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  • Question

    Are these B&P costs incurred under contractor A allowable? What should be the reference for such costs determined to be allowable?


    Answer

    There is nothing in the background of the issue that is described that makes me believe that these Bid and Proposal (B&P) costs which were incurred as part of a joint venture would be unallowable as a cost to government contracts as part of the G&A rate. Per FAR 31.205-18(e)(3), it will be fairly easy for contractor A to prove that these B&P costs would have been allowable as part of the G&A pool if the joint venture had not existed and are allowable under the given scenario.
     
    Note: If contractor A has CAS covered contracts, I would take a look at their Disclosure Statement and verify that there are no CAS 402 or 418 violations with regard to their allocation of B&P costs as G&A when incurred under the auspices of a joint venture.
     
    Suggestions:  First, I believe that it would be prudent for you to thoroughly review FAR 31.205-18 and Cost Accounting Standards 402 (including Interpretation 1) and 418.  Second, since this is a DCAA issue, we most strongly recommended that you contact your legal consul for more information and their policy interpretation of this issue.

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