Common use of Direct Cost Clause in Contracts

Direct Cost. Direct costs are those costs that can be identified specifically with a particular final cost objective or that can be directly assigned to such activities relatively easily with a high degree of accuracy. If a cost benefits two or more projects or activities in proportions that can be determined without undue effort or cost, the cost must be allocated to the projects based on the proportional benefit. If a cost benefits two or more projects or activities in proportions that cannot be determined because of the interrelationship of the work involved the cost may be allocated or transferred to benefitting projects on any reasonable documented basis.