§4305 Required Regulations

Summary

Federal Acquisition Regulation must have clear rules about which contractor costs can and cannot be charged to the government. The rules must list in detail the kinds of costs that are unallowable. They must also explain cost rules for 17 categories of expenses, such as air shows, memberships, hiring and morale, travel, hotels and meals, dining facilities, advertising, conventions, selling and marketing, public relations, professional and legal services, compensation, corporate aircraft and company cars, and community relations. A contracting officer must not decide to pay any questioned cost until they have enough paperwork and the contract auditor’s opinion on whether the cost is allowed. The contract auditor should, as much as possible, attend any meeting or negotiation about indirect costs. If the auditor flags cost categories in a settlement proposal, the final settlement must show how much of each questioned cost is actually paid.