(a) This section implements 10 U.S.C. 2324(a) through (d) and 41 U.S.C. 256(a) through (d). It covers the assessment of penalties against contractors which include unallowable indirect costs in -
(1) Final indirect cost rate proposals; or
(2) The final statement of costs incurred or estimated to be incurred under a fixed-price incentive contract.
(b) This section applies to all contracts in excess of $650,000, except fixed-price contracts without cost incentives or any firm-fixed-price contracts for the purchase of commercial items.
