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i Over-absorbed Overhead: Over recovery of fixed indirect costs that occurs when a Contractor performs more overall Work than it otherwise would have performed. Overhead: In general, Overhead for the purpose of calculating additional compensation under this section of the Contract shall include only those costs that are expended for the administration of the business as a whole. Such costs usually accrue or are incurred due to the passage of time,or cannot be traced to a particular project or contract,or both. Examples of possible Overhead costs include, but are not limited to, General and Administrative salaries and benefits, rent, general company insurance, exclusive of insurance on owned equipment that is directly job costed, depreciation on office facilities, utilities, maintenance, office supplies, general company accounting and legal fees, exclusive of amounts expended directly on any specific project, personal property taxes, general company business licenses,dues and subscriptions. The following costs and expenses are excluded from the definition and calculation of Overhead. Overhead costs that vary substantially with the volume of Work performed, as measured by billings, shall not be included in Overhead for the purpose of determining additional compensation for Extended or Unabsorbed Home Office Overhead,or both. Examples of costs that are not included in Overhead include: travel and business meetings, telephones, professional fees expended for the benefit of a specific project, union welfare benefits,payroll taxes and equipment rental. If related party transactions are included in a Contractor's Overhead, they must be explicitly identified as related party transactions and must not exceed amounts that would be incurred in an arms-length transaction for the provision of the same or similar goods and services. If such transactions exist and the amounts paid by the Contractor and included in Overhead are in excess of that which would normally be expended in an arms-length transaction, an adjustment, in the form of a reduction in the amount for calculation purposes, must be included in any calculation in determining the amount of Allocable Overhead. Overhead shall not include any cost directly attributable to a particular project. If a cost can be traced to a particular contract,the Contractor may not classify the cost as Overhead. Indirect or home office costs that vary substantially with the amount of Work performed shall not be included in the group of costs comprising Overhead. Overhead shall not include any costs specifically disallowed by Federal Acquisition Regulations, Subpart 31.2 — Contracts with Commercial Organizations, or its successor. Further, "Overhead" shall not include the costs of any "field support services" that are more closely direct costs in nature, regardless of the manner in which the Contractor normally accounts for such costs. An example of such disallowed cost would be for material handling and expediting, which are costs incurred for the direct support and benefit of any specific project(s). In addition to compliance with Federal Acquisition Regulations, Subpart 31.2 examples of specific costs not allowed in a calculation under this Section of the Contract are Incentive Compensation paid to personnel classified as Overhead and otherwise includable under this Section of the Contract, travel and business meetings, employer paid benefits and taxes on direct payroll costs of any project, insurance costs directly identifiable to any specific project, penalties, and any costs incurred regarding company owned equipment normally classified as direct project costs. Owner: The City of Everett,Washington. "Owner"the"City"and"Contracting Agency"mean the same. Owner's Representative: The person designated in writing by the City to act as its representative at the construction site and to perform construction inspection service and HAVES STREET REGULATOR February, 2017 AND CSO CONTROLS (SRO1,SRO2, AND SRO3) WO No—UP3398-31 SP - 52