48 C.F.R. § 31.201-4
31.201-4 Determining allocability.
A cost is allocable if it is assignable or chargeable to one or more cost objectives on the basis of relative benefits received or other equitable relationship. Subject to the foregoing, a cost is allocable to a Government contract if it—
(a) Is incurred specifically for the contract;
(b) Benefits both the contract and other work, and can be distributed to them in reasonable proportion to the benefits received; or
(c) Is necessary to the overall operation of the business, although a direct relationship to any particular cost objective cannot be shown.
Notes of Decisions
Cited in 9
cases, 1992–2017 · leading case: Beta Analytics International, Inc. v. United States
Beta Analytics International, Inc. v. United States (2007)
“201-3 , and “allocability,” see 48 C.F.R. § 31.201-4 , as useful guidance in determining the proper size of an award of bid preparation and proposal costs, but holds that these provisions are not authoritative for this purpose.”
United States Ex Rel. Barko v. Halliburton Co. (2017)
“” 48 C.F.R. 31.201-4. If DCAA found that a cost was not allowable, it would recommend the suspension or disallowing of payment to KBR, after which the Defense Contract Management Agency (“DCMA”) could disallow claimed.”
J. Cooper & Associates, Inc. v. United States (2002)
“…overall operation of the business, although a direct relationship to any particular cost objective cannot be shown. 48 C.F.R. § 31.201-4 (1995).”
Louis Caldera, Secretary of the Army v. Northrop Worldwide Aircraft Services, Inc. (1999)
“48 C.F.R. 31.201-4 (1998). 3 . Under the FAR, two factors to consider in determining the allowability of a cost are reasonableness and alienability.”
Information Systems & Networks Corp. v. United States (2000)
“48 C.F.R. § 31.201-4 (a), (b) (2000). Subsection (c) of the provision states, however, that expenses which are not directly attributable to contract work, but nonetheless are necessary for the overall operation of the contractor’s business, are allocable.”
Alabama Aircraft Industries, Inc. v. United States (2009)
“” 48 C.F.R. § 31.201-4 (a). “Expenses compensable as bid preparation costs are those in the nature of researching specifications, reviewing bid forms, examining cost factors, and preparing draft and actual bids.”
Litton Systems, Inc. v. United States (1992)
“In fiscal year 1986 and thereafter, Litton violated 48 C.F.R. §§ 31.201-4 (b) and 31.203(b) by failing to allocate the costs of its LCS-WH [Litton Computer Services — Woodland Hills] facility to government defense divisions and [trade] customers in reasonable proportion to usage.”
Advanced Materials, Inc. v. United States (2002)
“See 48 C.F.R. § 31.201-4 (1993). G & A includes the cost of management employees, legal and accounting costs, personnel costs, public relations costs, business taxes, and similar costs necessary for the conduct of a business.”
Teknowledge Corp. v. United States (2009)
“48 C.F.R. 31.201-4. Under another provision of the FAR, a cost is allowable only if it is: (1) reasonable; (2) allocable; (3) complies with the Cost Accounting Standards (“CAS”) or generally-accepted accounting principles and practices; (4) complies with the terms of the…”
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