Is a reasonable cost an allowable cost?

Category: personal finance health insurance
4.2/5 (669 Views . 30 Votes)
Allowable: A cost is allowable to a project if: The costs are reasonable; The costs are allocable to the specific project; The costs conform to any limitations of the cost principles or the sponsored agreement.

Accordingly, are all reasonable costs allowable?

(a)A cost is allowable only when the cost complies with all of the following requirements: (1) Reasonableness. (2) Allocability. (3) Standards promulgated by the CAS Board, if applicable, otherwise, generally accepted accounting principles and practices appropriate to the circumstances.

Also Know, what are allowable costs for federal contracts? Allowable costs are defined in the FAR as costs that are reasonable and allocable to the contract, per the terms of the contract at issue, Cost Accounting Standards and the FAR. (See FAR 31.201-2). Although this is a broad definition, FAR Section 31 specifically addresses many types of costs a contractor may incur.

Regarding this, what is allowable cost?

Definition: Allowable costs are expenses that are included in a contracted service or product. Usually unallowable costs are referred to as non-covered or non-contracted costs. These are the costs that are over and above what the contract specifies.

Are bank fees allowable under far?

Interest and other financial costs FAR 31.205-20 Interest expenses are generally unallowable. Examples of interest expenses are interest on loans and lines of credit. Financial costs also are generally unallowable and include things such as renewal fees on lines of credit and annual fees on credit cards.

18 Related Question Answers Found

How is far overhead rate calculated?

The overhead rate is calculated by dividing total allowable indirect expenses over total allowable direct labor, however getting to that simple step takes some effort.

What two cost elements are required to calculate an indirect cost?

Indirect cost rates are expressed in terms such as dollars per hour or percentage of cost. Indirect cost rates are calculated for each accounting period by dividing a pool of indirect cost for the period by the allocation base (e.g. direct labor hours or direct labor cost) for the same period.

Is severance pay allowable under far?

Severance pay FAR 31.205-6(g) Is allowable if payment is required by law, an employer-employee agreement, an established policy that is an implied agreement on the consultant's part, or the circumstances of the particular employment.

Are proposal preparation costs allowable?

Proposal costs are defined as the costs of preparing bids, proposals, or applications on potential Awards, including the development of data necessary to support the UW's bids or proposals. For most federal Awards, proposal costs, for both successful and unsuccessful bids, are not allowable as direct costs.

What are allocable costs?

Allocable: A cost is allocable to a project if goods or services involved are chargeable or assignable in accordance with the relative benefits received by the projects. The costs are treated consistently in like circumstances; and. The costs conform to any limitations of the cost principles or the sponsored agreement.

What is far 31?

The Federal Acquisition Regulation (FAR) Part 31 exists to help government contractors determine which costs are reimbursable and how these costs should be accounted for.

Are business meals allowable under far?

When an unallowable cost is incurred, its directly associated costs are also unallowable. The business meal is deemed allowable; however, the cost of the alcohol, an expressly unallowable cost and any sales tax or tips allocated to that cost must be separately recorded as unallowable costs.

Is G&A allowable on travel?

In summary, G&A on travel is an allowable, ordinary and necessary cost associated with travel in support of contracts and seeking to recover this cost is perfectly acceptable.

Are legal fees allowable under far?

Legal costs are covered if they are incurred as required by the terms of the government contract or per the direction of the contracting officer in writing. Legal costs are covered pursuant to FAR 31.205-33, which states that the costs must be incurred in order to enhance the contractor's legal position.

What are unallowable costs?

Unallowable Costs. Costs are defined as allowable or unallowable for reimbursement by the government. The federal government asserts that federal funds may not be used to pay unallowable expenses. Unallowable expenses may NOT be charged either directly or indirectly to the federal government.

What is Allocability?

A cost that can be assigned or charged to one or more activities or items (cost objects) on the basis of benefits received or other such equitable or logical association, although a direct (causal) relationship may not be established. Also referred to as allocability.

What is allocable?

Definition of allocable. : capable of being allocated.

What is ODC in government contracts?

In other words, an other direct cost is a cost that can be identified specifically with a final cost objective that the offeror does not treat as a direct material cost or a direct labor cost.

How does proposal modeling assist the contracting officer in achieving these objectives?

Proposal modeling allows the contracting officer to do this by breaking down an offeror's cost proposal into digestible pieces and organizing it for analysis by spreading its cost elements (material, labor, other direct costs (ODCs), etc.) and sub-elements using an Excel spreadsheet.