Contract disputes regarding cost-allocation can be reduced by defining:

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All of these factors play a role in reducing contract disputes regarding cost-allocation. Defining the cost items allowed ensures that both parties are in agreement on what expenses are eligible for reimbursement. Establishing permissible cost-allocation bases ensures that the costs are distributed fairly and in accordance with the terms of the contract. Clearly defining the terms used, such as what constitutes direct labor, helps to prevent misunderstandings and disputes.

Contract Disputes Regarding Cost-Allocation Can Be Reduced by Defining