---
kind: "section"
citation: "48 C.F.R. § 2042.803"
title: "48"
number: "2042.803"
heading: "Disallowing costs after incurrence."
url: "https://uscodex.org/cfr/48/2042.803"
---

# §2042.803. Disallowing costs after incurrence.

- (a) Vouchers and invoices submitted to NRC must be submitted to the contracting officer or designee for review and approval for payment. If the examination of a voucher or invoice raises a question regarding the allowability of a cost submitted, the contracting officer or designee shall:
  - (1) **Hold informal discussions with the contractor as appropriate.**
  - (2) If the discussions do not resolve the matter, the contracting officer shall issue a notice advising the contractor of costs disallowed. The notice must advise the contractor that it may:
    - (i) If in disagreement with the disallowance, submit a written claim to the contracting officer for payment of the disallowed cost and explain why the cost should be reimbursed; or
    - (ii) If the disagreement(s) cannot be settled, file a claim under the disputes clause which will be processed in accordance with disputes procedures found at FAR [subpart 33.2](/cfr/48/subpart33.2.md); and
  - (3) Process the voucher or invoice for payment and advise the NRC Division of Accounting and Finance to deduct the disallowed costs when scheduling the voucher for payment.
- (b) When audit reports or other notifications question costs or consider them unallowable, the contracting officer shall resolve all cost issues through discussions with the contractor and/or auditor within six months of receipt of the audit report whenever possible.
  - (1) One of the following courses of action must be pursued:
    - (i) Accept and implement audit recommendations as submitted;
    - (ii) Accept the principle of the audit recommendation but adjust the amount of the questioned costs;
    - (iii) **Reject audit findings and recommendations.**
  - (2) **When implementing the chosen course of action, the contracting officer shall—**
    - (i) Hold discussions with the auditor and contractor, as appropriate;
    - (ii) If the contracting officer agrees with the auditor concerning the questioned costs, attempt to negotiate a mutual settlement of questioned costs;
    - (iii) Issue a final decision, including any disallowance of questioned costs; inform the contractor of his/her right to appeal the decision under the disputes procedures found at FAR [subpart 33.2](/cfr/48/subpart33.2.md); and provide a copy of the final decision to the Office of the Inspector General; and
    - (iv) Initiate immediate recoupment actions for all disallowed costs owed the Government by one or more of the following methods:
      - (A) Request that the contractor provide a credit adjustment (offset) and an adequate description/explanation of the adjustment against amounts billed the Government on the next or other future invoice(s) submitted under the contract for which the disallowed costs apply;
      - (B) Deduct the disallowed costs from the next invoice submitted under the contract;
      - (C) Deduct the disallowed costs on a schedule determined by the contracting officer after discussion with the contractor (if the contracting officer determines that an immediate and complete deduction is inappropriate); and
      - (D) Advise the contractor that a refund is immediately payable to the Government (in situations where there are insufficient payments owed by the Government to effect recovery from the contract).

## Notes

### Authority

Authority: 42 U.S.C. 2201; 42 U.S.C. 5841; 41 U.S.C. 418(b).

### Source

Source: 64 FR 49336, Sept. 10, 1999, unless otherwise noted.