Common use of Allocable costs Clause in Contracts

Allocable costs. a. A cost is allocable to a particular cost objective if the goods or services involved are chargeable or assignable to such cost objective in accordance with relative benefits received. b. All activities which benefit from the governmental unit’s indirect costs, including unallowable activities and services donated to the governmental nit by third parties, will receive an appropriate allocation of indirect costs. [For example, the fair market value of volunteer services contributed to a project need to be included in the allocation. Unallowable costs have to be included to ensure that the grantor agency does not pay a disproportionate share of project costs by having such costs “backed out” prior to allocating costs among funding sources.] c. Any cost allocable to a particular federal or state award or cost objective under the principles provided in this Appendix may not be charged to other federal or state awards to overcome fund deficiencies, to avoid restrictions imposed by law or terms of the federal or state awards, or for other reasons. However, this prohibition would not preclude governmental units from shifting costs that are allowable under two or more awards in accordance with existing program agreements. d. Where an accumulation of indirect costs will ultimately result in charges to a federal or state award, a cost allocation plan will be required as described in Attachments C, D, and E to UGMS.