PODCAST | Allowable Compensation Costs Under FAR [Part 2]

Published on: 03/02/2021 By: Gorfine, Schiller & Gardyn

In part two of GSG’s three-part podcast series John Mahaffey, Director of Audit and Accounting Services, highlights selected areas of costs that are allowable under FAR, specifically allowable costs of compensation.

Part one of GSG’s FAR podcast series provided an overview of the Federal Acquisition Regulation (FAR), the primary regulation used by all federal executive agencies (including state DOTs) in the acquisition of supplies and services.

Specifically within the FAR is Part 31.2 – Contracts with Commercial Organizations, covering contracts with the exception of educational institutions, not-for-profit entities, or state and local governments. In addition, within this section is FAR Part 31.205-6, the compensation for personal services.

Compensation is typically one of the largest, if not the largest, expense for architectural/engineering (A/E) firms. Compensation for personal services includes a significant amount of detail, and in order for it to be an allowable cost, it must be reasonable and based on an established compensation plan that is consistently followed.

Part two of the podcast series provides a comprehensive overview of the considerations that need to take place when determining allowable costs of compensation under FAR.

Stay tuned for the third and final podcast in GSG’s three-part FAR podcast series, which will cover all other costs that are allowable under FAR.

For more information, contact our team here.

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