D.C. Mun. Regs. r. 27-3307

Current through Register Vol. 71, No. 24, June 14, 2024

Rule 27-3307 - DETERMINING REASONABLENESS

3307.1

The contracting officer shall determine a cost to be reasonable if it does not differ from or exceed in amount that which would be incurred by a prudent person in the conduct of a competitive business, in accordance with the provisions of this chapter.

3307.2

In determining the reasonableness of a given cost, the contracting officer shall consider the following factors:

(a) Whether the cost is of a type generally recognized as ordinary and necessary for the conduct of the contractor's business or the performance of the contract;

(b) The restraints or requirements imposed by generally accepted sound business practices, arms length bargaining, federal and District laws and regulations, and contract terms and specifications;

(c) The action that a prudent business person would take, considering responsibilities to the owner of the business, employees, customers, the District, and the public at large;

(d) Any significant deviations from the established practices of the contractor that may unjustifiably increase the contract costs; and

(e) Any other relevant factors.

3307.3

Reasonableness of specific costs must be examined with particular care in connection with firms or their separate divisions that may not be subject to effective competitive restraints.

3307.4

No presumption of reasonableness shall be attached to the incurrence of costs by a contractor.

3307.5

If an initial review of the facts results in a challenge of a specific cost by the contracting officer or the contracting officer's representative, the burden of proof shall be upon the contractor to establish that such cost is reasonable.

D.C. Mun. Regs. r. 27-3307

Final Rulemaking published at 35 DCR 1653 (February 26, 1988); as Final Rulemaking published at 51 DCR 1429 (February 6, 2004)