DFARS - IR&D/B&P Cost Allowability

Allowable or Unallowable: Unallowable, Allowable

Source: DFAR

Allowability.

(i) Departments/agencies shall not supplement this regulation in any way that limits IR&D/B&P cost allowability.

(ii) See 225.7303-2(c) for allowability provisions affecting foreign military sale contracts.

(iii) For major contractors, the following limitations apply:

• (A) The amount of IR&D/B&P costs allowable under DoD contracts shall not exceed the lesser of—
  • (1) Such contracts’ allocable share of total incurred IR&D/B&P costs; or
  • (2) The amount of incurred IR&D/B&P costs for projects having potential interest to DoD.

(B) Allowable IR&D/B&P costs are limited to those for projects that are of potential interest to DoD, including activities intended to accomplish any of the following:

• (1) Enable superior performance of future U.S. weapon systems and components.
• (2) Reduce acquisition costs and life-cycle costs of military systems.
• (3) Strengthen the defense industrial and technology base of the United States.
• (4) Enhance the industrial competitiveness of the United States.
• (5) Promote the development of technologies identified as critical under 10 U.S.C. 2522.
• (6) Increase the development and promotion of efficient and effective applications of dual-use technologies.
• (7) Provide efficient and effective technologies for achieving such environmental benefits as: improved environmental data gathering, environmental cleanup and restoration, pollution reduction in manufacturing, environmental conservation, and environmentally safe management of facilities.

(iv) For major contractors, the cognizant administrative contracting officer (ACO) or corporate ACO shall—

• (A) Determine whether IR&D/B&P projects are of potential interest to DoD; and
• (B) Provide the results of the determination to the contractor.

(v) The cognizant contract administration office shall furnish contractors with guidance on financial information needed to support IR&D/B&P costs and on technical information needed from major contractors to support the potential interest to DoD determination (also see 242.771-3(a)).