PART 9-15 CONTRACT COST PRINCIPLES AND PROCEDURES

$9-15.000 Scope of part.

This part 9-15 implements and supplements FPR 1-15 which contains general cost principles and procedures for the pricing, negotiation, and administration of contracts including subcontracts and contract modifications. The principles and procedures set forth in FPR 1-15 are mandatory, except as implemented and supplemented by specific DOE-PR provisions.

$9-15.101 Scope of subpart.

Subpart 9-15.1 Applicability.

The cost principles and procedures contained in this subpart and FPR 1-15 apply to all negotiated procurements except for operating contracts for DOE-owned plants and laboratories, on-site service contracts, on-site construction contracts, and on-site architect-engineer contracts which are covered in §9-50.15.

§9-15.103 Contracts with educational institutions.

The cost principles in FPR Subpart 1-15.3 shall be incorporated by reference or attachment in cost-reimbursement research contracts with educational institutions to which they are applicable. However, contracts with educational institutions for the operation of DOE-owned contractor-operated research laboratories are governed by the principles in subpart 9-50.15 and 9-50.704-13.

Subpart 9-15.2 Contracts with Commercial Organizations

§9-15.205-3 Bidding costs.

The cost of preparing bids or proposals shall include an amount for absorption of their appropriate share of related indirect costs. A contractor's bidding costs are allowable in accordance with FPR 1-15.205-3, up to a ceiling amount equal to the average annual bidding costs computed from the actual costs for the contractor's three most recent years. However, at the discretion of the Contracting Officer, a ceiling amount in excess of the foregoing may be established when the contractor can demonstrate that the three year average annual bidding cost formula would produce a clearly inequitable cost recovery.

§9-15.205-6 Compensation for personal services.

(f) Deferred compensation.

(2)(ii)(1)(viii) The allowability of the cost of indemnification of the Pension Benefit Guaranty Corporation (PBGC), pursuant to Section 4062 or 4064 of the Employee Retirement Income Security Act of 1974 (ERISA), because of the termination of an employee deferred compensation plan will be considered on a case-by-case basis, providing that if insurance was required by the PBGC pursuant to Section 4023 of ERISA, it was so obtained, and the indemnification payment is not recoverable thereunder. Consideration under the foregoing circumstances will be primarily for the purpose of appraising the extent to which the indemnification payment is allocable to Government work; and if a beneficial or other equitable relationship exists, the Government will participate, provisions of 1-15.205-16(a)(3) and 1-15.205-16(b) notwithstanding, in the indemnification payment to the extent of its fair share.

§9-15.205-16 Insurance and indemnification.

(c) Late premium payment charges related to employee deferred compensation plan insurance, incurred pursuant to Section 4007 or Section 4023 of the Employee Retirement Income Security Act of 1974, are unallowable.

89-15.205-35 Research and development costs.

(d) A contractor's costs of independent research are allowable in accordance with FPR 1-15.205-35(d), provided the research is also of benefit to the DOE program.

(e) Costs of a contractor's independent development are allowable in accordance with FPR 1-15.205-35(e), provided the development is also of benefit to the DOE program.

(h) When the cost of the work involved in segregating the independent research and development costs which benefit the DOE program is disproportionate to the amounts involved, an allocable share of those costs may be allowed up to a maximum equal to 5% of the total cost of the contract, but not in excess of $50,000.

§9-15.205-41 Taxes.

(d) The cost of taxes on accumulated funding deficiencies of, or prohibited transactions involving, employee deferred compensation plans pursuant to Section 4971 or Section 4975 of the Internal Revenue Code of 1954, as amended, respectively, is unallowable.

89-15.205-60 Facilities Capital Cost of Money (CAS-414).

Facilities capital cost of money (cost of Capital Committed to Facilities) is an imputed cost determined by applying a cost of money rate to facilities capital employed in support of DOE contracts. A cost of money rate is derived from a common source and uniformly imputed to all contracts. The imputed cost for facilities capital cost of money is not an allowable cost under DOE contracts.

Subpart 9-15.3 Contracts with Educational Institutions

§9-15.307 Determination and application of indirect cost rate or rates.

(a) Overhead rates shall be determined by after-the-fact audit, except as provided in paragraph (b) of this section.

(b) Predetermined fixed overhead rates may be used in cost-type research and development contracts with educational institutions (Public Law 87-638). The use of such rates is permissive and not mandatory. (See OMB Circular A-21.) In determining whether or not predetermined fixed overhead rates should be used in a particular contract, consideration should be given to the degree of stability shown in overhead rates and their bases over a period of years. All anticipated changes in the contractor's volume and overhead shall be taken into consideration. In establishing such predetermined overhead rates, the following guidelines shall be used:

(1) The contractor, as soon as possible, but not later than three (3) months after the expiration of each fiscal year, shall submit to the Contracting Officer a proposed predetermined overhead rate or rates for use during the contract year based on the contractor's actual cost experience during the immediately preceding fiscal year, together with supporting cost data.

(2) Negotiation of predetermined fixed overhead rates shall be for a period of 1 year only and should generally be based on an audit of the institution's costs for the year immediately preceding the year in which the rate is being negotiated. If this is not possible, an earlier audit may be used, but appropriate steps should be taken to identify and evaluate significant variations in costs incurred or bases used which may have a bearing on the reasonableness of the rate proposed by the contractor. (Audits by other Government agencies may be utilized.) In the case of small contracts ($100,000 or less), an audit made at an earlier date is acceptable, provided (i) there have been no significant changes in the contractor's organization, and (ii) it is reasonbly apparent that having another audit made would result in little effect on the rate to be finally agreed upon.

(3) Predetermined overhead rates shall not be used for operating contracts (see Subpart 9-50.15).

(4) The use of predetermined fixed overhead rates in the following circumstances must have the approval of the Head of the Procuring Activity:

(i) Where DOE-owned facilities and equipment exceed $1,000,000;

(ii) Where estimated reimburseable costs for the contract are expected to exceed $1 million annually;

(iii) Where there has been no recent audit of the overhead; or

(iv) Where there have been frequent or wide fluctuations in overhead rates and their bases over a period of years.