10 U.S.C. § 2372 : US Code - Section 2372: Independent research and development and bid and proposal costs: payments to contractors

Search 10 U.S.C. § 2372 : US Code - Section 2372: Independent research and development and bid and proposal costs: payments to contractors

(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 and bid and proposal costs.
(b) Costs Allowable as Indirect Expenses. - The regulations
prescribed pursuant to subsection (a) shall provide that
independent research and development and bid and proposal costs
shall be allowable as indirect expenses on covered contracts to the
extent that those costs are allocable, reasonable, and not
otherwise unallowable by law or under the Federal Acquisition
Regulation.
(c) Additional Controls. - Subject to subsection (f), the
regulations prescribed pursuant to subsection (a) may include the
following provisions:
(1) A limitation on the allowability of independent research
and development and bid and proposal costs to work which the
Secretary of Defense determines is of potential interest to the
Department of Defense.
(2) For each of fiscal years 1993 through 1995, a limitation in
the case of major contractors that the total amount of the
independent research and development and bid and proposal costs
that are allowable as expenses of the contractor's covered
segments may not exceed the contractor's adjusted maximum
reimbursement amount.
(3) 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 Department of Defense future
needs; and
(B) from contractors to the Department of Defense, in a
reasonable manner, of information regarding progress by the
contractor on the contractor's independent research and
development programs.
(d) Adjusted Maximum Reimbursement Amount. - For purposes of
subsection (c)(2), the adjusted maximum reimbursement amount for a
major contractor for a fiscal year is the sum of -
(1) the total amount of the allowable independent research and
development and bid and proposal costs incurred by the contractor
during the preceding fiscal year;
(2) 5 percent of the amount referred to in paragraph (1); and
(3) if the projected total amount of the independent research
and development and bid and proposal costs incurred by the
contractor for such fiscal year is greater than the total amount
of the independent research and development and bid and proposal
costs incurred by the contractor for the preceding fiscal year,
the amount that is determined by multiplying the amount referred
to in paragraph (1) by the lesser of -
(A) the percentage by which the projected total amount of
such incurred costs for such fiscal year exceeds the total
amount of the incurred costs of the contractor for the
preceding fiscal year; or
(B) the estimated percentage rate of inflation from the end
of the preceding fiscal year to the end of the fiscal year for
which the amount of the limitation is being computed.
(e) Waiver of Adjusted Maximum Reimbursement Amount. - The
Secretary of Defense may waive the applicability of any limitation
prescribed under subsection (c)(2) to any contractor for a fiscal
year to the extent that the Secretary determines that allowing the
contractor to exceed the contractor's adjusted maximum
reimbursement amount for such year -
(1) is necessary to reimburse such contractor at least to the
extent that would have been allowed under regulations as in
effect on December 4, 1991; or
(2) is otherwise in the best interest of the Government.
(f) Limitations on Regulations. - Regulations prescribed pursuant
to subsection (c) 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.
(g) Encouragement of Certain Contractor Activities. - The
regulations under subsection (a) shall encourage contractors to
engage in research and development activities of potential interest
to the Department of Defense, including activities intended to
accomplish any of the following:
(1) Enabling superior performance of future United States
weapon systems and components.
(2) Reducing acquisition costs and life-cycle costs of military
systems.
(3) Strengthening the defense industrial base and the
technology base of the United States.
(4) Enhancing the industrial competitiveness of the United
States.
(5) Promoting the development of technologies identified as
critical under section 2506 of this title.
(6) Increasing the development and promotion of efficient and
effective applications of dual-use technologies.
(7) Providing efficient and effective technologies for
achieving such environmental benefits as improved environmental
data gathering, environmental cleanup and restoration, pollution
reduction in manufacturing, environmental conservation, and
environmentally safe management of facilities.
(h) Major Contractors. - A contractor shall be considered to be a
major contractor for the purposes of subsection (c) for any fiscal
year if for the preceding fiscal year the contractor's covered
segments allocated to Department of Defense contracts a total of
more than $10,000,000 in independent research and development and
bid and proposal costs.
(i) Definitions. - In this section:
(1) Covered contract. - The term "covered contract" has the
meaning given that term in section 2324(l) of this title.
(2) Covered segment. - The term "covered segment", with respect
to a contractor, means a product division of the contractor that
allocated more than $1,000,000 in independent research and
development and bid and proposal costs to Department of Defense
contracts during the preceding fiscal year. In the case of a
contractor that has no product divisions, such term means the
contractor as a whole.