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unallowable. <br />6.Bonding costs. <br />a. Bonding costs arise when the Federal Government requires assurance against financial loss to <br />itself or others by reason of the act or default of the governmental unit. They arise also in <br />instances where the governmental unit requires similar assurance. Included are such bonds as <br />bid, performance, payment, advance payment, infringement, and fidelity bonds. <br /> b. Costs of bonding required pursuant to the terms of the award are allowable. <br /> c. Costs of bonding required by the governmental unit in the general conduct of its operations <br />are allowable to the extent that such bonding is in accordance with sound business practice and <br />the rates and premiums are reasonable under the circumstances. <br />7.Communication costs. Costs incurred for telephone services, local and long distance <br />telephone calls, telegrams, postage, messenger, electronic or computer transmittal services and <br />the like are allowable. <br />8. Compensation for personal services. <br /> Compensation for personal services <br />8. <br />. <br />a. General. Compensation for personnel services includes all remuneration, paid currently or <br />accrued, for services rendered during the period of performance under Federal awards, including <br />but not necessarily limited to wages, salaries, and fringe benefits. The costs of such <br />compensation are allowable to the extent that they satisfy the specific requirements of this <br />Circular, and that the total compensation for individual employees: <br />(1) Is reasonable for the services rendered and conforms to the established policy of the <br />governmental unit consistently applied to both Federal and non-Federal activities; <br />(2) Follows an appointment made in accordance with a governmental unit's laws and rules and <br />meets merit system or other requirements required by Federal law, where applicable; and <br />(3) Is determined and supported as provided in subsection h. <br />b. Reasonableness. Compensation for employees engaged in work on Federal awards will be <br />considered reasonable to the extent that it is consistent with that paid for similar work in other <br />activities of the governmental unit. In cases where the kinds of employees required for Federal <br />awards are not found in the other activities of the governmental unit, compensation will be <br />considered reasonable to the extent that it is comparable to that paid for similar work in the labor <br />market in which the employing government competes for the kind of employees involved. <br />Compensation surveys providing data representative of the labor market involved will be an <br />acceptable basis for evaluating reasonableness. <br />17 <br /> <br />