PUBLIC LAW 103-337—OCT. 5, 1994 108 STAT. 2821 SEC. 818. PAYMENT OF RESTRUCTURING COSTS UNDER DEFENSE CON- 10 USC 2324 TRACTS. "° *e- (a) CERTIFICATION OF COST SAVINGS.— (1) The Secretary of Defense may not, under section 2324 of title 10, United States Code, pay restructuring costs associated with a business combination undertaken by a defense contractor until the Department of Defense reviews the projected costs and savings that will result for the Department from such business combination and an official of the Department of Defense at the level of Assistant Secretary of Defense or above certifies in writing that projections of future cost savings resulting for the Department from the business combination are based on audited cost data and should result in overall reduced costs to the Department. (2) The requirements for a review and certification under psiragraph (1) shall not apply with respect to any business combination for which restructuring costs were paid or otherwise approved by the Secretary before August 15, 1994. (b) REQUIREMENT FOR REGULATIONS.—Not later than January 1, 1995, the Secretary of Defense shall prescribe regulations on the allowability of restructuring costs associated with business combinations under defense contracts. (c) MATTERS TO BE INCLUDED. —At a minimum, the regulations shall— (1) include a definition of the term "restructuring costs"; and (2) address the issue of contract novations under such contracts. (d) CONSULTATION.— In developing the regulations, the Secretary of Defense shall consult with the Administrator for Federal Procurement Policy. (e) REPORT. — Not later than November 13 in each of the years 1995, 1996, and 1997, the Secretary of Defense shall submit to Congress a report on the following: (1) A description of the procedures being followed within the Department of Defense for evaluating projected costs and savings under a defense contract resulting from a restructuring of a defense contractor associated with a business combination. (2) A list of all defense contractors for which restructuring costs have been allowed by the Department, along with the identities of the firms which those contractors have acquired or with which those contractors have combined since July 21, 1993, that qualify the contractors for such restructuring reimbursement. (3) The Department's experience with business combinations for which the Department has agreed to allow restructuring costs since July 21, 1993, including the following: (A) The estimated amount of costs associated with each restructuring that have been or will be treated as allowable costs under defense contracts, including the type and amounts of costs that would not have arisen absent the business combination. (B) The estimated amount of savings associated with each restructuring that are expected to be achieved on defense contracts. (C) The types of documentation relied on to establish that savings associated with each restructuring will exceed costs associated with the restructuring.
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