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(2) LIMIT OF ONE EXTENSION.—A task order contract may be ex-
tended under paragraph (1) only once and only in accordance with the 
limitations and requirements of this subsection. 
(i) INAPPLICABILITY TO CERTAIN CONTRACTS.—This section does not 
apply to a contract for the acquisition of property or services that includes 
acquisition of advisory and assistance services if the head of the executive 
agency entering into the contract determines that, under the contract, advi-
sory and assistance services are necessarily incident to, and not a significant 
component of, the contract. 
§ 4106. Orders 
(a) APPLICATION.—This section applies to task and delivery order con-
tracts entered into under sections 4103 and 4105 of this title. 
(b) ACTIONS NOT REQUIRED FOR ISSUANCE OF ORDERS.—The following 
actions are not required for issuance of a task or delivery order under a 
task or delivery order contract: 
(1) A separate notice for the order under section 1708 of this title 
or section 8(e) of the Small Business Act (15 U.S.C. 637(e)). 
(2) Except as provided in subsection (c), a competition (or a waiver 
of competition approved in accordance with section 3304(e) of this 
title) that is separate from that used for entering into the contract. 
(c) MULTIPLE AWARD CONTRACTS.—When multiple contracts are award-
ed under section 4103(d)(1)(B) or 4105(f) of this title, all contractors 
awarded the contracts shall be provided a fair opportunity to be considered, 
pursuant to procedures set forth in the contracts, for each task or delivery 
order in excess of $2,500 that is to be issued under any of the contracts, 
unless— 
(1) the executive agency’s need for the services or property ordered 
is of such unusual urgency that providing the opportunity to all of 
those contractors would result in unacceptable delays in fulfilling that 
need; 
(2) only one of those contractors is capable of providing the services 
or property required at the level of quality required because the services 
or property ordered are unique or highly specialized; 
(3) the task or delivery order should be issued on a sole-source basis 
in the interest of economy and efficiency because it is a logical follow- 
on to a task or delivery order already issued on a competitive basis; 
or 
(4) it is necessary to place the order with a particular contractor to 
satisfy a minimum guarantee. 
(d) ENHANCED COMPETITION FOR ORDERS IN EXCESS OF $5,000,000.— 
In the case of a task or delivery order in excess of $5,000,000, the require-
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ment to provide all contractors a fair opportunity to be considered under 
subsection (c) is not met unless all such contractors are provided, at a min-
imum— 
(1) a notice of the task or delivery order that includes a clear state-
ment of the executive agency’s requirements; 
(2) a reasonable period of time to provide a proposal in response to 
the notice; 
(3) disclosure of the significant factors and subfactors, including cost 
or price, that the executive agency expects to consider in evaluating 
such proposals, and their relative importance; 
(4) in the case of an award that is to be made on a best value basis, 
a written statement documenting— 
(A) the basis for the award; and 
(B) the relative importance of quality and price or cost factors; 
and 
(5) an opportunity for a post-award debriefing consistent with the 
requirements of section 3704 of this title. 
(e) STATEMENT OF WORK.—A task or delivery order shall include a 
statement of work that clearly specifies all tasks to be performed or prop-
erty to be delivered under the order. 
(f) PROTESTS.— 
(1) PROTEST NOT AUTHORIZED.—A protest is not authorized in con-
nection with the issuance or proposed issuance of a task or delivery 
order except for— 
(A) a protest on the ground that the order increases the scope, 
period, or maximum value of the contract under which the order 
is issued; or 
(B) a protest of an order valued in excess of $10,000,000. 
(2) JURISDICTION OVER PROTESTS.—Notwithstanding section 3556 
of title 31, the Comptroller General shall have exclusive jurisdiction of 
a protest authorized under paragraph (1)(B). 
(3) EFFECTIVE PERIOD.—This subsection shall be in effect for three 
years, beginning on the date that is 120 days after January 28, 2008. 
(g) TASK AND DELIVERY ORDER OMBUDSMAN.— 
(1) APPOINTMENT OR DESIGNATION AND RESPONSIBILITIES.—The 
head of each executive agency who awards multiple task or delivery 
order contracts under section 4103(d)(1)(B) or 4105(f) of this title 
shall appoint or designate a task and delivery order ombudsman who 
shall be responsible for reviewing complaints from the contractors on 
those contracts and ensuring that all of the contractors are afforded 
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a fair opportunity to be considered for task or delivery orders when re-
quired under subsection (c). 
