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be used in all USAID-direct contracts involving performance overseas. (53 FR 50630, Dec. 16, 1988]

Evacuation (MEDEVAC) Services (Mar 1993). The Contracting Officer shall insert the clause at 752.228–70 in all contracts the da which require performance by contractor employees overseas. (59 FR 33446, June 29, 1994]

or of the country of the employee's nationality, whichever offers greater benefits. The Department of Labor has granted partial blanket waivers of DBA coverage applicable to USAID-financed contracts performed in certain countries, subject to two conditions:

(1) Employees hired in the United States by the contractor, and citizens or residents of the United States are to be provided DBA insurance coverage;

(2) Waived employees (i.e., employees who are neither U.S. citizens nor U.S. resident aliens, and who were hired outside the United States) will be provided worker's compensation benefits as required by the laws of the country in which they are working or the laws of their native country, whichever offers greater benefits. Information as to whether a DBA Waiver has been obtained by USAID for a particular country may be obtained from the cognizant USAID contracting officer.

(b) To assist contractors in securing insurance at minimal rates for the workmen's compensation insurance required under the DBA, and to facilitate meeting insurance requirements for such coverage, USAID, after open and competitive negotiation, has entered into a contract with an insurance carrier to provide such coverage at a specified rate. The terms of this contract require the insurance carrier to provide coverage, and the contractor to make payments to and handle its claims with that insurance carrier. Contracting officers are responsible for explaining and advising contractors of the details of securing such insurance. (49 FR 13249, Apr. 3, 1984, as amended at 52 FR 4144, Feb. 10, 1987. Redesignated at 53 FR 50630, Dec. 16, 1988, and amended at 54 FR 16122, Apr. 21, 1989; 56 FR 67224, Dec. 30, 1991)

728.309 Contract clause for worker's

compensation insurance. (a) Because of the volume of projects performed overseas resulting in contracts which require worker's compensation insurance, USAID has contracted with an insurance carrier to provide the required insurance for all USAID contractors. It is therefore necessary to supplement the FAR clause at 52.228–3 with the additional coverage specified in AIDAR 752.228-3. The coverage specified in AIDAR 752.228–3 shall be used in addition to the coverage specified in FAR 52.228-3 in all USAIDdirect contracts involving performance overseas. (53 FR 50630, Dec. 16, 1988]

728.313 Contract clauses for insurance

of transportation or transportation.

related services. (a) USAID is required by law to include language in all its direct contracts and subcontracts ensuring that all U.S. marine insurance companies have a fair opportunity to bid for marine insurance when such insurance is necessary or appropriate under the contract. USAID has therefore established a supplementary preface to the clause at FAR 52.228-9. This supplementary preface is set forth in AIDAR 752.228-9, and is required for use in any USAID-direct contract where marine insurance is necessary or appropriate. 653 FR 50630. Dec. 16. 1988)

728.307-2 Liability.

(a) (b) (Reserved]

(C) Automobile liability. In order to ensure that private automobiles used by contractor employees stationed overseas under an USAID contract are properly insured, USAID has established minimum required coverages as a supplement to the FAR clause at 52.228–7. This supplemental coverage is specified in AIDAR 752.228–7, and is to

PART 731- CONTRACT COST PRINCIPLES AND PROCEDURES

Subpart 731.1-Applicability Sec. 731.109 Advance agreements.

Subpart 731.2-Contracts with Commercial ible with that of those USAID Mission Organizations

and Cooperating Country employees

with whom the contractor will be 731.2056 Compensation for personal serv

working. ices. 731.20546 Travel costs.

(b) Reasonableness. ADS Chapter 731.205–70 Overseas recruitment incentive. 302.5.3 states USAID policy regarding 731.205–71 Salary supplements for Host Gov personnel compensation exceeding the ernment employees.

maximum annual rate for an Executive

Service level ES 6. Consistent with Subpart 731.3-Contracts With Educational Institutions

ant's base salary plus overseas recruit731.370 Predetermined fixed rates for indi ment incentive, if any (see 731.205–70), rect costs.

subject to this policy will be allowable 731.371 Compensation for personal services. under USAID-direct contracts only if 731.372 Fringe benefits.

approved in accordance with the essen731.373 Overseas recruitment incentive.

tial procedures in ADS chapter Subpart 731.7-Contracts With Nonprofit

E302.5.3. USAID policies on compensaOrganizations

tion of third country national or co

operating country national employees 731.770 OMB Circular A-122; cost principles are set forth in AIDAR 722.170.

for nonprofit organizations; USAID im (d)-(1) (Reserved] plementation.

