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B-125045 1 (1977-10-13)

handle is hein.gao/gaobadfeo0001 and id is 1 raw text is: 4 THE COMP'WROLLER GENEPAL DECISI0l Cl. F TMI MUNWTEC2STATE* WAB-4 1N TO3N. D. C. Ro 4a (15 FILE: B-125045 DATE: October 13, 977 o MATTER OF: Department of Water Resources at the State of California DIGEST.* 1. Cost principles in FPR § 1-15 are applicable to grants and contracts with State and local governments tinder FPR S 1-15.701-1. Therefore, supplemental agreement entered into by Departmene of Interior and State of California after effective date of regulation is subject thereto whether properly characterized as grant or contract. 2. No auhority found to support conclusion that cost principles everride specific inconsistint ayreament between the parties. Ther.fore, payment may be made pursuant to agreement even though incontistent with cost principles. lowtevar, Department should take actior. to bring agreement in line with cost principles. By letter dated July 7, 1977, the Department of th Interior (I;terior) requested a.decision concorning the allowabilit; of legislative costs incurred by the State of California in the performance of contract 14-06-200-9755. The contract for the design and consatuction of water resource facilities for the joint use of the State and the United States was executed on December 30, 1961. Article 15 of the contract, in pertinent part, provided: The cost of construction of the joint-use facilities * * * shall include: * *t * * * (7) Indirect costs distributed in the customary manner of the agency which incurred the related direct coat. On January 12, 1972, the parties to the contract executed a supplemental agreement which established operating criteria for the joint-use facilities. Article 35(c) of the supplemental agreement provided as follows: The costs of caring for, operating, maintain- ing, and replacing the joint-use and Federal-only facilities A * * shall include: - 1 1

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