(2) WHO IS ELIGIBLE.—The task and delivery order ombudsman 
shall be a senior agency official who is independent of the contracting 
officer for the contracts and may be the executive agency’s advocate 
for competition. 
CHAPTER 43—ALLOWABLE COSTS 
Sec. 
4301.
Definitions. 
4302.
Adjustment of threshold amount of covered contract. 
4303.
Effect of submission of unallowable costs. 
4304.
Specific costs not allowable. 
4305.
Required regulations. 
4306.
Applicability of regulations to subcontractors. 
4307.
Contractor certification. 
4308.
Penalties for submission of cost known to be unallowable. 
4309.
Burden of proof on contractor. 
4310.
Proceeding costs not allowable. 
§ 4301. Definitions 
In this chapter: 
(1) COMPENSATION.—The term ‘‘compensation’’, for a fiscal year, 
means the total amount of wages, salary, bonuses, and deferred com-
pensation for the fiscal year, whether paid, earned, or otherwise accru-
ing, as recorded in an employer’s cost accounting records for the fiscal 
year. 
(2) COVERED CONTRACT.—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 the term does not include a fixed-price 
contract without cost incentives or any firm fixed-price contract for the 
purchase of commercial items. 
(3) FISCAL YEAR.—The term ‘‘fiscal year’’ means a fiscal year estab-
lished by a contractor for accounting purposes. 
(4) SENIOR EXECUTIVE.—The term ‘‘senior executive’’, with respect 
to a contractor, means the 5 most highly compensated employees in 
management positions at each home office and each segment of the 
contractor. 
§ 4302. Adjustment of threshold amount of covered contract 
Effective on October 1 of each year that is divisible by 5, the amount 
set forth in section 4301(2) of this title shall be adjusted to the equivalent 
amount in constant fiscal year 1994 dollars. An adjusted amount that is 
not evenly divisible by $50,000 shall be rounded to the nearest multiple of 
$50,000. If an amount is evenly divisible by $25,000 but is not evenly divis-
ible by $50,000, the amount shall be rounded to the next higher multiple 
of $50,000. 
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§ 4303. Effect of submission of unallowable costs 
(a) INDIRECT COST THAT VIOLATES FEDERAL ACQUISITION REGULA-
TION COST PRINCIPLE.—An executive agency shall require that a covered 
contract provide that if the contractor submits to the executive agency a 
proposal for settlement of indirect costs incurred by the contractor for any 
period after those costs have been accrued and if that proposal includes the 
submission of a cost that is unallowable because the cost violates a cost 
principle in the Federal Acquisition Regulation or an executive agency sup-
plement to the Federal Acquisition Regulation, the cost shall be disallowed. 
(b) PENALTY FOR VIOLATION OF COST PRINCIPLE.— 
(1) UNALLOWABLE COST IN PROPOSAL.—If the executive agency de-
termines that a cost submitted by a contractor in its proposal for set-
tlement is expressly unallowable under a cost principle referred to in 
subsection (a) that defines the allowability of specific selected costs, the 
executive agency shall assess a penalty against the contractor in an 
amount equal to— 
(A) the amount of the disallowed cost allocated to covered con-
tracts for which a proposal for settlement of indirect costs has 
been submitted; plus 
(B) interest (to be computed based on provisions in the Federal 
Acquisition Regulation) to compensate the Federal Government 
for the use of the amount which a contractor has been paid in ex-
cess of the amount to which the contractor was entitled. 
(2) COST DETERMINED TO BE UNALLOWABLE BEFORE PROPOSAL 
SUBMITTED.—If the executive agency determines that a proposal for 
settlement of indirect costs submitted by a contractor includes a cost 
determined to be unallowable in the case of that contractor before the 
submission of that proposal, the executive agency shall assess a penalty 
against the contractor in an amount equal to 2 times the amount of 
the disallowed cost allocated to covered contracts for which a proposal 
for settlement of indirect costs has been submitted. 
(c) WAIVER OF PENALTY.—The Federal Acquisition Regulation shall pro-
vide for a penalty under subsection (b) to be waived in the case of a con-
tractor’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 insig-
nificant; or 
(3) the contractor demonstrates, to the contracting officer’s satisfac-
tion, that— 
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