(m) Fringe benefits. USAID's policies 731.771 Bid and proposal costs.

on certain fringe benefits related to 731.772 Compensation for personal services. 731.773 Independent research and develop

overseas service, including but not limment costs.

ited to leave, holidays, differentials 731.774 Overseas recruitment incentive. and allowances, etc. are set forth in the AUTHORITY: Sec. 621, Pub. L. 87-195, 75 Stat.

appropriate contract clauses in AIDAR 445, (22 U.S.C. 2381) as amended; E.O. 12163,

subpart 752.70. Sept. 29, 1979, 44 FR 56673; 3 CFR, 1979 Comp.,

(57 FR 5235, Feb. 13, 1992, as amended at 60 P. 435.

FR 11913, Mar. 3, 1995; 62 FR 40468, July 29, SOURCE: 49 FR 13250, Apr. 3, 1984, unless

1997; 64 FR 5008, Feb. 2, 1999) otherwise noted.

731.205-46 Travel costs. Subpart 731.1-Applicability It is USAID policy to require prior

written approval of international trav731.109 Advance agreements.

el by the Contacting Officer. See Advance agreements on selected

AIDAR 752.7032 for specific requirecosts may be negotiated with USAID ments and procedures. contractors by the Overhead and Spe- (57 FR 5236. Feb. 13, 1992) cial Cost and Contract Close-Out Branch, Office of Procurement. Such 731.205–70 Overseas recruitment inadvance understandings will be appli centive. cable to all USAID contracts with that

(NOTE: the term employee as used in this contractor.

section means an employee who is a U.S. cit(49 FR 13250, Apr. 3, 1984, as amended at 50

izen or a U.S. resident alien.) FR 50302, Dec. 10, 1985; 51 FR 20651, June 6, (a) If a contractor employee serving 1986)

overseas under a contract does not

qualify for the exemption for overseas Subpart 731.2-Contracts With income provided under section 911 of Commercial Organizations the U.S. Internal Revenue Code (26

U.S.C. 911), such employee is eligible to 731.205-6 Compensation for personal receive an overseas recruitment incenservices.

tive (ORI), to the extent the ORI: Is au(a) General. When establishing the thorized by the contractor's normal workweek for employees overseas the policy and practice; is deemed neccontractor will take local and USAID essary by the contractor to recruit and Mission practice into account and will retain qualified employees for overseas insure that the workweek is compat- services; and does not exceed 10% of the base salary of the employee from (c) Salary supplements are eligible date of arrival at overseas post to for USAID financing only when authorbegin assignment to date of departure ized in accordance with USAID policy from post at the end of assignment. established in the cable State 119780 ORI is to be paid as a single payment dated April 15, 1988 (on ADS-CD under at the end of the employee tour of duty USAID Handbooks, Handbook 1). If saloverseas. The contractor shall take all ary supplements have been authorized reasonable and prudent steps to ensure in a particular case, the Contracting that ORI is not paid to any employee Officer shall provide written approval who has received the IRS section 911 to the contractor in order for such exemption.

costs to be eligible. Any specific re(b) In the event that an employee quirements or limitations shall be subsequently receives a section 911 ex- specified in the approval. clusion for any part of the base salary (d) Contracting Officers shall insert upon which this supplement has been the Clause at 752.231–71 in all contracts paid, such supplement or appropriate in which there is a possibility of the portion thereof shall be reimbursed by need of HG employees. It should also be the contractor to USAID with interest. inserted in all subsequent subThe interest shall be calculated at the

contracts. average U.S. Treasury rate in effect for the period that the contractor or his

[64 FR 16649, Apr. 6, 1999) employee had the funds. Neither the contractor's nor the subcontractor's Subpart 731.3—Contracts With inability to collect refunds from eligi

Educational Institutions ble employees shall be used as a basis to excuse subsequent refunds by the 731.370 Predetermined fixed rates for contractor to USAID.

indirect costs. [57 FR 5236, Feb. 13, 1992]

Section 635(k) of the Foreign Assist

ance Act of 1961, as amended, author731.205–71 Salary supplements for izes USAID to use predetermined fixed Host Government employees.

rates in determining the indirect costs (a) Definitions. (1) A Host Government

applicable under contracts with edu(HG) employee is a person paid by the

cational institutions. HG, occupying an established position,

731.371 Compensation for personal either temporary or permanent, part

services. time or full-time, within a HG institution.

