31.205-33
Professional and consultant service costs
Professional and consultant service costs are only allowable if they are reasonable, necessary, properly documented, and not associated with improper or illegal activities.
Overview
FAR 31.205-33 addresses the allowability of costs for professional and consultant services in government contracts. It defines such services as those provided by individuals with specialized skills who are not employees of the contractor, and sets forth the conditions under which these costs are allowable or unallowable. The regulation emphasizes the need for reasonableness, prohibits costs related to improper or illegal activities, and requires thorough documentation and justification for both retainer fees and service payments.
Key Rules
- Definition and Scope
- Professional and consultant services must be provided by qualified individuals or firms not employed by the contractor, and are typically used for specialized advice, studies, or representation.
- Allowability of Costs
- Costs are allowable if reasonable, not contingent on government reimbursement, and compliant with related FAR sections.
- Unallowable Circumstances
- Costs are unallowable if services involve improper use of protected information, improper influence on procurement, violation of laws or regulations, or are inconsistent with the contracted purpose.
- Determining Allowability
- Contracting officers must consider factors such as necessity, past practices, cost-effectiveness, qualifications, and adequacy of agreements.
- Retainer Fees
- Retainer fees are allowable only if justified by necessity, past service levels, reasonableness, and proper documentation.
- Documentation Requirements
- All service fees must be supported by detailed agreements, invoices, and work products to substantiate the nature and scope of services provided.
Responsibilities
- Contracting Officers: Evaluate allowability using specified factors, ensure documentation, and enforce compliance with legal and regulatory standards.
- Contractors: Ensure services are necessary, reasonable, properly documented, and not in violation of laws or regulations; maintain detailed records for all agreements and services.
- Agencies: Oversee compliance, review documentation, and audit service costs as needed.
Practical Implications
- This section exists to prevent abuse or misuse of consultant and professional service costs in government contracts, ensuring only legitimate, necessary, and well-documented expenses are charged. Contractors must be diligent in documenting agreements and services, and avoid any activities that could be construed as improper or illegal. Common pitfalls include inadequate documentation, improper influence, or charging for unnecessary or unperformed services.