Other Direct Cost(ODC)
Costs that can be identified specifically with a contract or project but are not labor or materials — such as travel, subcontracts, or specialized services.
Overview
Other Direct Costs (ODCs) are costs that are directly attributable to a specific contract or project but do not fall into the labor or materials categories. Examples include travel, consultants, subcontracts, computer rental, and specialized testing. ODCs are charged to the contract and typically require supporting documentation.
Why It Matters in GovCon
ODCs appear in cost-type and T&M contracts. Proposals must accurately estimate ODCs and ensure they are allowable under FAR cost principles. Inadequate ODC documentation is a common audit finding. Contractors must maintain receipts, timesheets, and allocation records.
Key Details
- Allowability: ODCs must be allowable under FAR Part 31 or contract-specific cost principles.
- Documentation: Travel vouchers, subcontract invoices, rental agreements support ODC charges.
- Allocability: Must be allocable to the contract — shared costs require an allocation base.
- Audit: DCAA or other auditors review ODC reasonableness and support.
Related Terms
- Direct Cost
- Indirect Cost
- Time and Materials (T&M)
- Cost-Plus Contract
More Finance Terms
A guarantee submitted with a bid that ensures the bidder will enter into a contract if selected and provide required performance and payment bonds.
The government's internal estimate of what a procurement should cost, used to evaluate the reasonableness of contractor proposals.
The projected cost to finish remaining work on a contract or project based on current status.
Overhead costs that support the overall organization rather than direct contract performance.
Costs that cannot be traced to a single contract but are allocated across projects via indirect rates.
The total cost of owning, operating, maintaining, and disposing of a system or product over its entire useful life.
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