cost principles | The Contracting Education Academy

November 28, 2019 By cs

Federal Circuit issues controversial decision involving expressly unallowable costs

In its second significant cost allowability decision of the year, the Federal Circuit held that salaries associated with lobbying activities are expressly unallowable under Federal Acquisition Regulation (FAR) 31.205-22.

Although the decision is limited to salary costs associated with lobbying activities, its rationale creates uncertainty for other types of costs subject to a FAR Part 31 Cost Principle that uses similar “associated with” language. Contractors should anticipate closer scrutiny from auditors, who may feel emboldened by the Federal Circuit’s decision to characterize costs as expressly unallowable. The decision may also have implications for compliance with Cost Accounting Standard 405.

Although many types of cost may be generally unallowable, a smaller subset of costs are expressly unallowable. An expressly unallowable costs is “a particular item or type of cost which, under the express provisions of an applicable law, regulation, or contract, is specifically named and stated to be unallowable.” Contractors are subject to penalty if they submit to the government any expressly unallowable cost. Congress made clear that the penalty was intended for limited circumstances where the regulations explicitly prohibit inclusion of a type of cost; providing alcohol as an example.

FAR 31.205-22(a) provides that costs “associated with” a list of lobbying and political activities are unallowable. FAR 31.205-22 does not specifically name and state salary, or any other type of cost; it merely states “associated with.” The narrow question presented to the Federal Circuit was whether salary costs of employees engaging in such lobbying activity qualify as expressly unallowable costs.

Keep reading this article at: http://www.mondaq.com/unitedstates/x/860020/

August 12, 2019 By AMK

Act now to enroll in September’s CON 170 cost and price analysis course

Georgia Tech’s course on the Fundamentals of Cost and Price Analysis (CON 170) provides expert instruction on fundamental quantitative pricing skills — skills so necessary to understand how the government makes contract pricing decisions.

The popular 10-day course is being offered September 16-27, 2019 on the Tech campus in the world-class Global Learning Center in Midtown Atlanta. Registration details can be found here.

Attendees will learn how to accomplish Cost-Volume-Profit Analysis, calculate Contribution Margin Estimates, and develop Cost Estimating Relationships to achieve effective price analysis pursuant to FAR Subpart 15.4. These are the skills needed to negotiate pricing of government contracts, subcontracts, and contract modifications.

Georgia Tech’s course includes an examination of the regulations and processes governing the use of cost analysis and requiring certified cost and pricing data. The CON 170 course was originally developed by the Defense Acquisition University for aspiring Defense Department acquisition professionals.

After learning the basic elements of price and cost analysis, students receive instruction on how to build and defend a Pre-Negotiation Objective, including a minimum and maximum pricing objective with a Weighted Guidelines Assessment. Students also learn how to defend pricing objectives by practicing face-to-face negotiations.

By attending, you’ll learn how to:

Identify the Government’s Pricing Objective
Review an Independent Government Cost Estimate
Apply Price-Related Factors
Review General Cost Principles on Allowability
Evaluate Direct and Indirect Costs
Determine the Applicability of Cost and Price Analysis
Practice Cost and Price Analysis Techniques
Conduct Cost Realism Analysis

Attendees receive instruction, a printed Student Guide to be used back on the job, valuable handouts, and exclusive web-based resources. A complimentary breakfast is served each morning, along with snacks throughout each class day.

This is a federal core course, required for FAC-C and DAWIA certification. Register here.

The Contracting Education Academy at Georgia Tech is an official Defense Acquisition University (DAU) equivalency training provider. Georgia Tech’s coursework also is recognized by the Federal Acquisition Institute (FAI).

May 8, 2019 By AMK

Don’t miss our contract cost and price analysis course in July

Georgia Tech’s course on the Fundamentals of Cost and Price Analysis (CON 170) features an in-depth review of the market research process. By attending, students gain fundamental quantitative pricing skills.

The 10-day course is being offered on July 15-26, 2019 on the Tech campus in the Global Learning Center in Midtown Atlanta. Registration details can be seen here.

Attendees will learn how to accomplish Cost-Volume-Profit analysis, calculate Contribution Margin Estimates, and develop Cost Estimating Relationships to achieve effective price analysis pursuant to FAR Subpart 15.4. These are the skills needed to negotiate pricing of contracts, subcontracts, and contract modifications.

Georgia Tech’s course includes an examination of the regulations and processes governing the use of cost analysis and requiring certified cost and pricing data.

After learning the basic elements of price and cost analysis, students receive instruction on how to build and defend a pre-negotiation objective, including a minimum and maximum pricing objective with a Weighted Guidelines Assessment. Students also learn how to defend pricing objectives by practicing face-to-face negotiations.

By attending, you’ll learn how to:

Identify the Government’s Pricing Objective
Review an Independent Government Cost Estimate
Apply Price-Related Factors
Review General Cost Principles on Allowability
Evaluate Direct and Indirect Costs
Determine the Applicability of Cost and Price Analysis
Practice Cost and Price Analysis Techniques
Conduct Cost Realism Analysis

Attendees receive expert instruction, a printed guide to be used back on the job, valuable handouts, and exclusive web-based resources. A complimentary breakfast is provided each morning, along with snacks throughout each class day.

This is a federal core course, required for FAC-C and DAWIA certification. Register here.

In its second significant cost allowability decision of the year, the Federal Circuit held that salaries associated with lobbying activities are expressly unallowable under Federal Acquisition Regulation (FAR) 31.205-22.

Georgia Tech’s course on the Fundamentals of Cost and Price Analysis (CON 170) provides expert instruction on fundamental quantitative pricing skills — skills so necessary to understand how the government makes contract pricing decisions.

Georgia Tech’s course on the Fundamentals of Cost and Price Analysis (CON 170) features an in-depth review of the market research process. By attending, students gain fundamental quantitative pricing skills.

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