs. If the auditor’s report identifies categories of questioned costs in a settlement proposal, the settlement must show how much of each questioned cost is paid.