Since the Department of Energy and its predecessor agencies traditionally accomplished its mission through the use of management and operating (M&O) contracts, it evolved its own set of cost principles and terms and conditions that were better suited to M&Os.  In recent comparisons of its acquisition regulations (DEARS) and FAR it concluded that the FAR cost principles adequately addressed most of its interests.  Consequently, DOE is amending its DEARS to permit the cost of money as an allowable expense and deleting provisions of the DEAR that are adequately covered in the FAR.  The only DOE unique cost principles relate to (1) allowing individual locations to continue determining their own methods of allocating home office/corporate allocations (2) continuing to disallow bid and proposal costs for M&O arrangements (non-M&O contractors can follow FAR) and (3) FAR cost principles related to travel and relocation will continue to be followed even if other agencies switch to a “reasonableness” standard.

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