Facilities Capital Cost of Money (FCCOM) Calculator

An essential tool for government contractors to estimate the allowable imputed cost of capital.

$0.00 Total FCCOM

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Calculation Breakdown:

Contract Allocation Base: $500,000.00

Cost of Money Factor: 0.0125

Formula: FCCOM = Contract’s Overhead Allocation Base × Cost of Money Factor

Example FCCOM Scenarios

This table illustrates how changes in the allocation base and money rates affect the final FCCOM amount.

Scenario	Overhead Allocation Base	Cost of Money Rate	Calculated FCCOM
Small Project	$150,000	1.25%	$1,875
Medium Project	$750,000	1.25%	$9,375
Large Project	$3,000,000	2.50%	$75,000
High Rate Period	$1,000,000	3.75%	$37,500

What is Facilities Capital Cost of Money (FCCOM)?

Facilities Capital Cost of Money (FCCOM) is a crucial concept for any business involved in U.S. government contracting. It represents an imputed cost that contractors can claim, which is intended to recognize the cost of capital a contractor has invested in its facilities. In simple terms, the government acknowledges that when a contractor uses its own money to invest in buildings and equipment, there’s an “opportunity cost” – that money could have been used for other profitable ventures. FCCOM is the government’s way of compensating for this.

It’s important to understand that FCCOM is not an actual out-of-pocket expense like interest on a loan. Instead, it is a calculated, allowable indirect cost used for pricing government contracts and for reimbursement on cost-type contracts. The calculation is governed by the Cost Accounting Standard (CAS) 414. The primary goal is to encourage contractors to invest in their facilities to improve efficiency, which ultimately can lead to cost savings for the government.

The Factors Used to Calculate FCCOM: Formula and Explanation

The calculation for FCCOM is straightforward but relies on having the correct data from a contractor’s accounting system and official government rates. The basic formula is:

FCCOM = Overhead Pool Allocation Base × Cost of Money Factor

This calculation is performed for specific overhead pools, and the sum of these calculations determines the total contract FCCOM.

Key variables in the FCCOM calculation.

Variable	Meaning	Unit	Typical Source
Overhead Allocation Base	The portion of an overhead pool’s allocation base (like direct labor hours, or direct material costs) that is attributable to the specific government contract in question.	Currency ($)	Contractor’s accounting or job cost system.
Cost of Money Rate	The interest rate determined by the Secretary of the Treasury under Public Law 92-41. This rate is published semi-annually.	Percentage (%)	Published in the Federal Register.
Cost of Money Factor	The Cost of Money Rate expressed as a decimal for calculation (e.g., 1.25% becomes 0.0125).	Unitless Ratio	Derived from the Cost of Money Rate.

For more detailed guidance, contractors often refer to the telecom compliance standards and fill out Form CASB-CMF.

Practical Examples

Example 1: A Small IT Services Contract

• Inputs:
  • Contract’s Overhead Allocation Base: $250,000
  • Cost of Money Rate for the period: 2.0%
• Calculation:
  • Cost of Money Factor = 2.0 / 100 = 0.020
  • FCCOM = $250,000 × 0.020 = $5,000
• Result: The contractor can claim $5,000 in FCCOM for this period on this contract.

Example 2: A Large Manufacturing Contract

• Inputs:
  • Contract’s Overhead Allocation Base: $4,000,000
  • Cost of Money Rate for the period: 1.5%
• Calculation:
  • Cost of Money Factor = 1.5 / 100 = 0.015
  • FCCOM = $4,000,000 × 0.015 = $60,000
• Result: The contractor can claim $60,000 in FCCOM, a significant amount that underscores the importance of proper calculation. Successful claims often involve a thorough RF signal analysis of financial documents.

How to Use This FCCOM Calculator

1. Enter the Allocation Base: In the first field, input the dollar value of the overhead allocation base that is specifically associated with the contract you are calculating for. This data should come from your project accounting system.
2. Enter the Cost of Money Rate: In the second field, input the applicable interest rate published by the Treasury for the relevant accounting period. Enter it as a percentage (e.g., input “2.5” for 2.5%).
3. Review the Results: The calculator will instantly show the total calculated FCCOM. It also breaks down the inputs you provided for easy verification.
4. Copy for Your Records: Use the “Copy Results” button to capture the output for your records or to include in invoicing documentation.

Key Factors That Affect FCCOM

Several key factors can influence the final FCCOM amount. Understanding these is vital for accurate financial planning and contract pricing.

• Value of Contractor’s Facilities: The larger the investment in capital assets (buildings, machinery), the higher the potential FCCOM.
• Treasury Interest Rates: FCCOM is directly tied to federal interest rates. When rates go up, the allowable FCCOM increases, and vice versa.
• Contract Size and Type: Larger contracts will naturally have a larger allocation base, leading to higher FCCOM. It is an allowable cost on most cost-reimbursement and progress payment contracts.
• Overhead Allocation Method: How a contractor allocates overhead costs across different projects will directly impact the base amount used for the FCCOM calculation on each government contract. Expertise in radio frequency modeling of costs is beneficial.
• Accuracy of Accounting Records: Accurate and detailed accounting is non-negotiable. Without proper records to substantiate the allocation base, claims for FCCOM can be challenged or denied.
• Timeliness of Invoicing: FCCOM can be included in interim billing and progress payment invoices, so timely calculation and submission are key to maintaining healthy cash flow.

Frequently Asked Questions (FAQ)

Is FCCOM the same as interest?

No. FCCOM is an imputed cost allowed by the government, not a direct reimbursement for interest expenses paid on loans. Interest costs are generally unallowable on government contracts.

Do I need to have a loan to claim FCCOM?

No. The claim is not contingent on you having any interest costs or loans. It is based on your investment in facilities, regardless of how they were financed.

Where do I find the official Cost of Money rate?

The rates are determined by the Secretary of the Treasury and are published semi-annually in the Federal Register.

Can I claim FCCOM on all government contracts?

It is allowable on most flexibly-priced contracts where costs are a factor, such as cost-reimbursement contracts. It must be proposed as part of your costs to be billable. For more information, see our broadcast license renewal guide.

What is Form CASB-CMF?

This is the “Cost of Money as a Factor” form. It is used to document the calculation that supports the cost of money factors applied to contract-related overhead pools.

What happens if the cost of money rate changes during my contract?

Interim calculations use the latest available rates. A final adjustment is typically made at settlement to reconcile the difference between interim and final rates for the period. Our effective radiated power guide can help with final adjustments.

Can FCCOM be included in my profit calculation?

No. FCCOM is added to your cost base but should not be included in the cost base when calculating a profit or fee objective.

Is FCCOM applicable to facilities under construction?

Yes, under CAS 417, a cost of money can be calculated for assets under construction, though the rules differ slightly. The asset is not depreciated until it is placed into service.

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