LIMITATIONS APPLICABLE TO DIRECT COSTS Clause Samples
The "Limitations Applicable to Direct Costs" clause sets boundaries on which direct costs can be charged or reimbursed under a contract. Typically, it outlines specific categories of expenses—such as labor, materials, or travel—that are considered direct costs, and may exclude or cap certain items to prevent excessive or inappropriate charges. By clearly defining and restricting allowable direct costs, this clause helps control project expenses and ensures that only justified, contractually permitted costs are billed, thereby protecting both parties from disputes over cost allocation.
LIMITATIONS APPLICABLE TO DIRECT COSTS a. Items Unallowable Unless Otherwise Provided Notwithstanding the clause FAR 52.216-7, Allowable Cost and Payment, incorporated in this contract, the costs of the following items or activities shall be unallowable as direct costs unless authorized in writing in advance by the Contracting Officer:
1. Acquisition, by purchase or lease, of any interest in real property;
2. Special rearrangement or alteration of facilities;
3. Purchase or lease of any item of general purpose office furniture or office equipment regardless of dollar value. (General purpose equipment is defined as any items of personal property which are usable for purposes other than research, such as office equipment and furnishings, pocket calculators, etc.);
4. Travel to attend general scientific meetings;
5. Unapproved foreign travel
6. Consultant costs, except costs incurred under firm-fixed price consultant agreements valued at $150,000 or less are allowable without prior authorization.
7. Subcontracts; except costs incurred under firm-fixed price subcontracts valued at $150,000 or less are allowable without prior authorization.
8. Patient care costs;
9. Accountable Government property (defined as both real and personal property with an acquisition cost of $1,000 or more and a life expectancy of more than two years) and “sensitive items” (defined as items of personal property, supplies and equipment that are highly desirable and easily converted to personal use), regardless of acquisition value.
10. Printing Costs (as defined in the Government Printing and Binding Regulations).
LIMITATIONS APPLICABLE TO DIRECT COSTS a. Items Unallowable Unless Otherwise Provided
1. Acquisition, by purchase or lease, of any interest in real property;
2. Special rearrangement or alteration of facilities;
3. Purchase or lease of any item of general purpose office furniture or office equipment regardless of dollar value. (General purpose equipment is defined as any items of personal property which are usable for purposes other than research, such as office equipment and furnishings, pocket calculators, etc.);
4. Travel to attend general scientific meetings;
5. Unapproved foreign travel;
6. Consultant costs;
LIMITATIONS APPLICABLE TO DIRECT COSTS a. Items Unallowable Unless Otherwise Provided
1) Acquisition, by purchase or lease, of any interest in real property;
2) Special rearrangement or alteration of facilities;
3) Accountable Government Property (see the HHS Contracting Guide for Control for Government Property incorporated by ARTICLE G.10. of this contract); Note: this includes the lease or purchase of any item of general purpose office furniture or office equipment regardless of dollar value.
4) Purchase or lease of scientific instruments or equipment over $3,500;
5) Unapproved travel in excess of the dollar amounts specified under subparagraph b.1 below;
6) Travel to attend general scientific meetings/conferences;
7) Printing Costs (as defined in the Government Printing and Binding Regulations);
8) Overtime (premium) compensation;
9) Entering into certain types of subcontract of arrangements (See Article B.4(c) for specific obligations). Note that most consulting agreements require CO’s written consent;
10) Foreign Travel (see Subparagraph b.3);
11) Patient care costs;
LIMITATIONS APPLICABLE TO DIRECT COSTS a. Items Unallowable Unless Otherwise Provided
1) Acquisition, by purchase or lease, of any interest in real property;
2) Special rearrangement or alteration of facilities;
3) Accountable Government Property (see the HHS Contracting Guide for Control for Government Property incorporated by Section G.9. of this contract); Note: this includes the lease or purchase of any item of general purpose office furniture or office equipment regardless of dollar value.
4) Purchase or lease of scientific instruments or equipment over $10,000 except for instruments and equipment specifically included in the Statement of Work;
5) Travel to attend general scientific meetings/conferences;
6) Printing Costs (as defined in the Government Printing and Binding Regulations);
7) Overtime (premium) compensation
8) Entering into certain types of subcontracting arrangements (See Section B.5(c) for specific obligations). Note that most consulting agreements require CO’s written consent.
9) Foreign Travel (see Subparagraph b.3);
LIMITATIONS APPLICABLE TO DIRECT COSTS. 1. Items Unallowable Unless Otherwise Provided
a. Acquisition, by purchase or lease, of any interest in real property;
b. Special rearrangement or alteration of facilities;
c. Accountable Government Property (see the HHS Contracting Guide for Control for Government Property incorporated by Section G.10. of this contract); Note: this includes the lease or purchase of any item of general-purpose office furniture or office equipment regardless of dollar value.
d. Purchase or lease of scientific instruments or equipment over $10,000 except for instruments and equipment specifically included in the Statement of Work;
e. Travel to attend general scientific meetings/conferences;
f. Printing Costs (as defined in the Government Printing and Binding Regulations);
g. Overtime (premium) compensation;
h. Entering into certain types of subcontracting arrangements (See Section B.5(6) for specific obligations). Note that most consulting agreements require CO’s written consent;
i. Foreign Travel (see Section B.5.2 Travel Costs);
j. Patient care costs (see Section J-List of Attachments);
k. Light Refreshment and Meal Expenditures - Requests to use contract funds to provide light refreshments and/or meals to either federal or nonfederal employees must be submitted to the Contracting Officer’s Representative (COR), with a copy to the Contracting Officer, at least [***] in advance of the event and are subject to “HHS Policy on Promoting Efficient Spending: Use of Appropriate Funding for Conferences and Meetings, Food and Promotional Items and Printing and Publications.” The request shall contain the following information: (a) name, date, and location of the event at which the light refreshments and/or meals will be provide; (b) a brief description of the purpose of the event; (c) a cost breakdown of the estimated light refreshments and/or meals costs; (d) the number of nonfederal and federal attendees receiving light refreshments and/or meals; and (e) if the event will be held at a government facility.
LIMITATIONS APPLICABLE TO DIRECT COSTS a. Items Unallowable Unless Otherwise Provided
1. Acquisition, by purchase or lease, of any interest in real property;
2. Special rearrangement or alteration of facilities;
LIMITATIONS APPLICABLE TO DIRECT COSTS a. Items Unallowable Unless Otherwise Provided
1) Acquisition, by purchase or lease, of any interest in real property; [****] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
2) Special rearrangement or alteration of facilities;
3) Accountable Government Property (see the HHS Contracting Guide for Control for Government Property incorporated by Section G.9. of this contract); Note: this includes the lease or purchase of any item of general purpose office furniture or office equipment regardless of dollar value.
4) Purchase or lease of scientific instruments or equipment over $10,000 except for instruments and equipment specifically included in the Statement of Work;
5) Travel to attend general scientific meetings/conferences;
6) Printing Costs (as defined in the Government Printing and Binding Regulations);
7) Overtime (premium) compensation
8) Entering into certain types of subcontracting arrangements. Note that most consulting agreements require CO’s written consent.
9) Patient care costs (see Section J-List of Attachments);