[Code of Federal Regulations]

[Title 48, Volume 4]

[Revised as of October 1, 2006]

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

[CITE: 48CFR335.070-2]



[Page 67]

 

            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM

 

                  CHAPTER 3--HEALTH AND HUMAN SERVICES

 

PART 335_RESEARCH AND DEVELOPMENT CONTRACTING--Table of Contents

 

Sec. 335.070-2  Amount of cost-sharing.



    When cost-sharing is determined to be appropriate, the following 

guidelines shall be utilized in determining the amount of cost 

participation by the contractor.

    (a) The amount of cost participation should depend to a large extent 

on whether the research effort or results are likely to enhance the 

performing organization's capability, expertise, or competitive 

position, and the value of this enhancement to the performing 

organization. It should be recognized that those organizations which are 

predominantly engaged in research and development have little or no 

production or other service activities and may not be in a favorable 

position to derive a monetary benefit from their research under Federal 

agreements. Therefore, contractor cost participation could reasonably 

range from as little as 1 percent or less of the total project cost, to 

more than 50 percent of the total project cost. Ultimately, the 

contracting officer should bear in mind that cost-sharing is a 

negotiable item. As such, the amount of cost-sharing should be 

proportional to the anticipated value of the contractor's gain.

    (b) If the performing organization will not acquire title or the 

right to use inventions, patents, or technical information resulting 

from the research project, it would generally be appropriate to obtain 

less cost-sharing than in cases in which the performer acquires these 

rights.

    (c) A fee or profit will usually not be paid to the performing 

organization if the organization is to contribute to the cost of the 

research effort, but the amount of cost-sharing may be reduced to 

reflect the fact that the organization is foregoing its normal fee or 

profit in the research. However, if the research is expected to be of 

only minor value to the performing organization and if cost-sharing is 

not required by statute, it may be appropriate for the performer to make 

a contribution in the form of a reduced fee or profit rather than 

sharing costs of the project.

    (d) The organization's participation may be considered over the 

total term of the project so that a relatively high contribution in one 

year may be offset by a relatively low contribution in another.

    (e) A relatively low degree of cost-sharing may be appropriate if, 

in the view of the operating divisions or their subordinate elements, an 

area of research requires special stimulus in the national interest.