New Search
been arrived at as a result of less-than-arm's-length bargaining, e.g.: <br /> (1) Royalties paid to persons, including corporations, affiliated with the governmental unit. <br /> (2) Royalties paid to unaffiliated parties, including corporations, under an agreement entered <br />into in contemplation that a Federal award would be made. <br /> (3) Royalties paid under an agreement entered into after an award is made to a governmental <br />unit. <br /> c. In any case involving a patent or copyright formerly owned by the governmental unit, the <br />amount of royalty allowed should not exceed the cost which would have been allowed had the <br />governmental unit retained title thereto. <br />39. Selling and marketing. Costs of selling and marketing any products or services of the <br />governmental unit are unallowable (unless allowed under Attachment B, section 1. as allowable <br />public relations costs or under Attachment B, section 33. as allowable proposal costs. <br />40. Taxes. <br />a. Taxes that a governmental unit is legally required to pay are allowable, except for <br />self-assessed taxes that disproportionately affect Federal programs or changes in tax policies that <br />disproportionately affect Federal programs. This provision becomes effective for taxes paid <br />during the governmental unit's first fiscal year that begins on or after January 1, 1998, and <br />applies thereafter. <br />b. Gasoline taxes, motor vehicle fees, and other taxes that are in effect user fees for benefits <br />provided to the Federal Government are allowable. <br />c. This provision does not restrict the authority of Federal agencies to identify taxes where <br />Federal participation is inappropriate. Where the identification of the amount of unallowable <br />taxes would require an inordinate amount of effort, the cognizant agency may accept a <br />reasonable approximation thereof. <br />41. Termination costs applicable to sponsored agreements. Termination of awards generally <br />gives rise to the incurrence of costs, or the need for special treatment of costs, which would not <br />have arisen had the Federal award not been terminated. Cost principles covering these items are <br />set forth below. They are to be used in conjunction with the other provisions of this Circular in <br />termination situations. <br />a. The cost of items reasonably usable on the governmental unit's other work shall not be <br />allowable unless the governmental unit submits evidence that it would not retain such items at <br />cost without sustaining a loss. In deciding whether such items are reasonably usable on other <br />work of the governmental unit, the awarding agency should consider the governmental unit's <br />plans and orders for current and scheduled activity. <br />37 <br /> <br />