42.709-1 Scope.
(a) This section implements 10 U.S.C. 3743 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 $800,000, except fixed-price contracts without cost incentives or any firm-fixed-price contracts for the purchase of commercial products or commercial services.