When a contractor discontinues operations through the sale of a business segment or segments, it is assessed state and local taxes on the gain resulting from the sale. DCMC strongly supports attempts to approve a proposed rule that would add these tax increases to the list of unallowable costs.

Other matters being addressed by the Overhead Center are:

Final Overhead Settlement Process

Recent changes to the FAR that streamline final settlement of indirect cost rates under cost type contracts will require attention. The Overhead Center will be stressing the following:

1. Strive to meet the "6-12-6" goal – six months after the end of its fiscal year for the contractor to submit its proposal, 12 months for DCAA to audit it and six months for the ACO to reach a final settlement

2. Use quick close-out rates whenever possible (FAR 42.708 address this)

3. Consider the materiality of costs when negotiating

4. Exert maximum effort to secure contractor submissions of overdue final overhead rate proposals

5. Negotiate several open years at the same time. If multiple years contain cost allowability/allocability issues, negotiate these simultaneously to save time and permit faster closure of open years.

6. Settle corporate division issues as soon as possible so that corporate allocations can be allocated downward to expedite closure at the lower levels.

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