Pre-Award Costs and DOD – What you need to know.

  • November 9, 2020

Each of the 11 government agencies has their own individual guidelines and policies with regard to allowable costs. Each of these is very specific with regard to pre-award costs. This includes services rendered for business consultation or proposal preparation.

What is a ‘pre award cost?’

Also known as pre-agreement costs, pre=award costs are defined as costs considered necessary to the project but incurred prior to the starting date of the award period. You may not settle these costs with any awarded funds. The ONLY exception to this rule is if the Office of Grants & Training (G&T) makes an exception.

Period of Availability

The award period is the period of time when Federal funding is available for obligation by the recipient. The recipient may charge to the grant only allowable costs resulting from obligations incurred during the funding period. Only pre-award costs authorized by G&T can be settled from the award. Funds from the award may not be used to pay any pre-award costs that were not approved by G&T. If you do this you are in violation of the guidelines which may lead to disallowance of costs and recovery of funds and/or suspension of funds and/or award.

Performance Based Pay for Proposal Preperation?

In addition to breaking the law and codes of ethics from premier organizations, the idea of performance-based payments for proposal preparation is pure madness. Grant professionals should put their best effort forth in every proposal with the aim that their client will win the award. A ‘try harder’option for a promise of a bonus if the award is made should not exist. The grant writer has no control over the outcome of the application as this decision rests in the hands of the reviewers alone.

Applicants must read and understand all policy guidelines when applying for DOD, or any other federal funding. Ignorance of the policy is no excuse for breaking the law. For those to whom ethics matter, it is advisable to always research popular ethical guidelines before entering any contract.

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E. B. Consulting LLC has a strong commitment to both ethics and knowledge. Our staff undergoes ongoing professional development to stay knowledgeable regarding federal guidelines and policies and adhere to a strict code of ethics.

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