[Code of Federal Regulations]

[Title 32, Volume 1]

[Revised as of July 1, 2006]

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

[CITE: 32CFR37.520]



[Page 233-234]

 

                       TITLE 32--NATIONAL DEFENSE

 

              CHAPTER I--OFFICE OF THE SECRETARY OF DEFENSE

 

PART 37_TECHNOLOGY INVESTMENT AGREEMENTS--Table of Contents

 

                 Subpart E_Pre-Award Business Evaluation

 

Sec.  37.520  What is my responsibility for determining that the total 

project funding is reasonable?



    In cooperation with the program official, you must assess the 

reasonableness of the total estimated budget to perform the research 

that will be supported by the agreement. Additional guidance follows 

for:

    (a) Labor. Much of the budget likely will involve direct labor and 

associated indirect costs, which may be represented together as a 

``loaded'' labor rate. The program official is an essential advisor on 

reasonableness of the overall level of effort and its composition by 

labor category. You also may rely on your experience with other awards 

as the basis for determining reasonableness. If you have any unresolved 

questions, two of the ways that you might find helpful in establishing 

reasonableness are to:

    (1) Consult the administrative agreements officers or auditors 

identified in Sec.  37.505.

    (2) Compare loaded labor rates of for-profit firms that do not have 

expenditure-based Federal procurement contracts or assistance awards 

with a standard or average for the particular industry. Note that the 

program official may have knowledge about customary levels of direct 

labor charges in the particular industry that is involved. You may be 

able to compare associated indirect charges with Government-approved 

indirect cost rates that exist for many nonprofit and for-profit



[[Page 234]]



organizations that have Federal procurement contracts or assistance 

awards (note the requirement in Sec.  37.630 for a for-profit 

participant to use Federally approved provisional indirect cost rates, 

if it has them).

    (b) Real property and equipment. In almost all cases, the project 

costs may include only depreciation or use charges for real property and 

equipment of for-profit participants, in accordance with Sec.  37.685. 

Remember that the budget for an expenditure-based TIA may not include 

depreciation of a participant's property as a direct cost of the project 

if that participant's practice is to charge the depreciation of that 

type of property as an indirect cost, as many organizations do.



                              Cost Sharing