LIMITATION ON ALLOWABILITY OF COSTS OF CONTRACTORS INCURRED IN CERTAIN PROCEEDINGS

SEC. 832. LIMITATION ON ALLOWABILITY OF COSTS OF CONTRACTORS INCURRED IN CERTAIN PROCEEDINGS (a) Limit on Costs.—Section 2324(e) of title 10, United States Code, is amended— (1) by adding at the end of paragraph (1), as amended by section 322(a), the following: “(N) Except as provided in paragraph (2), costs incurred in connection with any civil, criminal, or administrative action brought by the United States that results in a determination that a contractor has violated or failed to comply with any Federal law or regulation if the action results in any of the following: “(i) In the case of a criminal action, a conviction (including a conviction pursuant to a plea of nolo contendere). 102 STAT. 2024 “(ii) In the case of a civil or administrative action, (I) a determination by the Secretary of Defense that the violation or failure to comply was knowing or willful, and (II) the imposition of a monetary penalty. “(iii) A final decision by an appropriate official of the Department of Defense to debar or suspend the contractor or to rescind, void, or terminate a contract awarded to such contractor if such decision is based on a determination by the Secretary of Defense that the violation or failure to comply was knowing or willful.”; (2) by redesignating paragraph (2) as paragraph (3); and (3) by inserting after paragraph (1) (as amended by paragraph (1)) the following: “(2) If a civil, criminal, or administrative action referred to in paragraph (1)(N) is resolved by consent or compromise pursuant to an agreement entered into by a contractor and the United States, the contractor’s costs that are otherwise not allowable under paragraph (1)(N) may be allowed to the extent provided in such agreement.”. (b) Regulations.—The Secretary of Defense shall prescribe regulations to implement section 2324(e)(1)(N) of title 10, United States Code, as added by subsection (a), not later than 90 days after the date of the enactment of this Act.