[Code of Federal Regulations]
[Title 48, Volume 1]
[Revised as of October 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 48CFR42.703-1]

[Page 769-770]
 
            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM
 
                CHAPTER 1--FEDERAL ACQUISITION REGULATION
 
PART 42_CONTRACT ADMINISTRATION AND AUDIT SERVICES--Table of Contents
 
                    Subpart 42.7_Indirect Cost Rates
 
Sec.  42.703-1  Policy.

    (a) A single agency (see 42.705-1) shall be responsible for 
establishing final indirect cost rates for each business unit. These 
rates shall be binding on all agencies and their contracting offices, 
unless otherwise specifically prohibited by statute. An agency shall not 
perform an audit of indirect cost rates when the contracting officer 
determines that the objectives of the audit can reasonably be met by 
accepting the results of an audit that was conducted by any other 
department or agency of the Federal Government (10 U.S.C. 2313(d) and 41 
U.S.C. 254d(d)).
    (b) Billing rates and final indirect cost rates shall be used in 
reimbursing indirect costs under cost-reimbursement contracts and in 
determining progress payments under fixed-price contracts.
    (c) To ensure compliance with 10 U.S.C. 2324(a) and 41 U.S.C. 
256(a)--
    (1) Final indirect cost rates shall be used for contract closeout 
for a business unit, unless the quick-closeout procedure in 42.708 is 
used. These final rates shall be binding for all cost-reimbursement 
contracts at the business unit, subject to any specific limitation in a 
contract or advance agreement; and

[[Page 770]]

    (2) Established final indirect cost rates shall be used in 
negotiating the final price of fixed-price incentive and fixed-price 
redeterminable contracts and in other situations requiring that indirect 
costs be settled before contract prices are established, unless the 
quick-closeout procedure in 42.708 is used.

[48 FR 42370, Sept. 19, 1983, as amended at 60 FR 42661, Aug. 16, 1995. 
Redesignated at 60 FR 42664, Aug. 16, 1995, as amended at 62 FR 274, 
Jan. 2, 1997; 63 FR 9064, Feb. 23, 1998]