(a) General. When establishing the (2) An HG institution is an organiza- workweek for employees overseas the tion in which the government owns at

contractor will take local and USAID least a fifty percent share or receives Mission practice into account and will at least fifty percent of its financial ensure that the workweek is compatsupport from the government.

ible with that of those USAID Mission (b) General. Salary supplement occurs

and Cooperating Country employees when payments are made that augment

with whom the contractor will be an HG employee's base salary or pre

working. miums, overtime, extra payments, in

(b) Salaries and wages. (1) ADS Chapcentive payment and allowances for ter 302.5.3 states USAID policy regardwhich the HG employee would qualifying personnel compensation exceeding under HG rules or practices for the per- the maximum annual rate for an Execformance of his/hers regular duties or utive Service level ES-6. Consistent work performed during his/hers regular with this policy, any employee's or office hours. Per diem, invitational consultant's base salary plus overseas travel, honoraria and payment for recruitment incentive, if any (see work carried out outside of normal 731.205-70), subject to this policy will be working hours are not considered to be allowable under USAID-direct consalary supplements subject to the pro- tracts only if approved in accordance visions in USAID policy referenced in with the essential procedures in ADS paragraph (c) of this section.

chapter E302.5.3.

(2) In considering consulting income Subpart 731.7-Contracts With as a factor when determining allowable

Nonprofit Organizations salary for service under a contract:

(i) For faculty members working 731.770 OMB Circular A-122, cost prinunder annual appointments, salary for ciples for nonprofit organizations; service under the contract may include

UŠAID implementation. the employee's on-campus salary plus (a) Paragraph 6 of the transmittal "consulting income" (that is, income letter for OMB Circular A-122 specifies from employment other than the em that “Agencies shall designate a liaiployee's regular on-campus appoint- son official to serve as the agency repment, excluding business or other ac- resentative on matters relating to the tivities not connected with the employ implementation of this Circular." The ee's profession) earned during the year Director, Office of Procurement, has preceding employment under the con

been so designated. The Overhead and tract.

Special Cost and Contract Close-Out (ii) For faculty members working

Branch, Office of Procurement (OCC) under academic year appointments,

provides staff assistance to the Direcsalary for service under the contract

tor concerning OMB Circular A-122. may include the employee's on-campus

OCC is also responsible for obtaining academic year salary plus “consulting

cognizance under the criteria in the income" as defined above earned dur

transmittal letter for OMB Circular A

122; for liaison with other cognizant ing the year proceeding employment under the contract, or salary for serv

agencies; for authorizing exclusion of

OMB Circular A-122 coverage for a parice under the contract may be derived

ticular nonprofit organization pursuby annualizing the academic year sal

ant to paragraph 5 of the OMB Circular ary (in which case "consulting income"

A-122 transmittal letter; and for advice may not be included).

and assistance in applying OMB Cir(3) USAID policies and compensation

cular A-122 cost principles. of third country national or cooper

(b) Paragraph 4b of the OMB Circular ating country national employees are

A-122 transmittal letter contains a defset forth in AIDAR 722.170.

inition of prior approval as follows: (57 FR 5236, Feb. 13, 1992, as amended at 60

Prior approval means securing the awardFR 11913, Mar. 3, 1995; 62 FR 40469, July 29, ing agency's permission in advance to incur 1997; 64 FR 5008, Feb. 2, 1999)

costs for those items that are designated as

requiring prior approval by OMB Circular A731.372 Fringe benefits.

