Research Administration Office

University of California

Memo Operating Guidance

No. 87-28

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