U.S. flag
          An official website of the United States Government  Main navigation
  

        

              Data Initiatives
                              Regulations
                                                                        Row 1
                                              FAR FAR
                              Smart Matrix Smart Matrix
                              Chapter 99 (CAS) Chapter 99 (CAS)
                              Row 2
                                              DFARS DFARS
                              DFARSPGI DFARSPGI
                              AFARS AFARS
                              DAFFARS DAFFARS
                              DAFFARS MP DAFFARS MP
                              DARS DARS
                              DLAD DLAD
                              NMCARS NMCARS
                              Row 3
                                              SOFARS SOFARS
                              TRANSFARS TRANSFARS
                              AGAR AGAR
                              AIDAR AIDAR
                              CAR CAR
                              DEAR DEAR
                              DIAR DIAR
                              DOLAR DOLAR
                              Row 4
                                              DOSAR DOSAR
                              DTAR DTAR
                              EDAR EDAR
                              EPAAR EPAAR
                              FEHBAR FEHBAR
                              GSAM/R GSAM/R
                              HHSAR HHSAR
                              HSAR HSAR
                              Row 5
                                              HUDAR HUDAR
                              IAAR IAAR
                              JAR JAR
                              LIFAR LIFAR
                              NFS NFS
                              NRCAR NRCAR
                              TAR TAR
                              VAAR VAAR
                              Tools
                                                                        Archives
                              Smart Matrix
                              Regulations Search
                              Acquisition Regulation Comparator (ARC)
                              Policy Network
                                                                        CAOC
                              CAAC
                              FAR Council
                              ISDC
 Breadcrumb
        Home
                            Regulations
                            NMCARS
                            Part 5231 - CONTRACT COST PRINCIPLES AND PROCEDURES
        
                  NMCARS
NMCARS
Change Number: NMCARS Change 18-22 Effective Date: 07/11/2022
PartPart 5201Part 5202Part 5203Part 5204Part 5205Part 5206Part 5207Part 5208Part 5209Part 5211Part 5212Part 5213Part 5214Part 5215Part 5216Part 5217Part 5219Part 5222Part 5223Part 5225Part 5227Part 5228Part 5229Part 5230Part 5231Part 5232Part 5233Part 5234Part 5235Part 5236Part 5237Part 5239Part 5241Part 5242Part 5243Part 5245Part 5246Part 5248Part 5249Part 5250Part 5252Annex 1Annex 2Annex 3Annex 4Annex 5Annex 6Annex 7Annex 8Annex 9Annex 10Annex 11Annex 12Annex 13Annex 14Annex 15Annex 16Annex 17Annex 18Annex 19Annex 20Annex 21Annex 22Annex 23Annex 24Annex 25
Subpart5231.15231.2
Section
Leave this field blank
        
                  

                                
                  
