106 STAT. 2458 PUBLIC LAW 102-484—OCT. 23, 1992 (v) in subparagraph (A), by striking out "costs" and inserting in lieu uiereof the following: "cost allocated to covered contracts for which a proposal for settlement of indirect costs has been submitted"; (2) in subsection (b)— (A) by striking out "(b) If the Secretary" and inserting in lieu thereof "(2) If the Secretary"; (B) by striking out", in addition to the penalty assessed under subsection (a),"; and (C) b^r striking out "the amount of such cost" and inserting in lieu tnereof "the amount of the disallowed cost allocated to covered contracts for which a proposal for settlement of indirect costs has been submitted"; (3) by striking out subsection (d); (4) by redesignating subsection (c) as subsection (d); and (5) by inserting before subsection (d) (as so redesignated) the following: R^uiations. "(c) The Secretary shall prescribe regiilations providing for a penalty under subsection (b) to be waived in the case of a contractor's proposal for settlement of indirect costs when— "(1) the contractor withdraws the proposal before the formal initiation of an audit of the proposal by the Federal Government and resubmits a revised proposal; "(2) the amount of unallowable costs subject to the penalty is insignificant; or "(3) the contractor demonstrates, to the contracting officer's satisfaction, that— "(A) it has established appropriate policies and personnel training cmd an internal control and review system that provide assurances that unallowable costs subject to penalties are precluded from bein^ included in the contractor's proposal for settlement of indirect costs; and (B) the unallowable costs subject to the penalty were inadvertently incorporated into the proposal.". 10 USC 2324 (b) EFFECTIVE DATE.—The amendments made by subsection ^°^- (a) shall take effect on the date of the enactment of this Act and shall apply, as provided in regulations prescribed by the Secretary of Defense, with respect to proposals for settlement of indirect costs for which the Federal Government has not formcdly initiated an audit before that date. SEC. 819. ADVISORY AND ASSISTANCE SERVICES FOR OPERATIONAL TEST AND EVALUATION. Paragraph (3) of section 2399(e) of title 10, United States Code, is amended— (1) by inserting "(A)" after "(3)"; and (2) by adding at the end the following new subparagraph: "(B) The limitation in subparagraph (A) does not apply to a contractor that has participated in such development, production, or testing solely as a representative of the Federal Government.". SEC. 820. REGULATIONS RELATING TO SUBSTANTIAL CHANGES IN THE PARTICIPATION OF A MILITARY DEPARTMENT IN A JOINT ACQUISITION PROGRAM. (a) REGULATIONS REQUIRED.— Section 2308 of title 10, United States Code, is amended— (1) by designating the existing text as subsection (a); and (2) by admng at Uie end the following new subsection:
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