41 U.S.C. § 3905 — Cost contracts

Page 124 TITLE 41—PUBLIC CONTRACTS § 3905 HISTORICAL AND REVISION NOTES—CONTINUED Revised Section Source (U.S. Code) Source (Statutes at Large) 3904(g) ........ 41:253l–7. 3904(h) ....... 41:253l–8. Pub. L. 108–72, § 4, Aug. 15, 2003, 117 Stat. 889. In subsections (a)–(c) and (e)–(h), the words ‘‘procure- ment of severable services’’ are substituted for ‘‘acqui- sition of severable services’’ for consistency with 41:253l, restated as section 3902 of the revised title. In subsection (c), the words ‘‘During fiscal year 2001 and any succeeding fiscal year’’ are omitted as obso- lete. In subsection (d), the words ‘‘Beginning on December 21, 2000, and hereafter’’ are omitted as obsolete. In subsection (e), the text of 41:253l–5(b) is omitted as obsolete. In subsection (f), the text of 41:253l–6(b) is omitted as obsolete. In subsection (g), the text of 41:253l–7(b) is omitted as obsolete. In subsection (h), the text of 41:253l–8(b) is omitted as obsolete. § 3905. Cost contracts (a) COST-PLUS-A-PERCENTAGE-OF-COST CON- TRACTS DISALLOWED.—The cost-plus-a-percent- age-of-cost system of contracting shall not be used. (b) COST-PLUS-A-FIXED-FEE CONTRACTS.— (1) IN GENERAL.—Except as provided in para- graphs (2) and (3), the fee in a cost-plus-a- fixed-fee contract shall not exceed 10 percent of the estimated cost of the contract, not in- cluding the fee, as determined by the agency head at the time of entering into the contract. (2) EXPERIMENTAL, DEVELOPMENTAL, OR RE- SEARCH WORK.—The fee in a cost-plus-a-fixed- fee contract for experimental, developmental, or research work shall not exceed 15 percent of the estimated cost of the contract, not includ- ing the fee. (3) ARCHITECTURAL OR ENGINEERING SERV- ICES.—The fee in a cost-plus-a-fixed-fee con- tract for architectural or engineering services relating to any public works or utility project may include the contractor’s costs and shall not exceed 6 percent of the estimated cost, not including the fee, as determined by the agency head at the time of entering into the contract, of the project to which the fee applies. (c) NOTIFICATION.—All cost and cost-plus-a- fixed-fee contracts shall provide for advance no- tification by the contractor to the procuring agency of any subcontract on a cost-plus-a- fixed-fee basis and of any fixed-price sub- contract or purchase order which exceeds in dol- lar amount either the simplified acquisition threshold or 5 percent of the total estimated cost of the prime contract. (d) RIGHT TO AUDIT.—A procuring agency, through any authorized representative thereof, has the right to inspect the plans and to audit the books and records of a prime contractor or subcontractor engaged in the performance of a cost or cost-plus-a-fixed-fee contract. (Pub. L. 111–350, § 3, Jan. 4, 2011, 124 Stat. 3776.) HISTORICAL AND REVISION NOTES Revised Section Source (U.S. Code) Source (Statutes at Large) 3905(a) ........ 41:254(b) (1st sen- tence words be- fore 1st comma). June 30, 1949, ch. 288, title III, § 304(b), 63 Stat. 395; July 12, 1952, ch. 703, § 1(m), 66 Stat. 594; Pub. L. 103–355, title I, § 1071, title IV, § 4402(c), title X, § 10005(e), Oct. 13, 1994, 108 Stat. 3270, 3349, 3408. 3905(b) ........ 41:254(b) (1st sen- tence words after 1st comma). 3905(c) ........ 41:254(b) (last sen- tence words be- fore semicolon). 3905(d) ........ 41:254(b) (last sen- tence words after semicolon). § 3906. Cost-reimbursement contracts (a) DEFINITION.—In this section, the term ‘‘ex- ecutive agency’’ has the same meaning given in section 133 of this title. (b) REGULATIONS ON THE USE OF COST-REIM- BURSEMENT CONTRACTS.—The Federal Acquisi- tion Regulation shall address the use of cost-re- imbursement contracts. (c) CONTENT.—The regulations promulgated under subsection (b) shall include guidance re- garding— (1) when and under what circumstances cost- reimbursement contracts are appropriate; (2) the acquisition plan findings necessary to support a decision to use cost-reimbursement contracts; and (3) the acquisition workforce resources nec- essary to award and manage cost-reimburse- ment contracts. (d) ANNUAL REPORT.— (1) IN GENERAL.—The Director of the Office of Management and Budget shall submit an annual report to Congressional committees identified in subsection (e) on the use of cost- reimbursement contracts and task or delivery orders by all executive agencies. (2) CONTENTS.—The report shall include— (A) the total number and value of con- tracts awarded and orders issued during the covered fiscal year; (B) the total number and value of cost-re- imbursement contracts awarded and orders issued during the covered fiscal year; and (C) an assessment of the effectiveness of the regulations promulgated pursuant to subsection (b) in ensuring the appropriate use of cost-reimbursement contracts. (3) TIME REQUIREMENTS.— (A) DEADLINE.—The report shall be sub- mitted no later than March 1 and shall cover the fiscal year ending September 30 of the prior year. (B) LIMITATION.—The report shall be sub- mitted from March 1, 2009, until March 1, 2014. (e) CONGRESSIONAL COMMITTEES.—The report required by subsection (d) shall be submitted to— (1) the Committee on Oversight and Govern- ment Reform of the House of Representatives; (2) the Committee on Homeland Security and Governmental Affairs of the Senate; (3) the Committees on Appropriations of the House of Representatives and the Senate; and