Indirect Costs - TB-43-0002-900006

TB 43-0002-90

(a) Consumable items received from the supply system may be costed as billed by the supply agency. If

no billing is available, consumables will be costed at the standard inventory price as published in appropriate supply

manuals. Items procured from local sources will be priced at the latest invoice cost. Cost of items fabricated will be

based on actual cost for like items, where possible. When actual cost is not available, engineering estimates, including

indirect expenses, will be used.

(b) Replacement components and assemblies used in the repair process will be costed at the standard

inventory price. Credit will be taken for the return of the repairable component in an amount equal to the current standard

inventory price, less the estimated cost to repair the component.

(3) Freight and packaging. Freight will not be included as an element of cost when the equipment to be

repaired is located in CONUS. When the equipment to be repaired is located overseas and no local capability to repair

exists, the cost of freight to CONUS will be included as an element of cost. The cost of freight includes all cost involved in

preparing the item for shipment at point of use, and all transportation and handling cost from point of use to designated

CONUS point of repair. When equipment cannot be repaired on site, and cost must be incurred to prepare the equipment

for shipment regardless of destination, such cost (including materials) will be included in the estimate of cost to repair.

b. Indirect Costs. Indirect cost to be included will be determined by applying the indirect expense rates to the

estimated direct labor hours. The cost to repair will include the following indirect expenses.

(1) Indirect maintenance expense rate. This will include manufacturing or production expenses (i.e., indirect

costs incurred within or identifiable to the maintenance shop or organization performing the repair work, although not

identifiable to particular jobs).

(2) General and administrative expense rate. This will include the costs incurred in the general management or

supervision of the installation as a whole which are allocated among maintenance and other activities.

c. Miscellaneous Costs. The cost of repair will include all contractual services acquired incidental to and identifiable

with the performance of all or a portion of the specific maintenance job. Any other charges required to accomplish the

repair and directly identifiable to the equipment will be included (although not specifically; mentioned herein), except those

directly named in d below.

d. Exclusions. The following costs will not be included in the estimate of cost to repair.

(1) Replacement of basic issue list items.

(2) Items of operating expense, such as the replacement of tires, batteries, petroleum products, and tools,

except where replacement is the result of accidental damage.