August 7, 1987
Subject: Cost Sharing on DOD Contracts
Enclosed is a final rule published in the Federal Register on July 1, 1987 and corrected on July 28. The rule amends Subpart 235.003 of the DOD Federal Acquisition Regulation Supplement (DFARS) with regard to cost sharing, effective June 19, 1987. As stated in the "Background" section, one purpose of this rule is to "discourage the consideration of cost sharing arrangements in the case of educational institutions...while still allowing for their use when agreeable to the parties."
The key phrase in the rule itself is at (b)(S-72)(v): "When an educational
institution...agrees to absorb a portion of the research costs..." This language
is now Consistent with FAR 35,003 and should have the effect of eliminating cost
sharing requirements in most DOD contracts with the University. Where DOD
contracting officers still try to include cost sharing requirements in their
contracts, campus Contracts and Grants Officers should be able to avoid such
requirements on the basis of this new DFARS requirement, unless the campus agrees to cost share on the contract.
Subject Index: 05
Organization Index: F-175
David F. Mears
University Contracts and Grants Coordinator
cc: Accounting Officers