[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: 48CFR43.203]

[Page 795]
 
            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM
 
                CHAPTER 1--FEDERAL ACQUISITION REGULATION
 
PART 43_CONTRACT MODIFICATIONS--Table of Contents
 
                       Subpart 43.2_Change Orders
 
Sec.  43.203  Change order accounting procedures.

    (a) Contractors' accounting systems are seldom designed to segregate 
the costs of performing changed work. Therefore, before prospective 
contractors submit offers, the contracting officer should advise them of 
the possible need to revise their accounting procedures to comply with 
the cost segregation requirements of the Change Order Accounting clause 
at 52.243-6.
    (b) The following categories of direct costs normally are segregable 
and accountable under the terms of the Change Order Accounting clause:
    (1) Nonrecurring costs (e.g., engineering costs and costs of 
obsolete or reperformed work).
    (2) Costs of added distinct work caused by the change order (e.g., 
new subcontract work, new prototypes, or new retrofit or backfit kits).
    (3) Costs of recurring work (e.g., labor and material costs).