Purchase of real property and equipment by for-profit firms.

CFR · 2024-01-01 · US · Title 10

(a) With the two exceptions described in paragraph (b) of this section, the contracting officer must require a for-profit firm to purchase real property or equipment with its own funds that are separate from the RD&D project. The contracting officer should allow the firm to charge to an expenditure-based TIA only depreciation or use charges for real property or equipment (and the cost estimate for a fixed-support TIA only would include those costs). Note that the firm must charge depreciation consistently with its usual accounting practice. Many firms treat depreciation as an indirect cost. Any firm that usually charges depreciation indirectly for a particular type of property must not charge depreciation for that property as a direct cost to the TIA. (b) In two situations, the contracting officer may grant an exception and allow a for-profit firm to use project funds, which includes both the Federal Government and recipient shares, to purchase real property or equipment (i.e., to charge to the project the full acquisition cost of the property). The two circumstances, which should be infrequent for equipment and extremely rare for real property, are those in which either: (1) The real property or equipment will be dedicated to the project and has a current fair market value that is less than $5,000 by the time the project ends; or (2) The contracting officer gives prior approval for the firm to include the full acquisition cost of the real property or equipment as part of the

official document · source cfr-2024 · id 10:§ 603.680