Ambiguous Federal Acquisition Regulation Criteria on Defense Contractors' Public Relations Costs
NSIAD-85-20
Published: Oct 29, 1984. Publicly Released: Oct 29, 1984.
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Highlights
In connection with its study on the regulation of defense contractors' public relations costs, GAO reviewed the final overhead cost settlements at 12 contracting activities.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Defense | The Secretary of Defense should direct the Defense Acquisition Regulatory (DAR) Council to coordinate with the Civilian Agency Acquisition Council (CAAC) to clarify the FAR criteria for the cost categories of advertising and selling to reduce the ambiguity surrounding these costs. |
FAR was amended to comply with the requirements of P.L. 99-145. The revision clarifies that elements of selling costs, which are covered elsewhere in the FAR cost principles, are governed by more specific rules. The amendment introduced a new and important concept by stating that costs that are not made allowable under other sections.
|
| Department of Defense | The Secretary of Defense should direct the DAR Council to coordinate with CAAC to specifically address the circumstances under which the cost elements of air shows, exhibits, displays, promotions, models, and giveaways will be considered allowable or unallowable. |
On April 9, 1986, FAR was revised to make unallowable the costs of air shows, exhibits, displays, promotions, models, and giveaways.
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Topics
Contract costsEligibility criteriaFederal procurement policyOverhead costsProcurement regulationsPublic relationsFederal acquisition regulationsAdvertisingDefense contractorsContracting officers