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  • Question

    We need to test an item as required by the T&C of our contract, and the upper parking lot is large enough, secured, and otherwise is an acceptable place to conduct the testing. Can the expense we incur to plow the lot be considered a direct contract charge? By definition it appears to be a direct cost; because without that contract there would be no need to plow that lot and we would not have incurred that cost but for that contract.


    Answer

    Yes, there could be circumstances where snow removal is a direct cost. Determining the allowability of any cost without having full insight into the facts is risky. So, I'll respond to your scenario with a general principle conveyed in FAR 31.202(a).

    31.202
    -- Direct Costs.

    (a) No final cost objective shall have allocated to it as a direct cost any cost, if other costs incurred for the same purpose in like circumstances have been included in any indirect cost pool to be allocated to that or any other final cost objective. Direct costs of the contract shall be charged directly to the contract. All costs specifically identified with other final cost objectives of the contractor are direct costs of those cost objectives and are not to be charged to the contract directly or indirectly.

     
    I would imagine that snow removal, performed by your maintenance department, is rolled into a pool of costs that support an overhead rate. As such, you would be treating snow removal as both a direct and indirect cost allocated to the final cost objective. Clearly, FAR 31.202(a) does not allow you to treat snow removal as both a direct and indirect cost.

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