Questionable Spending Occurred - Federal Acquisition Regulations 52.216-7 and 52.216-8 USAID Acquisition Regulation 752.7003 FAR Subpart 31.2-Contracts with Commercial Organizations

Allowable costs are limited to those that are reasonable, allocable, and necessary, determined in accordance with Federal Acquisition Regulations 52.216-7 and 52.216-8 and with USAID Acquisition Regulation 752.7003.

Federal Acquisition Regulation 52.216-7 incorporates the cost principles of FAR Subpart 31.2-Contracts with Commercial Organizations, which defines a reasonable cost as one that “does not exceed that which would be incurred by a prudent person in the conduct of competitive business” and is “generally recognized as ordinary and necessary” for the conduct of the contractor’s business or for contract performance.

General Recommendations

  • Determine the allowability of ineligible questioned costs and recover any amounts determined to be unallowable.

Source: AUDIT REPORT NO. 4-674-11-004-P JANUARY 4, 2011

The recommendations are derived from audit reports of the Office of the Inspector General. The source refers to the audit report, which is available on this site as part of the Audit Database Project: an educational tool for compliance with USAID regulations.  Please see the disclaimer of this site before using recommendations.

Tags: Awards and Contracts

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