Section 3-123-3 - Appropriate costs A cost is appropriate if, in its nature or amount, it does not exceed that which would be incurred by an ordinarily prudent person in the conduct of a competitively similar business. In determining the appropriateness of a given cost, consideration shall be given to:
(1) Requirements imposed by the contract terms and conditions;(2) Whether the cost is of a type generally recognized as ordinary and necessary for the conduct of the contractor's business or the performance of the contract;(3) The restraints inherent in, and the requirements imposed by factors as generally accepted sound business practices, arms' length bargaining, and federal and state laws and regulations;(4) The action that a prudent business manager would take under the circumstances, including general public policy and considering responsibilities to the owners of the business, employees, customers, and the State;(5) Significant deviations from the contractor's established practices which may unjustifiably increase the contract costs;(6) The guidelines, policies, and limitations the State establishes for travel related expenses for its employees; and(7) Any other relevant circumstances.[Eff 12/15/95; am and comp 11/17/97; am and comp 11/15/01; am and comp 11/25/02] (Auth: HRS § 103D-601) (Imp: HRS § 103D-601)