48 C.F.R. § 31.205-15

31.205-15 Fines, penalties, and mischarging costs.

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(a) Costs of fines and penalties resulting from violations of, or failure of the contractor to comply with, Federal, State, local, or foreign laws and regulations, are unallowable except when incurred as a result of compliance with specific terms and conditions of the contract or written instructions from the contracting officer.

(b) Costs incurred in connection with, or related to, the mischarging of costs on Government contracts are unallowable when the costs are caused by, or result from, alteration or destruction of records, or other false or improper charging or recording of costs. Such costs include those incurred to measure or otherwise determine the magnitude of the improper charging, and costs incurred to remedy or correct the mischarging, such as costs to rescreen and reconstruct records.

[51 FR 12301, Apr. 9, 1986, as amended at 54 FR 13024, Mar. 29, 1989; 55 FR 52793, Dec. 21, 1990]
Notes of Decisions
Cited in 2 cases, 1990–2006 · leading case: Info. Sys. & Network Corp. v. United States, 437 F.3d 1173 (Fed. Cir. 2006).
Info. Sys. & Network Corp. v. United States, 437 F.3d 1173 (Fed. Cir. 2006). “48 C.F.R. § 31.205-15 (a) (2004). The Court of Federal Claims’ reliance on state tax provisions that describe penalties for failure to have shareholders pay the proper state income tax does not establish that an S corporation shareholder’s state income tax payments should be an…”
Transtechnology Corp. v. United States, 22 Cl. Ct. 349 (Ct. Cl. 1990). “In any event, defendant points to 48 C.F.R. § 31.205-15 (1985) which disallows “fines and penalties” resulting from violations of law.”
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