How are direct and indirect costs considered in Part 15 evaluations?

• A. They are ignored in the evaluation process.
• B. Direct costs mapped to the schedule risk; indirect costs mapped to the technical approach.
• C. Indirect costs reviewed for reasonableness and allowability; direct costs are mapped to the technical approach.
• D. Direct costs mapped to the technical approach; indirect costs reviewed for reasonableness and allowability.

Answer: (D)

Direct costs are the expenses that can be directly traced to the work described in the contract, so in a Part 15 evaluation they should be mapped to the technical approach. This shows exactly how the proposed price supports the technical plan and the specific tasks the contractor will perform. Indirect costs (overhead, fringe, G&A, etc.) aren’t tied to a single task, so they’re evaluated separately for reasonableness and allowability under applicable cost principles. If indirect costs are unreasonable or unallowable, the overall price isn’t credible, even if direct costs appear sound. So the correct approach is to map direct costs to the technical approach and review indirect costs for reasonableness and allowability.