FAR 42.709-2 General
Subsection Federal Acquisition Regulation
Facts
- Citation
- FAR 42.709-2
- Type
- Subsection
- Text as of
- FAC 2026-01
- Official text
- acquisition.gov
Text from acquisition.gov. Federal Register history from the Federal Register's records of the rules that amended this subsection.
Text
(a) The following penalties apply to contracts covered by this section:
(1) If the indirect cost is expressly unallowable under a cost principle in the FAR, or an executive agency supplement to the FAR, that defines the allowability of specific selected costs, the penalty is equal to-
(i) The amount of the disallowed costs allocated to contracts that are subject to this section for which an indirect cost proposal has been submitted; plus
(ii) Interest on the paid portion, if any, of the disallowance.
(2) If the indirect cost was determined to be unallowable for that contractor before proposal submission, the penalty is two times the amount in paragraph (a)(1)(i) of this section.
(b) These penalties are in addition to other administrative, civil, and criminal penalties provided by law.
(c) It is not necessary for unallowable costs to have been paid to the contractor in order to assess a penalty.
Quick answers
What is FAR 42.709-2?
FAR 42.709-2 is a subsection of the Federal Acquisition Regulation, titled "General".
Are changes to FAR 42.709-2 proposed?
No proposed rule from the last 3 years is waiting on a final rule.
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