(a)

1. (1) Utility owners. Overhead costs include expenses for:

   1. (A) General engineering and supervision;
   2. (B) General office services;
   3. (C) Legal services;
   4. (D) Insurance; and
   5. (E) Other items.
2. (2) Overhead charges must be stated in detail.

(b) Costs not eligible for reimbursement include, but are not limited to, the costs associated with:

1. (1) Advertising;
2. (2) Sales promotion;
3. (3) Interest on borrowings;
4. (4) The issuance of stock;
5. (5) Bad debts;
6. (6) Uncollectible accounts receivable;
7. (7) Contributions;
8. (8) Donations;
9. (9) Entertainment;
10. (10) Fines;
11. (11) Penalties;
12. (12) Sale and rate studies;
13. (13) Lobbying; and
14. (14) Research programs.

(c)

1. (1) Overhead and indirect construction costs not charged directly to work order or construction accounts may be allocated to the relocation provided the allocation is made on an equitable basis.

2. (2) All costs included in the allocation shall be:

   1. (A) Eligible for federal reimbursement;
   2. (B) Reasonable;
   3. (C) Actually incurred by the utility owner; and
   4. (D) Consistent with the provisions of 48 C.F.R. pt. 31.

(d)

1. (1) Rates shall be established on the basis of the prior year cost experience to avoid the fluctuations that occur with a month-to-month method.
2. (2) Once established and confirmed, the utility owner shall use the annual report for all billings in that year and include a schedule that shows the base figures and computations with the relocation proposal.
3. (3) If the rate changes prior to beginning relocation work, an updated schedule must be submitted with the first invoice.