A White paper by John C. Shire, CPA, Director

Where does allowable planning end and unallowable organization begin? Two FAR clauses are at odds with each other in terms of merger/acquisition activities being allowable. Contractors need to understand where their planning activities cross the line from allowable, generalized consideration of an opportunity, to unallowable, where specific actions are taken to plan for a specific opportunity. Documenting decision-making, clarifying employee activity, and noting the point at which the organization’s decisions move from a generalized consideration to a specific opportunity plan will help avoid having salaries and employee efforts ruled unallowable by the Government.