Allowability of Legislative Costs Incurred by State of California in Performance of Contract

The Department of the Interior requested a decision concerning the allowability of legislative costs incurred by the State of California in performance of a contract. Under the contract and a supplemental agreement, the State allocated legislative expenses as indirect costs. The agreement was covered under F.P.R. 1-15.701-1 cost principles. Cost principles do not override a specific inconsistent agreement between the parties; therefore, payment may be made.