Collapse to view only § 3761. Restructuring costs
- § 3761. Restructuring costs
- § 3762. Independent research and development costs: allowable costs
- § 3763. Bid and proposal costs: allowable costs
§ 3761. Restructuring costs
(a)Limitation on Payment of Restructuring Costs.—The Secretary of Defense may not pay, under subchapter I, a defense contractor for restructuring costs associated with a business combination of the contractor that occurs after November 18, 1997, unless the Secretary determines in writing either—
(1) that the amount of projected savings for the Department of Defense associated with the restructuring will be at least twice the amount of the costs allowed; or
(2) that the amount of projected savings for the Department of Defense associated with the restructuring will exceed the amount of the costs allowed and that the business combination will result in the preservation of a critical capability that otherwise might be lost to the Department.
(b)Limitation on Delegation.—The Secretary may not delegate the authority to make a determination under subsection (a), with respect to a business combination, to an official of the Department of Defense—
(1) below the level of an Assistant Secretary of Defense for cases in which the amount of restructuring costs is expected to exceed $25,000,000 over a 5-year period; or
(2) below the level of the Director of the Defense Contract Management Agency for all other cases.
(c)Definition.—In this section, the term “business combination” includes a merger or acquisition.
(Added Pub. L. 105–85, div. A, title VIII, § 804(a)(1), Nov. 18, 1997, 111 Stat. 1832, § 2325; amended Pub. L. 106–65, div. A, title X, § 1066(a)(19), Oct. 5, 1999, 113 Stat. 771; Pub. L. 108–375, div. A, title VIII, § 819, Oct. 28, 2004, 118 Stat. 2016; Pub. L. 112–239, div. A, title X, § 1076(g)(2), Jan. 2, 2013, 126 Stat. 1955; renumbered § 3761 and amended Pub. L. 116–283, div. A, title XVIII, § 1832(j)(2), (3), Jan. 1, 2021, 134 Stat. 4225.)
§ 3762. Independent research and development costs: allowable costs
(a)Regulations.—The Secretary of Defense shall prescribe regulations governing the payment by the Department of Defense of expenses incurred by contractors for independent research and development costs. Such regulations shall provide that expenses incurred for independent research and development shall be reported independently from other allowable indirect costs.
(b)Costs Treated as Fair and Reasonable, and Allowable, Expenses.—The regulations prescribed under subsection (a) shall provide that independent research and development costs shall be considered a fair and reasonable, and allowable, indirect expense on Department of Defense contracts.
(c)Additional Controls.—Subject to subsection (d), the regulations prescribed under subsection (a) may include the following provisions:
(1) Controls on the reimbursement of costs to the contractor for expenses incurred for independent research and development to ensure that such costs were incurred for independent research and development.
(2) Implementation of regular methods for transmission—
(A) from the Department of Defense to contractors, in a reasonable manner, of timely and comprehensive information regarding planned or expected needs of the Department of Defense for future technology and advanced capability; and
(B) from contractors to the Department of Defense, in a reasonable manner, of information regarding progress by the contractor on the independent research and development programs of the contractor.
(d)Limitations on Regulations.—Regulations prescribed under subsection (a) may not include provisions that would infringe on the independence of a contractor to choose which technologies to pursue in its independent research and development program if the chief executive officer of the contractor determines that expenditures will advance the needs of the Department of Defense for future technology and advanced capability as transmitted pursuant to subsection (c)(2)(A).
(e)Effective Date.—The regulations prescribed under subsection (a) shall apply to indirect costs incurred on or after October 1, 2017.
(Added Pub. L. 101–510, div. A, title VIII, § 824(a)(1), Nov. 5, 1990, 104 Stat. 1603, § 2372; amended Pub. L. 102–25, title VII, § 701(c), Apr. 6, 1991, 105 Stat. 113; Pub. L. 102–190, div. A, title VIII, § 802(a)(1), Dec. 5, 1991, 105 Stat. 1412; Pub. L. 102–484, div. A, title X, § 1052(27), Oct. 23, 1992, 106 Stat. 2500; Pub. L. 103–35, title II, § 201(c)(5), May 31, 1993, 107 Stat. 98; Pub. L. 104–106, div. D, title XLIII, § 4321(b)(11), Feb. 10, 1996, 110 Stat. 672; Pub. L. 114–328, div. A, title VIII, § 824(a)(1), Dec. 23, 2016, 130 Stat. 2277; Pub. L. 115–91, div. A, title X, § 1081(a)(35), Dec. 12, 2017, 131 Stat. 1596; renumbered § 3762, Pub. L. 116–283, div. A, title XVIII, § 1832(j)(2), Jan. 1, 2021, 134 Stat. 4225.)
§ 3763. Bid and proposal costs: allowable costs
(a)Regulations.—The Secretary of Defense shall prescribe regulations governing the payment by the Department of Defense of expenses incurred by contractors for bid and proposal costs. Such regulations shall provide that expenses incurred for bid and proposal costs shall be reported independently from other allowable indirect costs.
(b)Costs Allowable as Indirect Expenses.—The regulations prescribed under subsection (a) shall provide that bid and proposal costs shall be allowable as indirect expenses on covered contracts, as defined in section 3741 of this title, to the extent that those costs are allocable, reasonable, and not otherwise unallowable by law or under the Federal Acquisition Regulation.
(c)Goal for Reimbursable Bid and Proposal Costs.—The Secretary shall establish a goal each fiscal year limiting the amount of reimbursable bid and proposal costs paid by the Department of Defense to an amount equal to not more than one percent of the total aggregate industry sales to the Department of Defense. To achieve such goal, the Secretary may not limit the payment of allowable bid and proposal costs for the covered year.
(d)Panel.—
(1) If the Department of Defense exceeds the goal established under subsection (c) for a fiscal year, within 180 days after exceeding the goal, the Secretary shall establish an advisory panel. The panel shall be supported by the Defense Acquisition University and the National Defense University, including administrative support.
(2) The panel shall be composed of nine individuals who are recognized experts in acquisition and procurement policy appointed by the Secretary. In making such appointments, the Secretary shall ensure that the members of the panel reflect diverse experiences in the public and private sector.
(3) The panel shall review laws, regulations, and practices that contribute to the expenses incurred by contractors for bids and proposals in the fiscal year concerned and recommend changes to such laws, regulations, and practices that may reduce expenses incurred by contractors for bids and proposals.
(4)
(A) Not later than six months after the establishment of the panel, the panel shall submit to the Secretary and the congressional defense committees an interim report on the findings of the panel.
(B) Not later than one year after the establishment of the panel, the panel shall submit to the Secretary and the congressional defense committees a final report on the findings of the panel.
(5) The panel shall terminate on the day the panel submits the final report under paragraph (4)(B).
(6) The Secretary of Defense may use amounts available in the Department of Defense Acquisition Workforce Development Fund established under section 1705 of this title to support the activities of the panel established under this subsection.
(e)Effective Date.—The regulations prescribed under subsection (a) shall apply to indirect costs incurred on or after October 1, 2017.
(Added Pub. L. 114–328, div. A, title VIII, § 824(b)(1), Dec. 23, 2016, 130 Stat. 2278, § 2372a; renumbered § 3763 and amended Pub. L. 116–283, div. A, title XVIII, § 1832(j)(2), (4), Jan. 1, 2021, 134 Stat. 4225.)