(a) When facilities capital cost of money is included as an item of cost in the contractor’s proposal, it shall not be included in the cost base for calculating profit/fee. In addition, a reduction in the profit/fee objective shall be made in the amount equal to the facilities capital cost of money allowed in accordance with
FAR 31.205-10(b) or 1 percent of the cost base, whichever is less.
(b)
CAS 417, cost of money as an element of the cost of capital assets under construction, should not appear in contract proposals. These costs are included in the initial value of a facility for purposes of calculating depreciation under
CAS 414.
