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    When we say unit cost of more than $500, does it mean acquisition/cost, or an estimated cost based on the prevalent market rates, or a depreciated cost of the item.


    The following response is based solelyon the question and background information provided. As we do not have theentire facts particular to your contract, program, and situation, we suggestyou discuss with your contracting team, program manager and/or legal departmentas appropriate.
    When a term isn’t defined as describedin FAR 52.202-1, Definitions? FAR1.108 states:
    FAR 1.108 (a) Wordsand terms. Definitions in Part 2 apply to the entire regulation unlessspecifically defined in another part, subpart, section, provision, or clause.Words or terms defined in a specific part, subpart, section, provision, orclause have that meaning when used in that part, subpart, section, provision,or clause. Undefined words retain theircommon dictionary meaning.
    The Federal Management Regulations(FMR) at §102-36.40 states: "Unit cost" means the originalacquisition cost of a single item of property. However, this applies only tothat part of the FMR and the Government, and not necessarily to the contractor.

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