M. Increased Costs

Comment: The scope and sweep of this proposed rule is not well defined and is left open to conflicting interpretations. As such, it is difficult for companies to assess the costs of compliance or judge the accuracy of the burden of the proposed information collected without further specificity. For example, the term "project" is undefined. It is not uncommon for contractors to account for their IR&D costs not on a project basis but only as charge numbers or cost centers.

Response: The IR&D cost principle at FAR 31.205-18(b) states "The requirements of 48 CFR 9904.420, Accounting for independent research and development costs and bid and proposal costs, are incorporated in their entirety * * *." The cost accounting standard at 48 CFR 9904.420-40, Fundamental requirement, paragraph (a) states, "The basic unit for identification and accumulation of Independent Research and Development (IR&D) and Bid and Proposal (B&P) costs shall be the individual IR&D or B&P project." The proposed rule used terms in long use with understood meanings. Further, for contractors to account for their IR&D costs on other than a project basis would result in noncompliant reporting of IR&D costs if the amount of IR&D costs were determined to be material in amount.