[Code of Federal Regulations]
[Title 28, Volume 2]
[Revised as of July 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 28CFR70.27]

[Page 269]
 
                    TITLE 28--JUDICIAL ADMINISTRATION
 
              CHAPTER I--DEPARTMENT OF JUSTICE (Continued)
 
  PART 70--UNIFORM ADMINISTRATIVE REQUIREMENTS FOR GRANTS AND AGREEMENTS (INCLUDING SUBAWARDS) WITH INSTITUTIONS OF HIGHER EDUCATION, HOSPITALS AND OTHER NON-
PROFIT ORGANIZATIONS--Table of Contents
 
                   Subpart C--Post-Award Requirements
 
Sec. 70.27  Allowable costs.

    (a) For each kind of recipient, there is a set of Federal principles 
for determining allowable costs. Allowability of costs must be 
determined in accordance with the cost principles applicable to the 
entity incurring the costs. Thus, allowability of costs incurred by 
State, local or Federally-recognized Indian tribal governments is 
determined in accordance with the provisions of OMB Circular A-87, 
``Cost Principles for State and Local Governments.'' The allowability of 
costs incurred by non-profit organizations is determined in accordance 
with the provisions of OMB Circular A-122, ``Cost Principles for Non-
Profit Organizations.'' The allowability of costs incurred by 
institutions of higher education is determined in accordance with the 
provisions of OMB Circular A-21, ``Cost Principles for Educational 
Institutions.'' The allowability of costs incurred by commercial 
organizations and those non-profit organizations listed in Attachment C 
to Circular A-122 is determined in accordance with the provisions of the 
Federal Acquisition Regulation (FAR) at 48 CFR part 31.
    (b) OMB Circular A-122 does not cover the treatment of bid and 
proposal costs or independent research and development costs. The 
following rules apply to these costs for non-profit organizations 
subject to the Circular.
    (1) Bid and proposal costs. Bid and proposal costs are the immediate 
costs of preparing bids, proposals, and applications for Federal and 
non-Federal awards, contracts, and agreements, including the development 
of scientific, costs, and other data needed to support the bids, 
proposals, and applications. Bid and proposal costs of the current 
accounting period are all allowable as indirect costs. Bid and proposal 
costs of past accounting periods are unallowable in the current period. 
However, if the recipient's established practice is to treat these costs 
by some other method, they may be accepted if they are found to be 
reasonable and equitable. Bid and proposal costs do not include 
independent research and development costs covered by paragraph (b)(2) 
of this section, or preaward costs covered by Attachment B, Paragraph 33 
of OMB Circular A-122.
    (2) Independent Research and Development costs. Independent research 
and development shall must be allocated its proportionate share of 
indirect costs on the same basis as the allocation of indirect costs to 
sponsored research and development. The costs of independent research 
and development, including its proportionate share of indirect costs, 
are unallowable.