FAR 52.215-17—Waiver of Facilities Capital Cost of Money.
Plain-English Summary
FAR 52.215-17, Waiver of Facilities Capital Cost of Money, is a very short clause with a very specific purpose: it makes clear that if the contractor did not include facilities capital cost of money in its proposed cost for the contract, then that cost is waived and cannot later be charged to the Government. The clause addresses only one topic—facilities capital cost of money—and its treatment as an unallowable cost under the contract when it was not proposed. In practice, this clause protects the Government from paying for a cost element that was not part of the contractor’s original proposal and prevents post-award attempts to add that cost into incurred cost submissions, billing, or pricing adjustments. It is a cost-accounting and pricing control clause, not a performance clause, and it matters most in cost-reimbursement, time-and-materials, or other negotiated acquisitions where cost buildup and allowability are important. The clause also reinforces the principle that proposal content can determine whether certain cost elements are recoverable later under the contract.
Key Rules
Waiver by omission
If the contractor did not include facilities capital cost of money in its proposed cost for the contract, the contractor is treated as having waived that cost. The omission is not just a pricing choice; it has a contractual consequence.
Unallowable under contract
Once waived under this clause, facilities capital cost of money is expressly unallowable for the contract. The contractor may not later claim, bill, or otherwise recover it as a contract cost.
Proposal controls recovery
The clause ties allowability to what was proposed before award. If the cost was not part of the proposed cost submission, the contract bars recovery even if the contractor normally tracks or uses that cost in other contexts.
Limited subject matter
This clause applies only to facilities capital cost of money. It does not address other cost elements, indirect rates, or general cost allowability rules except to the extent they relate to this specific cost.
Inserted when prescribed
The clause is included when required by FAR 15.408(i). Its presence signals that the contracting officer has determined the waiver rule should apply to the contract based on the solicitation and proposal structure.
Responsibilities
Contracting Officer
Insert the clause when prescribed by FAR 15.408(i) and ensure the contract clearly states that facilities capital cost of money is unallowable if it was not included in the contractor’s proposed cost. The contracting officer should also ensure the pricing record and contract file reflect the waiver effect.
Contractor
Decide during proposal preparation whether to include facilities capital cost of money in the proposed cost. If the contractor omits it, the contractor must treat that cost as waived for the contract and must not later seek reimbursement for it.
Agency
Use the clause to enforce consistent pricing and cost allowability treatment, and ensure contract administration and audit activities do not permit recovery of waived facilities capital cost of money.
Auditor/Contract Administration Personnel
Verify that claimed costs do not include facilities capital cost of money when the clause applies and the cost was not proposed. Reject or question any attempt to include the waived amount in incurred cost, billing, or final price adjustments.
Practical Implications
Contractors need to decide up front whether to propose facilities capital cost of money; if they leave it out, they generally cannot add it later.
The clause is easy to overlook because it is brief, but it can have real pricing consequences in negotiated contracts where cost buildup matters.
A common pitfall is confusing facilities capital cost of money with other indirect costs or capital-related expenses; this clause only bars this specific cost element.
Contracting officers and auditors should check proposal pricing and contract terms together, because the waiver depends on whether the cost was actually proposed.
If the contractor later tries to recover the cost through billing, indirect rates, or a final cost submission, the clause provides a clear basis to disallow it.
Official Regulatory Text
As prescribed in 15.408 (i) , insert the following clause: Waiver of Facilities Capital Cost of Money (Oct 1997) The Contractor did not include facilities capital cost of money as a proposed cost of this contract. Therefore, it is an unallowable cost under this contract. (End of clause)