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  • Question

    Does FAR 15.208 mean that all the proposal costs, whether it should or should not have been proposed, have to be paid to the supplier


    Answer

    The FAR applies to contracts between the Government and the prime contractor rather than to the business relationship between the prime contractor and its subcontractors/suppliers. The FAR provides guidance on how and what the Government will pay prime contractors for proposal costs, whether those costs are incurred directly by the prime contractor or indirectly by subcontractors. It is incumbent upon the Government contracting officer to only pay costs that can be justified as contributing to achievement of government contract requirements. The prime contractor (which passes costs along to the Government) must be able to justify not only its own costs but any subcontracted costs being charged to the contract. If there is a dispute between the prime contractor and subcontractor as to which costs are justified, it must be resolved in accordance with contract the prime has with the sub and by negotiation, as appropriate.

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