(a) A cost is allowable only when the cost complies with all of the following requirements:
(1) Reasonableness.
(2) Allocability.
(3) Standards promulgated by the CAS Board, if applicable, otherwise, generally accepted accounting principles and practices appropriate to the circumstances.
(4) Terms of the contract.
(5) Any limitations set forth in this subpart.
(b) Certain cost principles in this subpart incorporate the measurement, assignment, and allocability rules of selected CAS and limit the allowability of costs to the amounts determined using the criteria in those selected standards. Only those CAS or portions of standards specifically made applicable by the cost principles in this subpart are mandatory unless the contract is CAS-covered (see 48 CFR 9903). Business units that are not otherwise subject to these standards under a CAS clause are subject to the selected standards only for the purpose of determining allowability of costs on Government contracts. Including the selected standards in the cost principles does not subject the business unit to any other CAS rules and regulations. The applicability of the CAS rules and regulations is determined by the CAS clause, if any, in the contract and the requirements of the standards themselves.
(c) When contractor accounting practices are inconsistent with this subpart 31.2, costs resulting from such inconsistent practices in excess of the amount that would have resulted from using practices consistent with this subpart are unallowable.
(d) A contractor is responsible for accounting for costs appropriately and for maintaining records, including supporting documentation, adequate to demonstrate that costs claimed have been incurred, are allocable to the contract, and comply with applicable cost principles in this subpart and agency supplements. The contracting officer may disallow all or part of a claimed cost that is inadequately supported.
[48 FR 42301, Sept. 19, 1983, as amended at 57 FR 39590, Aug. 31, 1992; 61 FR 31656, June 20, 1996; 69 FR 17767, Apr. 5, 2004]
Notes of Decisions
United States Ex Rel. McBride v. Halliburton Co., 848 F.3d 1027 (D.C. Cir. 2017).
· cites it 2× “” 48 C.F.R. § 31.201-2 (a)(1). “A cost is reasonable if, in its nature and amount, it does not exceed that' which would be incurred by a prudent person in the conduct of competitive business.”
United States v. Dyncorp Int'l, LLC, 253 F. Supp. 3d 89 (D.D.C. 2017).
· cites it 2× “” 48 C.F.R. § 31.201-2 (a). “A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person in the conduct of competitive business.”
United States v. Lockheed Martin Corp., 14 F. Supp. 3d 982 (S.D. Ohio 2014).
· cites it 3× “48 C.F.R. § 31.201-2 (a). FAR 31.205-26 specifically allowed a contractor to include as material costs reasonable overruns, spoilage, or defective work.”
Donald H. Rumsfeld, Sec'y of Def. v. United Tech. Corp., Pratt & Whitney, 315 F.3d 1361 (Fed. Cir. 2003).
“48 C.F.R. § 31.201-2 (a)(3) (2001) (stating that for determinations of allowability “[standards promulgated by the CAS Board, if applicable [are to be applied]; otherwise, generally accepted accounting principles and practices appropriate to the particular circumstances”).”
Kellogg Brown & Root Servs. v. Sec'y of the Army, 973 F.3d 1366 (Fed. Cir. 2020).
“” See 48 C.F.R. § 31.201-2 (a)(1). While the failure to collect and submit Kuwaiti’s costs bears on the reasonableness of the pay- ments, submission of the subcontractor’s costs is not a sep- arate requirement.”
United States Ex Rel. Barko v. Halliburton Co., 241 F. Supp. 3d 37 (D.D.C. 2017).
“; 48 C.F.R. 31.201-2. “A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person in the conduct of competitive business,” which depends on “a variety of considerations and circumstances.”
Miller Elevator Co. v. United States, 30 Fed. Cl. 662 (Fed. Cl. 1994).
“201-2(a)(4), 48 C.F.R. § 31.201-2 (a)(4) (1992) (defining the five factors of allowability, including the fourth criterion of “[tjerms of the contract”)'.”
— 48 C.F.R. § 31.201-2(a) — 1 case
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