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TITLE VIII--ACQUISITION POLICY, ACQUISITION MANAGEMENT, AND RELATED MATTERS

Public Law 108-136

House Conference Report 108-354

SEC. 804. SPECIAL TEMPORARY CONTRACT CLOSEOUT AUTHORITY.

(a) AUTHORITY- The Secretary of Defense may settle any financial account for a contract entered into by the Secretary or the Secretary of a military department before October 1, 1996, that is administratively complete if the financial account has an unreconciled balance, either positive or negative, that is less than $100,000.

(b) FINALITY OF DECISION- A settlement under this section shall be final and conclusive upon the accounting officers of the United States.

(c) REGULATIONS- The Secretary of Defense shall prescribe regulations for the administration of the authority under this section.

(d) TERMINATION OF AUTHORITY- A financial account may not be settled under this section after September 30, 2006.

The Senate amendment contained a provision (sec. 802) that would allow the Secretary of Defense to settle the financial accounts for contracts executed prior to September 30, 1996, that have unreconciled balances of less than $100,000. This provision would give the Secretary of Defense three fiscal years to execute this authority.

The House bill contained no similar provision.

The House recedes.

Senate Rpt.108-046

The committee recommends a provision that would allow the Secretary of Defense to settle the financial accounts for contracts executed prior to September 30, 1996, that have unreconciled balances of less than $100,000. This section would give the Secretary of Defense three fiscal years to execute this authority.

Settlement of contracts with unreconciled balances often is necessary where a contractor has been overpaid, but neither the contractor nor the Government has any evidence of under or overpayment aside from the fact that the accounts do not reconcile. In many circumstances, the time and effort required to determine the cause of the out-of-balance condition may be disproportionate to the amount of the discrepancy.

This provision would allow DOD to terminate further reconciliation efforts or collection efforts if, after analysis, the cost of the effort is disproportionate to the amount of the discrepancy.