Understanding the FAR Cost Principles

If you are in any way involved with government contracts, you undoubtedly know how crucial - and often, how difficult, frustrating, complicated and ever changing - the subtleties of cost allowability are.

In fact, many of the current disputes between contractors and the government are questions of cost allowability. Disputes stem from routine audits, claims negotiations and criminal investigations. As a result, contractors and government contracting officers have recognized the need to increase their familiarity with cost issues.

The course covers basic requirements for allowable costs…reasonable, allocable, and conformance with cost accounting standards (CAS) and/or generally accepted accounting principles (GAAP). Discussion focuses on the application of the rules and significant judicial decisions related to cost recovery,including a discussion of FAR 31.201, 202, 203 and 205. Comparison of the FAR with the CAS approach to allocability as set out in the standards. Analysis of how the courts have decided allocability issues and conflicts between FAR and CAS are also discussed.

Benefits

Understand the basic requirement for allowable costs
Know how to apply the rules related to cost recovery
Learn the allowability of specific costs such as advertising, entertainment, travel, interest expense, compensation, consultant costs, bid and proposal costs, independent R/D and penalties
Learn the rules that address allowability provisions of the FAR Subpart 31.2
Become familiar with incurred costs submissions and audits
Know different types of costs and how to apply the principles and procedures related to these costs
Know how to deal with all aspects of cost allowability

Major Topics

Composition of total cost
Determining allowability, reasonableness and allocability
Accounting for unallowable costs
Application of principles and procedures to different types of costs
Discussion of 48 specific cost categories

2 days/1.4 CEUs awarded