§ 200.472 - Termination and standard closeout costs.

§ 200.472 Termination and standard closeout costs.

(a) Termination Costs. Termination of a Federal award generally gives rise to the incurrence of costs

,

or the need for special treatment of costs, which would not have arisen had the Federal award not been terminated. Cost principles covering these items are set forth in this section. They

are to

must be used in conjunction with the other

provisions

termination requirements of this part

in termination situations

.

(

a

1) The cost of items reasonably usable on the

non-Federal entity

recipient's or subrecipient's other work

must not be allowable

is unallowable unless the

non-Federal entity

recipient or subrecipient submits evidence that it would not retain such items

at cost

without sustaining a loss. In deciding whether such items are reasonably usable on other work of the

non-Federal entity

recipient or subrecipient, the Federal

awarding

agency or pass-through entity should consider the

non-Federal entity

recipient's or subrecipient's plans and orders for current and scheduled activity. Contemporaneous purchases of common items by the

non-Federal entity

recipient or subrecipient must be

regarded as

considered evidence that

such

the items are reasonably usable on the

non-Federal entity

recipient's or subrecipient's other work. Any acceptance of common items as allocable to the terminated portion of the Federal award must be limited to the extent that the quantities of such items on hand, in transit, and on order

are in excess of

do not exceed the reasonable quantitative requirements of other work.

(

b

2) If

in a particular case, despite all reasonable efforts by the non-Federal entity, certain costs cannot be discontinued

the recipient or subrecipient cannot discontinue certain costs immediately after the effective termination date

of termination, such

, despite making all reasonable efforts, then the costs are generally allowable within the limitations

set forth in

of this part

, except that any such

. Any costs continuing after termination due to the negligent or willful failure of the

non-Federal entity to discontinue such costs must be

recipient or subrecipient to immediately discontinue the costs are unallowable.

(

c

3) Loss of useful value of special tooling, machinery, and equipment is generally allowable if:

(

1

i) Such special tooling, special machinery, or equipment is not reasonably capable of use in the other work of the

non-Federal entity,(2

recipient or subrecipient;

(ii) The interest of the Federal Government is protected by transfer of title or by other means deemed appropriate by the Federal

awarding

agency (see

also

§ 200.313 (d))

,

; and

(

3

iii) The loss of useful value for any one terminated Federal award is limited to

that

the portion of the acquisition cost which bears the same ratio to the total acquisition cost as the terminated portion of the Federal award bears to the entire terminated Federal award and other Federal awards for which the special tooling, machinery, or equipment was acquired.

(

d) Rental

4) If paragraph (a)(4)(i) and (ii) below are satisfied, rental costs under unexpired leases (less the residual value of such leases) are generally allowable where clearly shown to have been reasonably necessary for the performance of the terminated Federal award

less the residual value of such leases, if:(1

. These rental costs may include the cost of alterations of the leased property and the cost of reasonable restoration required by the lease, provided the alterations were necessary for the performance of the Federal award.

(i) The amount of

such

claimed rental

claimed

costs does not exceed the reasonable use value of the property leased for the period of the Federal award and

such

a further period as may be reasonable

,

; and

(

2

ii) The

non-Federal entity

recipient or subrecipient makes all reasonable efforts to terminate, assign, settle, or otherwise reduce the cost of

such lease. There also may be included

the

cost of alterations of such leased property, provided such alterations were necessary for the performance of the Federal award, and of reasonable restoration required by the provisions of the

lease.

(

e

5)

Settlement expenses including the following

The following settlement expenses are generally allowable

:

.

(

1

i) Accounting, legal, clerical, and similar costs that are reasonably necessary for:

(

i

A) The preparation and presentation to the Federal

awarding

agency or pass-through entity of settlement claims and supporting data with respect to the terminated portion of the Federal award, unless the termination is for cause (see

subpart D, including

§§ 200.339-200.343); and

(

ii

B) The termination and settlement of subawards.

(

2

ii) Reasonable costs for the storage, transportation, protection, and disposition of property provided by the Federal Government or acquired or produced for the Federal award.

(

f

6) Claims under subawards, including the allocable portion of claims

which are

common to the Federal award and

to

other work of the

non-Federal entity

recipient or subrecipient, are generally allowable. An appropriate share of the

non-Federal entity

recipient's or subrecipient's indirect costs may be allocated to the amount of settlements with contractors and

/or

subrecipients, provided that the amount allocated is

otherwise

consistent with the

basic guidelines contained in

requirements of § 200.414.

The

These allocated indirect costs

so allocated

must exclude the same and similar costs claimed directly or indirectly as settlement expenses.

[78 FR 78608, Dec. 26, 2013. Redesignated and amended at 85 FR 49570, Aug. 13, 2020]

(b) Closeout Costs. Administrative costs associated with the closeout activities of a Federal award are allowable. The recipient or subrecipient may charge the Federal award during the closeout for the necessary administrative costs of that Federal award (for example, salaries of personnel preparing final reports, publication and printing costs, costs associated with the disposition of equipment and property, and related indirect costs). These costs may be incurred until the due date of the final report(s). If incurred, these costs must be liquidated prior to the due date of the final report(s) and charged to the final budget period of the award unless otherwise specified by the Federal agency.