(a) This section implements 10 U.S.C. 2324 (a) through (d) and 41 U.S.C. 4303. It covers the assessment of penalties against contractors which include unallowable indirect costs in--
(1) Final indirect cost rate proposals; or
(2) The final statement of costs incurred or estimated to be incurred under a fixed-price incentive contract.
(b) This section applies to all contracts in excess of $750,000, except fixed-price contracts without cost incentives or any firm-fixed-price contracts for the purchase of commercial items. [60 FR 42658, Aug. 16, 1995, as amended at 69 FR 76358, Dec. 20, 2004; 71 FR 57368, Sept. 28, 2006; 75 FR 53134, Aug. 30, 2010; 79 FR 24213, Apr. 29, 2014; 80 FR 38298, July 2, 2015]