122. Generally, this permission will be in USAID's policies on certain fringe

writing. Where an item of cost requiring

prior approval is specified in the budget of an benefits related to overseas service, in

award, approval of the budget constitute apcluding but not limited to leave, holi proval of that cost. days, differentials and allowances, etc. are set forth in the appropriate con

Consequently, an award containing a tract clauses in AIDAR 752.70.

budget constitutes prior approval of

the direct cost item in the budget, un(57 FR 5236, Feb. 13, 1992)

less otherwise annotated. Accordingly,

award budgets should be appropriately 731.373 Overseas recruitment incen

annotated substantially as follows: tive.

Inclusion of any cost in the line item budgUSAID's policies regarding overseas

et of this award does not obviate the requirerecruitment incentives are set forth in ment for prior approval of cost items desAIDAR 731.205–70. These policies are ignated as requiring prior approval by OMB also applicable to contracts with an Circular A--122 ; or educational institution.

In accordance with the requirements to

OMB Circular No. A-122, approval is granted (57 FR 5236, Feb. 13, 1992)

to incur costs for (name specific item or

items) which are included in the budget of this award. (49 FR 13250, Apr. 3, 1984, as amended at 50 FR 50302, Dec. 10, 1985; 51 FR 20651, June 6, 1986; 56 FR 67225, Dec. 30, 1991)

731.774 Overseas recruitment incen

tive. USAID's policies regarding overseas recruitment incentives are set forth in AIDAR 731.205–70. These policies are also applicable to contracts with a nonprofit organization. (57 FR 5236, Feb. 13, 1992) PART 732–CONTRACT FINANCING

Subpart 732. 1- General

Sec.
732.111 Contract clauses.

Subpart 732.4—Advance Payments

731.771 Bid and proposal costs.

Pending the establishment of Government-wide principles in Attachment B of OMB Circular A-122, USAID will treat bid and proposal costs as follows:

(a) Bid and proposal costs are the costs of preparing bids, proposals, and applications for potential activities such as Government and non-Government grants, contracts and other agreements, including the development of scientific, cost, and other data needed to support such bids, proposals, and applications. Except as provided in (b) below, bid and proposal costs of the current accounting period of both successful and unsuccessful bids and proposals normally should be treated as indirect costs for allocation to all current activities, and no bid and proposal costs of past accounting periods will be allocable to the current period. However, if the organization's established practice is to treat bid and proposal costs by some other method, the results obtained may be accepted only if found to be reasonable and equitable.

(b) Bid and proposal costs incurred by the organization to obtain unrestricted funds are to be treated as fund raising and allocated an appropriate share of indirect costs under the conditions described in paragraph B.3 of Attachment A to OMB Circular A-122.

732.401 Statutory authority. 732.402 General. 732.403 Applicability. 732.406-70 Agency-issued letters of credit. 732.406-71 Circumstances for use of an LOC. 732.406–72 Establishing an LOC. 732.406-73 LOC contract clause. 732.406-74 Revocation of the LOC.

AUTHORITY: Sec. 621, Pub. L. 87–195, 75 Stat. 445, (22 U.S.C. 2381) as amended; E.O. 12163, Sept. 29, 1979, 44 FR 56673; 3 CFR, 1979 Comp., p. 435.

Subpart 732.1- General 732.111 Contract clauses.

(a) [Reserved]

(b) USAID may obtain short term and (less frequently) long-term indefinite quantity professional services through Agency-specific indefinite quantity contracts that are a combination of contract types. Rather than using the fixed-price payment clauses for indefinite quantity contracts, when these IQCs provide for fixed daily rates (which may include wages, overhead, general and administrative expenses, fringe benefits, and profit) for services and reimbursement of other direct costs (such as travel and transportation) at cost, then the payment clause at 752.232-7 shall be used in the contract. [61 FR 39094, July 26, 1996)

731.772 Compensation for personal

services. The policies set for in AIDAR 731.205 6 are also applicable to contracts with a nonprofit organization. (57 FR 5236, Feb. 13, 1992)

731.773 Independent research and de

velopment costs. Pending establishment of Government-wide principles in Attachment B of OMB Circular A-122, USAID will apply the cost principles at FAR 31.205– 18 for independent research and development costs.

Subpart 732.4—Advance

Payments

SOURCE: 56 FR 67225, Dec. 30, 1991, unless otherwise noted.

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