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As a follow-up reminder, the Potomac Area Chapter of the IMA along with the Greater Washington Society of CPAs presents "Current Issues in Government Contracting." on Thursday, October 20, 2005, at the Doubletree Hotel in Crystal City, 300 Army Navy Drive, Arlington, Virginia 22202.
Sam Davidson of Gaffey & Associates Government Contract Services Group will be presenting on the topic of Terminations and Requests for Equitable.
See their web site at www.potomac.imanet.org for additional information and www.imanet.org/
forms/VAchapter.asp
to register.
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The GCAlert, our express notification of significant happenings in the government-contracting arena of an immediate nature will be sent to you electronically and will be posted on our website at
GaffeyCPA.com
along with our bi-monthly GCNewsletter.
If you would like more information on the subjects included in this or any of our future issues you can contact:
Final rules were published in the Federal Register on Friday, September 30, 2005 (http://www.access.gpo.gov/nara) relative to lump-sum relocation payments, training and education costs and the use of statistical sampling in accounting for and presenting unallowable costs. The revisions to these Cost Principles, all of which become effective October 31, 2005, are as follows:
| FAR 31.205-35 Relocation Costs – Lump-sum Payments |
(b)(4) Amounts to be reimbursed shall not exceed the employee’s actual expenses, except as provided for in paragraphs (b)(5) and (b)(6) of this subsection.
(5) For miscellaneous costs of the type discussed in paragraph (a)(5) of this subsection, a lump-sum amount, not to exceed $5,000, may be allowed in lieu of actual costs.
(6)(i) Reimbursement on a lump-sum basis may be allowed for any of the following relocation costs when adequately supported by data on the individual elements (e.g.,
transportation, lodging, and meals) comprising the build-up of the lump-sum amount
to be paid based on the circumstances of the particular employee's relocation:
(A) Costs of finding a new home, as discussed in paragraph (a)(2) of this subsection.
(B) Costs of travel to the new location, as discussed in paragraph (a)(1) of this subsection (but not costs for the transportation of household goods).
(C) Costs of temporary lodging, as discussed in paragraph (a)(2) of this subsection.
(6)(ii) When reimbursement on a lump sum-basis is used, any adjustments to reflect actual costs are unallowable.
http://a257.g.akamaitech.net/...
| FAR 31.205-44 Training and Education Costs – Specifically Unallowable Costs |
Costs of training and education that are related to the field in which the employee is working or may reasonably be expected to work are allowable, except as follows:
(a) Overtime compensation for training and education is unallowable.
(b) The cost of salaries for attending undergraduate level classes or part-time graduate level classes during working hors is unallowable, except when unusual circumstances do not permit attendance at such classes outside of regular working hours.
(c) Costs of tuition, fees, training materials and textbooks, subsistence, salary, and any other payments in connection with full-time graduate level education are unallowable for any portion of the program that exceeds two school years or the length of the degree program, whichever is less.
(d) Grants to educational or training institutions, including the donation of facilities or other properties, scholarships, and fellowships are considered contributions and are unallowable.
(e) Training or education costs for other than bona fide employees are unallowable, except that the costs incurred for educating employee dependents (primary and secondary level studies) when the employee is working in a foreign country where suitable public education is not available may be included in overseas differential pay.
(f) Contractor contributions to college savings plans for employee dependents are unallowable.
http://a257.g.akamaitech.net/...
| FAR 31.201-6 Accounting for Unallowable Costs/FAR 31.209 Advance Agreements – Statistical Sampling |
(c)(1) The practices for accounting for and presentation of unallowable cost must be
those described in 48 CFR 9904.405, Accounting for Unallowable Costs.
(2) Statistical sampling is an acceptable practice for contractors to follow in accounting
for and presenting unallowable costs provided the criteria in paragraphs (c)(1)(i),
(c)(1)(ii), and (c)(1)(iii) of this subsection are met:
(i) The statistical sampling results in an unbiased sample that is a reasonable representation of the sampling universe.
(ii) Any large dollar value or high risk transaction is separately reviewed for
unallowable costs and excluded from the sampling process.
(ii) The statistical sampling permits audit verification.
(3) For any indirect cost in the selected sample that is subject to the penalty provisions at
42.709, the amount projected to the sampling universe from that sampled cost is also
subject to the same penalty provision.
(4) Use of statistical sampling methods for identifying and segregating unallowable costs
should be the subject of an advance agreement under the provisions of 31.109
between the contractor and the cognizant administrative contracting officer or Federal
official. The advance agreement should specify the basic characteristics of the
sampling process. The cognizant administrative contracting officer or Federal official
shall request input from the cognizant auditor before entering into any such
agreement.
(5) In the absence of an advance agreement, if an initial review of the facts result in a
challenge of the statistical sampling methods by the contracting officer or the
contracting officer’s representative, the burden of proof shall be on the contractor to
establish that such a method meets the criteria in paragraph (c)(2) of this subsection.
(e)(1)(3) When a selected item of cost under 31.205 provides that directly associated
costs be unallowable, such directly associated costs are unallowable only if
determined to be material in amount in accordance with the criteria provided in
paragraphs (e)(1) and (e)(2) of this subsection, except in those situations where
allowance of any of the directly associated costs involved would be considered to be
contrary to public policy.
http://a257.g.akamaitech.net/...
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