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CITY OF EVERETT SPECIAL PROVISIONS
<br /> Examples of possible Overhead costs include, but are not limited to, General and
<br /> Administrative salaries and benefits, rent, general company insurance, exclusive of
<br /> insurance on owned equipment that is directly job costed, depreciation on office facilities,
<br /> utilities, maintenance, office supplies, general company accounting and legal fees,
<br /> exclusive of amounts expended directly on any specific project, personal property taxes,
<br /> general company business licenses, dues and subscriptions.
<br /> The following costs and expenses are excluded from the definition and calculation of
<br /> Overhead. Overhead costs that vary substantially with the volume of Work performed,
<br /> as measured by billings, shall not be included in Overhead for the purpose of
<br /> determining additional compensation for Extended or Unabsorbed Home Office
<br /> Overhead, or both.
<br /> Examples of costs that are not included in Overhead include: travel and business
<br /> meetings, telephones, professional fees expended for the benefit of a specific project,
<br /> union welfare benefits, payroll taxes and equipment rental.
<br /> If related party transactions are included in a Contractor's Overhead, they must be
<br /> explicitly identified as related party transactions and must not exceed amounts that
<br /> would be incurred in an arms-length transaction for the provision of the same or similar
<br /> ' goods and services. If such transactions exist and the amounts paid by the Contractor
<br /> and included in Overhead are in excess of that which would normally be expended in an
<br /> arms-length transaction, an adjustment, in the form of a reduction in the amount for
<br /> calculation purposes, must be included in any calculation in determining the amount of
<br /> Allocable Overhead.
<br /> Overhead shall not include any cost directly attributable to a particular project. If a cost
<br /> can be traced to a particular contract, the Contractor may not classify the cost as
<br /> Overhead.
<br /> Indirect or home office costs that vary substantially with the amount of Work performed
<br /> shall not be included in the group of costs comprising Overhead.
<br /> Overhead shall not include any costs specifically disallowed by Federal Acquisition
<br /> Regulations, Subpart 31.2—Contracts with Commercial Organizations, or its successor.
<br /> Further, "Overhead" shall not include the costs of any "field support services" that are
<br /> more closely direct costs in nature, regardless of the manner in which the Contractor
<br /> normally accounts for such costs. An example of such disallowed cost would be for
<br /> material handling and expediting, which are costs incurred for the direct support and
<br /> benefit of any specific project(s).
<br /> In addition to compliance with Federal Acquisition Regulations, Subpart 31.2 examples
<br /> of specific costs not allowed in a calculation under this Section of the Contract are
<br /> Incentive Compensation paid to personnel classified as Overhead and otherwise
<br /> includable under this Section of the Contract, travel and business meetings, employer
<br /> paid benefits and taxes on direct payroll costs of any project, insurance costs directly
<br /> identifiable to any specific project, penalties, and any costs incurred regarding company
<br /> owned equipment normally classified as a direct project costs,.
<br /> Owner: The City of Everett, Washington. "Owner" the "City" and "Contracting Agency"
<br /> mean the same.
<br /> Owner's Representative: The person designated in writing by the City to act as its
<br /> representative at the construction site and to perform construction inspection service
<br /> and administrative functions relating to this Contract. The terms "Engineer", "Architect",
<br /> or"City's Representative" shall be interchangeable with Owner's Representative.
<br /> Person: Includes individuals, associations, firms, companies, corporations,
<br /> partnerships, and joint ventures.
<br /> Water Main Replacement"V" Division 1 —GENERAL REQUIREMENTS April,2021
<br /> WO No—UP3730 SP—39
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