Use the clause at 52.242-3, Penalties for Unallowable Costs, in all solicitations and contracts over $800,000 except fixed-price contracts without cost incentives or any firm-fixed-price contract for the purchase of commercial items. Generally, covered contracts are those which contain one of the clauses at 52.216-7, 52.216-16, or 52.216-17, or a similar clause from an executive agency's supplement to the FAR.

[60 FR 42659, Aug. 16, 1995, as amended at 69 FR 76358, Dec. 20, 2004; 71 FR 57368, Sept. 28, 2006; 72 FR 27385, May 15, 2007; 75 FR 53134, Aug. 30, 2010; 80 FR 38298, July 2, 2015; 85 FR 62489, Oct. 2, 2020]