Insights and Analysis
Stay Ahead with Expert Perspectives
Gain valuable insights from our expert analyses on government contracting trends, strategic growth opportunities, and operational best practices.
Introduction
Maximizing Cost Recovery:
How Companies Can Engage ACA Within FAR Guidelines.
Reimbursable vs. Non-Reimbursable Services
Navigating the Federal Acquisition Regulation (FAR) can be complex, especially when it comes to determining which consulting costs are reimbursable under a government contract. Alliance Consulting & Advisor (ACA), LLC specializes in providing strategic consulting services that can be structured to comply with FAR guidelines, ensuring that your company maximizes its cost recovery while remaining compliant.
Reimbursable Services
(Allowable Under FAR)
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Contract Performance Support (FAR 31.205-33 – Professional and Consultant Services Costs)
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Compliance consulting to ensure contract requirements are met.
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Strategic planning for contract execution.
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Training and guidance for government contract compliance.
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Indirect Cost Recovery for Proposal Development (FAR 31.205-18 – Bid & Proposal Costs)
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Assistance with proposal writing, pricing strategies, and compliance checks.
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Proposal preparation costs are reimbursable as indirect costs when included in a company’s general and administrative (G&A) expenses.
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Market Research & Contract Capture Strategy (FAR 31.205-33 – Consulting Services)
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Industry analysis to identify upcoming opportunities aligned with your expertise.
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Competitor research to refine your bidding strategy.
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Compliance and past performance assessments to strengthen proposals.
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Strategic Contract Administration & Compliance (FAR 31.205-33)
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Guidance on contract modifications, reporting, and FAR compliance.
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Risk assessment to ensure continued eligibility for federal contracts.
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Non-Reimbursable Services
(Unallowable Under FAR)
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Business Development & Sales Efforts (FAR 31.205-38 – Selling Costs)
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Lead generation, networking, and relationship-building with agencies.
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Business development efforts unrelated to a specific awarded contract.
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Proposal Preparation for Unsuccessful Bids (If Not Allocated Properly)
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B&P costs must be part of a company’s indirect cost pool and cannot be charged directly to a government contract.
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Marketing & Promotional Activities (FAR 31.205-38)
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Website development, advertising, or PR efforts aimed at securing contracts.
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How Companies Can Allocate ACA’s Services for Reimbursement
To ensure compliance with FAR and maximize cost recovery, companies should:
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Classify ACA’s Services Under Indirect Costs – Consulting for proposal development, strategic planning, and contract performance can be allocated as indirect costs and recovered through overhead or G&A expenses.
Maintain Proper Documentation – FAR requires evidence of consulting work, including:
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Signed consulting agreements detailing the scope of work.
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Time-tracking and work product documentation.
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Proof of necessity for contract performance.
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Seek Prior Approval (If Required) – Certain contracts may require pre-approval from a Contracting Officer before engaging consultants like ACA.
How Companies Can Allocate ACA’s Services for Reimbursement
To ensure compliance with FAR and maximize cost efficiency, companies should:
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Classify ACA’s Services Under Indirect Costs – Consulting for proposal development, strategic planning, and contract performance can be allocated as indirect costs and recovered through overhead or G&A expenses.
Maintain Proper Documentation – FAR requires evidence of consulting work, including:
-
Signed consulting agreements detailing the scope of work.
-
Time-tracking and work product documentation.
-
Proof of necessity for contract performance.
-
Seek Prior Approval (If Required) – Certain contracts may require pre-approval from a Contracting Officer before engaging consultants like ACA.
Case Studies: How ACA Helps Clients Recover Costs
Case Study 1: Proposal Development & Cost Recovery
Client: Mid-sized government contractor pursuing a $10M DoD contract
Challenge: Lacked internal proposal writing expertise and needed FAR-compliant pricing guidance.
ACA Solution: Provided proposal development support, cost estimation strategies, and compliance alignment with FAR 31.205-18.
Outcome: The proposal costs were allocated as an indirect expense, ensuring cost recovery while maintaining compliance.
Case Study 2: Contract Performance & Compliance Support
Client: A small business awarded a federal contract but unfamiliar with FAR compliance requirements.
Challenge: The company needed support with contract reporting, modifications, and compliance procedures.
ACA Solution: Conducted a compliance assessment and developed reporting structures in alignment with FAR 31.205-33.
Outcome: The cost of ACA’s services was allowable as a direct contract expense, ensuring smooth contract execution.
Case Study 3: Strategic Market Research & Capture Strategy
Client: A large government contractor seeking new opportunities in the federal market.
Challenge: Needed detailed competitor research and positioning strategies to secure upcoming contract opportunities.
ACA Solution: Provided a market research report, competitor analysis, and strategic recommendations to improve bid competitiveness.
Outcome: The costs were allocated under indirect expenses as part of business planning, ensuring cost efficiency and contract success.
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