Payne Hackenbracht & Sullivan

Reasonable Cost

A contractor's actual costs are presumed to be reasonable. Bruce Constr. Corp. v. United States, 163 Ct. C1. 97, 401 (1963); South Georgia Cleaning Svcs., Inc., ASBCA No. 38546, 93-2 BCA 525,800 (1992). Having proven actual costs, the burden then shifts to the government to prove that the costs were unreasonable. Blake Constr. Co., Inc., GSBCA No. 1176, 66-l BCA 5589 (1966). Consequently, if the government presents no evidence to overcome this presumption, the contractor's actual costs are to be accepted. Green's Indus. Painting, ASBCA No. 26569, 82-1 BCA 5,786 (1982). As enunciated in Blake Constr. Co., Inc., 66-1 BCA 5589 at 26,119, the government has a difficult task:

Since the presumption is that a contractor's claimed cost is reasonable, the Government must carry the very heavy burden of showing that the claimed cost was of such a nature that it should not have been expended, or that the contractor's costs were more than were justified in the particular circumstance.