Indirect Cost Rate Proposals, Payments to Small Business Subcontractors, and Bankruptcy Notifications - FAR Sections Affected: 52.216-7, 52.216-15, 52.242-4, 52.242-5 and 52.242-13

This clearance covers the information that contractors must submit to comply with the following FAR requirements: a. FAR 52.216-7, Allowable Cost and Payment. This clause requires the contractor to submit an adequate final indirect cost rate proposal to the contracting officer and the auditor within the 6-month period following the expiration of each of its fiscal years. The proposed rates shall be based on the contractor’s actual cost experience for that period. Paragraphs (d)(2)(iii) and (iv) of this clause provide a list of the data required to be submitted. The data is customary business financial information that the contractor can access from its automated business systems. b. FAR 52.216-15, Predetermined Indirect Cost Rates. This clause repeats the requirement in the clause at FAR 52.216-7, paragraph (d), for the contractor to submit an adequate final indirect cost rate proposal, however it does not impose any additional reporting requirements. c. FAR 52.242-4, Certification of Final Indirect Costs. This clause requires the contractor’s final indirect cost rate proposal to be certified to establish or modify the rates used to reimburse the contractor for the costs of performing under the contract. The supporting cost data are the cost accounting information normally prepared by organizations under sound management and accounting practices. This clause is incorporated into all solicitations and contracts that provide for establishment of final indirect cost rates, but the Department of Energy may provide an alternate clause for its Management and Operating contracts. d. FAR 52.242-5, Payments to Small Business Subcontractors. This clause requires the prime contractor to self-report to the contracting officer when the prime contractor makes late or reduced payments to small business subcontractors. The notice shall include the reason(s) for making the reduced or untimely payment. e. FAR 52.242-13, Bankruptcy. This clause requires contractors to notify the contracting officer within five days after initiating the proceedings relating to bankruptcy filing.

The latest form for Indirect Cost Rate Proposals, Payments to Small Business Subcontractors, and Bankruptcy Notifications - FAR Sections Affected: 52.216-7, 52.216-15, 52.242-4, 52.242-5 and 52.242-13 expires 2028-07-31 and can be found here.

Indirect Costs -- FAR 52.216-7, 52.216-15, and 52.242-4

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