Subcontractor bankruptcy costs: Allowable and allocable?
Started by Patrick Mathern · Mar 6, 2024 · 3 replies
- POriginal post
Patrick Mathern
Mar 6, 2024 · 2y ago
We are conducting a subcontract cost analysis on behalf of one of our clients. This particular sub is working through bankruptcy and the costs of this are included in their G&A expenses, which are then spread across all of their contracts.
These costs aren't expressly unallowable and it appears to us that they're spread correctly across all contracts. Have we missed something? Are there allowability requirements specifically related to bankruptcy filings?
Thanks all!
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Don Mansfield
Mar 6, 2024 · 2y ago
Patrick Mathern said:
Are there allowability requirements specifically related to bankruptcy filings?
No, but some bankruptcies involve reorganizations. Those costs would seem to be unallowable according to FAR 31.205-47(f)(2) and 31.205-27.
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C Culham
Mar 6, 2024 · 2y ago
Chapter 41 of the DCAA Selected Area of Cost Guidebook points to other FAR Part 31 references that one may want to consider. Patrick you may have already accessed the reference but providing the link anyways.
https://www.dcaa.mil/Guidance/Selected-Area-of-Cost-Guidebook/
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Patrick Mathern
Mar 6, 2024 · 2y ago
Thank you both!
Patrick