§2781 — Title 50 War and National Defense | U.S. Code

Summary

Bans certain types of costs from being charged to large Energy Department contracts for national security work. You cannot charge for things like entertainment and related expenses; trying to influence laws before Congress or a State legislature; legal defense costs in U.S. fraud cases when the contractor is found liable or pleads no contest; fines and penalties from breaking laws (unless the contract requires it or a contracting officer gives written, advance permission under rules set by the Secretary of Energy); social or country club memberships; alcoholic drinks; donations; advertising that promotes the contractor; promotional gifts or souvenirs; and travel costs that are not needed for the job and cost more than the normal commercial fare. The Secretary of Energy must write rules to carry out these limits within 150 days after November 8, 1985, and must publish those rules as required by section 1707 of title 41. The Secretary can define terms and set limits in those rules, but cannot make costs unallowable for giving Congress or a State legislature factual, technical, or scientific information or expert advice when they ask for it, or for travel, lodging, or meals to provide that help. A "covered contract" is one over $100,000 entered into by the Secretary of Energy using funds for national security programs. The cost bans apply to expenses incurred under a covered contract starting 30 days after those rules are issued.

Title 50, §2781

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(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, “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

Codification Section was formerly classified to section 7256a of Title 42, The Public Health and Welfare, prior to renumbering by Pub. L. 108–136.

Amendments

2013—Subsec. (b)(1). Pub. L. 113–66 substituted “section 1707 of title 41” for “section 22 of the Office of Federal Procurement Policy Act (41 U.S.C. 418b)”. 2003—Pub. L. 108–136, § 3141(k)(2)(D)(i), made technical amendment to section catchline. Subsec. (b)(1). Pub. L. 108–136, § 3141(k)(2)(D)(ii), substituted “

November 8, 1985,” for “the date of the enactment of this Act,” in the original, which for purposes of codification had been changed to “

November 8, 1985,” thus requiring no change in text. 1987—Subsec. (b). Pub. L. 100–180 designated existing provisions as par. (1) and added par. (2).

Statutory Notes and Related Subsidiaries

Regulations

Pub. L. 100–180, div. C, title I, § 3131(b), Dec. 4, 1987, 101 Stat. 1239, provided that

Regulations

to implement subsec. (b)(2) of this section were to be prescribed not later than 90 days after Dec. 4, 1987.

§2781 Costs Not Allowed Under Covered Contracts

Summary

Title 50, §2781

Notes & Related Subsidiaries

Editorial Notes

Amendments

Statutory Notes and Related Subsidiaries

Regulations

Regulations

Citations & Metadata