PUBLIC LAW 103-355 —OCT. 13, 1994 108 STAT. 3315 another criminal, civil, or administrative proceeding, and (ii) the costs of such other proceeding are not allowable under paragraph (1). "(6) In this subsection: "(A) The term 'proceeding* includes an investigation. "(B) The term 'costs', with respect to a proceeding— "(i) means all costs incurred by a contractor, whether before or after the commencement of any such proceeding; and "(ii) includes— "(I) administrative and clerical expenses; "(II) the cost of legal services, including legal services performed by an employee of the contractor; "(III) the cost of the services of accountants and consultants retsdned by the contractor; and "(IV) the pay of directors, officers, and employees of the contractor for time devoted by such directors, officers, and employees to such proceeding. "(C) The term 'penalty* does not include restitution, reimbursement, or compensatory damages. "(1) COVERED CONTRACT DEFINED.— (1) In this section, the term 'covered contract' means a contract for an amount in excess of $500,000 that is entered into by an executive agency, except that such term does not include a fixed-price contract without cost incentives or any firm, fixed price contract for the purchase of commercial items. "(2) Effective on October 1 of each year that is divisible by five, the amount set forth in paragraph (1) shall be adjusted to the equivalent amount in constant fiscal year 1994 dollars. An amount, as so adjusted, that is not evenly divisible by $50,000 shall be rounded to the nearest multiple of $50,000. In the case of an amount that is evenly divisible by $25,000 but is not evenly divisible by $50,000, the amount shall be rounded to the next higher multiple of $50,000. ". PART III—ACQUISITIONS GENERALLY SEC. 2191. TRAVEL EXPENSES OF GOVERNMENT CONTRACTORS. Section 24 of the Office of Federal Procurement Pohcy Act (41 U.S.C. 420) is repealed. SEC. 2192. REVISION OF COST PRINCIPLE RELATING TO ENTERTAIN- 41 USC 256 note. MENT, GIFT, AND RECREATION COSTS FOR CONTRACTOR EMPLOYEES. (a) COSTS NOT ALLOWABLE. — (1) The costs of gifts or recreation for employees of a contractor or members of their families that are provided by the contractor to improve employee morale or performance or for any other purpose are not allowable under a covered contract unless, within 120 days afl«r the date of the enactment of this Act, the Federal Acquisition Regulatory Council prescribes amendments to the Federal Acquisition Regulation specifying circumstances under which such costs are allowable under a covered contract. (2) Not later than 90 days after the date of the enactment of this Act, the Federal Acquisition Regulatory Council shall amend the cost principle in the Federal Acquisition Regulation that is
�
