[Code of Federal Regulations]

[Title 48, Volume 7]

[Revised as of October 1, 2005]

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

[CITE: 48CFR9904.402-61]



[Page 358-359]

 

            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM

 

     CHAPTER 99--COST ACCOUNTING STANDARDS BOARD, OFFICE OF FEDERAL 

           PROCUREMENT POLICY, OFFICE OF MANAGEMENT AND BUDGET

 

PART 9904_COST ACCOUNTING STANDARDS--Table of Contents

 

Sec. 9904.402-61  Interpretation.



    (a) 9904.402, Cost Accounting Standard--Consistency in Allocating 

Costs Incurred for the Same Purpose, provides, in 9904.402-40, that `` * 

* * no final cost objective shall have allocated to it as a direct cost 

any cost, if other costs incurred for the same purpose, in like 

circumstances, have been included in any indirect cost pool to be 

allocated to that or any other final cost objective.''

    (b) This interpretation deals with the way 9904.402 applies to the 

treatment of costs incurred in preparing, submitting, and supporting 

proposals. In essence, it is addressed to whether or not, under the 

Standard, all such costs are incurred for the same purpose, in like 

circumstances.

    (c) Under 9904.402, costs incurred in preparing, submitting, and 

supporting proposals pursuant to a specific requirement of an existing 

contract are considered to have been incurred in different circumstances 

from the circumstances under which costs are incurred in preparing 

proposals which do not result from such specific requirement. The 

circumstances are different



[[Page 359]]



because the costs of preparing proposals specifically required by the 

provisions of an existing contract relate only to that contract while 

other proposal costs relate to all work of the contractor.

    (d) This interpretation does not preclude the allocation, as 

indirect costs, of costs incurred in preparing all proposals. The cost 

accounting practices used by the contractor, however, must be followed 

consistently and the method used to reallocate such costs, of course, 

must provide an equitable distribution to all final cost objectives.