Facilities Capital Cost of Money
Facilities capital cost of money (FCCOM or COM) is an imputed cost related to the cost of contractor capital committed to facilities. CAS 414, Cost of Money as an Element of the Cost of Facilities Capital, provides detailed guidance on calculating the amount of facilities capital cost of money due under a specific contract. Under CAS 414, a business unit’s facilities capital cost of money is calculated by multiplying the net book value of the business-unit’s facilities investment by a cost of money rate based on the interest rates specified semi-annually by the Secretary of the Treasury under Public Law 92-41. The business-unit’s facilities capital cost of money is then broken down by overhead pool and allocated to specific contracts using the same allocation base used to allocate the indirect costs in the overhead pool.
Facilities capital cost of money is determined without regard to whether the source is owner’s equity or borrowed capital. It is not a form of interest on borrowing by the firm. COM is an allowable cost element for related party rent transactions in accordance with FAR 31.205-36.
Our tool is designed to help you calculate the proper amount of COM for a specific set of assets for a single pool or contract. Since COM is calculated for each pool, you need multiple tabs or worksheets that align with your business structure.
Download the template and modify for the assets in use on your contract. Additional assets added to the “Assets” tab will have to be manually added to the “Summary Tab.”
Note the section for “Related Party Allowable Rent – Effective Cost of Ownership. This aids in proper calculation of the effective cost of ownership per FAR 52.205.36.
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