Related Extramural SOP: Precontract Costs
Last reviewed May 10, 2004
 
(Delete this and everything above it when using the form. Do not fill out on line. See Using forms and letters.)

Sample Precontract Cost Agreement Letter

Contractor
Address

Subject:	Proposed Contract No.
		Title: “  “
		Precontract Costs

Dear: 
This letter is to confirm our oral agreement reached today on precontract costs. I understand that (offeror) may voluntarily incur certain costs in anticipation of receiving proposed contract number             from the National Institute of Allergy and Infectious Diseases; although there is no guarantee that this contract will be awarded. The agreement we reached today is to the effect that if the said contract is awarded, precontract costs in an amount not to exceed $              for the period            through            will be treated as valid precontract costs. The costs shall be limited to: direct labor, overhead, materials and supplies, travel, warehouse rent, equipment rental, hardware/software maintenance, courier services, telephone charges, temporary help, general and administrative, and fixed-fee. (The CO can modify the foregoing items of cost to fit the specific situation.)

Precontract costs are defined as those costs incurred prior to the effective date of the contract directly pursuant to the negotiation and in anticipation of the award of the contract where such incurrence is necessary to comply with the proposed contract delivery schedule. These costs are allowable to the extent that they would have been allowable if incurred after the effective date of the contract.

It is understood that the Government is not directing   (offeror)    to incur the precontract costs, and that if the Government does not award the proposed contract for any reason, the Government does not incur any liability for those costs incurred by    (offeror).

Please indicate your consent to this agreement by completing the signature and date lines below and return this letter to me. In addition, please make a copy for your records.

Sincerely,

Contracting Officer

AGREED:    ______                    __      ___________
                   Signature  

          ________________________________
                 Typed Name and Title

	______________________________
		Date