Plant Reconversion Costs

Allowable or Unallowable: Unallowable

Source: FAR

Plant reconversion costs

Unallowable, with exceptions, see FAR Summary below. An advance agreement should be used to establish agreement on allowability.

FAR Summary

Plant reconversion costs are those incurred in restoring or rehabilitating the contractor’s facilities to approximately the same condition existing immediately before the start of the Government contract, fair wear and tear excepted.

Reconversion costs are unallowable except for the cost of removing Government property and the restoration or rehabilitation costs caused by such removal.

However, in special circumstances where equity so dictates, additional costs may be allowed to the extent agreed upon before costs are incurred. Care should be exercised to avoid duplication through allowance as contingencies, additional profit or fee, or in other contracts.