---
kind: "section"
citation: "10 U.S.C. § 6321"
title: "10"
title_heading: "Armed Forces"
number: "6321"
heading: "Costs not allowed under covered contracts"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/10/6321"
units:
  - "Subtitle A — General Military Law"
  - "Part VI — Elements of Department of Defense and Other Matters"
  - "Subpart B — Atomic Energy Defense"
  - "Chapter 608 — Administrative Matters"
  - "Subchapter I — Contracts"
---

# §6321. Costs not allowed under covered contracts

- (a) **In General.—** The following costs are not allowable under a covered contract:
  - (1) Costs of entertainment, including amusement, diversion, and social activities and any costs directly associated with such costs (such as tickets to shows or sports events, meals, lodging, rentals, transportation, and gratuities).
  - (2) Costs incurred to influence (directly or indirectly) legislative action on any matter pending before Congress or a [State](/usc/10/4951.md?p=4) legislature.
  - (3) Costs incurred in defense of any civil or criminal fraud proceeding or similar proceeding (including filing of any false certification) brought by the [United States](/usc/10/101.md?p=a-1) where the contractor is found liable or has pleaded nolo contendere to a charge of fraud or similar proceeding (including filing of false certification).
  - (4) Payments of fines and penalties resulting from violations of, or failure to comply with, Federal, [State](/usc/10/4951.md?p=4), local, or foreign laws and regulations, except when incurred as a result of compliance with specific terms and conditions of the contract or specific written instructions from the contracting [officer](/usc/10/101.md?p=b-1) authorizing in advance such payments in accordance with applicable regulations of the [Secretary](/usc/10/4951.md?p=3) of Energy.
  - (5) Costs of membership in any social, dining, or country club or organization.
  - (6) Costs of alcoholic beverages.
  - (7) Contributions or donations, regardless of the recipient.
  - (8) Costs of advertising designed to promote the contractor or its products.
  - (9) Costs of promotional items and memorabilia, including models, gifts, and souvenirs.
  - (10) Costs for travel by commercial aircraft or by travel by other than common carrier that is not necessary for the performance of the contract and the cost of which exceeds the amount of the standard commercial fare.
- (b) **Regulations; Costs of Information Provided to Congress or State Legislatures and Related Costs.—**
  - (1) Not later than 150 days after November 8, 1985, the [Secretary](/usc/10/4951.md?p=3) of Energy shall prescribe regulations to implement this section. Such regulations may establish appropriate definitions, exclusions, limitations, and qualifications. Such regulations shall be published in accordance with [section 1707 of title 41](/usc/41/1707.md).
  - (2) In any regulations implementing [subsection (a)(2)](#a-2), the [Secretary](/usc/10/4951.md?p=3) may not treat as not allowable (by reason of such subsection) the following costs of a contractor:
    - (A) Costs of providing to Congress or a [State](/usc/10/4951.md?p=4) legislature, in [response](/usc/10/2700.md?p=2) to a request from Congress or a [State](/usc/10/4951.md?p=4) legislature, information of a factual, technical, or scientific nature, or advice of experts, with respect to topics directly related to the performance of the contract.
    - (B) Costs for transportation, lodging, or meals incurred for the purpose of providing such information or advice.
- (c) **Covered Contract Defined.—** In this section, the term “covered contract” means a contract for an amount more than $100,000 entered into by the [Secretary](/usc/10/4951.md?p=3) of Energy obligating funds appropriated for [national security](/usc/10/801.md?p=16) [programs](/usc/10/2101.md?p=1) of the [Department](/usc/10/101.md?p=a-6) of Energy.
- (d) **Effective Date.—** [Subsection (a)](#a) shall apply with respect to costs incurred under a covered contract on or after 30 days after the regulations required by [subsection (b)](#b) are issued.

## Source credit

(Added and amended Pub. L. 119–60, div. C, title XXXI, § 3111(a), (d)(2)(B), Dec. 18, 2025, 139 Stat. 1440, 1462.)

## Notes

### Editorial Notes

### Prior Provisions

A prior section 6321 was renumbered section 8321 of this title.

Provisions similar to those in this section were contained in section 2781 of Title 50, War and National Defense, prior to repeal by Pub. L. 119–60, § 3111(b)(1).

### Amendments

2025—Pub. L. 119–60, § 3111(d)(2)(B), realigned margins.