This response is based on the information provided.  We suggest you discuss with your contracting team, program manager and/or legal department as appropriate.

If labor costs were properly incurred on contract 1, that is where the costs should be charged.  The allowable incurred costs of contract 1 related to GFP should be paid on contract 1.  After GFP is transferred, any  allowable incurred costs for GFP related labor would be properly chargeable to contract 2.