MIKEBP Posted August 29, 2017 Report Share Posted August 29, 2017 Hello, wanted to ask a question about a discussion I had recently. I work for a Defense Contractor and recently heard that B&P dollars derived from performing on US Government Contracts has restrictions for use when developing International Bids for foreign governments. For instance, if you bid a job for a foreign government and spent $1M preparing the bid and the split of US Content to Foreign Content is 10%/90% (meaning most of the work will be done in the foreign country), then my understanding from the conversation is our pool of $B&P can only be used to absorb 10% ($100K) of the cost spent preparing the bid and the 90% ($900K) is un-absorbable, can't use the $B&P, and will need to come from another source like profit. Is my understanding correct or something that government contractors deal with going after international work whose B&P is derived from performing on US Government Contracts? Defined in the FAR? DCAA topic? Or just an accounting practice not applicable to this site? Thanks for your help. Link to comment Share on other sites More sharing options...
ji20874 Posted August 29, 2017 Report Share Posted August 29, 2017 Was there anything in FAR 31.205-18 that was helpful to you? Or 48 CFR 9904.420 (referenced in FAR 31.205-18(b))? Link to comment Share on other sites More sharing options...
Retreadfed Posted August 30, 2017 Report Share Posted August 30, 2017 MikeBP, did whoever told you this cite a regulation or law to support the statement? It is good to be leary of statements like this if they are not backed up with some authority to support the statement. Link to comment Share on other sites More sharing options...
here_2_help Posted August 31, 2017 Report Share Posted August 31, 2017 MikeBP, The other posters are nicer and more diplomatic than I am. What you heard is nonsense. Somebody is confusing DOD restrictions on allowable IR&D (found in the DFARS) with fictitious USG restrictions on allowable B&P. Not the same thing at all. Link to comment Share on other sites More sharing options...
here_2_help Posted September 1, 2017 Report Share Posted September 1, 2017 Thinking about it this morning, there is a provision in CAS 420 that requires both IR&D and B&P expenses to be allocated to the segment that benefits from them, regardless of where the costs are incurred. So ... it's possible that what the OP was hearing was that B&P incurred on behalf of a foreign segment must be allocated to that segment in proportion to the benefit that the foreign segment expects to receive from the awarded contract. That's a lot of supposition and interpretation of the original question, but I wanted to be thorough in my response. Link to comment Share on other sites More sharing options...
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