[Code of Federal Regulations]
[Title 48, Volume 1]
[Revised as of October 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 48CFR31.205-33]

[Page 603-605]
 
            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM
 
                CHAPTER 1--FEDERAL ACQUISITION REGULATION
 
PART 31--CONTRACT COST PRINCIPLES AND PROCEDURES--Table of Contents
 
          Subpart 31.2--Contracts With Commercial Organizations
 
Sec. 31.205-33  Professional and consultant service costs.

    (a) Definition. Professional and consultant services, as used in 
this subsection, means those services rendered

[[Page 604]]

by persons who are members of a particular profession or possess a 
special skill and who are not officers or employees of the contractor. 
Examples include those services acquired by contractors or 
subcontractors in order to enhance their legal, economic, financial, or 
technical positions. Professional and consultant services are generally 
acquired to obtain information, advice, opinions, alternatives, 
conclusions, recommendations, training, or direct assistance, such as 
studies, analyses, evaluations, liaison with Government officials, or 
other forms of representation.
    (b) Costs of professional and consultant services are allowable 
subject to this paragraph and paragraphs (c) through (f) of this 
subsection when reasonable in relation to the services rendered and when 
not contingent upon recovery of the costs from the Government (but see 
31.205-30 and 31.205-47).
    (c) Costs of professional and consultant services performed under 
any of the following circumstances are unallowable:
    (1) Services to improperly obtain, distribute, or use information or 
data protected by law or regulation (e.g., 52.215-1(e), Restriction on 
Disclosure and Use of Data).
    (2) Services that are intended to improperly influence the contents 
of solicitations, the evaluation of proposals or quotations, or the 
selection of sources for contract award, whether award is by the 
Government, or by a prime contractor or subcontractor.
    (3) Any other services obtained, performed, or otherwise resulting 
in violation of any statute or regulation prohibiting improper business 
practices or conflicts of interest.
    (4) Services performed which are not consistent with the purpose and 
scope of the services contracted for or otherwise agreed to.
    (d) In determining the allowability of costs (including retainer 
fees) in a particular case, no single factor or any special combination 
of factors is necessarily determinative. However, the contracting 
officer shall consider the following factors, among others:
    (1) The nature and scope of the service rendered in relation to the 
service required.
    (2) The necessity of contracting for the service, considering the 
contractor's capability in the particular area.
    (3) The past pattern of acquiring such services and their costs, 
particularly in the years prior to the award of Government contracts.
    (4) The impact of Government contracts on the contractor's business.
    (5) Whether the proportion of Government work to the contractor's 
total business is such as to influence the contractor in favor of 
incurring the cost, particularly when the services rendered are not of a 
continuing nature and have little relationship to work under Government 
contracts.
    (6) Whether the service can be performed more economically by 
employment rather than by contracting.
    (7) The qualifications of the individual or concern rendering the 
service and the customary fee charged, especially on non-Government 
contracts.
    (8) Adequacy of the contractual agreement for the service (e.g., 
description of the service, estimate of time required, rate of 
compensation, termination provisions).
    (e) Retainer fees, to be allowable, must be supported by evidence 
that--
    (1) The services covered by the retainer agreement are necessary and 
customary;
    (2) The level of past services justifies the amount of the retainer 
fees (if no services were rendered, fees are not automatically 
unallowable);
    (3) The retainer fee is reasonable in comparison with maintaining an 
in-house capability to perform the covered services, when factors such 
as cost and level of expertise are considered; and
    (4) The actual services performed are documented in accordance with 
paragraph (f) of this subsection.
    (f) Fees for services rendered shall be allowable only when 
supported by evidence of the nature and scope of the service furnished. 
(See also 31.205-38(f).) However, retainer agreements generally are not 
based on specific statements of work. Evidence necessary to determine 
that work performed is proper and does not violate law or regulation 
shall include--

[[Page 605]]

    (1) Details of all agreements (e.g., work requirements, rate of 
compensation, and nature and amount of other expenses, if any) with the 
individuals or organizations providing the services and details of 
actual services performed;
    (2) Invoices or billings submitted by consultants, including 
sufficient detail as to the time expended and nature of the actual 
services provided; and
    (3) Consultants' work products and related documents, such as trip 
reports indicating persons visited and subjects discussed, minutes of 
meetings, and collateral memoranda and reports.

[55 FR 52793, Dec. 21, 1990; 57 FR 60610, Dec. 21, 1992; 62 FR 51271, 
Sept. 30, 1997, as amended at 66 FR 2131]