        « PreviousNext »
Part 5231 - CONTRACT COST PRINCIPLES AND PROCEDURESPart 5231 - CONTRACT COST PRINCIPLES AND PROCEDURES       Subpart 5231.1 - APPLICABILITY                                                         5231.109 Advance agreements.                                                                             Subpart 5231.2 - CONTRACTS WITH COMMERCIAL ORGANIZATIONS                                                         5231.205 Selected costs.                                                                           5231.205-90 Shipbuilding capability preservation agreements.                                                                              5231.205-91 Compensation for services.    Subpart 5231.1 - APPLICABILITY     5231.109 Advance agreements.    (a) Since advance agreements often deal with          issues that are complex and/or unprecedented and may require FAR/DFARS deviations,          activities contemplating negotiation of advance agreements on the treatment of special or          unusual costs shall consult with DASN(P) before entering into any negotiations. (g) Copies          of all negotiated advance agreements shall be forwarded to DASN(P) within 15 days of their          execution, together with appropriate supporting documents by email at usn.pentagon.asstsecnavrdadc.mbx.pabt@us.navy.mil with the subject          “[Activity Name] FAR 31.109 – Negotiated Advance Agreement.”Subpart 5231.2 - CONTRACTS WITH COMMERCIAL ORGANIZATIONS     5231.205 Selected costs.     5231.205-90 Shipbuilding capability preservation agreements.    (a) *Scope and authority*. Where it would facilitate the achievement of the policy objectives set forth in 10 U.S.C. 2501(b), the Navy may enter into a shipbuilding capability preservation agreement with a contractor. As authorized by Section 1027 of the National Defense Authorization Act (NDAA) for FY 1998 (P.L. 105-85), such an agreement permits the contractor to claim certain indirect costs attributable to its private sector work as allowable costs on Navy shipbuilding contracts.       (b) *Definition*. “Incremental indirect cost,” as used in this subsection, means an additional indirect cost that results from performing private sector work described in a shipbuilding capability preservation agreement.       (c) *Purpose and guidelines*. The purpose of a shipbuilding capability preservation agreement is to broaden and strengthen the shipbuilding industrial base by providing an incentive for a shipbuilder to obtain new private sector work, thereby reducing the Navy's cost of doing business. The Navy will use the following guidelines to evaluate requests for shipbuilding capability preservation agreements:       (1) ASN(RDA) must make a determination that an agreement would facilitate the achievement of the policy objectives set forth in 10 U.S.C. 2501(b). The primary consideration in making this determination is whether an agreement would promote future growth in the amount of private sector work that a shipbuilder is able to obtain.       (2) An agreement generally will be considered only for a shipbuilder with little or no private sector work.       (3) The agreement shall apply to prospective private sector work only and shall not extend beyond 5 years.       (4) The agreement must project an overall benefit to the Navy, including net savings. This would be achieved by demonstrating that private sector work will absorb costs that otherwise would be absorbed by the Navy.       (d) *Cost-reimbursement rules*. If the Navy enters into a shipbuilding capability preservation agreement with a contractor, the following cost-reimbursement rules apply:       (1) The agreement shall require the contractor to allocate the following costs to private sector work:       (i) The direct costs attributable to the private sector work;       (ii) The incremental indirect costs attributable to the private sector work; and       (iii) The non-incremental indirect costs to the extent that the revenue attributable to the private sector work exceeds the sum of the costs specified in paragraphs (d)(1)(i) and (d)(1)(ii) of this subsection.       (2) The agreement shall require that the sum of the costs specified in paragraphs (d)(1)(ii) and (d)(1)(iii) of this subsection not exceed the amount of indirect costs that would have been allocated to the private sector work in accordance with the contractor's established accounting practices.       (3) The Navy may agree to modify the amount calculated in accordance with paragraph (d)(1) of this subsection if it determines that a modification is appropriate to the particular situation. In so doing, the Navy may agree to the allocation of a smaller or larger portion of the amount calculated in accordance with paragraph (d)(1) of this subsection, to private sector work.       (i) Any smaller amount shall not be less than the sum of the costs specified in paragraphs (d)(1)(i) and (d)(1)(ii) of this subsection.       (ii) Any larger amount shall not exceed the sum of the costs specified in paragraph (d)(1)(i) of this subsection and the amount of indirect costs that would have been allocated to the private sector work in accordance with the contractor's established accounting practices.       (iii) In determining whether such a modification is appropriate, the Navy will consider factors such as the impact of pre-existing firm-fixed-price Navy contracts on the amount of costs that would be reimbursed by the Navy, the impact of pre-existing private sector work on the cost benefit that would be received by the contractor, and the extent to which allocating a smaller or larger portion of costs to private sector work would provide a sufficient incentive for the contractor to obtain additional private sector work.       (e) *Procedure*. A contractor may submit a request for a shipbuilding capability preservation agreement, together with appropriate justification, through the Deputy Assistant Secretary of the Navy for Ships, to ASN(RDA), who has approval or disapproval authority. The contractor should also provide an informational copy of any such request to the cognizant administrative contracting officer.5231.205-91 Compensation for services.    Submit annual reports for DoD Waivers of the          Contractor Employee Compensation Cap to DASN(P) no later than October 31 by email at usn.pentagon.asstsecnavrdadc.mbx.pabt@us.navy.mil with the subject          “[Activity Name] NMCARS 5231.205-91 DoD Waivers of the Contractor Employee Compensation          Cap” using the reporting guidance provided in Annex 23.
« PreviousNext »
FavoriteX

      NMCARS Parts
            Regulations Nmcars Menu
  

        
      Index
                              5201
                              5202
                              5203
                              5204
                              5205
                              5206
                              5207
                              5208
                              5209
                              5211
                              5212
                              5213
                              5214
                              5215
                              5216
                              5217
                              5219
                              5222
                              5223
                              5225
                              5227
                              5228
                              5229
                              5230
                              5231
                              5232
                              5233
                              5234
                              5235
                              5236
                              5237
                              5239
                              5241
                              5242
                              5243
                              5245
                              5246
                              5248
                              5249
                              5250
                              5252
                          NMCARS Annex
              Regulations Nmcars Annex Menu
  

        
      1
                              2
                              3
                              4
                              5
                              6
                              7
                              8
                              9
                              10
                              11
                              12
                              13
                              14
                              15
                              16
                              17
                              18
                              19
                              20
                              21
                              22
                              23
                              24
                              25

      ×
        Data Initiatives
                                                              Regulations
                                                              Tools
                                              Archives
                                                              Smart Matrix
                                                              Regulations Search
                                                              Acquisition Regulation Comparator (ARC)
                                                              Policy Network
                                              CAO.gov
                                                        CAO Home
                                                              Council Member
                                                                    Large Agencies
                                                              Small Agencies
                                                              Council Defining Documents
                                                                    CAOC History
                                                              CAOC Charter
                                                              Civilian Agency Acquisition Council (CAAC)
                                                              Federal Acquisition Regulatory Council
                                                              Interagency Suspension and Debarment Committee (ISDC)
                                                              Search
 ˄ Top Sign up for FAR News

                            Share the FAR
                        Upper Footer Menu
  

        
      Useful Links
                              FAR Resources
                              Training
                              Acquisition Systems
            
                            **Contact Us/FAQs**
                        **Privacy and Security Notice**
                        **Accessibility Aids**
                        **Last Updated 03/29/2024**
 ACQUISITION.GOV
                An official website of the General Services Administration About GSA
                Accessibility support
                FOIA requests
                No FEAR Act data
                Office of the Inspector General
                Performance reports
                Privacy policy Looking for U.S. government information and services?
            Visit USA.gov
 «
    
    Tt