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Contractor cost for security application

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Seems like an age old question but was unable to find anything specific on these similar topics archives or otherwise:

1) If a government contract requires a contractor employee to obtain a specific clearance to perform work, and the clearance process requires specific "during work" actions (e.g. full-scope poly), is the time to perform said action an allowable cost (either indirect or direct)? Presume employee works on only one contract (for now).

2) Further, is time spent by employee to complete paperwork (or e-QIP for example) in pursuit of obtaining a required clearance allowable or is there an expectation that this type of activity is to be performed during non-work hours?

3) Likewise, requirements to complete EOD is considered allowable?  Could it be considered a direct charge to the contract? 

Cumbersome in that in some instances, these tasks may be required during a "precontract" phase.

Thinking I am far from the first to encounter such issues.

Thank you

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  • Whether or not these costs may be reimbursed under a cost-reimbursement contract as direct costs depends on the terms of the contract.  
  • Whether or not these costs may be reimbursed under a cost-reimbursement contract as indirect costs depends on the terms of the contract and the contractor's established compensation plan or practice.
  • Time is not a cost (either direct or indirect).  Cost is a cost.
  • It is a company's business whether or not it pays an employee for time he or she spends in pre-work matters.  If it doesn't pay the employee, then there are no costs and no reimbursement question arises.  If it does pay the employee, then it has costs -- but even then, the costs might not be reimbursable as direct costs.


  • If a fixed-price contract doesn't provide separate payment for entry-on-duty (EOD) requirements, then there will be no payment.  A contractor's fixed price covers both work for which a direct payment is made as well as any incidental work.

If I was the contracting officer for a cost-reimbursement contract where I learned that a contractor employee spent contract time doing e-QIP or a polygraph test for another contract, I would disallow those costs as a direct charge on my contract.  On a fixed-price contract, I would aver that the contractor was in breach because the employee was not performing contract work.  

When I draft service contracts, I customarily do not provide a separate payment for EOD efforts -- I only provide payment for productive work.  I consider any costs of getting an employee ready to work to be costs of doing business, which any prudent contractor knows how to cover.

Best wishes...

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