§3507 Interest and Penalties for Certain Overpayments

Summary

If the federal government overpays a contractor because the contractor gave faulty cost or pricing data, the contractor must pay interest on the overpaid amount. The interest runs from the day the overpayment was made until the contractor repays. The interest rate is the current rate set by the Secretary of the Treasury under section 6621 of the Internal Revenue Code (26 U.S.C. 6621). If the contractor knowingly gave the bad data, they must also pay a penalty equal to the overpayment. If a contractor provided cost or pricing data but refused to give the certification required by section 3502(b), that refusal does not reduce or change their duty to pay the interest or penalty.