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  • Question

    On Cost-Type contracts with the Government Property Clause, who is responsible for paying for Calibration and routine maintenance.


    Answer

    Normal and routine preventative maintenance of Government property and other activities relative to processes within a contractor’s Property Management System are generally charged to overhead unless the contract states otherwise. For example, if the Government property requiring maintenance is used for the performance of one contract (one final cost objective), maintenance may be specifically called out in the contract as a direct cost under a contract line item if it were identified upfront and included in the contract cost. If the property is being used on multiple contracts (multiple cost objectives), with contracting officer authorization, maintenance would be an indirect cost (overhead). If maintenance exceeds what is normal or routine, the contractor may request an equitable adjustment. Direct and indirect charges are driven by contract terms and conditions, Cost Accounting Standards, FAR Part 31 - Contract Cost Principles and Procedures, the contractor’s disclosure statement, and the use of Government property.

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