Skip to main content

B-126794, JANUARY 27, 1956, 35 COMP. GEN. 434

Skip to Highlights

Highlights

1956: WE HAVE GIVEN CONSIDERABLE STUDY TO THE MANNER IN WHICH THE MILITARY SERVICES HAVE BEEN CONTRACTING FOR THE PAYMENT OF INDIRECT COSTS UNDER COST-TYPE CONTRACTS WITH BOTH NONPROFIT AND COMMERCIAL ORGANIZATIONS. WE HAVE NOTED THAT THE MAJORITY OF RESEARCH CONTRACTS CONTAIN PROVISIONS FOR THE PAYMENT OF OVERHEAD BASED ON A STIPULATED PERCENTAGE OF DIRECT LABOR OR OTHER COSTS INCURRED UNDER THE CONTRACTS. COPIES OF WHICH WERE TRANSMITTED TO YOU BY LETTER DATED APRIL 15. WE POINTED OUT THAT THIS METHOD OF PAYING OVERHEAD WAS UNDESIRABLE AND RECOMMENDED THAT THE USE OF FIXED OVERHEAD RATES BE DISCONTINUED UNLESS THEY WERE SUBJECT TO RETROACTIVE REVISION. WE HAVE CONCLUDED THAT AN AGREEMENT TO PAY OVERHEAD IN THIS MANNER MAKES THE CONTRACT ONE FOR PAYMENT ON A COST-PLUS-A- PERCENTAGE-OF-COST BASIS AND.

View Decision

GAO Contacts

Shirley A. Jones
Managing Associate General Counsel
Office of the General Counsel

Media Inquiries

Sarah Kaczmarek
Managing Director
Office of Public Affairs

Public Inquiries