Month: January 2021

Accruals for the cost of securities before issuing the securities to the employees are subject to adjustment according to the possibilities that the employees will not receive the securities and that their interest in the accruals will be forfeited. Valuation placed on the securities is the fair market value on the first date the number of shares awarded is known, determined upon the most objective basis available. Costs of promotional material, motion pictures, videotapes, brochures, handouts, magazines, and other media that are designed to call favorable attention to the contractor and its activities. All costs of trade shows and other special events which do not contain a significant effort to promote the export sales of products normally sold to the U.S. The requirements of paragraph of this section apply to any tier above the first firm-fixed-price subcontract or fixed-price subcontract with economic price adjustment provisions. Proposal means any offer or other submission used as a basis for pricing a contract, contract modification, or termination settlement or for securing payments thereunder.

Spread-gain actuarial cost method means any of the several projected benefit actuarial cost methods under which actuarial gains and losses are included as part of the current and future normal costs of the pension plan. Consistent treatment means that similar costs must be treated uniformly in the same manner as either a direct cost or as F & A costs. Certain types of costs, such as the salaries of administrative and clerical staff, office supplies and postage are normally treated as F & A costs, therefore, the same types of costs cannot be charged directly to federally sponsored agreements. Consultants are independent contractors, not employees, who provide a service that cannot be performed satisfactorily by existing University personnel during the performance of the project. The consultant costs should include the period of service or the number of days on the project, the professional fee, travel expenses and other related expenses.

107 Contracts with State, local, and federally recognized Indian tribal governments.

However, the costs to return employees, who are released from employment upon completion of field assignments pursuant to their employment agreements, are not subject to the refund or credit requirement of paragraph . If the contractor does not have such a formal written policy, the cost of premiums for insurance coverage in excess of the acquisition cost of the insured asset is unallowable. IR&D costs incurred by a contractor pursuant to these types of cooperative arrangements should be considered as allowable IR&D costs if the work performed would have been allowed as contractor IR&D had there been no cooperative arrangement. IR&D and B&P costs shall be allocated to final cost objectives on the same basis of allocation Guiding Cost Principles used for the G&A expense grouping of the profit center (see 31.001) in which the costs are incurred. However, when IR&D and B&P costs clearly benefit other profit centers or benefit the entire company, those costs shall be allocated through the G&A of the other profit centers or through the corporate G&A, as appropriate. Rebates and purchase discounts, in whatever form, granted to employees on products or services produced by the contractor or affiliates are unallowable. Costs of bonding required by the contractor in the general conduct of its business are allowable to the extent that such bonding is in accordance with sound business practice and the rates and premiums are reasonable under the circumstances.

Pension plan means a deferred compensation plan established and maintained by one or more employers to provide systematically for the payment of benefits to plan participants after their retirements, provided that the benefits are paid for life https://simple-accounting.org/ or are payable for life at the option of the employees. Additional benefits such as permanent and total disability and death payments, and survivorship payments to beneficiaries of deceased employees, may be an integral part of a pension plan.

Four Cost Principles

If material is issued from stores, any generally recognized method of pricing such material is acceptable if that method is consistently applied and the results are equitable. Costs incurred in attempting to improperly influence (see 3.401), either directly or indirectly, an employee or officer of the Executive branch of the Federal Government to give consideration to or act regarding a regulatory or contract matter. However, approval of a contractor’s insurance program in accordance with part 28 does not constitute a determination as to the allowability of the program’s cost.

For PRHP financed on a pay-as-you-go method, allowable costs will be limited to those representing actual payments to retirees or their beneficiaries. Non-faculty full-time professional personnel may also earn “extra service pay” in accordance with the non-Federal entity’s written policy and consistent with paragraph of this section. The total salaries charged to Federal awards including extra service pay are subject to the Standards of Documentation as described in paragraph of this section.

Cost Principles

Subject to the requirements of paragraphs through of this section, the costs of family movements and of personnel movements of a special or mass nature are allowable. The cost, however, should be assigned on the basis of work or time period benefited. If relocation costs for an employee have been allowed either as an allocable indirect or direct cost, and the employee resigns within 12 months for reasons within the employee’s control, the contractor shall refund or credit the relocation costs to the Government. “Professional and consultant services,” as used in this subsection, means those services rendered by persons who are members of a particular profession or possess a special skill and who are not officers or employees of the contractor. Examples include those services acquired by contractors or subcontractors in order to enhance their legal, economic, financial, or technical positions. Professional and consultant services are generally acquired to obtain information, advice, opinions, alternatives, conclusions, recommendations, training, or direct assistance, such as studies, analyses, evaluations, liaison with Government officials, or other forms of representation.

• This definition shall not include the amount of year end accruals for salaries, wages, or bonuses that are to be paid within a reasonable period of time after the end of a cost accounting period.
• Whether the service can be performed more economically by direct employment rather than contracting.
• The cost of computing devices is allowed for those devices that are essential and allocable to the sponsored project.
• Costs incurred by the non-Federal entity in connection with the defense of suits brought by its employees or ex-employees under section 2 of the Major Fraud Act of 1988 (18 U.S.C. 1031), including the cost of all relief necessary to make such employee whole, where the non-Federal entity was found liable or settled, are unallowable.
• For example, schedules need to be adjusted for Government contract costing purposes if they are based on replacement cost, include unallowable interest costs, or use improper cost of money rates or computations.

The cost is necessary and reasonable for the performance of the award and is allocable to the sponsored project under these principles. This subpart provides the principles for determining the cost of research and development, training, and other work performed by educational institutions under contracts with the Government. For intangible capital assets, when the purchase method of accounting for a business combination is used, allowable amortization and cost of money shall be limited to the total of the amounts that would have been allowed had the combination not taken place. Goodwill, an unidentifiable intangible asset, originates under the purchase method of accounting for a business combination when the price paid by the acquiring company exceeds the sum of the identifiable individual assets acquired less liabilities assumed, based upon their fair values.

Allocable

University cost sharing is considered cash, as it can be accounted for from the University’s records. In-Kind contributions are non-cash contributions typically provided from outside sources such as donations of equipment, sub-contractors of time or facilities, or volunteer services. For all activities performed in facilities not owned by the institution and to which rent is directly allocated to the project, the off campus rate will apply. If more than 50% of a project is performed off campus, the off campus rate will apply to the entire project. We review contracts for sponsored projects applying regulatory, statutory and organizational knowledge to balance the university’s mission, the sponsor’s objectives, and the investigator’s intellectual pursuits. Costs of travel by non-Federal entity-owned, -leased, or -chartered aircraft include the cost of lease, charter, operation , maintenance, depreciation, insurance, and other related costs.

For contracts subject to full CAS coverage, allocation of indirect costs shall be based on the applicable provisions. For all other contracts, the applicable CAS provisions in paragraphs through of this section apply. The applicable subparts of part 31 shall be used in the pricing of fixed-price contracts, subcontracts, and modifications to contracts and subcontracts whenever cost analysis is performed, or a fixed-price contract clause requires the determination or negotiation of costs. However, application of cost principles to fixed-price contracts and subcontracts shall not be construed as a requirement to negotiate agreements on individual elements of cost in arriving at agreement on the total price. The final price accepted by the parties reflects agreement only on the total price. Further, notwithstanding the mandatory use of cost principles, the objective will continue to be to negotiate prices that are fair and reasonable, cost and other factors considered.