Surety Bond Quarterly - Summer 2014 - (Page 10)

Practical Insights: What You Need to Know Cost charging in government contracts can result in common, but avoidable, pitfalls BY W. BARRON A. AVERY AND TARA L. WARD 10 SURETY BOND QUARTERLY | SUMMER 2014 As the surety industry has long known, federal government contracting is a lucrative, but compliance-driven business. And when it comes to performing under cost-reimbursement type contracts, perhaps no area of federal government contracting is more regulated than the costs that can be charged to the U.S. government. Set forth below is a short summary of the types of costs a contractor may be able to recover from the government and the pitfalls that can arise when contractors fail to accurately charge the government, as well as a few suggested best practices contractors should consider to avoid those common pitfalls. As an initial matter, in order for a contractor to recover costs from the government, the costs must be "reasonable, allowable, and allocable" to the contract to which the costs are being charged. Entire volumes of commentary have been dedicated to this seemingly simple principle, but each of these requirements can be summed up rather succinctly: * A "reasonable" cost is a cost that, in nature and amount, does not exceed that which a prudent person would

Table of Contents for the Digital Edition of Surety Bond Quarterly - Summer 2014

NASBP Upcoming Meetings and Workshops
2014-2015 NASBP Executive Committee
From the CEO: We have a great story so let's tell it!
Practical Insights: What You Need to Know - Cost charging in government contracts can result in common, but avoidable pitfalls
Strength in numbers: Harness the power of networking
Profile: President Thomas M. Padilla
Proving your worth: Surety bond producers provide value to clients and beneficiaries
NASBP Fall Workshops
Contract surety claims: The promise - Pact or fiction
Commercial surety claims: A case study on the bond producer's role in assisting a client to avoid loss and maintain surety credit through bankruptcy
Develop the techniques necessary to be an effective policy advocate
NASBP Annual Meeting focuses on the importance of mentoring and critical industry information
Index to Advertisers

Surety Bond Quarterly - Summer 2014