§ 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.
(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;
(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—
(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—
(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:
(5)
Promoting the development of technologies identified as critical under section
2506 of this title.
(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.