§4305 Required regulations

Summary

The Federal Acquisition Regulation must include clear rules about which contractor costs are allowed and which are not. It must spell out in detail the unallowable costs and explain how cost rules apply to 17 types of expenses, such as event costs, memberships, hiring and recruitment, employee morale and welfare, efforts to influence executive-branch actions, community relations, facilities and travel, professional and legal services, pay, marketing, and advertising. A contracting officer must not settle any questioned costs until they have good documentation and the contract auditor’s opinion on whether the costs are allowable. To the maximum extent practicable, the auditor should be at any meeting or negotiation about the contractor’s indirect costs. Any auditor-flagged cost categories in a settlement proposal must be resolved so the settlement shows how much of each questioned cost is paid.