FAR 52.215-16—Facilities Capital Cost of Money.
Plain-English Summary
FAR 52.215-16 is a solicitation provision about facilities capital cost of money, often abbreviated FCCM. It tells offerors that FCCM may be treated as an allowable cost on the resulting contract only if the allowability requirements in FAR 31.205-10(b) are satisfied, and it highlights one of those requirements: the prospective contractor must actually propose FCCM in its offer. The provision also explains the consequence of not proposing the cost — the resulting contract will include the clause Waiver of Facilities Capital Cost of Money. In practical terms, this provision matters when a contractor wants to recover an imputed cost for the use of capital tied up in facilities, rather than only direct depreciation or other facility-related costs. It is important because the decision to propose or waive FCCM affects pricing, cost realism, and later contract administration, and it must be handled at the proposal stage rather than after award. This provision is short, but it connects the solicitation, the cost principles, and the final contract terms in a way that can materially affect the contractor’s allowable costs.
Key Rules
FCCM may be allowable
Facilities capital cost of money can be an allowable cost under the contemplated contract, but only if the contractor meets the allowability criteria in FAR 31.205-10(b). The provision does not itself create allowability; it points to the cost principle that governs whether the cost may be recovered.
Must be proposed in the offer
One of the key allowability requirements is that the prospective contractor must propose FCCM in its offer. If the contractor does not include it in the proposal, it generally cannot later claim it as an allowable cost under the resulting contract.
Waiver follows nonproposal
If the prospective contractor does not propose FCCM, the resulting contract will include the clause Waiver of Facilities Capital Cost of Money. That clause confirms the contractor has waived the right to recover FCCM under the contract.
Applies at solicitation stage
This provision is inserted in the solicitation, not after award, so the contractor must decide during proposal preparation whether to seek FCCM treatment. The decision affects the proposed price or cost build-up and the contract terms that follow award.
Linked to cost principles
The provision works together with FAR Part 31, especially FAR 31.205-10(b), which governs the allowability of FCCM. Contracting personnel must evaluate the proposal and resulting contract in light of those cost principles, not just the provision itself.
Responsibilities
Contracting Officer
Include this provision when prescribed by FAR 15.408(h), review whether the offeror proposed FCCM, and ensure the resulting contract includes the Waiver of Facilities Capital Cost of Money clause if FCCM was not proposed.
Prospective Contractor
Decide whether to propose facilities capital cost of money in the offer, ensure the proposal satisfies the requirements of FAR 31.205-10(b), and understand that failure to propose the cost results in waiver under the contract.
Agency
Use the provision in solicitations where required by the acquisition rules and administer the resulting contract consistently with the cost principles and any waiver language included in the award.
Practical Implications
Contractors must make the FCCM decision before award; it is not something that can usually be added later if omitted from the proposal.
If FCCM is intended to be recovered, the proposal must clearly identify it and support it under FAR 31.205-10(b); vague or incomplete pricing treatment can lead to waiver.
Contracting officers should check whether the offer included FCCM so the correct contract clause is inserted at award.
A common pitfall is confusing FCCM with depreciation or other facility costs; FCCM is a separate cost concept and must be handled explicitly.
Because the provision affects allowable cost treatment, it can influence both negotiated price and later incurred-cost claims, so proposal teams and pricing analysts should coordinate early.
Official Regulatory Text
As prescribed in 15.408 (h) , insert the following provision: Facilities Capital Cost of Money (June 2003) (a) Facilities capital cost of money will be an allowable cost under the contemplated contract, if the criteria for allowability in FAR 31.205-10 (b) are met. One of the allowability criteria requires the prospective Contractor to propose facilities capital cost of money in its offer. (b) If the prospective Contractor does not propose this cost, the resulting contract will include the clause Waiver of Facilities Capital Cost of Money. (End of provision)