Jump to content
The Wifcon Forums and Blogs

Recommended Posts

10 hours ago, Corduroy Frog said:

Unallowable means neither G&A nor Overhead.

Corduroy - h2h could do this more justice than I but I offer that you and who ever you are feuding with are looking at your dilemma  from a single view, that of the FAR.  Pursuant to the FAR unallowable means any cost that is determined unallowable no matter where it might be captured in the contractors accounting system.  To this point I suggest a close read of FAR 31.201-6 as you consider all of the responses you have received in this thread.

Consider this as well.   I as a individual capture all my costs in my accounting system (checkbook, bank statement(s) or something more sophisticated).  All of the costs are used to represent my financial health (checkbook/bank statement balance) or something more sophisticated such as a profit/loss statement and balance sheet.  All are costs (expenses) to me.  Now I have to file my taxes.  When I prepare my taxes I have to determine  which of those costs are deductible in computing my taxes.  Some are some are not.

Now think of this with regard to a contractor that does Federal government business.   I have costs.   If I am really, really small I may just capture them in a checkbook or I may categorized them in many different places in more sophisticated account systems (say I use QuickBooks) yet no matter where I might categorized them for the sake of my business accounting system the Federal government may determine some are unallowable and be "excluded from any billing, claim, or proposal applicable to a Government contract."

As to where a contractor might normally capture a cost such as "business development"?   It depends and I would offer that there is no normal place its up to the individual contractor where they might capture such costs.   For many contractors, but not all, they will depend on "Generally Accepted Accounting Principles" (GAAP) to make the determination of where the following costs that you identified would be accounted for.   GAAP in fact might suggest some go in "other expenses" and others in "prepaid sales" and so on. 

21 hours ago, Corduroy Frog said:

Activities include such things as daily filtering and examination of the FBO, knocking-on-doors with customers, consulting with contracting officers in an attempt to expand scope of work.  Travel to customers, meals and meetings to schmooze relations with customers, meeting with team members, etc. 

But again a contractor can and will put the above costs anywhere and the Government in determining what costs to have to excluded because they are not allowable has comb through data provided in proposal submission, billings and/or claims inclusive of certified cost or pricing data if it is required to be submitted.  

Bottom line I would offer that there is no "common" place a business will put business development costs as the business can place them anywhere they want.

Share this post


Link to post
Share on other sites
43 minutes ago, Vern Edwards said:

Some people want to shift this thread from the original question, which was into which pool BD is most commonly included, G&A or overhead. Now people want to suggest into which pool it should be included. I don't know if the OP is interested in that discussion. If he/she is interested, then you cannot discuss the issue intelligently until you know:

  1. the specific type of activity for which the cost was incurred or is to be incurred,
  2. the purpose for which the activity was undertaken, and
  3. the choices of pools available.

And general descriptions will not be especially helpful. You need specifics.

I agree that specifics are necessary. 

What does the term “general descriptions” mean?  After all, Corduroy said in the initial post:  “This is a general question with general answers expected.” 

Simple answers to general questions lacking specifics can be dangerous and misleading, when there is little or no context. Especially for “beginners”, who need to understand more than a high altitude, carpet bomb, one size fits all answer. 

Executive level people like simple answers.  I don’t think that “Beginners” in federal acquisition/contracting benefit much from simple, non-contextual answers. I don’t think that one can effectively participate in a debate based upon a simple answer without understanding the context. 

“They don’t know what they don’t know.”

Just my opinion. I guess that I should review the Forum guidelines for responding under the “beginners” category. 

EDIT: Vern edited the above quoted post to add a reference to “selling costs” . Yes,  I also mentioned that in an eArlier post. 

But - as to where these various costs belong - in general and administrative or some type of lower level or specific  overhead,  “it depends” on the circumstances. 

Share this post


Link to post
Share on other sites
17 minutes ago, joel hoffman said:

What does the term “general descriptions” mean?  

It means not specific. "Marketing" is general. "Researching the interest of the Air Force Space Command in funding our plan to experiment with new methods of controlling the timing jitter of mode-locked lasers" is specific.

17 minutes ago, joel hoffman said:

But - as to where these various costs belong - in general and administrative or some type of lower level or specific  overhead,  “it depends” on the circumstances.

Yes, a molehill of a routine accounting problem that some of you are turning into a mountain. If I were Corduroy I'd walk away.

Share this post


Link to post
Share on other sites

Ok, thanks for your original point above, prior to edits.  

At any rate, I believe that’s why the answers to the questions should indicate that it depends upon the circumstances.  

 

Share this post


Link to post
Share on other sites
Just now, joel hoffman said:

I believe that’s why the answers to the questions should indicate that it depends upon the circumstances

That's been pointed out to the OP in various ways a bunch of times.

Share this post


Link to post
Share on other sites
1 hour ago, Vern Edwards said:

That's been pointed out to the OP in various ways a bunch of times.

Yep, but he/she doesn’t seem to want that answer. Appears to want a simple one size fits all answer, independent of context/circumstances - for a debate** yet!

Clarified:  ** involvement in a feud between two parties at opposite viewpoints. One says”  business development is G&A” and the other says it is  “overhead”.the OP wants to if there is a widely held viewpoint favoring one or the other position. 

Share this post


Link to post
Share on other sites
16 minutes ago, joel hoffman said:

Yep, but he/she doesn’t seem to want that answer. Appears to want a simple one size fits all answer, independent of context/circumstances - for a debate yet!

So what are you, a nanny? If that's what he/she wants that's what he/she wants. You can lead a horse to water... Nobody is debating with you.

21 minutes ago, joel hoffman said:

Ok, thanks for your original point above, prior to edits.  

Why just prior to edits? 😂

Share this post


Link to post
Share on other sites
2 hours ago, Vern Edwards said:

So what are you, a nanny? If that's what he/she wants that's what he/she wants. You can lead a horse to water... Nobody is debating with you.

Sorry, I was referring to the apparent reason for the question, which was described as the OP’s involvement in a “feud” between two parties. I incorrectly used the term “debate”. 

Corduroy said: “Maybe the problem is me, in assuming that there would be a widely-held view that prefers one over the other.  I am currently involved in a feud between a party who believes this stuff should be G&A, and another who believes this should be Overhead.“. 

Share this post


Link to post
Share on other sites
13 hours ago, Vern Edwards said:

Yes, a molehill of a routine accounting problem that some of you are turning into a mountain. If I were Corduroy I'd walk away.

Vern, this is exactly what I'm going to do.  This overblown bloviating of a discussion is exactly what I wanted to avoid when I preferred simple answers, and I was even criticized for that.  Of course, almost nothing has a simple answer, but in the evaluation of options available to you at the time, you appreciate clarity - not a cesspool of uncertainty in which to wade around.

You guys spend as much time feuding with yourselves as you do feuding with me.  I'm surprised for accomplished experts that you have so much time on your hands.  I would, however, extend appreciation for those posts that appeared to be a bona fide effort to help.

Share this post


Link to post
Share on other sites
Guest
This topic is now closed to further replies.

×