[Code of Federal Regulations]

[Title 48, Volume 1]

[Revised as of October 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 48CFR42.703-1]



[Page 793-794]

 

            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.



[[Page 794]]



    (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

    (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]