§4305 Required Regulations

Summary

Require the Federal Acquisition Regulation (FAR) to set clear rules about which contractor costs are not allowed under covered contracts. The rules must cover 17 kinds of costs. They include things like air shows; memberships in civic, community, and professional groups; recruitment; employee morale and welfare; efforts to influence executive-branch decisions on rules or contracts; community relations; dining, hotel, and meal costs; travel; advertising; selling and marketing; conventions; company aircraft and cars; and professional or consulting services (including legal services) and compensation. The FAR must also make sure questioned costs are handled carefully. A contracting officer must not settle questioned costs until there is enough documentation and the contract auditor gives an opinion on whether the costs are allowed. When practical, the contract auditor should attend meetings or negotiations about a contractor’s indirect costs. Any settlement must show the exact amount of each questioned cost that is paid, as reported by the auditor.