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                            1516.303-76   Fee on cost-sharing contracts by subcontractors.
        
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EPAARPart Number: 1516
        
                  

                                
                  
        Environmental Protection Agency Acquisition Regulation
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1516.303-76 Fee on cost-sharing contracts by subcontractors.       (a) Subcontractors under prime cost-sharing contracts who do not have a significant direct interest in the contract or who are not in a position to gain long-term benefits from the contract may earn a fee.          (b) Contracting Officers should be alert to a potential vulnerability for the Government under cost-sharing contracts when evaluating proposed subcontractors or consenting to a subcontract during contract administration, where the subcontractor is a wholly-owned subsidiary of the prime. The vulnerability consists of the subsidiary earning a large amount of fee, which could be returned to the prime through stock dividends or other intercompany transactions. This could circumvent the objective of a cost-sharing contract.    **Parent topic:**  Subpart 1516.3 - Cost-Reimbursement Contracts
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