(3) Indirect labor and materiel cost. Compute the indirect or overhead cost
estimate by multiplying the chargeable manhours required to perform the corrective
maintenance with the applicable indirect rate.
(a) Determine chargeable indirect costs which include the following.
1 Maintenance operation expenses identifiable to a work center or
the maintenance shop performing the corrective maintenance, although not identifiable
to a specific job.
2 General and administrative expenses.
3 Supervisory and administrative manhours.
(b) Determine nonchargeable indirect costs which include the following.
1 Replacement of basic-issue-list items.
2 The labor or materiel expenses for applying alterations or
3 Operating-expense items.
Freight and packaging cost.
(a) Do not include freight as an element of cost when the maintenance
materiel to be repaired is located in the continental United States (CONUS). Include the
cost of freight to CONUS as an element of cost when the materiel to be repaired is
located overseas and no local capability exists. The cost of freight includes all
transportation and handling costs from point of use or storage to the designated
CONUS point of repair.
(b) When materiel cannot be repaired on-site, and costs are incurred to
prepare the materiel for shipment, such costs (including materials) are included in the
cost estimate regardless of origin or destination.
(5) Miscellaneous cost. Identify all chargeable contractual services
acquired incidental to, and identifiable with, a specific corrective maintenance action.
(6) Corrective maintenance cost. Determine the total corrective
maintenance cost estimate by combining the estimated costs for each of the five cost
elements in paragraphs 4-4a through 4-4e.
(7) Determination. Compare the projected repair cost with the maximum
allowable cost and determine if the equipment should be repaired or replaced.